How to Calculate Craft Profit and Profit Margin
Profit is what remains after cost and fees, not the gap between supply cost and the listing price.
Use net revenue, not the listing price
Profit = money received after fees − total cost. Total cost includes materials, labor, packaging, overhead and waste. If you skip labor, you are measuring cash leftover, not whether the work paid.
On marketplaces, fees often include a listing fee, a percent of item plus shipping, and payment processing with a fixed per-order charge. Small items feel the fixed charge more.
Gross profit vs net profit for makers
Gross Profit is Selling Price minus Direct Materials and Direct Labor. Net Profit is what is left after deducting overhead, packaging, platform fees, payment processing, and taxes.
Focusing only on gross profit gives a false sense of success. If a product generates $15 in gross profit but incurs $6 in marketplace fees, $2 in shipping supplies, and $4 in allocated studio overhead, your real net profit is only $3.
Track profit per hour
A $12 profit on a piece that took four hours is $3 per hour. A $8 profit on a twenty-minute print is a different business. Divide profit by hours of your time, including packing.
The Craft Profit Calculator and the 3D printing profit calculator both show this so a “good margin” on paper does not hide slow work.