Calculate Total Profit

The total profit calculation is one of the most important skills for every entrepreneur. Whether you sell through bol.com, have your own webshop, or deliver physical products — without insight into your total profit, you don't know if your business is healthy. In this extensive article, we explain step by step how to calculate the total profit, which formulas to use, which costs to include, and how to avoid common mistakes.

What is total profit and why is it so important?

Total profit is the amount that remains after you have deducted all costs from your total turnover. It is the ultimate measure of your company's financial health. Many starting sellers only look at turnover, but turnover says nothing if your costs are higher than your income. Only when you calculate the total profit do you know if you are actually making money.

The difference between gross profit and net profit is crucial. Gross profit is your turnover minus the direct purchase costs. Net profit (the total profit) is what remains after deducting ALL costs: purchase costs, shipping costs, platform commissions, taxes, marketing costs, packaging material, and overhead costs. For a realistic view of your profitability, you should always calculate the net profit.

The formula to calculate your total profit

The basic formula for calculating your total profit is simple:

Total profit = Total turnover (excluding VAT) − Total costs

Let's break this down further. Your total turnover is the sum of all sales revenue excluding VAT. Your total costs consist of several components that you must all include for an accurate calculation:

Cost item	Description	Example
Purchase costs	Price you pay for the product to your supplier	€5.00 per piece
Shipping costs	Costs for shipping to the customer (or to fulfillment)	€3.50 per shipment
Platform commission	Commission that the sales platform charges	€2.10 (e.g., 15% of €14)
Packaging costs	Boxes, filling material, tape, labels	€0.80 per package
Marketing costs	Advertisements, sponsored products, SEO	€0.50 per sold product
Return costs	Costs of returns (on average over all sales)	€0.40 per product
Overhead costs	Software, office, administration, insurance	€0.30 per product

Step by step: calculating total profit with a practical example

Let's go through a concrete example. Suppose you sell a product on bol.com for €24.95 including VAT (21%). You have sold 200 pieces in a month.

Step 1: Calculate the turnover excluding VAT

Turnover including VAT: 200 × €24.95 = €4,990.00
VAT amount: €4,990.00 / 1.21 × 0.21 = €866.45
Turnover excluding VAT: €4,990.00 - €866.45 = €4,123.55

Step 2: Calculate the total costs

Purchase costs: 200 × €8.00 = €1,600.00
Shipping costs: 200 × €3.50 = €700.00
Platform commission (15%): €4,123.55 × 0.15 = €618.53
Packaging costs: 200 × €0.80 = €160.00
Marketing costs: 200 × €0.50 = €100.00
Return costs (8% return percentage): 16 × €5.00 = €80.00
Overhead costs: €150.00
Total costs: €3,408.53

Step 3: Calculate the total profit

Total profit = €4,123.55 - €3,408.53 = €715.02

This means a profit margin of 17.3% — a healthy percentage for e-commerce. Per product, you earn a net €3.58. With the Boloo Sales Dashboard, you can have this calculation automated for all your products.

Gross profit versus net profit: the difference explained

A common mistake is confusing gross profit with net profit. Below, you'll see the difference in one overview:

Type of profit	Formula	Example (200 products)
Gross profit	Revenue excl. BTW - Purchase costs	€4,123.55 - €1,600.00 = €2,523.55
Operating profit	Gross profit - Business costs	€2,523.55 - €1,658.53 = €865.02
Net profit (total profit)	Operating profit - Overhead	€865.02 - €150.00 = €715.02
Gross profit margin	(Gross profit / Revenue) × 100%	61.2%
Net profit margin	(Net profit / Revenue) × 100%	17.3%

For making strategic decisions, the net profit is the most reliable. A high gross profit can completely evaporate due to high operating costs. That's why it's essential to always apply the full profit formula.

Common mistakes when calculating total profit

In practice, calculating the total profit often goes wrong. These are the most common mistakes entrepreneurs make:

1. Not excluding VAT from revenue

VAT is not income but a pass-through to the tax authorities. Always calculate with revenue excluding VAT. If your selling price is €24.95 including VAT, your actual revenue is only €20.62 per product.

2. Forgetting return costs

On bol.com, the average return percentage is between 5% and 15%, depending on the product category. Clothing even has return percentages of up to 30%. You must include these costs — including return shipping, re-evaluation, and potential value loss — in your calculation.

3. Underestimating platform commissions

Bol.com charges commissions that vary per category, from 5% to 17%. Additionally, you pay fixed sales costs per order. Check the current bol.com commissions to avoid surprises.

4. Ignoring seasonal effects

Your total profit fluctuates over the year. In peak periods like Sinterklaas and Christmas, your revenue is higher, but so are your advertising costs and return percentage. Calculate your total profit per month and look at the annual average for strategic decisions.

5. Not including time spent

As a self-employed entrepreneur, your own time is also a cost factor. If you spend 20 hours a week on your webshop and your total monthly profit is €715, you effectively earn €8.94 per hour. Determine in advance what your hourly rate should be and include it in your profit calculation.

How to increase your total profit

Now that you know how to calculate your total profit, the next step is: improvement. There are three levers to increase your profit:

Higher selling price

This is the most direct way, but also the most challenging in a competitive market. Focus on adding value: better product photos, more detailed descriptions, and excellent customer service justify a higher price. Use the Listing Generator AI to optimize your product pages.

Lower purchase costs

Negotiate with suppliers for volume discounts, compare multiple suppliers, and consider importing directly. For more tips, check out our article on calculating and improving your profit.

Lower operational costs

Automate where possible. Use tools for automatic invoicing, consider LVB (Logistics via Bol) for more efficient shipping, and optimize your ad budget by focusing on top-performing products.

Calculating total profit per product versus per period

There are two ways to approach your total profit: per product or per period. Both are valuable:

Per product: Calculate the profit per item sold. This helps you identify unprofitable products and optimize your assortment. A product with high sales but negative net profit is a hidden cost factor.

To calculate the total profit per product, assign all costs to individual products. This is also known as the product margin. Don't forget to proportionally allocate shared costs (overhead, software).

Per period: Calculate your total profit per month, quarter, or year. This gives you insight into trends and seasonal effects. You can see if your business is growing or shrinking and adjust accordingly. Check out our guide on calculating total revenue for more context on sales analysis.

Useful tools for calculating your total profit

Although you can calculate your total profit manually with a spreadsheet, there are smarter ways. A good dashboard saves you hours of work and prevents calculation errors. With the Boloo Sales Dashboard, you can see your profit per product, per period, and per category at a glance — including all costs like commissions, shipping costs, and returns automatically processed.

Other useful features include automatically calculating your break-even point (the number of products you need to sell to make a profit) and comparing profit margins between different products or periods. This way, you always make data-driven decisions.

Frequently asked questions about calculating total profit

What is the formula for total profit?

The formula is: Total profit = Total revenue (excluding BTW) - Total costs. Total costs include purchase costs, shipping costs, commissions, marketing costs, return costs, and overhead costs.

What is a good profit margin for e-commerce?

A net profit margin between 10% and 20% is considered healthy for e-commerce. Above 20% is excellent. Below 10% makes your business vulnerable to unexpected cost increases.

How do I calculate the profit per sold product?

Profit per product = Selling price excluding BTW - (Purchase price + Shipping costs + Commission + Packaging + Proportional overhead). Multiply this by the number of units sold for the total profit.

Should I include BTW in my profit calculation?

No, BTW is a pass-through cost. Always calculate your profit based on amounts excluding BTW. Calculate the BTW amount by dividing the price including BTW by 1.21 (for 21% BTW) and subtracting the difference.

How often should I calculate my total profit?

At least monthly, but preferably weekly. The more often you track your profit, the sooner you detect trends and problems. An automated dashboard makes this effortless.