E-commerce Profitability Dashboard

Understanding Your E-commerce Profitability

Key Metrics Explained

• Net Sales (Revenue): The actual income from selling your product (your listed selling price, excluding GST collected for the government).
• Cost of Goods Sold (COGS): The direct cost of acquiring or manufacturing your product.
• Gross Profit: Net Sales minus COGS. Shows profitability before any operating expenses.
• Operating Expenses: All costs incurred to run the sales operation, including marketplace fees, shipping, packaging, marketing, warehousing, technology, seller overheads, and estimated costs for returns/RTOs.
• Operating Profit (EBIT): Earnings Before Interest and Taxes. Calculated as Gross Profit minus Total Operating Expenses. This is a key indicator of your core business profitability.
• Profit Before Tax (PBT): EBIT minus any interest expenses (assumed zero here).
• Net Profit (PAT): Profit After Tax. The final bottom-line profit after all expenses and taxes.

Why Accurate Profit Calculation Matters

E-commerce platforms have complex fee structures that can easily erode your margins if not calculated precisely. This calculator helps you:

• Understand your true cost per sale and profitability at multiple levels (Gross, Operating, Net).
• Identify which costs are impacting your margins the most via the P&L and pie chart.
• Make informed pricing decisions to stay competitive while profitable.
• Plan for growth by understanding your unit economics.
• Account for risks like returns and RTOs in your financial planning.

How to Improve Your Margins

• Negotiate better product costs: Bulk purchases or finding alternative suppliers can reduce COGS.
• Optimize marketplace selection & terms: Different platforms have different fee structures - sell where your margins are best and understand all fees.
• Reduce returns & RTOs: Accurate product descriptions, high-quality images, good packaging, and reliable shipping partners can reduce these costly events.
• Optimize packaging: Lighter/smaller, yet protective, packaging can reduce shipping costs and material expenses.
• Improve marketing efficiency: Focus on high-converting keywords, target audiences effectively, and track ad spend ROI to lower customer acquisition cost.
• Control overheads: Regularly review all operational and fixed costs for potential savings.