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 -- total sales revenue including shipping charged to customers.
Discounts -- combined seller and TikTok-funded discounts applied to orders.
Net Sales -- product revenue after discounts, excluding shipping. Used internally as the base for Gross Profit and margins.

Net Sales = Gross Sales − Shipping Revenue − Discounts.

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

Your business profit from selling operations, before subsidy and ad spend. It starts from Gross Profit and adjusts for each operating cost aggregate:

Operating Profit
  = Gross Profit
  + Manual Income
  − Net Shipping             (shipping revenue, shipping fees, FBT fees)
  − Fees & Taxes             (referral fee, platform commission, co-funded promo fee, taxes, other fees)
  − Affiliate Expenses       (sales + ads commissions)
  − Samples (Marketing)
  − Refunds & Returns        (refunds + cancellations)
  − Manual Expenses
  − FBS Manual Shipping

Net Profit

Net Profit = Operating Profit + Platform Subsidy − Ad Spend.

Platform Subsidy is TikTok's contribution to promotional discounts. It appears inside GMV on the revenue side so you can see the full merchandise value, but it only affects profit at the Net Profit line -- Gross Sales already excludes it, so adding it earlier in the profit waterfall would double-count.

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 subsidies.

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.