Profit Margin Calculator (E-commerce)

Margin vs Markup — knowing the difference

Two terms, two formulas, often confused:

• Margin (%) = Profit ÷ Selling Price × 100. "What share of the sale is profit?"
• Markup (%) = Profit ÷ Cost × 100. "How much above cost am I selling?"

A 50% markup on a ₹500 cost gives a ₹750 selling price (₹250 profit on ₹750 = 33% margin). A 50% margin on ₹500 cost requires a ₹1,000 price (₹500 profit on ₹1,000 = 50% margin). Markup is always higher than margin for the same product.

Healthy margin benchmarks for Indian D2C

Category	Healthy gross margin	Why
Apparel / Fashion	55-70%	High return rate (15-25%) eats into margin
Beauty / Personal care	60-75%	Brand premium absorbs marketing
Electronics / Gadgets	15-30%	Commoditised — volume game
Home decor / Furniture	40-55%	Heavy + RTO costs, lower volumes
Grocery / Essentials	10-25%	Frequent purchase — thin margin OK
Health supplements	50-65%	Trust premium, education-led sales
Handicrafts / Artisan	50-65%	Story premium, lower scale

What this calculator misses

This is gross margin — cost vs sale only. Real e-commerce profitability needs:

• – Marketplace commission (use the commission calculator) — 8-30% off the top
• – Payment gateway fees — 1.5-2% on cards, 0.4-0.7% on UPI
• – Shipping (use the shipping calculator) — varies by zone, weight
• – Returns / RTO — 10-25% of COD orders, full shipping cost lost
• – Marketing CAC — Meta ads ₹100-400 per acquired customer in 2026
• – Packaging — branded boxes, fillers, fragile-handling stickers

Net margin after all of these is usually 30-50% of gross margin for D2C.

FAQs

What's a "good" profit margin for online sales?

Depends on the category and channel. Marketplace sellers (Amazon/Flipkart) often run 5-15% net margin because of commissions. D2C brands aim for 25-40% net to fund marketing and growth. Anything below 10% net is a treadmill — a single bad month or RTO spike wipes you out.

Margin or markup — which should I price by?

Most retailers price by markup (cost + X%) because cost is what they know. But analyse and report by margin (% of sale) — it's the metric that compares cleanly across price points and lets you spot category drift fast.

How does FlexiCommerce help track margin?

FlexiCommerce stores cost price per product, computes per-order margin live, and surfaces low-margin SKUs in the admin dashboard so you can deprioritise or reprice them. See it in the demo.