Formula
Total Transaction Cost = Gateway Cost + Other Transaction Cost
Formula Components
| Metric | Definition |
|---|---|
| Gateway Cost | Payment gateway processing fees including flat and percentage-based fees |
| Other Transaction Cost | User-defined transaction costs from order cost entries |
| Metadata | |
|---|---|
| Type | Currency |
| Data Source | Shopify |
| Aggregation | Sum |
Example
Your store processed $125,000 in orders this month with $4,875 in total transaction costs:| Component | Amount | % of Revenue |
|---|---|---|
| Gateway Cost | $3,750 | 3.0% |
| Other Transaction Cost | $1,125 | 0.9% |
| Total Transaction Cost | $4,875 | 3.9% |
How It Works
Total Transaction Cost aggregates all payment-related fees from your orders. Gateway costs are pulled from Shopify’s transaction data, while Other Transaction costs come from user-defined order cost entries with the “Transaction” category. This metric is deducted from CM1 to calculate CM2.When to Use
| Scenario | Action |
|---|---|
| Calculating contribution margin | Deduct from CM1 alongside fulfillment costs |
| Evaluating payment processors | Compare total processing costs across gateways |
| Pricing strategy | Factor transaction costs into product margins |
| Profitability analysis | Track how payment fees impact net margins |
Related Metrics
| Metric | Relationship |
|---|---|
| Gateway Cost | Component: payment processor fees |
| Other Transaction Cost | Component: user-defined transaction costs |
| Gateway Cost % | Gateway fees as percentage of revenue |
| CM1 | Margin before transaction and fulfillment costs |
| CM2 | Margin after deducting this cost |