Track true e-commerce profitability with MerchantFlow P&L. Manage COGS, ad spend, expenses, and calculate accurate gross and net profit margins.

Profit & Loss (P&L) Overview

Profit & Loss tracking in MerchantFlow gives Shopify and WooCommerce merchants a complete view of true profitability by combining revenue data with cost of goods sold (COGS), advertising spend, operating expenses, and capital expenses in a single dashboard. Go beyond top-line revenue to understand which products, channels, and campaigns actually generate profit.

What Is P&L Tracking?

Profit & Loss tracking helps you understand:

True profitability - revenue minus all costs, not just gross sales
Profit margins - percentage of profit per product, category, and overall business
Cost breakdown - where your money goes across COGS, ads, and operations
Net profit - what you actually keep after every expense

Why it matters: High revenue does not always mean high profit. P&L tracking reveals which products are truly profitable and which erode your bottom line.

P&L Components

Revenue

Total sales from your connected e-commerce platform (Shopify or WooCommerce), tracked through synced order data.

Cost of Goods Sold (COGS)

Product manufacturing or wholesale cost
Shipping from supplier
Import duties and tariffs
Packaging materials

Advertising Spend

Google Ads campaigns
Meta (Facebook/Instagram) Ads
TikTok Ads and Snapchat Ads
Other paid marketing

Operating Expenses (OPEX)

Software subscriptions
Marketing costs
Operations and fulfillment
Overhead costs
Salaries and contractors

Capital Expenses (CAPEX)

Equipment purchases
Website development
Major infrastructure investments

How Profit Is Calculated

MerchantFlow uses an industry-standard ecommerce waterfall and the same calculation in every surface (dashboard KPIs, P&L pages, North Star history, orders, and the daily email summary):

Gross Profit:

Gross Profit = Net Revenue - COGS

Contribution Margin (after all variable order-level costs):

Contribution Margin = Gross Profit - Shipping - Fulfillment - Payment Fees - Ad Spend

Net Profit (after operating costs, amortised CapEx, and other variable expenses):

Net Profit = Contribution Margin - OpEx - Amortised CapEx - Variable Costs

Profit Margin:

Profit Margin % = (Net Profit / Net Revenue) x 100

What is excluded by default:

Sales tax is treated as pass-through unless you turn on "Tax is a cost" in Settings > Financial Preferences. See Tax Rules.
Refunds are already netted out of net revenue, so they are not subtracted again.
Funding repayment is treated as cash flow, not an operating cost, so it does not reduce net profit.

Quick Links

COGS Management - Add and manage product costs
Importing COGS - CSV, BeProfit, and store cost sync
COGS Accuracy - Effective dates, coverage, and recompute
Fulfillment Costs - 3PL, percentage, and per-product methods
Country Fulfillment Rates - Per-destination rates and tiers
Ad Spend Tracking - Monitor advertising expenses
Profit Margins - Calculate and analyze margins
Order Tracking - Order-level profitability
Expense Tracking - Track business expenses
Bank Balance - Monitor cash position
Burn Rate & Runway - Cash flow analysis
Bundle Management - Track bundle profitability

Accessing the P&L Dashboard

Navigate to Dashboard > P&L to view:

Overall profit margin (gross and net)
Total gross profit and total net profit
Profit trend over time
Profit by product and by category
Cost breakdown chart
Bank balance section
Expense summary
Burn rate calculation and runway estimate

How to Set Up P&L Tracking

Step 1: Add COGS

For accurate profitability, add Cost of Goods Sold for your products.

Method 1: Edit on the COGS Page

Go to Dashboard > P&L > COGS
Find the product (expand it to see variants)
Click a cost to edit it inline, or use "Bulk Edit COGS" to set many at once
Enter the product cost and save

Method 2: Import

Go to Dashboard > P&L > COGS
Click "Import"
Upload a CSV with sku and cost columns, a BeProfit export, or sync costs from your connected Shopify or WooCommerce store

See the COGS Management guide for the page itself and Importing COGS for every import option.

Step 2: Connect Advertising Platforms

Ad spend automatically syncs from connected platforms:

Google Ads - if connected
Meta Ads - if connected
TikTok Ads and Snapchat Ads - if connected

Manual ad spend entry:

Go to Dashboard > P&L > Ad Spend
Click "Add Expense"
Enter amount, date, and campaign
Allocate to products (optional)
Save

Ad spend tracking guide

Step 3: Track Business Expenses

Record all operating and capital expenses:

Go to Dashboard > Expenses
Click "Add Expense"
Enter amount, date, category (marketing, software, overhead, etc.), and type (OPEX or CAPEX)
Optional: Attribute to project or channel
Save

Set up recurring expenses:

Toggle "Recurring" ON
Set frequency (monthly, quarterly, annual)
Automatically creates each period

Expense tracking guide

Step 4: Monitor Bank Balance

Track your cash position for a complete financial picture:

Go to Dashboard > P&L > Bank Balance
Click "Add Balance"
Enter today's bank account balance
Record regularly (weekly recommended)

View metrics:

Current balance
Burn rate (cash spending rate)
Runway (months until $0)
Balance forecast

Bank balance guide

Share P&L as an Image

The P&L overview supports a Share P&L action that exports the current waterfall as a shareable image. Use it for investor updates, social posts, or quick screenshots for advisors.

How to Share

Open Dashboard > P&L
Click Share in the top-right of the P&L card
Choose a theme (dark or light) - the image renders with brand-consistent typography in either mode
Optionally toggle Include store name if you want the business name to appear on the image
Click Download to save the PNG, or Copy to copy directly to clipboard

The exported image includes revenue, gross profit, contribution margin, and net profit lines for the selected timeframe. The filename includes the timeframe and store name so files stay distinguishable when you share several at once.

P&L Freshness and Today's Numbers

P&L snapshots refresh automatically on a daily worker so the dashboard always reflects the latest synced orders, ad spend, COGS, and expenses. For today's date, MerchantFlow also runs a separate refresh loop that recomputes the in-flight P&L throughout the day as new orders sync in. You do not need to trigger a manual recompute - the dashboard will surface a fresh number every few minutes during active trading hours.

If the headline number ever looks meaningfully different from your live calculation (for example, an order that just synced has not yet flowed through), MerchantFlow's drift analyzer flags the gap to engineering for review. You can also see the timestamp of the last snapshot in the P&L header.

Margin by Region

For a per-country breakdown of revenue, COGS, ad spend, CAC, net profit, and POAS, see the dedicated Margin by Region page. It is most useful when you ship to multiple destination countries and want to see which regions are profitable and which are leaking margin.

All Costs Summary

Navigate to P&L > All Costs to view your complete cost structure:

Revenue total
COGS subtotal
Ad spend subtotal
Operating expenses subtotal
Capital expenses subtotal
Net profit (Revenue - All Costs)
Net margin %

Why it matters: Gross profit (Revenue - COGS - Ads) does not show the full picture. Net profit includes software subscriptions, overhead costs, team salaries, equipment purchases, and all other business expenses.

Example:

Revenue: $100,000
COGS: $40,000
Ad spend: $20,000
Operating expenses: $25,000
Gross profit: $40,000 (40% margin)
Net profit: $15,000 (15% margin)

True profitability is 15%, not 40%.

Profit Margin Benchmarks

Margin Level	Range
Excellent	40%+
Good	20-40%
Acceptable	10-20%
Low	Below 10% (evaluate pricing and costs)

Varies by industry:

Electronics: 10-20%
Fashion: 40-60%
Home goods: 25-40%
Beauty: 60-80%

Profit margin guide

ROAS Tracking

Return on Ad Spend is calculated automatically:

ROAS = Revenue / Ad Spend

Benchmarks:

3x: Minimum for most businesses
4-5x: Good
6x+: Excellent

Ad spend tracking

Troubleshooting P&L Issues

COGS not showing

Verify COGS entries exist for your products
Confirm the time range includes orders
Check that products were active during the period

Profit seems wrong

Verify COGS values are correct
Confirm ad spend is syncing properly
Check for missing cost categories
Verify currency settings

Ad spend not tracking

Confirm Google Ads or Meta Ads integration is connected
Verify a recent sync completed
Check that campaigns were active during the period

Frequently Asked Questions

How does MerchantFlow calculate profit margins?

MerchantFlow calculates gross margin as (Net Revenue - COGS) / Net Revenue. Ad spend is deducted at the contribution margin line together with fulfillment and payment fees, and net margin deducts all remaining costs including OPEX and amortised CAPEX. Margins are displayed as percentages at the product, category, and business level.

Do I need to enter COGS for every product?

No. Focus on your highest-revenue products first. MerchantFlow's coverage metrics help you prioritize. Aim for at least 80% revenue coverage for meaningful profit calculations.

Can I track ad spend from platforms other than Google and Meta?

Yes. MerchantFlow also syncs ad spend from TikTok Ads and Snapchat Ads. For other platforms, you can manually enter ad spend in the P&L section.

How often should I update COGS?

Review and update COGS quarterly or whenever supplier pricing changes, you switch suppliers, or import duties change.

Last updated: July 31, 2026

Profit & Loss Tracking for E-Commerce