P&L
The P&L shows what your store earned and what it kept over a date range. Revenue, the cost of the goods you sold, gross profit, ad spend and contribution profit are all on one page. Costs Shopify doesn’t know about, such as shipping and payment fees, come off below gross profit when you enter them.
How It’s Calculated
The Figures
- Net Revenue: what your products sold for, less discounts and returns. By default it also includes shipping and any tax not already in your prices.
- Orders: the number of orders in the range.
- Avg Order Value: Total Sales divided by orders. Total Sales always includes shipping and tax, whatever your revenue settings, and is net of returns.
- COGS: the cost of the goods you sold, worked out as quantity × unit cost for each line item.
- Gross Profit: Net Revenue less COGS. Its caption shows it as a margin of Net Revenue.
- Gross Margin: Gross Profit as a share of Net Revenue.
- Ad Spend: what your connected ad platforms report you spent, plus any expense you’ve marked to count as ad spend. Its caption shows MER, which is Net Revenue divided by Ad Spend.
- Refund Impact: what refunds cost you after allowing for the goods that came back. It’s the amount refunded, less the refunded share of the order’s COGS.
- Contribution Profit: Gross Profit less Ad Spend and less the costs you entered. Contribution Margin is the same as a share of Net Revenue.
With Compare on, each figure shows its change from the comparison period. With no ad platform connected, Ad Spend, Contribution Profit and Contribution Margin show a dash. Ad Spend and Contribution Profit also show a link to connect one.
Costs You Entered
The Costs You Entered row shows 4 estimates: Shipping, Payment Fees, Handling and Other Expenses. They come from the Costs page, not from Shopify, and each is labeled as an estimate. A cost you haven’t entered shows Not entered, which is different from zero.
They’re taken off below gross profit, so Gross Profit and Gross Margin never include them. Contribution Profit does.
What Counts
- Orders count on the day they were processed, in your store’s time zone.
- Canceled orders, and orders whose payment was voided or expired, are left out.
- Returns count on the day the refund was made, for orders placed in the range or up to 2 years before it.
- Ad spend counts on the day it was spent.
- Ad spend from an account that bills in another currency is converted to your store’s currency. It uses the latest exchange rate, not the rate on the day it was spent.
Unit Costs
COGS uses each product variant’s unit cost from Shopify, the Cost per item field. It uses the cost set today, not the cost when the order was placed, so changing a cost in Shopify changes COGS for past periods too.
A line item whose variant has no cost counts as zero cost. A cost of 0 is a cost, so a free gift or a sample stays costed.
The COGS caption shows how much is covered: All line items costed, or the share of line items that have a cost. Below 100%, COGS is too low and Gross Profit is too high.
Revenue Settings
Include taxes in revenue and Include shipping in revenue are in the Report settings menu at the top of the page. Both are on by default.
They change Net Revenue, and the figures worked out from it, for your whole team. Total Sales and Avg Order Value aren’t affected.
Filters
You can narrow the P&L by date range, comparison, customer segment, sales channel and advanced filters. Ad spend is recorded for your whole store, so it doesn’t follow a segment, channel or advanced filter. When one is on, Ad Spend, Contribution Profit and Contribution Margin are marked Store-wide: treat those as a rough guide rather than an exact figure.
The P&L Over Time chart groups by hour for ranges up to 3 days, by day up to 93 days, and by month beyond that.
What Good Looks Like
There’s no single right margin: it depends on what you sell and how you sell it. What matters most is that the figures are complete and moving the right way.
- COGS is fully costed. The caption reads All line items costed. Until it does, gross profit is overstated.
- Gross Margin is steady or rising. A falling margin with steady sales points to heavier discounts, a shift toward lower-margin products, or rising costs.
- Contribution Profit is positive. This is what’s left after your products, ads and other costs. A negative figure means the period cost more than it brought in.
- MER holds up as ad spend grows. If MER drops each time you spend more, the extra spend is buying less.
Some cards also show how similar stores compare. That needs a store category on the Business Profile page. This comparison is in beta.
The comparison needs at least 25 stores. It starts with stores in your category, size and country. When there aren’t enough, it widens to your category and size, then your category, then all stores.
What to Do About It
- Fill in missing unit costs. Open Unit Cost Coverage to see which products have no cost and how much revenue they carry. Then set Cost per item for them in Shopify.
- Enter the costs Shopify doesn’t have. Add your shipping, payment fees, handling and monthly expenses on the Costs page, so Contribution Profit reflects what you really keep.
- Find what’s driving profit. Top Profit Drivers lists your 5 products with the most gross profit. With Compare on, Biggest Movers shows the 5 whose gross profit changed most.
- Check your ad spend. If Contribution Profit is falling while sales grow, compare MER across periods and look at Advertising for the campaigns behind it.
To take the P&L elsewhere, choose Export CSV for a row per period, or Schedule Export to get it on a schedule. Exporting needs the Export data permission.