When a sale notification arrives, the amount shown is revenue: what the customer paid. What you actually keep is smaller. Working out the difference takes a few minutes, and it tells you whether a product is worth promoting, whether your ads pay for themselves, and whether your price needs to change.
Revenue is not profit
Revenue is the selling price. Profit is revenue minus the costs of that sale. For a digital download the costs are mostly fees, which is why profit is often lower than sellers expect on cheap products and higher than they expect on more expensive ones.
Step by step
- Start with the selling price, before any fees. If you charge VAT or sales tax and pass it on, use the price without the tax.
- Work out the percentage fees. Add up every fee charged as a percentage, such as a marketplace transaction fee and a payment processing fee, and apply the total to the price.
- Add any fixed fees charged on each sale, such as a flat processing or listing fee.
- Add other costs per sale, such as a licence that charges you each time you sell.
- Add advertising per sale, if you advertise. Divide your ad spend by the number of sales it brought in: £15 of ads that produced 10 sales is £1.50 per sale.
- Subtract the total from the price. That is your estimated profit per sale. Divide it by the price for your margin.
Profit per sale = price − (price × percentage fees) − fixed fee − other costs − advertising
A worked example
A set of printable worksheets sells for £9.50. These fees are hypothetical, chosen only to show the method: a 6.5% platform fee, 4% payment processing, a £0.20 fixed fee, and advertising that works out at £1.50 per sale.
| Selling price | £9.50 |
|---|---|
| Platform fee (6.5%) | −£0.62 |
| Payment processing (4%) | −£0.38 |
| Fixed fee | −£0.20 |
| Advertising per sale | −£1.50 |
| Total costs | −£2.70 |
| Estimated profit | £6.80 |
| Profit margin | 71.6% |
Over 40 sales in a month, that is £380.00 of revenue and £272.10 of estimated profit. Without the advertising, each sale would earn about £8.30, so the ads need to bring in sales you would not otherwise have made to be worth their cost.
Costs that are not per sale
Some costs happen once, or monthly, rather than on each sale: the hours you spent designing, fonts or graphics you bought outright, mockup templates, software subscriptions. Spreading them across sales in the calculation above makes the per sale figure hard to compare. Instead, work out how many sales cover them.
If you spent £60 on a font licence and mockups for the worksheets, £60 ÷ £6.80 is about 8.8, so the first 9 sales pay back that cost. Everything after that is profit on the product.
What this number leaves out
The method above, and the Profit Calculator, deliberately leave out a few things. Keep them in mind:
- Tax. Income tax on your profit, and VAT or sales tax if they apply to you. Rules depend on where you and your customers are, so check with your tax authority or an accountant.
- Refunds. If you give occasional refunds, your real profit will be a little lower than the estimate.
- Currency conversion. Selling in one currency and being paid in another can add a conversion fee.
- Your time. A product that earns £6.80 a sale may still not be worth it if it needs hours of support.
Check your platform's current fees
Fees change, and they can depend on your country, payment method and account. Before you rely on any figure, check your platform's own fee pages, for example Etsy's fees and payments policy or Gumroad's pricing page. This site is independent and is not affiliated with either.
Try it with your own numbers
The Profit Calculator works through these steps for any price and fees you enter, and shows totals for any number of sales. If you want to follow your real sales month by month across several products, the Digital Product Profit Tracker spreadsheet does that, including ad spend and refunds.
The figures in this guide are hypothetical. Always use the current fees from your own platform's fee page.