Revenue is easy to see; profit is not. This guide walks the whole path from the money a customer pays to the money you actually keep — every cost that comes out along the way, and how to track it. Each section links to a deeper guide if you want the detail.
Revenue is not profit
Your dashboard shows revenue, but after product cost, fees, shipping, ads and returns, the number left can be a fraction of the sale — or negative. That leftover is yourtrue profit, and most stores never see it clearly.
The full cost chain
Revenue − COGS − Shipping − Payment fees − Ad spend − Returns − Other costs = Net profit (per order) − Operating expenses = Operating profit (per period)
1. COGS — the biggest cost
Cost of goods sold is what your product cost you. It's usually the largest cost and the foundation of every profit number. When unit cost changes over time, you apply it by method — FIFO, LIFO or average.
2. Payment fees
Processing rates and third-party transaction feesare small percentages that add up across every order — and they hit thin-margin products hardest.
3. Shipping, returns and other costs
Shipping you paid, refunds and returns, packaging and misc. costs all come out of the order. Returns are especially sneaky — they cost more than the refund because you also lose shipping, fees and the ad spend that won the sale.
4. Gross profit vs net profit
Gross profit subtracts only COGS; net profit subtracts everything. A healthy gross profit can still hide a net loss once ads and fees are counted — which is why you watch both.
5. Net profit vs operating profit
Net profit is per order; operating profitsubtracts your fixed running costs (rent, salaries, tools) over a period to show whether the whole business makes money.
6. Margins tie it together
Express profit as a percentage of revenue and you can compare anything — seehow to calculate profit margin for gross and net margin with worked examples.
7. Break-even
Your break-even point is how many units you must sell to cover your costs. Below it you're funding the business; above it, every sale adds profit. Use the free calculator to find yours.
How to track it all
Working this out per order, by hand, isn't realistic. ProfitVaultconnects to your store and computes true profit on every order automatically — COGS, fees, shipping, attributed ad spend and returns — then rolls it up into profit and loss by day, product and period. Revenue is easy to see; ProfitVault makes profit just as easy.