# Profit reports

You can use profit reports to see information about your costs, margins, and profit.

## On this page

## Adding cost per item to your products

Profit is reported only for products and variants that had cost recorded at the time they were sold. To get value from your profit reports, you need to add a cost per item to your products.

#### Steps:

- In your Shopify admin, click
**Products**. - Click the name of a product to edit it.
- In the
**Pricing**section, add a dollar value in the**Cost per item**field. The cost per item is how much it costs you for the product or variant. For example, if you resell a product, then you can enter the price that you paid the manufacturer, excluding taxes, shipping, or other costs. If you create the product yourself, then you can enter a value that is based on your labor and material costs. - Click
**Save**.

## Viewing profit reports

## Profit by product

The **Profit by product** report shows your gross profit by product for the selected date range.

For each product that had cost recorded at the time it was sold, you see the following information:

Column | Description |
---|---|

Net quantity | The total number of units sold during this time period. |

Net sales | The total net sales during this time period. |

Cost | The total cost of the units sold during this time period. |

Gross margin | The profit margin on this product during this time period. The margin is calculated as ([net sales - cost] / net sales) * 100. For example, if your net sales are $50 and your cost is $30, then the gross margin (calculated as ([50 - 30] / 50) * 100) is 40%. |

Gross profit | The total profit made on this product during this time period. It's calculated by subtracting the cost from net sales. |

Discounts and refunds affect your profit margin. If you sold discounted products or issued refunds during this time period, then the reported **Gross margin** is different than the margin you see on the corresponding product details page. Learn how discounts and refunds affect profit margin.

## Profit by product variant SKU

The **Profit by product variant SKU** report shows your gross profit by variant.

For each product variant that had cost recorded at the time it was sold, you see the following information:

Column | Description |
---|---|

Net quantity | The total number of units sold during this time period. |

Net sales | The total net sales during this time period. |

Cost | The total cost of the units sold during this time period. |

Gross margin | The profit margin on this product variant during this time period. The margin is calculated as ([net sales - cost] / net sales) * 100. For example, if your net sales are $50 and your cost is $30, then the gross margin (calculated as ([50 - 30] / 50) * 100) is 40%. |

Gross profit | The total profit made on this product variant during this time period. It's calculated by subtracting the cost from net sales. |

Discounts and refunds affect your profit margin. If you sold discounted products or issued refunds during this time period, then the reported **Gross margin** is different than the margin you see on the corresponding product details page. Learn how discounts and refunds affect profit margin.

## Profit by Point of Sale location

The **Profit by Point of Sale location** report shows your gross profit by point of sale location.

For each POS location, you see the following information:

Column | Description |
---|---|

Net quantity | The total number of units sold during this time period. |

Net sales | The total net sales during this time period. |

Cost | The total cost of the units sold during this time period. |

Gross margin | The profit margin on this product variant during this time period. The margin is calculated as ([net sales - cost] / net sales) * 100. For example, if your net sales are $50 and your cost is $30, then the gross margin (calculated as ([50 - 30] / 50) * 100) is 40%. |

Gross profit | The total profit made on this product variant during this time period. It's calculated by subtracting the cost from net sales. |

## Discounts and refunds

Discounts and refunds affect your net sales and profit margin.

The **margin** that is shown on the product details page is based on the full price of the product. The **Gross margin** shown in your profit reports is based on the net sales of the product, which takes into account any discounts or refunds you offered during the reporting period.

#### Example: Effect of discounts on profit reports

A T-shirt with a regular price of $20 and a cost of $10 shows as having a 50% margin on the product details page.

If you discount the T-shirt 25% to sell it for $15 during the reporting period, then the same T-shirt shows as having a 33% margin on the **Profit by product** report.

## Considerations for dynamic reporting options

The **Cost per item** field contains static data, which means that the data in your profit reports is only relevant to a specific point in time. If you need to report data that is dynamic, you have the following options:

- Run your financial reports in another business system, such as an enterprise resource planning (ERP) or Accounting system.
- Consider using a reporting app from the Shopify app store to report on the total value of your inventory.
- Calculate costs, profits, and losses manually.