E-commerce Glossary

Net Profit

Actual profit after deducting all costs: product, shipping, transaction, advertising, and operational.

Net profit is the amount remaining after deducting all costs from your net revenue. It is the ultimate metric for evaluating the financial health of your e-commerce business.

The full calculation: Net Profit = Net Revenue - COGS - Shipping Costs - Transaction Fees - Advertising Costs - Operational Costs.

Many e-commerce owners confuse revenue with profit. A $50,000/month revenue can hide a net profit of just $2,000 if margins are thin and advertising costs are high. Fullmetrix calculates net profit automatically by deducting 5 cost categories.

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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