The calculator says I make 30% but the money reaching my bank is far less; what am I missing?

Checklist: what did you leave out?

Take an ordinary order from your store, open last week's statements, and go through these one by one:

• Payment gateway or marketplace fees: taken before the money reaches you, so they never show in sales but shrink the payout.
• Shipping you absorb: if you offer free or subsidised delivery, the difference comes out of profit.
• Advertising: what you spent divided by the number of orders.
• Returns and refused orders: delivery both ways with no sale, and sometimes a product you cannot resell.
• VAT: if you entered the VAT-inclusive price, part of it was never yours.
• Packaging, labels and little extras in each parcel.

Re-run with the real figures

Add up what these items cost for one order, add it to the product cost in the Profit margin calculator, and keep the same price before tax.

The drop from 30% to 9% is not a calculator error; it is exactly the money going to places you had not counted. Better still, you now know where it goes: shipping alone is more than half the gap.

And if a gap is still left?

Some reasons have nothing to do with margin and everything to do with timing:

• Payout schedules: some marketplaces and gateways transfer funds days or weeks later, so this week's sales have not landed yet.
• Restocking: the profit may exist, but it has turned into goods on the shelf.
• Fixed monthly costs such as rent, subscriptions and salaries: not a product cost, but paid out of the same profit.

Make it a monthly habit

Log shipping, ad spend and fees in the Expense summary generator to see their monthly totals, then divide by the number of orders to get an average cost per order. Add it to the product cost once a month and watch the real margin. If it turns out lower than you need, work out a new price that accounts for shipping and fees with the Selling-price calculator.