# Shopify Metrics Glossary

In this article, you'll find a list of metrics used in TrueProfit Profit Analytics and Product Analytics. Quickly search for the term you want using Ctrl+F.

## A. Metrics in Profit Analytics

Metrics | Definitions | Formulas |
---|---|---|

Revenue | The final income before any expenses are subtracted, also known as Total sales in Shopify. | Revenue = Gross Sales – Discounts – Refunds + Taxes Charged + Shipping Charged |

Total Cost | The sum of all expenses occurring during the operation of your business. | Total Cost = Cost of Goods Sold + Handling Fees + Shipping Cost + Ad Spend + Transaction Fees + Custom Spend |

Net Profit | The amount of money you gain after all costs are deducted. | Net Profit = Revenue + Tips + Gift Card Sales - Total Cost - Taxes Charged |

Net Margin (%) | Your business's profitability when comparing net income to sales revenue. The higher the margin rate, the more profitable you are for each dollar spent. | Net Margin = (Net Profit / Revenue)*100 |

Ad Spend | Total cost for advertising pulled from ads platforms. TrueProfit currently supports: Facebook, Google Ads, Bing, Amazon, Tiktok, Pinterest, and Snapchat. Learn more | |

Ad Spend Per Order | The average amount of ad spent to acquire an order. | Ad Spend Per Order = Ad Spend / Total Orders |

Average Order Value (AOV) | The average amount of money a customer spend in one order. Higher AOV often means higher profit margin, as most cost per order is fixed whether someone buys more or less. | Average Order Value = Revenue / Total Orders |

Average Order Profit | The average profit you earn from one order. | Average Order Profit = Profit / Total Orders |

Cost of Goods Sold | Cost of goods sold (COGS) is the direct cost of manufacturing your products. Learn more | |

Shipping Costs | Shipping costs are the costs you need to pay in order to deliver your products. Learn more | |

Shipping Charged | The shipping charge is what your customers pay for shipping. This is set up in Shopify and automatically pulled into True Profit. | |

Custom Cost | Other expenses such as software/apps, influencers, rent, salary, Shopify plan, and taxes. Learn more | |

Transaction Fee | The amount of money that your payment gateways (Paypal, Stripe, etc.) and Shopify charge for each of your order. Learn more | |

Taxes | Taxes are what your customers are obliged to pay when checking out on your Shopify store. The default sale tax rates are calculated and updated regularly by Shopify. True Profit displays these tax data pulled in from your Shopify Shop. | |

Tips | Online tipping enables your customers to add a tip to their order on the payment page when they check out. Tips are calculated either by a percentage of the order total or by a custom amount. This is set up in Shopify and automatically pulled into TrueProfit. | |

Handling Fees | This is the amount that covers all expenses regarding fulfillment, such as warehouse storage cost, shipment cost, and packing cost. If Handling fee is not set for a product, the default value will be zero. | |

ROAS | Return on ad spend (ROAS) measures the amount of revenue your business earns for each dollar spent on advertising platforms. | ROAS = Revenue/Total Ads Spend |

POAS | Profit on Ad Spend (POAS) measures the amount of profit your business earns for each dollar spent on advertising platforms. | POAS = Gross Profit/ Total Ad Spend |

Purchase Frequency | The average number of times your customers make a purchase in a certain period. | Purchase Frequency = Total Orders / Total Customers |

New Customers Per Order | The percentage of new customers in total orders in the certain period. | New Customers Per Order = (Number of New Customers / Total Orders)*100 |

NcROAS | Return on ad spend from new customers (ncROAS) measures the amount of revenue from new customers your business earns for each dollar it spends on advertising platform. | Return on Ad Spend from New Customers = Total New Customers Revenue / Total Ad Spend |

## B. Metrics in Product Analytics

Metrics | Definitions | Formulas |
---|---|---|

BEP (Break-even Cost per Purchase) | The maximum cost to acquire an order so you can break even or start making profit. | BEP = (Sale Price - Total Cost) * UPT |

BER (Break-even Return On Ad Spend) | The minimum ROAS (Return On Ad Spend) on Facebook you have to earn so you can break even or start making profit. | BER = (Sale Price * UPT) / BEP |

Revenue | The total amount of money that the product has sold for. | |

Profit | The amount of money you've earned from selling a product. | Profit = Revenue - Total Cost |

Cost | The total cost of the product. | Cost = COGS + Shipping Cost + Transaction Fees |

Views | The number of page views that the product received. | |

ATC (Add to cart) | The number of times the product was added to the shopping cart. | |

ATC rate (Add-to-cart rate) | The percentage of sessions where the product was added to the shopping cart. | ATC rate = ATC / Views |

Orders | The total number of orders of the product. | |

Units Sold | The total number of individual items sold of a product. | |

UPT (Units per Transaction) | The average items per order. If no order is made, this value will be equal to 1. | UPT = Total Units Sold / Total Orders |

Conversion rate | The percentage of sessions where the product was purchased. | Conversion rate = Purchases / Views |

Purchases | The number of times the product was purchased. |

## C. Metrics in Lifetime Value

Metrics | Definitions | Formulas |
---|---|---|

Repurchase Rate | Repurchase Rate is the percentage rate of customers having placed another order within a certain period of time. | Repurchase Rate = Number of second-time-purchase customers / Number of customer |

LTV | Lifetime Value (LTV) is the average revenue that a customer will generate throughout their lifetime as a paying customer. | LTV = Total Revenue / Total Customers |

CAC | Customer Acquisition Cost (CAC) is the total cost of sales and marketing efforts that are needed to acquire a customer. | CAC = Total Ad Spend / Number of Acquired Customers |

LTV:CAC ratio | This ratio shows the Lifetime Value of a customer as compared to the cost of acquiring them. |

Updated on: 06/04/2023

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