Calculating profits from e-commerce sales is crucial, but it’s also hugely beneficial to predict the profit you will be able to earn before you even start selling.
Maximizing your profitability before you even set your price entails an understanding of what profits you can expect.
This is the calculation for profit:
Profit = Selling Price - (Product Cost + Selling Expenses)
Selling expenses include everything you had to pay for in order to sell your product such as taxes, shipping costs, etc.
You also need to include a risk analysis based on consumer demand and your competition, in order to predict how much inventory you will sell and profit you can make.
This isn’t something you need to do on your own thankfully as you can outsource to an expert, or use one of the many available tools and online resources. If you have a Shopify store, you could even add one of their profit tracking apps to your store.