Profit Margin on Imported Products — The Math Most Importers Get Wrong
Two mistakes destroy import margins before the first sale: calculating off the invoice price instead of landed cost, and confusing markup with margin. Both make a losing product look like a winner. Here's the correct formula, the margin-vs-markup trap, and realistic targets per sales channel.
The Margin vs Markup Trap — Same Numbers, Different Answers
| Landed cost per unit | $30.74 |
| Selling price | $49.00 |
| Profit per unit | $18.26 |
| Margin (profit ÷ price) | 37.3% |
| Markup (profit ÷ cost) | 59.4% |
Want a true 50% margin on this unit? Price = $30.74 ÷ (1 − 0.50) = $61.48. Applying "50% markup" instead gives $46.11 — which is only a 33% margin. That 17-point gap is the most expensive spreadsheet cell in e-commerce.
Realistic Margin Targets by Channel (2026)
Gross margin on landed cost, before advertising. Averages from import-heavy catalogs.
| Channel | Target gross margin | Reality check |
|---|---|---|
| Amazon FBA | 25–35% | After referral fee (~15%) + FBA fees — start from landed cost, not invoice |
| Own Shopify store | 50–65% | You keep the platform margin but pay for traffic (ads eat 10–25% of revenue) |
| Wholesale / B2B | 15–30% | Volume compensates; payment terms risk is the hidden cost |
| Retail (own shelf) | 50–60% | Keystone pricing (2× landed) is the floor, not the goal |
| Marketplaces (eBay/Etsy) | 30–45% | Fees 13–17% + promoted listings |
Your margin has a silent enemy: tariff drift
Margins are set once; tariffs change quarterly. The 2026 Section 122 surcharge and the forced-labor tariff that replaced it moved most US import lanes by 10 points — any store that didn't reprice absorbed it straight out of margin. The fix is procedural, not clever: recalculate landed cost on every shipment, and set an alert on your lanes so a duty change triggers a repricing review instead of a quiet quarterly loss.
Get the Landed Cost Your Margin Math Needs
Margin starts from the true per-unit cost. Calculate it — duty stack included — then apply price = cost ÷ (1 − target margin). The result screen's Sell Price Advisor does exactly that for 20/35/55% targets.
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Instant Landed Cost
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