The percentage of revenue remaining after subtracting the cost of goods sold.
| Metric | Definition |
|---|
| Gross Revenue | Total revenue from product sales before discounts and adjustments |
| COGS | Cost of goods sold from Shopify product inventory data |
| Metadata | |
|---|
| Type | Percentage |
| Data Source | Shopify |
| Aggregation | Weighted Average |
Example
Your store generated $50,000 in revenue with $30,000 in product costs, resulting in a 40% product margin:
| Category | Revenue | COGS | Margin % |
|---|
| Apparel | $25,000 | $12,500 | 50% |
| Accessories | $15,000 | $10,500 | 30% |
| Home Goods | $10,000 | $7,000 | 30% |
| Total | $50,000 | $30,000 | 40% |
How It Works
Product Margin % calculates the percentage of each revenue dollar that remains after covering product costs. Shopify provides product cost data through inventory settings or metafields. This metric aggregates across all line items in orders, weighted by revenue contribution.
When to Use
| Scenario | Action |
|---|
| Evaluating product profitability | Identify high-margin products to promote |
| Pricing decisions | Adjust prices on low-margin items |
| Supplier negotiations | Flag products with eroding margins |
| Ad spend allocation | Focus budget on products with healthy margins |
| Metric | Relationship |
|---|
| Gross Revenue | Revenue before deductions (denominator) |
| COGS | Product costs subtracted from revenue |
| Product Margin | Dollar amount instead of percentage |
| Net Revenue | Revenue after discounts and refunds |
