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Gross Profit Formula

The gross profit formula is used to calculate the profit a business makes after covering the expenses required to make their products or provide their services.

How do you calculate gross profit?

Gross profit is calculated by subtracting the cost of goods sold (COGS) from the total sales revenue from those goods.

Formula

Total sales revenue - Cost of goods sold

Why is gross profit important?

Gross profit is an important metric to track when analyzing the profitability of your brand and the efficiency of your personalization efforts in driving conversions and increasing Average Order Value (AOV).