How profit is calculated

Easy Profit Calculator turns every paid order into a true profit number by subtracting every cost that order really carried, then adds your monthly business costs on top to reach your bottom line. Here is exactly what goes in.

What counts as revenue

Revenue is your net sales after discounts and after any refunded amounts, for orders in the period you are looking at. It is not gross sales, and it is not the order total a customer paid. Sales tax and gift card sales are handled separately so they do not inflate your profit.

The costs we subtract on each order

For every order, we subtract:

1. Product cost (COGS) - what the goods sold actually cost you.
2. Payment fees - what your payment provider charged to process the sale.
3. Shipping cost - what it cost you to ship, not what the customer paid.
4. Return costs - labels, handling, and lost value when an order is returned.
5. Ad spend attributed to the order - the marketing cost tied to that sale.
6. Affiliate payouts - any commission owed on the sale.

What is left is the order's net profit. It does not yet include your monthly fixed costs or salaries.

Your bottom line each month

To get the bottom line shown on the dashboard, we take the net profit of every order in the month and then subtract your monthly fixed costs, salaries, and any marketing spend you entered by hand. That final figure is your net profit after everything.

A few related terms you will see:

• Gross margin: revenue minus product cost, divided by revenue. It ignores shipping, fees, and ads.
• Contribution margin: order-level net profit divided by revenue, before fixed costs.
• Net margin: net profit after everything, divided by revenue.

Where the numbers come from

Every figure is built from your real Shopify orders plus the costs you set in Cost rules. The single biggest input is product cost - if it is missing, profit looks higher than it really is. See Add your product costs to fill it in.