Costs and profit

Profit reports start from the cost per item recorded on your Shopify variants. Three settings fill in what Shopify does not track, so the numbers match how your business actually runs.

• Fulfillment cost per order — packing, labour and shipping you absorb, applied per order.
• Operating expenses per month — rent, salaries, software; spread across the period being reported.
• Commission rate — a percentage taken off revenue, for affiliates or marketplaces.

There is also a reorder point used by the inventory reports to decide what counts as low stock.

What profit means here

Revenue minus cost of goods sold, minus the fulfillment and commission you configured, minus the share of operating expenses that falls in the report's date range. Net margin is that figure over revenue.

If cost per item is missing on your variants, cost of goods shows as zero and profit will read high. Filling in costs in Shopify fixes it everywhere at once.