Shopify Profit Formula Explained: The Complete Breakdown

Here's the formula. It's not complicated. What's complicated is actually tracking every variable.

Six variables. Most Shopify merchants only track the first one. Let's walk through each with a real example: a store doing $50,000/month selling $65 products.

Revenue — the number Shopify loves to show you

$50,000. Big bold number at the top of your dashboard. This is every dollar that came in from customers — product price, shipping charges, taxes. None of the costs are subtracted yet. It's the starting line, not the finish.

COGS — what you paid for the stuff you sold

Let's say you buy products for $22 each and sell for $65. That's 33.8% COGS. On $50K revenue, that's $16,900 gone. But wait — did you include inbound shipping? Packaging? The 3% of units that arrive damaged and can't be sold? Add another $2,500. Real COGS: $19,400.

Refunds — the cost nobody budgets for

Your refund rate is 7%. That's $3,500 refunded. But you also lost the payment processing fee on those orders ($110), paid return shipping labels ($280), and spent time restocking ($150). Real refund cost: $4,040. Calculate yours →

Payment fees — the quiet $1,500/month leak

2.9% + $0.30 per transaction. On 769 orders averaging $65, that's $1,631 every month. You never see this money. It's deducted before it hits your bank. Which is exactly why most merchants forget to count it.

Shipping — the gap you pretend doesn't exist

You charge $5.99 for shipping. It actually costs $7.50 (including the box, the tape, the label). That's $1.51 per order x 769 orders = $1,161/month in shipping subsidies. Find your shipping gap →

The final number

Almost half your revenue disappeared before you saw it. And we didn't even count Shopify plan costs, app subscriptions, or marketing spend.

Don't do this math manually. Drop your Shopify Orders CSV into the CSV Profit Checker and get the real number in 10 seconds.