How to read your profit result
A marketplace sale can look profitable until the smaller costs are added. The mistake is usually not the product cost. Sellers remember what they paid for the item. The missing money is often in payment fees, labels, boxes, tape, returns, marketplace promotions, and the difference between what the buyer pays for shipping and what fulfillment actually costs.
Start with the sale price and any shipping amount paid by the buyer. That is your gross revenue. Then subtract the product cost, actual shipping cost, packaging, platform percentage fees, fixed payment fees, and any ad cost needed to win the sale. If the item often comes back, add a small return reserve. The remaining amount is the profit you can use to pay yourself, reinvest, or cover overhead.
Margin and markup are related but not the same. Margin compares profit to the selling price. Markup compares profit to the product cost. A product with a 50 percent markup does not have a 50 percent margin. If you buy something for 10 and sell it for 15, the markup is 50 percent, but the margin is 33.3 percent before other costs.
The break-even price is the point where profit is zero. It is useful for deciding the lowest price you can accept during negotiation, clearance, or promoted listings. The target price goes one step further: it estimates the price needed to hit your chosen margin after all costs entered in the form.