How to Calculate Profit on Shopify: The Numbers You’re Missing
8 min read
Your Shopify dashboard shows $12,000 in sales last month. Great, right? Not so fast. After refunds, ads, and fees, you’re left with $7,200. That’s a 40% margin—if you’re lucky. Most sellers lose 5-10% to hidden costs. We’ve been there. Here’s how to track real profit, not just revenue.
Why Your Shopify Profit Numbers Are Wrong
Shopify’s built-in reports don’t show net profit. They show revenue minus refunds. That’s it. No platform fees, no ad spend, no shipping costs. Example: SKU B07X sold 200 units at $29.99 each. Shopify says you made $5,998. But after $1,200 in ads, $600 in refunds, and $300 in transaction fees, you’re at $4,898. That’s a 17% drop from the top-line number. Multiply that by hundreds of SKUs, and you’re losing thousands.
How to Calculate Real Profit on Shopify
Real profit = Revenue – (Product Cost + Platform Fees + Shipping + Ads + Refunds). That’s it. No magic. Just math. The hard part? Tracking all those costs. Shopify’s reports don’t sync with Amazon, TikTok Shop, or eBay. You need a tool that pulls everything into one place. We switched to Gomarginify in March. Now we see true profit per SKU across all marketplaces. No more guessing.
How to Fix Low Margins on Shopify
Low margins? Start with refunds. If SKU B07X has a 5% refund rate, that’s $300 lost on 200 units. Next, check ad spend. If you’re paying 20% of revenue on ads, that’s $1,200 gone. Then look at fees. Shopify takes 2% + $0.30 per transaction. That’s $3.20 per $100 sale. Add shipping costs, and you’re at $5-7 per order. Cut one of those, and you’re back in the black.
Step by step
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Step 1: Pull Your Shopify Sales Data
Go to Shopify Analytics > Reports > Sales. Export the last 30 days. You’ll see revenue, refunds, and discounts. That’s your starting point. Example: $12,000 revenue, $600 refunds. Subtract refunds: $11,400.
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Step 2: Add Up Your Costs
Now, add product cost, fees, and shipping. Example: $5,000 product cost, $300 transaction fees, $500 shipping. Total costs: $5,800. Subtract from revenue: $11,400 – $5,800 = $5,600.
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Step 3: Subtract Ad Spend
Go to Shopify Ads > Performance. Export the last 30 days. Example: $1,200 ad spend. Subtract from profit: $5,600 – $1,200 = $4,400. That’s your real profit.
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Step 4: Compare Across Marketplaces
If you sell on Amazon or TikTok Shop, repeat the process. Example: Amazon SKU B07X lost 12% margin last month. Compare that to Shopify’s 36%. If Amazon’s lower, cut ads or raise prices there.
FAQ
How do I track profit across multiple marketplaces?
Use a tool like Gomarginify. It syncs Shopify, Amazon, TikTok Shop, and others. You’ll see true profit per SKU, not just revenue.
What’s a good profit margin on Shopify?
Aim for 30-40%. If you’re below 20%, check refunds and ad spend. Those are the biggest profit killers.
How do I reduce refunds on Shopify?
Improve product images and descriptions. Most refunds happen because buyers get something different than expected. We cut refunds by 30% after updating our listings.
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