I Thought I Made $5000 Profit, But I Forgot Shipping Costs
I sold 100 t-shirts for $30 each = $3000 revenue. T-shirt cost was $10 each = $1000. I thought profit was $2000. Then my accountant asked "What about $400 shipping you paid to get them?" My real gross profit was only $1600. I was blind.
What Gross Profit Actually Means
Gross profit is not your final profit, it's your profit after product cost, before rent, ads, software. It's the first health check. If gross profit is low, your business model is wrong.
How I Calculate It Now (With a Free Tracker)
Gross Profit = Revenue - Cost of Goods Sold (COGS)
Example: $3000 revenue - ($1000 product + $400 shipping) = $1600 gross profit.
I don't use Excel anymore. I use a free income and expense tracker. I add revenue and COGS from my phone, it automatically shows my gross profit per product. It's free and shows me which product is worth selling.
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