Gross Profit vs Net Profit Explained 2025 (With Examples)
- Gross profit is the money left after you subtract the cost to produce your product.
- Net profit is what’s left after all business expenses are paid — from rent to marketing to taxes.
- You sell a T-shirt for $100
- Your cost to make and ship it (COGS) is $60
- Adjust prices to improve profit per sale
- Negotiate better supplier costs
- Spot issues in production or fulfillment
- Make smarter inventory and ad spend decisions
- Revenue: $100
- COGS: $60
- Gross Profit: $40
- $10 on Facebook ads
- $3 on app subscriptions
- $2 on payment processing fees
- $5 in taxes
- See whether your business is truly profitable (not just selling a lot)
- Set realistic budgets and plan for growth
- Make hiring, marketing, and reinvestment decisions
- Understand how much cash you can actually take home or reinvest
- Gross profit = Can I make money selling this product?
- Net profit = Can I build a business that actually lasts?
- Real-time Net Profit Dashboard: Get an instant overview of your business performance with all key performance metrics, including gross profit and net profit.
- Auto-track all costs: Track every expense to unlock accurate profit insights.
- Profit-based Product Analytics & MKT Attribution: Know which products and marketing channels are truly driving profit.
- P&L Report: High-level view of your financial health, anytime.
- Customer Lifetime Value (CLV): Unlock customer true value for smarter retention strategies.
- Mobile app, All-store view & AI Assistant: Get your store's profit insights, even on the go
- Gross profit shows you whether your products are priced and produced efficiently.
- Net profit tells you if your entire business is actually making money after all expenses.
Leah Tran
Content Executive at TrueProfit & eCommerce Content Specialist
Leah Tran is a Content Specialist at TrueProfit, where she crafts SEO-driven and data-backed content to help eCommerce merchants understand their true profitability. With a strong background in content writing, research, and editorial content, she focuses on making complex financial and business concepts clear, engaging, and actionable for Shopify merchants.
