How to Calculate the Real Profit on Each Online Order

The short answer: the profit on an order is what you collect from the customer minus every cost that order caused: the product, packaging, payment fees, the delivery you paid for, discounts you gave, the advertising that brought the customer in, and a share of the orders that failed. Revenue is the first number on that list, not the last. In the worked example below, an order that looks like ₦18,700 of sales leaves about ₦5,200 of profit once failed orders are shared across the batch.

Last updated 28 October 2026.

Most sellers watch revenue because it is the number every dashboard shows. It feels good, and it is also the number that can hide a business that is busy but not earning. This guide shows how to work out profit for a single order, how to spread the costs that do not belong to one order, and what to do with the answer. If you want help setting your selling price in the first place, read how to price products in Nigeria. This article starts after the sale.

Revenue, gross profit and profit: three different numbers

• Revenue is the money the customer pays you, including any delivery fee they pay.
• Gross profit is revenue minus the direct cost of the goods you sold.
• Order profit (sometimes called contribution) is revenue minus every cost that exists because that order exists: goods, packaging, payment charges, delivery, discounts, advertising and failures.

Monthly rent, your own salary, software subscriptions and equipment are fixed costs. They do not change with one more order, so they stay out of order profit. You subtract them later, from the total of all your order profits. If you skip order profit and go straight to a monthly total, you cannot tell which products or channels are making the money.

The cost list: eight lines most sellers should check

1. Product cost. What you paid for the item, including the cost of getting it to your store (transport, import charges, supplier delivery). Use the cost of the stock you actually sold, not the cost of your next batch.
2. Packaging. Box, mailer, tape, tissue, label, thank-you card. Packaging is a small number that adds up, so cost it per order.
3. Payment charges. Card, transfer and gateway fees. Paystack's help page lists local transactions at 1.5% plus ₦100, with the ₦100 not charged below ₦2,500 and local fees capped at ₦2,000. Flutterwave's Nigeria pricing page lists local collections at 2%, with 7.5% VAT on fees. Check the live page for your own account before you rely on these, because providers change rates. If you pass the fee on to the customer, that adds to your revenue, so count the fee on both sides.
4. Platform fee. If your store software charges per order or monthly, include it. On Webift's Pay per order (Free) plan the platform fee is ₦300 for each qualifying paid order, and it is reversed if the whole order is refunded. See Webift pricing explained for the plans.
5. Delivery you pay for. The rider or courier charge. If the customer pays a delivery fee, that is revenue on the other side of the ledger. The cost to you is the actual charge, and any gap is your subsidy.
6. Discounts. A 10% discount code is not a marketing expense you can forget. It is money removed from the sale. Use the price the customer actually paid.
7. Advertising per order. Total ad spend divided by the orders it produced. This is a rough average, and it is better than ignoring ads.
8. Failures and returns. Orders you delivered nothing for: the customer was unreachable, refused, or returned the item. They still cost you delivery, sometimes twice, plus lost time.

A worked example (illustrative numbers only)

These are made-up numbers for a made-up tote bag. They are not Webift customer results. Replace them with yours.

What the customer pays

Check: 18,000 - 1,800 = 16,200. Then 16,200 + 2,500 = 18,700.

What the order costs you

Check the payment fee: 1.5% of 18,700 is 280.50. Add 100 and you get 380.50. Check the total: 7,200 + 450 = 7,650. Add 3,000 for 10,650. Add 380.50 for 11,030.50. Add 300 for 11,330.50. Add 1,500 for 12,830.50.

Profit on this order: 18,700 - 12,830.50 = ₦5,869.50. As a share of what the customer paid, that is 5,869.50 divided by 18,700, which is about 31.4%.

Notice what the numbers show. The delivery line cost ₦3,000 but the customer paid ₦2,500, so you subsidised ₦500. The discount removed ₦1,800. Ads took ₦1,500. Those three lines alone take ₦3,800 out of an order that looked like an ₦18,000 sale. Before ads, the same order leaves ₦7,369.50.

Now add the orders that fail

The ₦5,869.50 above only exists if the order is delivered and paid. Suppose you run ₦30,000 of ads and get 20 orders, which is the ₦1,500 per order used above. Of those 20 orders, 19 are delivered and 1 is a cash-on-delivery order that fails. For the failed order, the rider went out and came back at ₦3,000 each way, and the packaging was reusable. Because it was never paid, there is no payment fee and no platform fee.

Check: 7,369.50 x 19 = 140,020.50. Then 140,020.50 - 6,000 = 134,020.50. Then 134,020.50 - 30,000 = 104,020.50.

Spread over all 20 orders, that is about ₦5,201 each, and the revenue you actually collected is 19 x ₦18,700 = ₦355,300. Batch profit as a share of that revenue is 104,020.50 divided by 355,300, which is about 29.3%.

So the batch headline is ₦355,300 of sales, and the money left is ₦104,020.50 before your fixed costs. If you only watched revenue, a week with two failures instead of one would look the same on a sales chart while the profit dropped by another ₦6,000 or more. To go deeper on cutting those failures, read how to reduce failed cash-on-delivery orders.

Your own order-profit worksheet

Copy this into a spreadsheet or a notebook. One row per product you sell often.

Then add a failure allowance. Take your last 30 to 50 orders, count how many were never delivered or were returned, and work out what each one cost you in delivery and lost time. Divide the total by the number of orders that did succeed and subtract that from line J. That one adjustment is the most common difference between a profit figure you believe and one you can bank.

Common mistakes

• Using list price instead of the price paid. If half your customers use a code, your real average price is lower than the one on the product page.
• Forgetting that delivery is both revenue and cost. Count the fee the customer pays and the charge you pay. Never net them in your head.
• Using the cost of your first batch. If restocking costs more, your margin has already shrunk.
• Spreading ad cost over only the orders that arrived. Ads bring in failed orders too. Divide by all orders.
• Ignoring your own time. If packing each order takes ten minutes, decide what that is worth, or at least know it.
• Treating a profitable average as proof every product is profitable. Run the worksheet for your top three products separately. One may be carrying the others.

What to do with the result

• Profit is thin on a product: look first at delivery and discounts, because they are decisions you control. Raise the price of that product, raise the free-delivery threshold, or end the permanent discount. How to set a free-delivery threshold without losing your margin shows the calculation.
• Profit is fine but cash is tight: your money is tied up in stock and unpaid cash-on-delivery orders. That is a cash-flow problem, not a profit problem, and needs a different fix.
• A promotion looks busy: run the worksheet on promotional orders before you repeat it. Our guide to measuring whether a promotion made a profit covers this.
• A spreadsheet is enough. You do not need special software to do any of this. A notebook with one line per order works for a few orders a day.

Where your store dashboard helps

Your store software cannot know your product cost, packaging or ad spend unless you tell it, so it will not give you profit. What it can give you is the sales side of the worksheet. Webift's dashboard shows sales over time, recent orders, sales by payment method and top products, and the order list can be filtered by payment status, so you can see which orders were actually paid. One caution: the dashboard counts an order as a sale as soon as it is placed (cancelled and refunded orders are left out), so orders still waiting for payment are included. For a paid-only revenue figure, filter the order list by payment status "paid" and total those orders. Keep the cost lines in your own sheet. Webift also keeps payment status (pending, paid, failed, refunded) separate from order status, which helps you count only paid orders. The payment provider's own fees still apply and are charged by the provider, not by Webift.

FAQs

What is the difference between profit margin and markup?

Markup is profit divided by cost. Margin is profit divided by price. On a ₦10,000 item that cost ₦6,000, the profit is ₦4,000. Markup is 4,000 divided by 6,000, about 66.7%. Margin is 4,000 divided by 10,000, which is 40%. Mixing the two up is a common reason sellers think they earn more than they do.

Should I include the Webift platform fee and payment fees in my cost per order?

Yes. They only occur because the order happened, so they belong in order profit. Check each provider's current published rates and your own plan, because rates and plans can change.

Is a 30% margin good?

There is no single good number. It depends on your category, your delivery costs and how much cash is tied up in stock. What matters is that the margin stays positive after failures and that it covers your fixed costs at the volume you actually sell.

How often should I recalculate?

Every time something big changes: supplier price, delivery rate, ad cost, or a new discount. Otherwise, a quick monthly check using your last 30 to 50 orders is enough for most small sellers.

Try it on your next 20 orders

Pick your three bestselling products, fill in the worksheet for each, and see where the money actually goes. If you want a store that records sales and payment status in one place while you do the cost side in your own sheet, you can create a free Webift store. The Free plan has no subscription fee.