Gross Profit
Revenue minus what you paid for the products. That's it — no payment fees, no refunds, no apps. Gross profit tells you if your pricing makes sense before overhead eats into it.
Example
You sold $20K worth of product. The products cost you $6K from the supplier. Gross profit = $14K. The remaining $6K hasn't been touched by fees or refunds yet.
Why It Matters
Gross profit is your first reality check — it tells you if your wholesale-to-retail pricing even makes sense before Shopify fees and shipping eat into it. If your gross margin is below 50%, you'll struggle to cover operating expenses and still have money left over.
Pro Tip
Calculate gross profit per product, not just store-wide. You might find that your best-selling item has the worst gross margin, and a price increase on just that one product could change everything.
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