--- title: "Which Sales Channel Is Actually Profitable? A Method | MCC" description: "Selling on a marketplace, your own site and in person? How to compare channels after fees, shipping, returns and your own time, with a worked example…" url: "https://mcc-solutionsnj.com/bookkeeping/guides/which-sales-channel-is-actually-profitable" --- Bookkeeping guide · Updated October 26, 2026 # Which Sales Channel Is Actually Profitable? A Method Revenue by channel is easy to find. Profit by channel is not, and the two often rank the channels in opposite order. The channel with the most sales may be the one that pays you the least. By [Matthew Coleman](/about), MCC Solutions Want this handled for you? Monthly bookkeeping, cleanup and year-end close for small businesses. Start with a free health check of your books. [Free health check](/bookkeeping/health-check)[Get a quote](/bookkeeping/#interest) **Related:** [Trial balance explained](/bookkeeping/guides/trial-balance-explained) · [Owner contribution or loan](/bookkeeping/guides/owner-equity-and-capital-contributions) · [Closing entries and retained earnings](/bookkeeping/guides/closing-entries-and-retained-earnings) **Free tools:** [What should I charge per hour?](/bookkeeping/freelance-hourly-rate-calculator) · [Depreciation schedule calculator](/bookkeeping/depreciation-calculator) [![Intuit ProAdvisor Gold tier badge](/img/credentials/intuit-proadvisor-gold.png)](https://proadvisor.intuit.com/app/accountant/search?searchId=matthew-coleman77)Gold tier in Intuit's ProAdvisor program. [See my Intuit listing](https://proadvisor.intuit.com/app/accountant/search?searchId=matthew-coleman77) Keeping your own books? Tallyfinch does invoices, bank import and reports on your computer. [See Tallyfinch](/bookkeeping/mcc-books-downloadable-bookkeeping-software) ## Start with contribution, not revenue For each channel, take the sales and subtract only the costs that exist because you sell there: the cost of the goods, shipping you pay, platform and payment fees, returns and refunds, and anything you pay to list or promote. What is left is the contribution from that channel. It is the number that tells you whether the channel earns its place. Leave rent, insurance and your own software out at first. Those costs exist whether or not you use a given channel, so splitting them across channels mostly produces arguments, not decisions. ## A worked example Say a marketplace brings $5,000 of sales in a month. Goods cost $2,000, fees and promoted listings take $900, shipping you cover is $450 and returns cost $250. Contribution is $1,400, or 28 percent of sales. Your own website brings $3,000 of sales with goods at $1,200, card fees at $100, shipping at $300 and returns at $60. Contribution is $1,340, or about 45 percent. The marketplace is bigger and the website is better. If you could trade some marketplace effort for a bit more website traffic, the numbers favor the trade. Without the split, the marketplace would have looked like the star. ## Count what events and markets really cost For in-person sales, add the booth or table fee, travel, supplies you bought for the day, and the hours you stood there. A busy craft fair can still lose money once the fee and the leftover stock are counted. Record each event as its own line so you can compare one to the next. Keep the hours too, even if you do not charge yourself for them. A channel that earns a decent contribution but eats two weekends a month has a cost that the spreadsheet alone will not show. ## Set your minimum price per channel Fees differ by channel, so the same item needs a different price to earn the same margin. Work backward: take your cost, add the shipping you absorb, divide by one minus your target margin and the fee percentage. That gives the lowest price that still hits your target on that channel. If the market will not pay that price on a channel, the channel is a clearance outlet, not a business line. That is a fine role, as long as you know it is one. ## Keeping the inputs honest Use fees from your own statements, not from a pricing page, because promotions, tiers and add-ons change what you actually pay. Reconcile the payout from each platform to your bank deposit each month so refunds and held funds do not hide in the totals. A workbook that does this arithmetic for you saves the setup. The Sales-Channel Profit Tracker on this site lays out channels, events, a sales tax tracker and the minimum-price calculation, using fees you enter yourself. Your CPA can tell you how to treat each cost for tax. ## Common questions **Should I drop my least profitable channel?** Not automatically. A channel can bring new customers who later buy elsewhere, or it can clear slow stock. Decide on purpose, with the contribution numbers and the hours in front of you. **How often should I run this comparison?** Monthly is enough for most sellers, and after any fee change or major promotion. **Do I include sales tax in channel sales?** No. Sales tax you collect is owed to the state, so track it separately and leave it out of revenue and margin. This guide is general information, not tax, legal or accounting advice. Rules, fees and due dates change; check with the IRS, the NJ Division of Taxation or a licensed professional for your situation. Let us handle it [### Monthly bookkeeping Categorizing, reconciling and monthly reports, with cleanup, payroll and NJ filings available. Bookkeeping →](/bookkeeping/) [### Square, Stripe and payment processors How sales from Square, Stripe, PayPal and other processors should flow into your accounting software, and why deposits never match sales. Square & Stripe →](/bookkeeping/software/square-and-stripe)[### QuickBooks Online Monthly bookkeeping, cleanup and reconciliation in QuickBooks Online for New Jersey small businesses. Your account stays in your name. QuickBooks →](/bookkeeping/software/quickbooks-online) More guides - [Was That Craft Fair or Pop-Up Worth It? How to Tell](/bookkeeping/guides/was-that-craft-fair-or-pop-up-worth-it) - [Are My Books Ready for My CPA or a Lender? A Checklist](/bookkeeping/guides/are-my-books-ready-for-my-cpa-or-lender) - [How to Explain Month-Over-Month Variances in Your Books](/bookkeeping/guides/how-to-explain-month-over-month-variances) - [Occupancy vs Net Per Night: What Makes a Rental Profitable](/bookkeeping/guides/occupancy-vs-net-per-night-airbnb-profit) Free tool - [Bookkeeping health check](/bookkeeping/health-check) Related - [Sales-Channel Profit Tracker (Excel)](/toolkits/sales-channel-profit-tracker) - [Bookkeeping for ecommerce sellers](/bookkeeping/guides/bookkeeping-for-ecommerce-sellers) [All guides](/bookkeeping/guides) Reach small business owners, freelancers and bookkeepers who read this guide: [advertise here](/advertise#bookkeeping). Tallyfinch ### Books you keep on your own computer Tallyfinch does invoices, bills, bank import, reconciliation and the main reports, in a file you own. $99 once, then $5 a month for updates; the app keeps working if you stop the plan. It does not do payroll or sales tax filing. The free download records up to 60 entries. [See Tallyfinch](/bookkeeping/mcc-books-downloadable-bookkeeping-software) [Download it free](/tools/pro/trial/mccBooks) [Compare the three apps](/software) ## Rather have us keep the books? Ask for a quote. [Get a Quote](/bookkeeping/#interest)[Call (908) 444-6373](tel:+19084446373)