Shopify Metric
E-commerce
Profit Margin = ((Revenue - COGS) / Revenue) × 100
Profit margin by product measures the percentage of revenue retained as profit after deducting cost of goods sold for each product. It reveals which products generate healthy margins and which are margin-dilutive.
Full guide: definition, formula, and benchmarksShopifyE-commerceProfit Margin by Product
Profit margin by product measures the percentage of revenue retained as profit after deducting cost of goods sold for each product. It reveals which products generate healthy margins and which are margin-dilutive.
How to calculate profit margin by product
Why profit margin by product matters for Shopify users
Revenue alone does not indicate profitability. A high-revenue product with thin margins may contribute less profit than a modest seller with healthy margins. Product-level margin visibility guides pricing and promotion decisions.
Shopify merchants can rank products by margin contribution to prioritise promotion of profitable items and investigate margin-negative products for pricing or sourcing adjustments.
Understand and act on profit margin by product with KPI Tree
Sync Shopify product cost and revenue data to your warehouse and compute margins in KPI Tree. Build a profitability tree showing margin by product, category, and channel.
Assign finance and merchandising ownership with alerts when any product margin falls below target or turns negative.
Get started with your Shopify data
MCPPull metrics from Shopify directly through the Model Context Protocol.
Connect your existing warehouse where Shopify data already lands.
Our professional services team can build you turn-key AI foundations in a matter of weeks. Data warehouse on Snowflake/BigQuery, ELT with Fivetran, all modelled in dbt with a semantic layer.
Related Shopify metrics
Product Performance Analysis
E-commerceMetric Definition
Product performance analysis evaluates each product on revenue, units sold, margin, return rate, and conversion rate. It identifies which products drive value and which underperform across multiple dimensions.
Average Order Value
E-commerceMetric Definition
AOV = Total Revenue / Number of Orders
Average order value (AOV) is the mean monetary value of each completed order. It captures the combined effect of pricing, bundling, upselling, and promotional strategies on basket size.
Product Return Rate
E-commerceMetric Definition
Return Rate = (Returned Units / Sold Units) × 100
Product return rate is the percentage of sold units that are returned by customers. It reflects product quality, description accuracy, and how well customer expectations are met.
Gross Merchandise Volume
E-commerceMetric Definition
GMV = Sum of All Order Values (Before Returns and Discounts)
Gross merchandise volume (GMV) is the total value of all merchandise sold through your Shopify store before deducting returns, discounts, and fees. It represents the top-line scale of your e-commerce operation.
Explore profit margin by product across integrations
All Shopify metrics
Average Order ValueCart Abandonment RateCheckout Conversion RateCustomer Acquisition CostCustomer Lifetime ValueCustomer Repeat RateDiscount Usage AnalysisFulfilment SpeedGross Merchandise VolumeInventory TurnoverMarketing Channel AttributionNew vs Returning CustomersOrder FrequencyOrders Per CustomerProduct Performance AnalysisProduct Return RateRevenue by ChannelRevenue by GeographyRevenue Per VisitorSessions to Purchase RatioShipping Cost AnalysisStore Conversion RateTop Selling Products AnalysisTraffic Source PerformanceAbandoned Cart Recovery RateAverage Product RatingCart Conversion RateCheckout Abandonment RateCollection Performance AnalysisCustomer Cohort AnalysisCustomer Segmentation AnalysisPayment Method DistributionRevenue Growth RateSeasonal Trend AnalysisEmpower your team to understand and act on Shopify data
Map what drives your metrics, measure progress at any grain, prove what works statistically, and deliver personalised action plans to every team member.
