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 = Total Sales − Blended 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:

Total Sales = order_revenue - (refund_money - total_refunded_tax)
Blended Ad Spend = spend + custom_ad_spend
Total Costs = cogs - total_refunded_cogs + payment_gateway_costs + shipping_costs + custom_excl_ad_spend + handling_fees + taxes

Where:

order_revenue = SUM(order_revenue) --> Orders table
refund_money = ABS(SUM(total_refunded_price)) --> Refunds table
total_refunded_tax = ABS(SUM(total_refunded_tax)) --> Refunds table
spend = SUM(spend) --> Ads table
custom_ad_spend = SUM(IF(is_ad_spend, amount, 0)) --> Custom Spend table
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, indicating earnings after all costs, is critical for evaluating a business's financial performance. Efficiently leveraging Net Profit data can guide strategic business decisions:

  • Assess Financial Health: Net Profit reflects true profitability, essential for assessing the business’s capacity to generate earnings beyond its costs.
  • Optimize Expenses: Identifying cost-saving opportunities from the detailed expense analysis impacting Net Profit can significantly enhance efficiency.
  • Guide Strategic Decisions: Use Net Profit trends to make informed decisions on investments and resource allocations to maximize returns.
  • Adjust Pricing and Sales: Analyze how pricing adjustments and sales focus can improve Net Profit, targeting higher-margin offerings.
  • Allocate Budgets Effectively: Direct budgets towards initiatives like marketing or product development, which are likely to increase long-term profitability.

Example Use

Prompt

What's my net profit the past 7 days?

Response

Query

SELECT
  SUM(bs.total_sales) - SUM(bs.spend) - SUM(bs.total_costs) AS net_profit
FROM
  prepared_blended_stats_table AS bs
WHERE
  bs.event_date BETWEEN DATE_SUB(CURRENT_DATE(), INTERVAL 7 DAY) AND DATE_SUB(CURRENT_DATE(), INTERVAL 1 DAY);