Many WooCommerce store owners still aren’t sure what gross profit actually means or how to calculate it inside their store. Yet, this single number can completely change how you understand your business performance. In this tutorial, we’ll explain what gross profit is, how to calculate it, and how to automatically track it using the ProfitBlue Financial Reporting Plugin.
What Is Gross Profit?
Gross profit is one of the most important financial indicators in eCommerce. It tells you how much money your business makes after paying for the products you sell.
Formula:
Gross Profit = Revenue – COGS (Cost of Goods Sold)
If your WooCommerce store generates $170,000 in revenue and your product costs (COGS) total $163,000, your gross profit is $7,000.
This number represents how efficiently you are producing or sourcing your goods. It shows the money left over to cover operating expenses like shipping, marketing, or rent.
How to Set Up COGS in ProfitBlue
To calculate gross profit automatically, ProfitBlue uses your COGS data. Inside the plugin, you’ll find a Data Settings section where you can enter or import the cost of goods sold for each product.
Once you insert these values, ProfitBlue instantly calculates:
- Gross Profit (the absolute amount)
- Gross Margin (the percentage value of profitability)
- Per-Order Profitability for every sale
These results appear across your Profit & Loss (P&L) table, product analysis tabs, and overview dashboards — all in real time.
For example, if you record a product cost of $10 and sell it for $100, ProfitBlue automatically records a $90 gross profit on that sale and includes it in your monthly and yearly reports.
Why Gross Profit Matters
Gross profit tells you whether your products are priced correctly and whether your sourcing strategy is sustainable. Without tracking it, you might have high sales but little to no profit left at the end of the month.
By analyzing this number regularly, you can:
- Identify which products bring the highest returns
- Cut or renegotiate unprofitable items
- Optimize pricing and marketing strategies
- Monitor performance trends month by month
From Gross Profit to Gross Margin
After calculating gross profit, ProfitBlue also helps you determine your gross margin, which expresses the same relationship as a percentage.
Formula:
Gross Margin = (Gross Profit ÷ Revenue) × 100
In the example above, $7,000 divided by $170,000 equals a 4.1% gross margin. This percentage makes it easy to track performance trends — rising margins indicate healthy pricing and efficient sourcing, while falling margins can warn of growing costs or excessive discounts.
How ProfitBlue Simplifies It
Instead of calculating numbers manually in spreadsheets, ProfitBlue does everything for you automatically. It analyzes each order, applies your cost data, and displays accurate gross profit and margin calculations across all reports. You get a clear overview of how profitable your WooCommerce business really is, anytime.
Final Thoughts
Gross profit is the foundation of every financial decision. It shows how much you truly earn before covering your other expenses and provides the first signal of whether your store is healthy or struggling.
With the ProfitBlue plugin for WooCommerce, you can calculate and monitor your gross profit effortlessly — gaining the real numbers and financial clarity you need to grow confidently.