Marketplace Selling 101: How to Calculate Your Real Profit After Commission, Shipping and VAT

A product that sells for 500 and cost 300 to source looks like 200 profit. It almost never is. Between the sale and the payout that lands in your account, a marketplace deducts commission, the buyer's VAT gets separated out of what you thought was revenue, and shipping is billed by whichever is bigger — the parcel's actual weight or its dimensional (volumetric) weight. Skip any one of these and the number you're looking at isn't profit, it's a guess.

Step 1: VAT was never your revenue

The selling price a buyer pays is VAT-inclusive, but the VAT portion belongs to the tax authority, not to you — it passes through your account on its way somewhere else. Your actual revenue is:

revenue (excl. VAT) = selling price ÷ (1 + VAT rate)

At a sale price of 500 and 20% VAT, revenue excluding VAT is 500 ÷ 1.20 = 416.67, not 500. Every profit calculation that starts from the full selling price is overstating revenue by the VAT rate. The VAT Calculator does this split both ways — add VAT to a net price, or extract it from a gross one.

Step 2: commission is charged on the gross price

Here's the detail that catches people out: most marketplaces (Turkish and European ones especially) charge their commission percentage on the full selling price, VAT included — not on your VAT-excluded revenue. A 15% commission on a 500 sale is 75, taken before VAT is even considered. This means commission and VAT both come out of the same top-line number, and you can't simply subtract one after already subtracting the other's base.

Step 3: shipping is billed on whichever weight is bigger

A lightweight but bulky item — a lampshade, a pillow, a box of paper cups — doesn't get charged by its actual weight. Carriers bill dimensional (volumetric) weight, calculated from the parcel's dimensions:

volumetric weight = (width × length × height in cm) ÷ divisor

The divisor depends on the carrier and shipping method — Turkish domestic carriers commonly use 3000, air freight typically uses 5000 or 6000. Whichever is larger, the actual scale weight or this calculated volumetric weight, is what gets billed. A parcel that weighs 1 kg but measures 40×30×25 cm has a volumetric weight of (40×30×25)/3000 = 10 kg — you'll be billed for 10, not 1. The Volumetric Weight Calculator runs this for any divisor and tells you which basis applies to your parcel.

Putting it together

total cost   = purchase cost + commission + shipping + packaging + other expenses
net profit   = revenue (excl. VAT) − total cost
margin       = net profit ÷ revenue (excl. VAT)

Worked example: selling price 500, VAT 20%, commission 15%, purchase cost 200, shipping 30, packaging 10.

Line	Amount
Revenue excl. VAT (500 ÷ 1.20)	416.67
Commission (15% of 500)	75.00
Total cost (200 + 75 + 30 + 10)	315.00
Net profit (416.67 − 315.00)	101.67
Margin (101.67 ÷ 416.67)	24.4%

That 101.67 is a long way from the naive "500 − 300 = 200" most people start with, and the Marketplace Profit Calculator runs exactly this arithmetic — enter the same five numbers and it separates VAT, commission, shipping and packaging the same way.

Margin vs markup, while you're at it

Margin (profit ÷ selling price) and markup (profit ÷ cost) are frequently confused and describe different things: a 50% markup on a 200 cost gives a 300 selling price, but that's only a 33% margin, not 50%. The Profit Margin Calculator shows both side by side so a target margin doesn't accidentally get typed in as a markup, or vice versa.