How does Shopify calculate profit?

Shopify gives different options for profit calculation, such as profit by product, profit by product variant SKU, profit by the point of sale location etc. Shopify requires the user to enter the cost of each product and its markup for correct profit computation.

Shopify calculates your gross margin using this formula:

([net sales - cost] / net sales) * 100

Shopify deducts the product cost from its net sales to calculate your gross profit. You can view the profit reports in Shopify by clicking the "Store." Select "Analytics" and then choose "Reports." Click the report you want to evaluate from the "Profit Margin" section.