How do you calculate the profit of your business or product? Whether you run a webshop, sell via bol.com, or have a physical store: calculating profit is the basis of healthy entrepreneurship. In this article, we'll explain step by step which formulas you use, what the difference is between gross profit and net profit, and how you can optimize your profit margin as an online seller.
What is profit exactly?
Profit is the amount that remains after you've deducted all costs from your revenue. Sounds simple, but in practice, there are different types of profit that each give a different picture of your financial health. As an entrepreneur, it's crucial to understand which profit concepts exist and when to apply which calculation.
The three most important profit concepts are:
- Gross profit - revenue minus direct costs (purchase costs)
- Net profit - gross profit minus all other costs (rent, personnel, marketing, etc.)
- Profit margin - profit expressed as a percentage of revenue
How do you calculate profit? The basic formulas
To calculate profit, you use the following formulas. We'll discuss them one by one with examples so you can get started right away.
Calculating gross profit
Gross profit shows how much you retain after deducting the direct costs of your product. These are the purchase costs, also known as the purchase value of revenue (IWO).
Formula: Gross profit = Revenue (excl. BTW) − Purchase costs
Example: You sell a product for €24.20 including BTW. The purchase price is €8.00.
- Revenue excluding BTW: €24.20 / 1.21 = €20.00
- Gross profit: €20.00 − €8.00 = €12.00
Calculating net profit
Net profit is what you actually retain. Here, you deduct not only the purchase costs but also all variable and fixed costs. Think of sales platform commissions, shipping costs, storage costs, marketing expenses, and business costs.
Formula: Net profit = Revenue (excl. BTW) − Purchase costs − Other costs
Example: With the same revenue of €20.00 and purchase price of €8.00:
- Bol.com commission (12%): €2.40
- Shipping costs: €3.50
- Packaging material: €0.60
- Total other costs: €6.50
- Net profit: €20.00 − €8.00 − €6.50 = €5.50
Calculating profit margin
The profit margin tells you what percentage of your revenue is actually profit. This is one of the most important KPIs for any seller, as it allows for comparison between products and periods.
Formula: Profit margin (%) = (Net profit / Revenue excl. BTW) × 100
Example: Net profit €5.50, revenue €20.00:
- Profit margin: (€5.50 / €20.00) × 100 = 27.5%
Overview of profit formulas
| Profit concept | Formula | What it measures |
|---|---|---|
| Gross profit | Revenue − Purchase costs | Margin at product level |
| Net profit | Revenue − All costs | Actual earnings |
| Gross profit margin | (Gross profit / Revenue) × 100 | Product margin in % |
| Net profit margin | (Net profit / Revenue) × 100 | Total margin in % |
| ROI | (Net profit / Investment) × 100 | Return on investment |
Which costs should you include?
A common mistake when calculating profit is not including all costs. Below is an overview of costs that you, as an online seller, should include in your profit calculation:
Direct costs (variable per product)
- Purchase price of the product
- Shipping costs to the customer
- Packaging material
- Platform commission (bol.com charges 5% to 17%)
- Return costs (on average 10-15% of orders)
- LVB costs if you use Logistics via bol.com
Indirect costs (fixed per period)
- Storage costs (warehouse or LVB)
- Software costs (tools, accounting)
- Advertising budget (bol.com Sponsored Products)
- Business insurance
- Accountant and administration
- KvK registration and any permits
Calculation example: complete profit calculation for bol.com
Let's go through a complete example for a product you sell via bol.com. Suppose you sell a phone case:
| Cost item | Amount |
|---|---|
| Selling price incl. BTW | €18,15 |
| Revenue excl. BTW (÷ 1,21) | €15,00 |
| Purchase price | €3,50 |
| Bol.com commission (8%) | €1,20 |
| Shipping costs | €3,20 |
| Packaging | €0,40 |
| Return costs (15% chance × €3,20) | €0,48 |
| Total costs | €8,78 |
| Net profit per unit | €6,22 |
| Net profit margin | 41,5% |
With 200 sales per month, this results in a monthly net profit of €1,244. Use the Boloo Profit Calculator to automatically make these calculations for all your products.
Common mistakes when calculating profit
Many starting sellers overestimate their profit because they don't include all costs. These are the most common mistakes:
- Forgetting to deduct VAT - Always calculate your profit based on revenue excluding VAT. The VAT you receive is not profit but must be paid to the tax authorities.
- Ignoring return costs - On average, 10-15% of online orders are returned. Include these costs per sold product.
- Underestimating platform costs - In addition to commission, there are transaction costs, potential advertising costs, and storage costs with LVB. Check out a complete overview of bol.com costs.
- Not counting your own hours - Your own time is valuable too. Calculate your effective hourly wage to see if your business is really profitable.
- Confusing revenue and profit - A revenue of €10,000 per month sounds impressive, but if your costs are €9,500, your profit is only €500.
Tips to increase your profit
Now that you know how to calculate profit, you'll want to make it as high as possible. Here are proven strategies:
1. Lower your purchase costs
Negotiate with suppliers for volume discounts. Consider buying directly in China via platforms like Alibaba. Even a few percent lower purchase costs can make a big difference in your total profit margin.
2. Optimize your shipping costs
Compare shipping partners and negotiate rates based on your shipping volume. Consider whether Logistics via bol.com is more advantageous than shipping yourself, especially for smaller products.
3. Strategically increase your selling price
Use keyword research to find products with less competition where you can charge higher margins. Improve your product page and photos to justify a premium price.
4. Lower your return percentage
Invest in clear product descriptions, accurate photos, and good packaging. Each returned product not only costs you shipping costs, but also time and often a part of the product value.
5. Monitor your profit continuously
Use the Boloo Sales Dashboard to monitor your daily revenue, costs, and profit per product. This way, you can quickly identify which products are performing well and which are loss-making.
Calculating profit with the Boloo Profit Calculator
Manually calculating your profit takes a lot of time, especially if you sell dozens or hundreds of products. The Boloo Profit Calculator automatically calculates your gross profit, net profit, and profit margin per product, taking into account all bol.com costs, including commission, shipping costs, and LVB rates.
With the Sales Dashboard, you also get an overview of your total profit per day, week, or month - so you always know where you stand.
Frequently asked questions about calculating profit
Should I include VAT in my profit calculation?
No, if you are VAT-liable, you always calculate profit excluding VAT. The VAT you receive when selling is paid to the tax authorities, and the VAT you pay when purchasing (pre-tax) is claimed back through your VAT return.
What is a good profit margin for bol.com sellers?
A healthy net profit margin for bol.com sellers is between 20% and 40%. Margins below 15% are risky because unexpected costs (returns, price drops) can quickly make you loss-making. Use the profit formula to calculate your margin per product.
How do you calculate profit when selling multiple products?
Calculate the profit per product and add them up. Take into account different commission percentages per product category and different shipping costs per product size. A tool like the Profit Calculator does this automatically for your entire range.
What is the difference between profit and cash flow?
Profit is an accounting concept: revenue minus costs. Cash flow is the actual flow of money: the money that comes in minus the money that goes out. You can make a profit but still have cash flow problems, for example, if bol.com only pays you after two weeks but your supplier wants to be paid in advance.
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