Gross Profit: Revenue Minus COGS

Gross Profit measures revenue minus cost of goods sold. It shows product-level profitability before operating expenses.

Formula

Gross Profit = Revenue − COGS

Formula Components

Metric	Definition
Net Revenue	Revenue after discounts and refunds
COGS	Cost of goods sold for products

Metadata
Type	Currency
Data Source	Shopify
Aggregation	Sum

Example

Your Shopify store generated $100,000 in net revenue with $40,000 in COGS.

Metric	Value	Calculation
Net Revenue	$100,000	After discounts/refunds
COGS	$40,000	Product costs
Gross Profit	$60,000	$100,000 − $40,000

A gross profit of $60,000 means you have $60K remaining to cover fulfillment, marketing, and operating expenses.

How It Works

Gross Profit is the first step in calculating contribution margin. It subtracts only the direct cost of products from net revenue. This metric is useful for understanding product-level profitability before any operating costs are applied.

When to Use

Scenario	Action
Product profitability analysis	Compare gross profit across product lines
Pricing decisions	Ensure gross profit covers operating costs
Supplier negotiations	Understand COGS impact on profitability
Margin trend monitoring	Track gross profit over time

Metric	Relationship
NC Gross Profit	Gross profit from new customers
RC Gross Profit	Gross profit from returning customers
Gross Profit % (of Gross)	Gross profit as percentage of gross revenue
Contribution Margin	Gross profit minus variable costs

See all Contribution Margin metrics →

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​Formula

​Formula Components

​Example

​How It Works

​When to Use

​Related Metrics

Formula

Formula Components

Example

How It Works

When to Use

Related Metrics