Revenue

The final money you receive from customers, also known as Total sales in Shopify. 

Revenue = gross sales – discounts – refunds + taxes + shipping charges

Note: taxes and shipping are the money you charge customers.


Total cost

The sum of all expenses occurring during the operation of your business.

Total cost = Cost of goods sold + Shipping cost + Ad spend + Transaction fees + Custom spend


Net profit

The amount of money you gain after all costs are deducted. 

Net profit = Revenue - Total cost


Net profit margin (%)

The measurement of your business's profitability. The higher the number, the more profitable the company. A low profit margin might indicate a problem that is interfering with profitability potential such as unnecessarily high expenses.

Net profit margin = Net profit / Revenue


Ad spend 

Total cost for advertising such as Facebook Ads, Google AdWords.

Currently TrueProfit supports adding Facebook ad spend, pulled from your chosen Facebook ad account(s). The next versions will also cover Google AdWords.


Ad spend per order

The average amount of ad spend to acquire an 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 how much the products cost you, as opposed to how much you charge customers (Sales price). For most dropshippers, COGS is the product prices you pay on AliExpress.


Shipping cost

In TrueProfit, a fixed amount of shipping cost is added to each order. 

Shipping cost = Flat rate * Total orders


Custom cost

Other expenses such as software/app, influencers, rents, salary, Shopify plan, taxes. 


Transaction fee

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

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