Amazon and Shopify Fees: How Do You Know If You're Actually Making Money After All of Them?
To know if you're actually making money after Amazon and Shopify fees, you need to calculate your true net margin per order — subtracting every platform fee, payment processing charge, fulfillment cost, and applicable tax from your selling price, not just your product cost. Most Canadian e-commerce owners are surprised to find their real margin is 10–20 percentage points lower than they thought.
The Fee Stacks Are Different — and Both Are Sneaky
Amazon and Shopify don't just charge one fee. They charge several, at different stages, with different names. Here's what's actually biting into each sale:
Amazon (typical third-party seller): - Referral fee: 8–15% of the sale price, depending on category (beauty and health tend to sit at 8–15%) - FBA fulfillment fee: charged per unit, based on size and weight — often $3–$8+ per item - FBA storage fees: monthly, and punishing in Q1 after holiday inventory buildup - Advertising (PPC): frequently 10–30% of revenue for competitive categories — this one is easy to forget when calculating margin - FX and remittance fees: if you're a Canadian seller receiving USD payouts and converting to CAD
Shopify: - Monthly platform fee: $39–$399+ CAD/month (Basic to Advanced), spread across your order volume - Payment processing: 2.4–2.9% + $0.30 per transaction via Shopify Payments; higher if you use a third-party gateway - App fees: inventory management, reviews, subscriptions, upsell tools — these add up fast and are rarely tracked as a cost of sale - Shipping costs: even with carrier discounts, often not fully recovered in what customers pay
The trap is that none of these fees show up together in one place. Amazon shows you a "net proceeds" number. Shopify shows you gross revenue. Neither hands you a clean profit figure.
Build a "True Margin" Calculation Per Order
The only way to know if you're making money is to calculate what one sold unit actually returns. A simple framework:
Selling Price
− Product Cost (COGS)
− Platform/Referral Fee
− Payment Processing Fee
− Fulfillment / Shipping Cost
− Your Share of Advertising Spend (ad cost ÷ units sold)
− Your Share of Platform Subscription (monthly fee ÷ units sold)
─────────────────────────────────────
= True Net Margin per Unit
Do this for your top 10 SKUs. You will almost certainly find that two or three of them are barely breaking even — or actually losing money once ads are included.
Where Canadian Sellers Specifically Lose Margin
A few leaks that are especially common for Canadian e-commerce businesses:
- Currency conversion: Amazon Canada (amazon.ca) pays in CAD, but Amazon US (amazon.com) pays in USD. If you're not tracking the conversion loss and bank fees, that's real money gone.
- GST/HST on fees: Amazon and Shopify charge GST/HST on their fees to Canadian businesses. You can claim this back as an Input Tax Credit (ITC) — but only if you're tracking it. Many owners don't, and quietly leave money on the table every quarter.
- Shipping undercharges: charging flat-rate shipping that doesn't reflect actual carrier costs is one of the most common ways growing stores quietly bleed margin.
The Multi-Platform Problem
If you're selling on both Amazon and Shopify — and many Canadian e-commerce owners are — you need to run this analysis per channel, not just in aggregate. A product that's profitable on Shopify may be margin-negative on Amazon once FBA and PPC are factored in. Blending the numbers hides the truth.
This is precisely the kind of multi-platform financial picture that SGML Accounting works through with clients — not just reconciling the numbers, but translating them into channel-by-channel decisions about where to actually grow.
The Honest Bottom Line
Platform dashboards are built to show you revenue. Your job — or your accountant's — is to show you profit. If you've never built a true per-unit margin calculation that includes every fee, advertising cost, and currency adjustment, you don't yet know what you're actually making. That's the number worth knowing.
Frequently asked questions
What is a good profit margin for a Canadian e-commerce business after all fees?
A healthy net margin for Canadian e-commerce typically falls between 15–30%, depending on category. Sellers in competitive niches like supplements or skincare on Amazon often see net margins under 15% once advertising is included. If you're below 10%, there's almost always a fee or cost leak worth investigating.
Does Shopify charge GST/HST on its fees to Canadian businesses?
Yes. Shopify charges GST/HST on its subscription and transaction fees to Canadian-registered businesses. The good news is you can claim these as Input Tax Credits (ITCs) on your GST/HST return — but you need to be tracking them properly to do so.
How do I compare profitability between my Amazon and Shopify channels?
Run a true net margin calculation separately for each channel, using the same formula: selling price minus COGS, platform fees, payment processing, fulfillment, and advertising. A product can be profitable on Shopify and margin-negative on Amazon — blending the two hides that reality.
Are Amazon FBA fees tax-deductible for Canadian sellers?
Yes — Amazon FBA fees, referral fees, advertising costs, and Shopify subscription fees are all legitimate business expenses deductible against your Canadian business income. Proper tracking is essential, especially for sellers with both CAD and USD transactions.
Why does my Shopify revenue look healthy but my bank account doesn't reflect it?
Shopify reports gross revenue before fees, refunds, chargebacks, shipping costs, and app charges are deducted. The gap between what Shopify reports and what lands in your bank is exactly where your margin is hiding — or disappearing. A proper bookkeeping reconciliation maps every dollar from gross sale to net deposit.
Every business's fee structure, tax position, and channel mix is different — the frameworks here are educational starting points. Talk to your accountant about how these apply to your specific situation.