E-commerce Glossary

Gross Profit

Difference between revenue and the cost of goods sold, a key indicator of gross margin.

Gross profit equals revenue minus the direct cost of goods sold (COGS). It is the first level of profitability, before deducting shipping, transaction, advertising, and operational costs.

Calculation: Gross Profit = Revenue - COGS. If you sell $100,000 with a COGS of $40,000, your gross profit is $60,000, or a 60% gross margin.

Gross margin measures your business's ability to cover operational costs and generate profit. For an e-commerce, a healthy gross margin is between 50% and 70%. Below 40%, it becomes difficult to finance acquisition and growth.

Fullmetrix automatically calculates gross profit by importing your product costs and deducting them from your net revenue. You see your gross margin by product, by category, and by period.

Related terms

AOV (Average Order Value)Average amount spent per order in your store.See definition ARPU (Average Revenue Per User)Average revenue generated per user over a given period.See definition Blended CACAverage acquisition cost including all marketing channels.See definition Blended ROASOverall return on all advertising spend combined.See definition CAC (Customer Acquisition Cost)Total cost to acquire a new customer.See definition Churn RatePercentage of customers lost over a given period.See definition
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