What Costs Are Factored Into My True Profit CalculationUpdated 5 days ago

A genuine profit calculation includes every cost involved in running the business — not just the obvious ones. Most founders dramatically underestimate their true operational costs because they track ad spend and COGS but overlook the layer of smaller recurring costs that accumulate to a meaningful amount across a month or quarter.

Every cost category factored into the true profit calculation I build into the dashboard:

Product costs — COGS for every product sold, calculated per unit and aggregated across all orders in the period.

Advertising spend — total combined spend across every active ad platform.

Platform fees:

• Shopify monthly subscription
• Transaction fees on every order where applicable
• Payment processing fees — typically a percentage of every transaction

App subscriptions — the monthly cost of every installed app. These accumulate across email marketing, loyalty, reviews, upsells, customer support and other tools and are frequently overlooked as a cost category entirely.

Shipping costs — the cost of shipping each order to the customer, minus any shipping revenue collected at checkout from the buyer.

Returns and refunds — revenue lost through returns and the direct cost of processing them including any return shipping.

One-time service costs — costs like ad creative production and professional services, amortized across the months they benefit.

Every category combined gives the founder a real net profit number — not an optimistic approximation.