Metrics Dictionary

Net Profit

net_profit

Overview

Net profit is the total revenue from product sales after deducting all costs, including advertising spend, cost of goods, shipping costs, payment gateway costs, handling fees, taxes, and any other operational expenses.

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Net Profit = Order Revenue − Refunds − Ad Spend − Total Costs

The calculation is based on data in the Blended Stats table.

Detailed Breakdown

The formula above is derived from the following components:

  • Order Revenue = SUM(order_revenue) --> Orders table

    • order_revenue = Total revenue after adjustments such as discounts, shipping, fees, and taxes.

  • Refunds = SUM(refund_money) --> Refunds table

    • refund_money = ABS(SUM(total_refunded_price))

  • Ad Spend = spend + custom_ad_spend

    • spend = SUM(spend) --> Ads table
    • custom_ad_spend = SUM(IF(is_ad_spend, amount, 0)) --> Custom Spend table

  • Total Costs = cogs - total_refunded_cogs + payment_gateway_costs + shipping_costs + custom_excl_ad_spend + handling_fees + taxes

    • cogs = SUM(cost_of_goods) --> Orders table
    • total_refunded_cogs = ABS(SUM(total_refunded_cogs)) --> Refunds table
    • payment_gateway_costs = SUM(payment_gateway_costs) --> Orders table
    • shipping_costs = SUM(shipping_costs) --> Orders table
    • custom_excl_ad_spend = SUM(IF(is_ad_spend = false, amount, 0)) --> Custom Spend table
    • handling_fees = SUM(handling_fees) --> Orders table
    • taxes = SUM(taxes) --> Orders table

Insights and Actions

Net Profit provides a comprehensive view of your business's financial health, showing the revenue left after deducting all expenses, including advertising and operational costs.

  • Assess Business Performance: Use net profit to understand how well your business is performing financially. A positive net profit indicates healthy operations, while a negative figure may require adjustments to reduce costs or increase revenue.
  • Identify Cost-Saving Opportunities: Analyze components like Ad Spend, COGS, and Shipping Costs to pinpoint areas for cost optimization. Reducing inefficiencies can directly improve net profit.
  • Guide Investment Decisions: Use net profit as a benchmark to evaluate the financial impact of expanding into new marketing channels or increasing operational expenses.

Related Metrics

  • Blended ROAS: Helps gauge overall ad efficiency in driving revenue, complementing net profit analysis.
  • Total Costs: Breaks down all operational expenses, offering insight into areas where cost reductions might improve net profit.
  • Refunds: Tracks the financial impact of refunds on profitability, highlighting trends that may require operational improvements.

Example Use

Prompt

What's my net profit the past 7 days?

Response

Query

SELECT
  SUM(bst.order_revenue) - SUM(bst.refund_money) - SUM(bst.spend) - SUM(bst.total_costs) AS net_profit
FROM
  blended_stats_tvf () AS bst
WHERE
  bst.event_date BETWEEN CURRENT_DATE() - 7 AND CURRENT_DATE()  - 1

Updated 38 minutes ago