Include the product cost, inbound shipping to your warehouse, marketplace fees (typically 8-15%), payment processing (2-3%), outbound shipping if you offer free delivery, and packaging materials. These combined costs often significantly exceed the raw product cost.

Successful e-commerce businesses typically target a net margin of 10-20% after all costs. Margins below 10% leave little room for error or growth investment. If your margins are thin, look for ways to increase average order value or reduce fulfillment costs.

Product returns can devastate margins since you absorb return shipping, restocking labor, and potential inventory loss. E-commerce return rates average 20-30% for apparel. Build expected return costs into your margin calculations to avoid unpleasant surprises.