Calculating Shopify profit: revenue, costs and an example
An order can bring revenue and still contribute little. Calculate net values, cost of goods, shipping, fees, advertising and returns separately, with a complete example.
You can only calculate Shopify profit once you define which revenue and costs belong to the same period. Net revenue minus cost of goods is a first level. If you also deduct shipping, payment fees, attributable advertising and return costs, you get a broader contribution margin. Company profit additionally needs fixed costs and other relevant expenses.
Telling revenue, gross profit and contribution margin apart
Shopify describes its gross profit report as net sales minus recorded product costs. Products without a cost stored at the time of sale can be missing from it. A positive value from this report therefore does not automatically answer what is left after your additional costs.
A payout is not a complete profit calculation either: timing, fees, refunds and withheld amounts can differ from the order period. Reconcile orders, payments and costs instead of equating bank receipts with profit.
| Metric | Calculation | What is still missing |
|---|---|---|
| Net revenue | Revenue after discounts and refunds taken into account, excluding VAT | The related costs |
| Gross profit with product costs | Net revenue minus recorded cost of goods | For example shipping, fees, advertising and fixed costs |
| Contribution margin at a chosen cost level | Net revenue minus the defined variable costs | Fixed costs and, where applicable, other expenses |
| Operating result for a period | Total contribution minus allocated operating fixed costs | Other relevant result items and how they are delimited |
A complete example calculation for one order
All of the following figures are made-up example assumptions and already net. They are not Shopify fees or market prices. A shipping charge paid by the customer would belong on the revenue side; none is added here.
| Item | Amount | Note |
|---|---|---|
| Net revenue | €150.00 | Starting point after revenue corrections taken into account |
| Cost of goods | −€60.00 | Allocated to the item sold |
| Shipping and fulfillment | −€10.00 | Actual cost of the order |
| Payment/platform fees | −€5.00 | Example value; in practice check the transactions |
| Attributable advertising | −€25.00 | Disclosed attribution model |
| Return cost allowance | −€10.00 | Estimate, not a second revenue refund |
| Contribution after these costs | €40.00 | Still before fixed costs and other expenses |
150 − 60 − 10 − 5 − 25 − 10 = 40 euros. The contribution margin on this cost basis is 40 ÷ 150 × 100 = 26.67 percent. If, for example, 15 euros of fixed costs are later allocated in a traceable way, 25 euros remain on the extended example basis. A cost type left out is not a zero value.
Do not count returns and ad costs twice
A refund may already be deducted from net revenue. If you deduct the same refund a second time as a cost, you distort the result. Return shipping, handling or goods that can no longer be sold are additional items that can be considered separately. Estimated provisions and actually incurred values stay distinguishable.
For advertising, a campaign total is often available first. Splitting it across orders or products is a model. Document the period, channel and allocation; an attribution is no proof that a particular ad alone caused the purchase. Without a reliable allocation, a shop-level result for the same period can be more honest than seemingly exact per-order profits.
How to check your own calculation
- Fix one period, one currency and one consistent net/gross basis.
- Reconcile orders, discounts and refunds for this period; mark missing data visibly.
- Check product costs at the actual time of sale. Do not treat missing product costs as zero.
- Add shipping, fulfillment and fees from the related transactions.
- Include advertising and returns with a documented allocation or as a clearly labelled estimate.
- Report the contribution and the missing cost items. Deduct fixed costs only in an explicitly extended level.
Source and limits
Shopify's official documentation was checked on 6 October 2026. The vendor report and our own extended example are described separately. The calculation explains cost levels; it does not replace full bookkeeping or a professional review of your tax and result delimitation.