Understanding your true profit margins is essential for running a successful Shopify store. Many merchants focus solely on revenue, but the real measure of success is what you keep after all costs.
The Problem with Surface-Level Metrics
Most Shopify dashboards show you revenue and basic costs, but they miss crucial expenses that eat into your margins:
Calculating True Profit
Here's the formula for calculating your real profit margin:
True Profit = Revenue - COGS - Shipping - Fees - Marketing - Returns
Let's break this down with an example. Say you sell a product for $100:
True profit: $100 - $30 - $8 - $3.20 - $15 - $5 = $38.80
That's a 38.8% margin, not the 70% you might have assumed from COGS alone.
How Cipzo Helps
Cipzo automatically tracks all these costs and shows you your true profit margin for every product, variant, and channel. No more spreadsheets, no more guesswork.
With real-time visibility into your actual margins, you can:
1. Identify products that are secretly losing money
2. Optimize pricing for profitability
3. Allocate marketing spend more effectively
4. Make data-driven inventory decisions
Next Steps
Start by auditing your current margins. Add up all your costs for your top 10 products and calculate the true profit. You might be surprised by what you find.