Many WooCommerce store owners often ask how to find the real number behind their net profit — what it includes, how it’s calculated, and why it matters. In this tutorial, we’ll break down what net profit actually means, how to calculate it, and how the ProfitBlue Financial Reporting Plugin makes it easy to track automatically.
What Is Net Profit?
Net profit is the amount that shows how much money your business truly earns after all expenses have been deducted. Unlike gross profit, which only looks at revenue minus product costs, net profit goes further and includes every other expense your business has.
It’s the ultimate measure of your WooCommerce store’s profitability because it tells you what’s left once everything is paid for.
How to Calculate Net Profit
The calculation is simple in theory, but complex in practice because it involves multiple layers of costs.
Formula:
Net Profit = Revenue – COGS – Variable Costs – Fixed Costs – Taxes on Income
Here’s how each component works:
- Revenue – The total amount your store earned from sales.
- COGS (Cost of Goods Sold) – What you paid for the products you sold.
- Variable Costs – Expenses that change depending on sales, such as shipping, payment fees, or ad spend.
- Fixed Costs – Ongoing expenses like rent, software subscriptions, and salaries.
- Taxes on Income – The amount you owe based on your profits.
For example, if your WooCommerce store made $170,000 in revenue, and you deduct:
- $7,480 in COGS
- $20,000 in variable costs
- $960 in fixed costs
- $0 in taxes
You get a net profit of $142,000.
This number tells you how much money actually stays in your business after covering every expense.
Why Net Profit Is Important
Net profit gives you a realistic picture of your financial health. High sales don’t necessarily mean success — if your costs are rising faster than your revenue, your net profit will shrink.
By tracking this number, you can:
- Identify which costs are consuming your earnings.
- Evaluate whether your pricing strategy is sustainable.
- Spot trends in monthly profit growth or decline.
- Make informed decisions on spending, hiring, and scaling.
ProfitBlue displays this data month by month, so you can easily see how your profitability evolves over time and react before problems grow.
How ProfitBlue Calculates It for You
The ProfitBlue plugin for WooCommerce automatically performs all these calculations. Once your COGS, variable costs, and fixed costs are entered in the Data Settings, ProfitBlue generates your Profit & Loss (P&L) report in real time.
You’ll see both the absolute net profit (the exact dollar amount) and the net margin (the percentage of revenue that becomes profit). This gives you a full overview of how efficient your store really is.
Final Thoughts
Net profit is the most important financial metric in any WooCommerce business. It’s what remains after every bill is paid — the number that tells you whether your company is truly growing or just running on cash flow.
By using ProfitBlue, you can track your net profit automatically, analyze trends, and identify exactly where to improve to make your store more profitable month after month.