Profit reporting requires revenue and cost data such as product cost, discounts, returns, shipping, transaction fees, advertising, and operating expenses.
Official answer
Shopify profit reporting starts with net revenue, then subtracts the costs required to generate and fulfill that revenue.
A useful progression is Gross Profit after COGS, then contribution margins after fulfillment, payment fees, shipping, returns, and advertising, followed by Net Profit after operating expenses. The exact layers depend on how your business manages costs.
Do not rely on revenue alone. A product or campaign can generate strong sales while losing money after discounts, shipping, fees, returns, and acquisition costs are included.
Follow-up questions
Should ad spend be included in Shopify product profit?
Include ad spend when the goal is contribution or net profitability. Keep it separate from gross profit so product economics and acquisition economics can still be analyzed independently.
Should shipping and payment fees be included in profit?
Yes when measuring contribution or net profit. Keep them as separate cost layers so you can see whether margin pressure comes from the product, fulfillment, or payment costs.