Common Mistakes When Calculating Profit Margins for Shopify Stores
- Assuming that higher revenue means higher profit — Focusing solely on revenue can be misleading, as it doesn’t account for costs and expenses.
- Assuming that all products and customers bring equal profitability — Without segmenting your customers and products based on profitability, you may end up investing resources inefficiently.
- Returns & Refunds
- Payment Processing Fees
- Third-Party App Fees
- Outsourcing Costs
- Costs of Professional Services
- Net profit & Net profit margin
- Conversion rate
- Customer acquisition cost (CAC)
- Average order value (AOV)
- Customer lifetime value (CLV)
- Real-time profit dashboard
- Detailed product analytics of every SKU, including frequently bought-together items
- Comprehensive customer profitability analytics like CLV, CAC, LTV:CAC ratio, etc.
- Aggregated view of multiple Shopify stores in one central hub
- Advanced COGS, shipping costs, and custom expenses tracking
Irene Le
Content Manager at TrueProfit & eCommerce Marketing Specialist
Irene Le is the Content Manager at TrueProfit, specializing in crafting insightful, data-driven content to help eCommerce merchants scale profitably. With over 5 years of experience in content creation and growth strategy for the eCommerce industry, she is dedicated to producing high-value, actionable content that empowers merchants to make informed financial decisions.
