Revenue, payout and profit: three numbers sellers confuse
Why the money a marketplace sends you is not your revenue — and neither is your profit.
Many online sellers measure success by the payout that arrives from their marketplace. It is a useful cash figure, but it is not revenue, and it is certainly not profit.
Gross sales and net revenue
Gross sales is the total value of orders before anything is deducted. Net revenue subtracts discounts and refunds. This is the figure your margins should be measured against.
Payout
A payout is net revenue minus the fees and deductions the platform keeps — commissions, payment fees, sometimes shipping subsidies. Treating payout as revenue hides those costs and understates how much your channel really costs you.
Profit
Gross profit subtracts the cost of goods from net revenue. Contribution profit then subtracts variable costs such as platform fees, shipping, packaging, affiliate commissions and advertising. Operating profit finally allocates your fixed costs.
In practice
Record all three separately. If a cost is unknown, mark profit as incomplete instead of assuming zero — an optimistic number is more dangerous than a missing one.