Profit Metrics

Overview

Profit metrics tell you how much money you are actually keeping after all costs, fees, and expenses are accounted for. Dashboardly calculates three levels of profit -- Gross, Operating, and Net -- each giving you a progressively more complete picture of your TikTok Shop's financial health.

Metrics

Gross Profit

• What it shows: How much you earn after subtracting the cost of the products you sold, but before any other expenses (fees, commissions, shipping costs, etc.).
• Formula: Net Sales - COGS
• Where you see it: Dashboard, Profit & Loss, Sales & Profit, Product Details
• Example: You sell 5,000 worth of products (Net Sales) and those products cost you 2,000 to purchase (COGS). Your Gross Profit is 3,000. This means you have 3,000 to cover all your other expenses (fees, shipping, marketing, etc.).
• Important notes:
  • If Gross Profit equals Net Sales, you likely have not set your product costs. See Setting Up COGS.
  • Net Sales is defined as Product Sales + Shipping Revenue - Discounts (see Revenue Metrics).
  • COGS includes the cost of cancelled orders that were shipped but not returned, because the product left your inventory.

Operating Profit

• What it shows: Your profit from store operations before ad spend. It is anchored to the total amount TikTok actually settles to you -- the settlement deposits across both order and non-order statement lines -- then adjusted for your own costs that TikTok does not handle.
• How it is calculated: Start from what TikTok settles to you, then subtract Cost of Goods Sold, sample/marketing costs, manual expenses, and FBS manual shipping, and add manual income and reclaimable VAT where you have configured it.
• Where you see it: Dashboard, Profit & Loss, Sales & Profit
• Example (illustrative): Imagine TikTok settles 2,400 to you across all order and statement lines. You then subtract 2,000 of product cost (COGS), 50 of sample costs, and 30 of manual expenses, and add 20 of manual income. Your Operating Profit is roughly 340. (These numbers are for illustration only -- your real figure comes straight from your settlement total and your configured costs.)
• Important notes:
  • The fee, shipping, refund, and affiliate rows you see in the Profit & Loss breakdown are a transparency view of what TikTok already deducted before paying you. They are not separate amounts subtracted from Net Sales, so adding those rows up by hand will not land exactly on Operating Profit. For very recent orders TikTok has not settled yet, the figure is an estimate that updates automatically once TikTok settles.
  • If Operating Profit is negative, your settlement total plus manual income is not covering your product and operating costs.
  • This is the core measure of whether your shop's operations are profitable before external factors like TikTok subsidies or ad spend.

Net Profit

• What it shows: Your final bottom-line profit after everything -- including your advertising spend. This is the final cash result of running your shop.
• Formula: Operating Profit - Net Ad Spend
• Where you see it: Dashboard, Profit & Loss, Sales & Profit
• Example: Your Operating Profit is 2,100 and you spent 500 on TikTok Ads. Your Net Profit is 2,100 - 500 = $1,600.
• Important notes:
  • Platform Subsidy is shown for transparency only. It is TikTok's contribution to your co-funded promotions, and that amount is already included in your sales revenue (and in your TikTok settlement deposits) -- so it is not added to Net Profit a second time. Net Profit = Operating Profit - Net Ad Spend.
  • Net Ad Spend is your ad spend after any ad credits. It is pulled from your connected TikTok Ads account. If you have not connected TikTok Ads, Net Ad Spend will be zero and Net Profit will equal Operating Profit.
  • If you want to compare profitability before ad spend, use Operating Profit instead.

Margin

• What it shows: What percentage of your net sales you keep as gross profit.
• Formula: (Gross Profit / Net Sales) x 100
• Where you see it: Dashboard, Profit & Loss, Sales & Profit, Product Details
• Example: If your Gross Profit is 3,000 and your Net Sales are 5,000, your Margin is 60%. That means you keep 0.60 of every 1.00 in net sales after product costs.
• Important notes:
  • Margin will show as blank/empty if Net Sales is zero or negative. A day with no sales will not have a Margin value.
  • This metric requires COGS to be set on the Inventory page. Without COGS, Margin will show as 100%, which is misleading -- it means product costs have not been configured, not that you are keeping 100% of revenue.
  • A healthy Margin varies by product category. Most TikTok Shop sellers aim for 40-70% Margin before operating expenses.

ROI (Return on Investment)

• What it shows: How much operating profit you earn for every dollar spent on inventory.
• Formula: (Operating Profit / COGS) x 100
• Where you see it: Dashboard, Profit & Loss, Sales & Profit
• Example: Your Operating Profit is 2,100 and your COGS is 2,000. Your ROI is 105%. That means you earned 1.05 in operating profit for every 1.00 of product cost.
• Important notes:
  • ROI uses Operating Profit (not Net Profit) because it measures the return on your inventory investment before subsidies and ad spend.
  • ROI will show as blank if COGS is zero -- set your product costs on the Inventory page to enable this metric.
  • An ROI above 100% means you are more than doubling your investment in inventory. An ROI below 0% means you are losing money on inventory after all operating costs.

How These Metrics Connect

Profit metrics build on each other in a clear hierarchy:

Net Sales
  - COGS
  = Gross Profit  -----> Margin = (Gross Profit / Net Sales) x 100

TikTok Settlement Total (deposits across order + non-order lines)
  - COGS
  - Sample / Marketing Costs
  - Manual Expenses
  - FBS Manual Shipping
  + Manual Income
  + Reclaimable VAT (where configured)
  = Operating Profit  --> ROI = (Operating Profit / COGS) x 100

Operating Profit
  - Net Ad Spend
  = Net Profit

The fee, shipping, refund, and affiliate rows in the P&L breakdown decompose the TikTok settlement total for transparency -- they are not separate subtractions from Net Sales, so a hand-tally of those rows will not exactly equal Operating Profit.

Margin and ROI are percentage views of Gross Profit and Operating Profit respectively. They help you compare performance across different time periods or products regardless of absolute dollar amounts.

Common Questions

Why is my Net Profit higher than my Operating Profit? Net Profit is not higher because of Platform Subsidy. Net Profit = Operating Profit - Net Ad Spend, so it is normally equal to or lower than Operating Profit. The Platform Subsidy is shown for transparency only -- it is TikTok's contribution to your co-funded promotions, and that amount is already included in your sales revenue (and in your TikTok settlement deposits), so it is not added to Net Profit a second time. If you have no ad spend, Net Profit equals Operating Profit.

Why do Margin and ROI show as blank or N/A? Both metrics require COGS to be set. Go to the Inventory page and enter your unit costs for each product, or use the bulk CSV import. See Setting Up COGS. Until costs are configured, Margin will show as 100% (misleading) and ROI will be blank.

Why does Operating Profit seem too low? Check these common causes:

1. High Platform Fees & Taxes from TikTok marketplace fees
2. Large Refunds & Returns in the period
3. Affiliate commissions on creator/partner sales
4. Sample costs from sending free products to influencers
5. Missing COGS data causing Gross Profit to be artificially high (check the Inventory page)

Review the Profit & Loss page for a detailed breakdown of every expense category.

Why do numbers differ slightly between the Dashboard and P&L page? Both pages use the same data source and the same formulas. If you notice a difference, verify that you are comparing the exact same date range and the same shop. Both pages should produce identical results for identical inputs.

What is the difference between Margin and ROI? Margin measures gross profit as a percentage of revenue -- "how much do I keep per dollar sold." ROI measures operating profit as a percentage of inventory cost -- "how much do I earn per dollar invested in products." They answer different questions and are both useful. A product can have high Margin but low ROI if operating expenses are very high.

Why is my Margin 100%? A Margin of 100% almost always means that COGS has not been set for your products. When COGS is $0, Gross Profit equals Net Sales, and Margin calculates as 100%. This is not accurate -- set your product costs in Inventory or via Setting Up COGS to see your real margin.