Why am I losing profit when using Zendrop with a 45% margin?

Phoeniffire
Tourist
5 0 2

Hi guys I to am new to shopify im useing zendrop I have had 2 sales that come to $95.20 now I have all my products set at a 45 % profit margin but when I go to zendrop it says my profit margin is -$31 so I don't understand how I can have profit margins at 45% but be losing money any help would be greatly appreciated 

Reply 1 (1)

olasunkanmi
Shopify Partner
32 0 8

It's possible that there are other costs associated with your sales that are not accounted for in your 45% profit margin calculation. For example, shipping and handling fees, payment processing fees, and product costs are all expenses that can eat into your profits.

To get a better understanding of your actual profit margins, you should calculate the cost of goods sold (COGS) for each product, and then subtract that amount from the sales price to arrive at the gross profit. The gross profit can then be divided by the sales price to arrive at the profit margin percentage.

Here's an example calculation:

Let's say you sold a product for $100.

The cost of goods sold for that product is $55.

Gross profit: $100 - $55 = $45.

Profit margin percentage: $45 ÷ $100 = 45%.

So, even though your products are set at a 45% profit margin, your actual profit margins may be lower if there are other expenses that are not accounted for in your calculations. I recommend reviewing your expenses and product costs to see if there are any areas where you can reduce costs or increase prices to improve your overall profit margins.

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