The average profit from products per order, calculated before fulfillment and transaction costs.
| Metric | Definition |
|---|
| Product Margin | Gross revenue minus cost of goods sold |
| Orders | Total number of completed orders in the period |
| Metadata | |
|---|
| Type | Currency |
| Data Source | Shopify |
| Aggregation | Average |
Example
Your store processed 1,247 orders in January with a total Product Margin of $31,175:
| Metric | Value | Calculation |
|---|
| Gross Product Revenue | $87,290 | Sum of product sales |
| Product COGS | $56,115 | Sum of product costs |
| Product Margin | $31,175 | $87,290 − $56,115 |
| Product Margin Per Order | $25.00 | $31,175 ÷ 1,247 |
How It Works
Product Margin Per Order divides total Product Margin by Order Count. Product Margin is the difference between Gross Revenue and COGS. This metric isolates product profitability before fulfillment costs, transaction fees, and other variable expenses are applied.
When to Use
| Scenario | Action |
|---|
| Evaluating product mix profitability | Compare margin per order across product categories |
| Setting free shipping thresholds | Ensure threshold covers product margin |
| Analyzing bundle performance | Check if bundles improve per-order margin |
| Identifying margin erosion | Track trends to catch declining profitability early |
| Metric | Relationship |
|---|
| Product Margin | Numerator: total margin across all orders |
| Orders | Denominator: order count for averaging |
| COGS Per Order | The cost component per transaction |
| Gross Revenue | Revenue component of the margin calculation |
