What is net profit in Shopify?

The money left after all costs — product, shipping, fees, marketing, salaries, overhead — are subtracted from revenue.

How is net profit different from gross profit?

Gross profit is revenue minus product cost; net profit subtracts all other costs too.

Why is net profit more important than revenue?

Revenue shows sales; net profit shows what you actually keep — high revenue with low net profit isn't sustainable.

How do I track net profit on Shopify?

Use Shopify reports plus accounting tools to track all costs and calculate net profit.

What's a good net profit margin for ecommerce?

It varies by industry, but 10–20% is a common healthy range for ecommerce.

Glossary Term

N

Net Profit

What's left after all costs — the true bottom line of your store.

Book A Consultation Back to Glossary

Key Takeaways
Net Profit is what's left after all costs are subtracted from revenue.
It's the true bottom line — what you actually keep.
High revenue with low net profit means you're not making money.
Tracking it per product and channel shows what's driving the business.
It's the ultimate measure of store health.

Overview

Net Profit is the money left after all costs — product cost, shipping, fees, marketing, salaries, and overhead — are subtracted from revenue. On Shopify, it's the true bottom line: what you actually keep from every sale.

Net profit is the number that matters. High revenue with low net profit means you're busy but not making money. Tracking net profit per product, per channel, and per month tells you what's actually driving your business — and what's draining it.

Net profit pairs with gross profit (revenue minus product cost), reports (where you track it), and data analytics for insight. It's the ultimate measure of store health.

1

Why Net Profit Matters for Shopify Merchants

1
True Bottom Line
Net profit tells you what you actually keep — revenue alone is misleading.
2
Product Profitability
Track net profit per product to see which items truly make money.
3
Channel Insight
Compare net profit per channel to focus on what's most profitable.
4
Pricing Guidance
If net profit is thin, you may need to raise prices or cut costs.
5
Growth Signal
Growing net profit means a healthy, sustainable business.

2

Improving Your Net Profit

1
Track all costs
Include product cost, shipping, fees, marketing, salaries, and overhead in your calculation.
2
Find margin leaks
Identify products or channels with thin net profit and fix or cut them.
3
Raise prices
If your net profit is thin, a small price increase can significantly improve it.
4
Cut costs
Negotiate with suppliers, reduce shipping costs, and trim unnecessary spend.
5
Focus on winners
Double down on products and channels with the highest net profit.