Profit & Loss Statement Guide

What This Guide Covers

Definitions and formulas behind the metrics shown on the Profit & Loss page. For the page UI walkthrough, see Profit & Loss.

GMV

GMV (with TikTok Co-funding) is the total merchandise value of all orders. It is a parent metric with two parts:

GMV (base) = subtotal + shipping fee charged to customers.
Platform Subsidy = TikTok's contribution to promotional discounts.

So: GMV (with TikTok Co-funding) = subtotal + shipping fee + Platform Subsidy.

Revenue

Gross Sales -- product value at the original price before discounts. Customer-paid shipping is shown separately.
Discounts -- discounts funded by the seller. TikTok-funded product discounts and co-funded promotion fees have their own rows; do not combine them with seller discounts.
Net Sales -- the selected report's product revenue after its applicable discounts, excluding customer-paid shipping. It is the base for Gross Profit and margins.

Gross Sales already excludes shipping, so do not subtract Shipping Revenue from it to calculate Net Sales. For Order date, Net Sales subtracts seller discounts and TikTok-funded product discounts. Seller-Credited Net Sales is a separate amount that retains TikTok-funded support; do not treat the two rows as identical. For Statement date, use the report's statement-based Net Sales and any separate Statement Detail Reconciliation. Compare the same shop, dates, timezone, accounting basis and report version.

Costs & Expenses

Cost of Goods Sold (COGS)

The total cost of products that were sold, calculated from your cost-of-goods inputs. See Setting Up Cost of Goods (COGS) for setup.

Net Shipping

Shown in the Shipping section. A parent row with three children:

Shipping Revenue -- shipping fees you charged customers.
Shipping Fees -- actual cost of shipping. The value in this row already accounts for shipping revenue collected from customers.
FBT Fees -- Fulfilled-by-TikTok warehouse fees.

Fees & Taxes

Platform charges deducted from orders: Referral Fee, Platform Commission, Co-funded Promo Fee, Taxes, and Other Fees.

Affiliate Expenses

Commissions paid to affiliates: sales commissions and ads commissions combined.

Samples (Marketing)

Costs associated with sample giveaways and promotional items: sample COGS, sample shipping, sample fees.

Refunds & Returns

Refund records tied to original orders. Includes cancelled orders where revenue was reversed after booking.

Manual Adjustments

Entries you added manually: Manual Income, Manual Expenses, and FBS Manual Shipping. See Manual Adjustments for how to add and manage these.

Ad Spend

Shown in the Advertising section. Broken down into:

Gross Ad Spend -- your paid spend on TikTok Ads.
Ad Credits -- TikTok-funded credits applied against your spend.

Profit Metrics

Gross Profit

Gross Profit = Net Sales − COGS.

Operating Profit

Operating Profit is profit from store operations before Net Ad Spend. On Settlement basis, it starts from TikTok settlement activity, then applies merchant-side costs and income outside that settlement, including COGS, sample costs, Manual Expenses, FBS Manual Shipping and Manual Income. Configured VAT adjustments and eligible reclassification of advertising already paid from settlement also apply. TikTok shipping, fees, affiliate commissions and refunds already included in settlement are not deducted a second time. On Accrual basis, order-side revenue, shipping, fees, affiliate, refunds, COGS and manual adjustments build profit for orders in the selected period; settlement reconciliation is a reference.

Settlement basis
  TikTok settlement activity
  − merchant-side costs outside settlement
  + merchant-side income and applicable adjustments
  = Operating Profit before Net Ad Spend

Accrual basis
  Order-side revenue and signed operating components
  − COGS and applicable merchant-side costs
  + merchant-side income
  = Operating Profit before Net Ad Spend

Net Profit

Net Profit = Operating Profit − Net Ad Spend.

Platform Subsidy is TikTok's contribution to promotional discounts. It is already included in your sales revenue and in your TikTok settlement deposits, so it is shown for transparency only -- it is not added again at the Net Profit line. It still appears inside GMV (with TikTok Co-funding) on the revenue side so you can see the full merchandise value; adding it into the profit waterfall would double-count it.

Margins

Gross Margin = Gross Profit ÷ Net Sales × 100%
Net Margin = Net Profit ÷ Net Sales × 100%

ROI

ROI = Operating Profit ÷ COGS × 100%. Measures return on inventory investment before Net Ad Spend.

P&L Section Names

The P&L page organizes metrics into these sections (in display order):

GMV, Revenue, Cost of Goods, Shipping, Fees & Taxes, Affiliate, Samples (Marketing), Refunds & Returns, Manual Adjustments, Advertising, Performance & Volume, Profit.

Reading the P&L Table

In the P&L table, cost rows display as negative numbers because they are stored in TikTok's settlement format. The Net Profit calculation has already applied these deductions -- you don't need to subtract them again manually.