Net profit is the amount of money remaining after all costs have been deducted from revenue, including COGS, operating expenses, marketing spend, and taxes. It is the bottom line of your business.
Net profit is the amount of money remaining after all costs have been deducted from revenue, including COGS, operating expenses, marketing spend, and taxes. It is the bottom line of your business.
Net Profit = Revenue − COGS − Operating Expenses − Taxes Net profit is what you actually take home. It accounts for every expense your business incurs: product costs, advertising, software subscriptions, wages, transaction fees, and taxes. A store can have impressive revenue and healthy gross margins but still show zero or negative net profit if overheads are too high. This is the single number that tells you whether your business is truly making money.
Net Profit = Revenue − COGS − Operating Expenses − Taxes Your store does £25,000 in monthly revenue. COGS is £8,000, marketing costs £5,000, Shopify and app fees total £500, and other expenses are £1,500. Your net profit is £25,000 − £8,000 − £5,000 − £500 − £1,500 = £10,000, giving you a 40% net margin.
Net profit is the only metric that tells you if your store is a viable business. Growing revenue while net profit stays flat or negative means you are scaling losses. Every pricing, sourcing, and marketing decision should ultimately be evaluated by its impact on net profit.
Celebrating revenue growth without checking whether net profit is also growing
Forgetting to include all costs like payment processor fees, returns, and chargebacks
Confusing cash flow with net profit — you can be profitable on paper but cash-poor
StoreLyst builds a complete P&L statement for your store, calculating net profit by pulling in COGS, ad spend, and Shopify fees automatically. You see your true bottom line without manual spreadsheets.
Learn more about P&L Reporting →A net profit margin of 10–20% is considered healthy for most ecommerce businesses. Early-stage stores reinvesting heavily in growth may operate at 5–10%. Anything below 5% consistently suggests a structural problem with pricing or costs.
Gross profit only subtracts COGS from revenue. Net profit subtracts everything: COGS, marketing, operations, software, wages, and taxes. Gross profit tells you if your products are priced well; net profit tells you if your business is viable.
Yes, and it is common. If your products have a 50% gross margin but you spend heavily on ads, subscriptions, and staff, your total expenses can exceed gross profit, resulting in a net loss. This is why tracking both metrics matters.
Review net profit monthly at minimum. Weekly is better for fast-growing stores or those running heavy ad spend. Real-time dashboards, like those in StoreLyst, let you catch profit-eroding issues before they compound.
Stop calculating in spreadsheets. Get real-time net profit tracking for your Shopify store.