Most Shopify sellers know their store-level profit. Very few know their per-SKU profit.
That’s a problem, because store-level profit hides the truth: some products carry the business, and some lose money on every sale.
Here’s how to calculate true profit per SKU, step by step.
Step 1: Start with revenue per SKU
Export your Shopify orders (Orders → Export → CSV). Group by SKU and sum the revenue.
Example:
SKU A: 120 units sold, $3,600 revenue
SKU B: 80 units sold, $2,400 revenue
SKU C: 200 units sold, $4,000 revenue
Step 2: Subtract landed COGS
Landed COGS = product cost + freight + duties + customs fees.
If you don‘t know your landed cost, ask your supplier for the full breakdown, or estimate: factory price × 1.3–1.5 (depending on your shipping method and country).
Example:
SKU A: $6.80 landed cost × 120 units = $816
SKU B: $9.20 landed cost × 80 units = $736
SKU C: $4.10 landed cost × 200 units = $820
Step 3: Subtract payment processing fees
If you use Shopify Payments: 2.9% + $0.30 per transaction.
If you use Stripe on Shopify: 2.9% + $0.30 + 0.5%–2% Shopify third-party fee.
Example (Shopify Payments, 2.9% + $0.30):
SKU A: $3,600 × 2.9% + (120 × $0.30) = $104.40 + $36 = $140.40
SKU B: $2,400 × 2.9% + (80 × $0.30) = $69.60 + $24 = $93.60
SKU C: $4,000 × 2.9% + (200 × $0.30) = $116 + $60 = $176
Step 4: Subtract outbound shipping
If you offer free shipping, this is a real cost. If you charge shipping, subtract only the gap between what you charge and what you pay.
Example:
SKU A: $4.50 per order × 120 = $540
SKU B: $5.20 per order × 80 = $416
SKU C: $3.80 per order × 200 = $760
Step 5: Subtract return processing
Return rate × (return shipping + repackaging + lost product value).
Example (5% return rate, $8 per return):
SKU A: 6 returns × $8 = $48
SKU B: 4 returns × $8 = $32
SKU C: 10 returns × $8 = $80
Step 6: Subtract allocated ad spend
This is the hardest part. If you run ads to a collection page or a specific product, allocate the ad spend to that SKU. If ads go to the homepage, allocate proportionally by revenue.
Example (total ad spend $1,200, allocated by revenue share):
SKU A: 36% of revenue → $432
SKU B: 24% of revenue → $288
SKU C: 40% of revenue → $480
Step 7: Calculate true profit per SKU
| SKU | Revenue | COGS | Payment Fees | Shipping | Returns | Ad Spend | True Profit | Margin |
|---|---|---|---|---|---|---|---|---|
| A | $3,600 | $816 | $140 | $540 | $48 | $432 | $1,624 | 45% |
| B | $2,400 | $736 | $94 | $416 | $32 | $288 | $834 | 35% |
| C | $4,000 | $820 | $176 | $760 | $80 | $480 | $1,684 | 42% |
Now you can see: SKU B has the lowest margin (35%). It might be worth raising its price, renegotiating its COGS, or cutting ad spend on it.
The shortcut
Doing this manually for 50+ SKUs takes hours. I built an Excel template that does all seven steps automatically — you paste your Shopify export, add COGS and ad spend, and it calculates true profit per SKU, monthly P&L, and real ROAS.
See the Shopify Profit Tracker →
Originally published on nicheaitool.com.
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