How to use our new spreadsheet: A How to guide for the Product Profit and Loss Spreadsheet
Recently, a friend requested that I create a spreadsheet to help them understand whether a product would make a profit or loss when sold online.
With that in mind, we have outlined how to use the Product Profit and Loss spreadsheet below.
If you want to download the spreadsheet please visit our downloads page.
How to guide: eCommerce Profit and Loss Calculator
Please note: This spreadsheet is designed for analyzing the pricing of a single e-commerce item.
- It is not intended for consignment or wholesale pricing analysis. * Instead, it focuses on direct-to-consumer online sales.
- Before filling in each column, please conduct your own research.
Guidelines for Use:
Only the yellow boxes are editable; all other sections are protected to maintain functionality.
Enter numbers only in the yellow boxes—do not include currency symbols (£, $, etc.) or percentage signs (%).
The spreadsheet will handle formatting automatically.
The examples below use British Pound Sterling (£) for reference, but the same principles apply to US Dollars ($), Euros (€), and other currencies.
If you are having any problems with this spreadsheet, please email joseph@homeworkinghenry.com
If you want to download the spreadsheet please visit our downloads page.
How to Use the Calculator
- Research Costs & Income Potential
Gather reasonable estimates for each column, including costs and potential earnings.
- Enter Data
Input the appropriate figures into the yellow boxes using numbers only (no currency symbols or percentages).
Once all required fields are filled, the calculator will generate results automatically.
- Analyze Discounts
Use the Discount Analysis tab to assess the impact of any discounts on your pricing and profitability.
- Finalizing Your Calculation
When you have reviewed and finalized your figures, click Print to save or share your results.
Using the Calculator for Pricing & Profit Analysis
This calculator helps you determine how much money you might make with an item and assists in setting a profitable price.
Start by identifying fixed (hard) costs that do not change, such as production and shipping expenses.
Then, experiment with different pricing strategies and variable costs to find the most profitable approach.
By following these steps, you can make informed decisions about pricing and profitability.
If you want to download the spreadsheet please visit our downloads page.
Explaining Each Cost and Income Line
Filling in the Income Lines
Income
This is the price you intend to sell the item for and charge the customer.
Example: If you plan to sell the item for £99.99, enter 99.99 in the yellow box.
Shipping Charged
This is the amount you charge the customer for shipping. If you offer free shipping, enter 0 or leave it blank.
Example: You decide to charge £4 for Royal Mail 2nd Class shipping, so you enter 4 in the yellow box.
Other Fees
This covers any additional charges, such as installation fees or express dispatch costs. If there are no extra fees, enter 0. Example: You do not charge extra fees, so you enter 0 in this box.
Filling in the Cost Lines
Item Cost
This is the total cost to make or purchase the item.
If you make the item, include material, labour, and energy costs.
If you buy the item, include its cost plus a proportional share of shipping and handling.
Example: You buy 100 items for £1 each, with a £10 shipping charge. The cost per item is £1.10, so you enter 1.10 in the yellow box.
Shipping Cost
This is the cost to send your item via a courier such as Royal Mail, UPS, or Evri.
Example: If Royal Mail 2nd Class costs £3.49, enter 3.49 in the yellow box.
Packing Cost
This includes packaging materials like boxes, labels, tape, shipping bags, and bubble wrap.
Example: If your label costs £0.10 and the shipping bag is £0.90, the total packaging cost is £1.00, so you enter 1 in the box.
Inserts & Marketing
This covers any additional items included in the package, such as discount codes or promotional freebies.
Example: You include a small bag of chocolates costing £0.50, so you enter 0.50 in the box.
Staffing Costs
This is the cost to pick, pack, and ship the item, which may be based on your own time.
Example: If you ship 10 packages per hour and pay yourself £30 per hour, the cost per item is £3. If you can ship 30 per hour, the cost per item is £1, so you enter 1 in the yellow box.
Platform Costs
Fixed Costs
Listing Fee
The cost to list the item on a platform.
Example: eBay charges £0.12 per item, so you enter 0.12 in the yellow box.
Sales Fee
A fixed fee per sale, regardless of the item’s price.
Example: If a platform charges £5 per sale, enter 5 in the box.
Payment Processing Fee
The cost of processing payments, often with a fixed and percentage-based element.
Example: PayPal charges £0.25 + 2.3%. Enter 0.25 in the fixed fee box and 2.3 in the variable percentage box.
Shipping & Dispatch Fee
If a platform charges a handling fee separate from mailing costs, enter the amount.
Example: If a warehouse charges £2.50 per item, enter 2.50 in the yellow box.
Platform Subscription Fee
This is the cost of platform membership (e.g., Amazon FBA), divided by the number of expected sales.
Example: If Amazon charges £30 per month and you make 30 sales, the cost per sale is £1. Enter 1 in the box.
Platform Advertising Fee
If a platform charges a fixed fee per sale for advertising, enter the amount.
Example: If eBay charges £5 per sale for promoted listings, enter 5 in the yellow box.
Variable Costs
Listing Fee (%)
Some platforms charge a percentage-based listing fee instead of a fixed fee.
Example: If the platform charges 1% of the sale price, enter 1 in this box.
Payment Processing Fee (%)
Many payment providers charge a percentage fee.
Example: PayPal charges 2.3%. Enter 2.3 in this box.
Shipping & Dispatch Fee (%)
Some platform fulfilment services charge a percentage-based shipping fee.
Example: If the fee is £0.50 + 5%, enter 0.50 in the fixed fee box and 5 in the percentage box.
Platform Advertising (%)
Platforms like eBay allow you to allocate a percentage of the sale price to advertising.
Example: If you set 5% of the sale price for advertising, enter 5 in this box.
Other Platform Fees (%)
If there are any additional percentage-based fees not covered above, enter them here.
Marketing Costs
Each marketing cost should be allocated on a per-sale basis.
Social Media Marketing
Costs for advertising on platforms like Facebook, Instagram, Twitter, TikTok, or Reddit.
Example: If you spend £5 per sale on Facebook Ads, enter 5 in this box.
Digital Marketing
Costs for online marketing outside of social media, such as Google Ads.
Example: If you spend £1 per sale on Google Ads, enter 1 in this box.
Offline Marketing
Costs for offline promotions like direct mail, flyers, TV ads, or billboards.
Example: If you spend £10 per sale on direct mail, enter 10 in this box.
Other Costs
These three boxes allow you to allocate additional fixed costs that are unique to your business.
Any Questions?
If you have any questions about this spreadsheet, please email joseph@homeworkinghenry.com.
If you want to download the spreadsheet please visit our downloads page.