Net Profit
The money left over once every cost the app knows about has come out.
What it means
Net Profit is Total Sales minus every cost the app knows about: tax, delivery, Ad Spend, product cost (COGS), payment fees and whatever you entered as Custom ExpensesCustom ExpensesSee the full entry.. It's a euro figure for the period you've selected, and it's the last line — nothing comes off after it. Rent, payroll and software only count if someone typed them in, so an empty Cost Settings makes this read high.
Show the math
Formula and a worked example
Sales minus Tax, Shipping, Ad Spend and COGS gives you the same variable costs that produce Contribution ProfitContribution ProfitWhat each sale contributes before fixed costs..
Gateway is the estimated payment fee on those orders, and Custom Expenses is everything you added on Cost Settings — rent, payroll, software, agency fees.
Worked example. €100,000 of sales, less €8,000 tax, €7,000 delivery, €20,000 ads and €40,000 COGS leaves €25,000. Take off €2,400 of payment fees and €12,000 of Custom Expenses and Net Profit is €10,600.
Only the last term is yours to type. Leave those expenses out of Cost Settings and the same month reads €22,600 — a shop that looks more than twice as profitable as it is, in every export and every board pack.
It answers the question
After everything, did the period make money? A positive number means the shop paid for itself; a negative one means you funded it.
Why it matters
Every other metric argues about a slice of the business; this is the one that lands in the bank. It's the till at closing time, after the suppliers, the couriers and the landlord have taken theirs.
Read the euros next to Net Profit MarginNet Profit MarginWhat you keep after every cost; the truest read on health.15% or more is healthy before you celebrate a bigger figure. Net Profit up on a thinner margin means you grew the shop and not the model, and those two want different work.
What good looks like
No universal euro figure exists — a strong Net Profit for a €500,000 shop is a rounding error for a €20m one. Judge it against your own last 3 months at similar sales, and against Net Profit MarginNet Profit MarginWhat you keep after every cost; the truest read on health.15% or more is healthy, which is the version you can hold up next to your category. Check the figure is complete first: with fixed costs missing, you're reading a number built to flatter you.
How to improve it
| Lever | What you do | Expect | How long | Watch out for |
|---|---|---|---|---|
| Fast Cancel the subscriptions nobody opens | Audit the recurring software and app fees sitting in your expense list | Net Profit up by the full amount, every month | 1–2 weeks | Some tools quietly hold a flow or a product feed together. One wrong cancellation costs more revenue than the whole audit saves. |
| Fast Turn off the ad spend that doesn't pay | Pause the campaigns whose orders cost more to win than they leave behind | Net Profit up inside a month | 2–4 weeks | Paid traffic feeds next year's repeat orders. Cut hard and profit improves now while new customer count falls for a quarter. |
| Slow Raise your best sellers by 5% | Take the increase on the products people buy for reasons other than price | Most of the rise lands straight on Net Profit | 1 quarter | Conversion softens on every channel at once, and paid campaigns feel it first because their cost per order doesn't move with your price. |
| Slow Cut the cost of getting parcels out | Renegotiate carrier rates and right-size the packaging | Net Profit up 1–3 points of sales | 1–2 quarters | Cheaper carriers are slower ones. Delivery complaints and refunds usually arrive before the saving does. |
Every lever costs something somewhere. The last column is the one to read twice.
Read it with
A bigger shop isn't automatically a better one. Reading the bottom line against the top tells you which you've built.
Growth worth having
The shop grew and kept more of it. Something in your cost base didn't scale with volume — that's the part worth understanding.
Busy and no better off
More orders, less money. Either the sales themselves stopped paying their way or your fixed costs grew faster than they did.
Leaner on less
You shed cost faster than revenue. A genuine result, though profit built by shrinking runs out after a couple of quarters.
Both falling
Revenue fell and the bills didn't. This is where a slow month becomes a loss, and the expense list is the only half you can move quickly.
The distance between them is your fee and overhead load, in euros, without anyone adding it up. Contribution Profit up €15,000 with Net Profit up €3,000 means overheads took 80% of a good month — drift that neither line shows by itself.
Together they say whether a bigger number came from a better business. Net Profit up 10% with the margin down means you grew the shop and kept a thinner slice of each sale; both up means the model itself improved. The euros alone can't tell those apart.
Common misreads
It isn't cash. Stock you bought and haven't sold, tax you're holding and money customers owe you all sit outside this line. A profitable month can still be a tight one.
Find out where the loss came from first. Contribution Profit tells you whether the sales themselves paid their way — if that looks healthy, your problem is the cost of running the shop, not what you sell.
Something on Cost Settings changed, most often an expense being added, edited or backdated into the period. Check the expense list before you go looking at the shop.
Also called
Bottom line · net income · net earnings · profit after all costs
See yoursYour Net Profit for the period, with every cost that was subtracted listed above it.
Open Shopify Profit →