Short answer. Your real net margin is what is left after landed cost, platform commission, payment costs, return costs, shipping and exchange rate. A standard report in your accounting software shows revenue or a rough gross margin, not that allocation down to product and order level. That is why you steer on revenue. Real margin per product, channel and supplier requires its own allocation.
Your revenue is growing. Whether your profit is growing with it, you do not actually know for sure. That is the quiet trap of the reseller: you steer on the number you can see, because the number that matters never adds up anywhere.
Why your margin never adds up
Your costs are scattered. Purchasing in one system, commission in the marketplace portal, payment costs at your provider, shipping at the carrier, returns somewhere else again. Your accounting software, whether that is Exact or another package, adds up revenue and a rough gross margin. It does not calculate a real net margin per SKU, because your cost structure and allocation are yours alone.
Calculating landed cost
Real margin starts with real purchasing costs. Landed cost is not only the purchase price, but purchasing plus import duties plus freight, per product. With cross-border purchasing that makes a big difference. If you calculate with the bare purchase price, your margin looks healthier than it is.
Everything off, down to order and SKU level
The real net margin is what is left after everything has been deducted:
- Landed cost (purchasing, import duties, freight)
- Platform commission and any creator commission
- Payment costs from your provider
- Return costs (see allocating return costs to your margin)
- Shipping and storage
- Advertising costs and exchange rate
Once you calculate that per order and per SKU, only then do you see which product, which channel and which supplier actually makes money.
Comparing margin per supplier and per route
For the reseller there is an extra layer. You buy the same products from different sources, at different prices, tiers and lead times. Which source actually makes money?
You only see that when you link margin to the purchasing route, and that only works when your sourcing overview adds up. Margin per supplier is not a report you pull out of a package. It is an allocation that follows your routes.
Why no standard package covers this
An ERP has reporting, but it does not model your allocation. That is why this runs in Excel for most resellers, alongside the software, with yesterday's numbers. That is exactly the build-or-buy line: the happy path of revenue reporting is covered, your net margin allocation is not.
This needs to be calculated, down to the order. The question is not whether, but whether it can be done today in a smarter way and with less manual work than in Excel with yesterday's numbers. It can. I first go through your process, and then build the allocation that runs automatically with your sales, so you see your real margin in real time.
Frequently asked questions
How do I calculate my net margin per product?
Deduct from the selling price all costs tied to that product: landed cost, commission, payment costs, return costs, shipping and advertising costs. What is left is your real net margin, not the gross margin your accounting software shows.
What is landed cost and how do I calculate it?
Landed cost is the total purchasing cost of a product: purchase price plus import duties plus freight. With cross-border purchasing this is considerably higher than the bare purchase price, and without landed cost your margin looks healthier than it is.
How do I see which sales channel brings in the most?
By calculating your margin per channel after deducting all channel-specific costs such as commission and returns. Revenue per channel says nothing; only the net margin per channel shows which channel makes money.
Why does my margin not add up in my accounting software?
Because a standard package shows revenue and a rough gross margin, but does not allocate your costs down to order and SKU level. That allocation differs per company and falls outside standard reporting.
Further reading
- Tracking purchasing across multiple suppliers
- Allocating return costs to your margin
- VAT and margin in cross-border sales
I am Ricardo Theijs of RNT Projects. I ran cross-border e-commerce myself for years and build the margin allocation that standard reports do not deliver.
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