Revenue is not profit
Revenue shows how much was sold, not how much remains in the business. Discounts and returns reduce the amount you can treat as Net Revenue. Product costs, shipping, payment fees, advertising spend and other operating costs then reduce that figure further. Looking only at sales can make a higher-revenue month appear stronger even when the underlying margin has deteriorated.
The core profitability equation
For a practical business picture, start with Net Revenue and subtract the costs associated with making the sale. COGS reflects the cost of products sold. Shipping and fulfillment represent delivery costs, while payment fees reduce what you retain from each transaction. Advertising spend is a real cost regardless of how the ad platform attributes revenue.
Why data completeness matters
A missing cost does not mean the real cost is zero. If COGS is missing for part of the catalog, estimated profit can appear higher than reality. A useful profitability analysis should therefore show both the result and how complete the underlying data is.
What to compare every week
Review Net Revenue, Estimated Profit and Profit Margin together. Then identify which cost moved most: products, shipping, fees or advertising. Comparing against the previous equivalent period is often more useful than a single number because it shows whether the economics of the business are genuinely improving.
What to check in practice
FAQ
What is the difference between revenue and profit in e-commerce?
Revenue is the value of sales. Profit remains after returns, product costs and the other known costs of the business are removed.
What is a good profit margin for an e-commerce store?
There is no single correct percentage for every store. It depends on products, category, fulfillment, advertising and operating costs. Your own historical performance and business targets are the useful comparison.
Do I need to connect my store to calculate profitability?
No. You can start with manual or CSV data. Connecting the store reduces manual work but is not required to begin.