> ## Documentation Index
> Fetch the complete documentation index at: https://docs.upstackdata.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Gross Profit: Revenue Minus COGS

> Track gross profit for your Shopify store. Understand revenue minus cost of goods sold for product-level profitability.

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

## Formula

<Info>
  **Gross Profit** = **Revenue** − **COGS**
</Info>

### Formula Components

| Metric                                                           | Definition                          |
| ---------------------------------------------------------------- | ----------------------------------- |
| [**Net Revenue**](/reference/metrics/orders/revenue/net-revenue) | Revenue after discounts and refunds |
| [**COGS**](/reference/metrics/orders/cogs/cogs)                  | Cost of goods sold for products     |

| Metadata        |                             |
| --------------- | --------------------------- |
| **Type**        | Currency                    |
| **Data Source** | [Shopify](/sources/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               |

***

## Related Metrics

| Metric                                                                                                | Relationship                                |
| ----------------------------------------------------------------------------------------------------- | ------------------------------------------- |
| [NC Gross Profit](/reference/metrics/orders/contribution-margin/new-customer-gross-profit)            | Gross profit from new customers             |
| [RC Gross Profit](/reference/metrics/orders/contribution-margin/returning-customer-gross-profit)      | Gross profit from returning customers       |
| [Gross Profit % (of Gross)](/reference/metrics/orders/contribution-margin/gross-profit-gross-percent) | Gross profit as percentage of gross revenue |
| [Contribution Margin](/reference/metrics/orders/contribution-margin/contribution-margin)              | Gross profit minus variable costs           |

[See all Contribution Margin metrics →](/reference/metrics/orders/contribution-margin)