Hello,
Shopify profit margin calculator numbers does not match if I manually calculate profit. Does it takes into account any other cost while calculating the profit?
Thanks,
Label By H
Topic summary
A Shopify merchant discovered discrepancies between Shopify’s profit margin calculator and their manual calculations, questioning whether additional costs are factored into the tool’s results.
Core Issue:
- Manual profit calculations don’t match Shopify’s calculator output
- Uncertainty about which costs/expenses are included in Shopify’s formula
- Another user confirmed experiencing the same discrepancy
Technical Context:
One respondent clarified the standard gross margin formula: (Net Sales – COGS) × 100 / Net Sales. They noted complications can arise from VAT, discounts, and timing of deductions.
Proposed Solutions:
Multiple third-party profit tracking apps were recommended:
- BeProfit, TrueProfit, Bloom Analytics: Track comprehensive expenses including production, shipping, and marketing costs
- Draft Profit Margins: Calculates earnings per order or specific products
- Custom Profit Analytics tool: Integrates Shopify data with ad platforms (Meta, Google) via BigQuery for tailored dashboards
Status: The original question remains unanswered regarding Shopify’s native calculator methodology. The discussion shifted toward alternative tracking solutions rather than explaining the specific discrepancy.
1 Like
Hi Label by H - if you’re looking for an easy way to calculate your profits that takes into account a broader scope of costs/expenses, check out BeProfit - Profit Tracker. It’s a free app that gives you a dashboard to track and analyze your store’s profits and expenses (including production, shipping, marketing costs, and more). BeProfit will help you focus your effort in order to maximize your Shopify store’s profit.
Hello Label By H,
Were you able to get an answer to your question? I also input my pricing into a manual formula and got different results. So I was also wondering if Shopify considers other costs when calculating the margin %
TCA50
It can be a bit tricky to calculate margins, you have to know when to subtract VAT and discounts, etc.
If you’d like to calculate how much you’ll earn on an average order, or an order of specific products, you might want try the Draft Profit Margins app.
Hi,
You might want to check out Shopify’s Profit Margin Calculator here: https://www.shopify.com/tools/profit-margin-calculator
In general gross margin is calculated this way: Gross Margin Formula ( In Percentage Form) = (Net Sales – COGS) * 100 / Net Sales
And when I look at it in my Shopify that pretty much matches the numbers Shopify calculates.
Hope this helps.
Thomas
1 Like
Hello @labelbyh ,
We are OneCommerce - an eCommerce Solution Platform.
In general, the profit margin calculation involves subtracting your total costs (including the cost of goods sold, shipping, and any other expenses) from your total revenue, and then dividing the result by your total revenue to get a percentage. To calculate all that cost, we have an app called TrueProfit can help you track every cost in a dashboard.
Hope this can help.
Regards,
OneCommerce team.
Hey @labelbyh ,
Check out Bloom Analytics for accurate profit margin tracking, factoring in all key data points to calculate net profit and gross profit margins. It also provides a detailed breakdown of the key contributors included in the calculations.
Use the free trial to test Bloom Analytics on your store and analyze profits with precision.
Hope this helps!
Hi,
We were solving exactly the same case in our own Shopify stores and after testing some tools mentioned above we’ve developed our own tool. It aggregates data from Shopify a simple CMS where you can add additional data about your products and data from meta ads, google ads etc…
Everything is going to the BigQuery database and after some calculation. We have installed this tool to some of our Digismoothie agency clients, who are happy with the dashboards in Google Looker available everyday + we are maintaining the tool for our own purposes and providing updates.
The biggest benefit is, that everything is tailored and made for your business, but it uses our core (middleware), which is already done.
Here is some basic info about our tool Profit Analytics.
Some of the screenshot:
Main overview
Customer Insights
Order Analyser
Let me know, if you want to see the demo.
Have a great day,
Tomas