If you run an e-commerce store, you probably check your revenue every morning. That's normal. But revenue is a vanity metric: it tells you absolutely nothing about what you actually earn.
A merchant doing €50,000 in revenue a month can very well be losing money. Another doing €15,000 can make a comfortable net profit. The whole difference lies in the hidden costs most merchants forget to count.
The revenue trap
Shopify shows you a nice sales chart going up. Meta shows a ROAS of 4. Google Ads reports 200 conversions. Everything looks fine. Yet your bank account isn't keeping up.
The problem is that nobody shows you your true profit. Not Shopify, not Meta, not your accountant (who shows up three months later). You're flying blind.
The complete e-commerce net profit formula
Here's the formula every e-commerce merchant should know by heart:
Net Profit = Revenue - Cost of Goods - Shipping Costs - Payment Fees - Platform Fees - Ad Spend - Handling Fees - Returns and Refunds
Let's break down each of these costs.
1. Cost of goods sold (COGS)
This is what your products cost you: what you pay your supplier, plus import fees, customs duties and inbound freight. Its share of the selling price varies a lot from one product to another. The example below is a worked case, not a market average.
If you sell a product for €39.90 and buy it for €12 with €3 in import fees, your COGS is €15, or 37.6% of the selling price.
2. Shipping costs
Whether you offer free or paid shipping, you pay the carrier. In France, expect €4 to €8 per parcel with Colissimo or Mondial Relay. If you offer free shipping, it comes straight out of your margin.
3. Payment processing fees
Payment fees depend on the provider, the country and the plan. On a €50 order, even a rate of around 2% already means €1 per order — multiplied by the month's volume. Check the actual rate in your contract; it changes.
4. Platform fees
Your Shopify subscription depends on your current plan, and apps come on top of it (email, reviews, pages). These subscriptions are a fixed cost: they don't follow your order count, but they weigh on your margin. Take the amounts from your invoices, not from a copied price list.
5. Ad spend
This is often the largest cost. Meta Ads, Google Ads, TikTok Ads and influencer marketing go out before your product margin is known. This is where most calculation mistakes happen: people scale on an ad platform's ROAS without subtracting everything else.
6. Handling fees
If you use a third-party logistics provider (3PL), you pay order fulfillment fees: picking, packing, labeling. Expect €1.50 to €3 per order on average.
7. Returns and refunds
Return rates vary widely by category: fashion gets far more returns than consumables. Every return costs you return shipping, restocking fees and sometimes the product itself. Count your own rate, not a generic one.
A worked example, not a real store
Let's take an illustrative store doing €30,000 in revenue in a month, with 600 orders (€50 average order value). The percentages below are the example's assumptions, not averages:
- Revenue: €30,000
- COGS (40%): -€12,000
- Shipping (€5.50 x 600): -€3,300
- Payment fees (1.8%): -€540
- Subscriptions (Shopify + apps): -€250
- Advertising (Meta + Google): -€8,000
- Handling (€2 x 600): -€1,200
- Returns (5% of revenue): -€1,500
Net profit = 30,000 - 12,000 - 3,300 - 540 - 250 - 8,000 - 1,200 - 1,500 = €3,210
That's a net margin of 10.7% in this example. Out of €30,000 in revenue, €3,210 is left. This isn't "the market average": it's how costs stack up. Your margin will be different.
Why spreadsheets are no longer enough
You can do this calculation by hand. But doing it every day, for every product, cross-referencing data from Shopify, Meta, Google and your logistics provider? It's an operational nightmare. And mistakes are expensive.
The data changes in real time: a product that was profitable yesterday no longer is if CPA rises by 20%. You need to be able to react right away, not wait for the monthly report.
Automating the calculation with ProfitPilotPro
ProfitPilotPro connects a Shopify store and your Meta, TikTok and Google accounts to calculate net profit: revenue, minus COGS, shipping, fees and ad spend. VAT follows the store setting. The formulas are detailed in the metrics guide.
You open the dashboard and see whether the period is profitable. Product by product, campaign by campaign, with the costs you entered — not with a made-up margin.
The trial lasts 14 days, no credit card required. Create an account.