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Gross Profit vs Net Sales in Print-on-Demand (Explained)
Quick Answer: Net sales are your total sales after refunds, discounts, and cancellations. Gross profit is net sales minus your cost of goods sold (COGS). In print-on-demand (POD), net sales tell you how much revenue actually stayed in your store. Gross profit shows if your products are priced with enough margin. You need both metrics to understand true profitability.
Not sure how profit works in POD? See our step-by-step guide to calculating POD profits. If you’d rather skip spreadsheets and see your numbers in real time, connect your store at PodVector. For accounting reference, see Investopedia’s Net Sales definition.
Definitions: Net Sales vs Gross Profit
Net Sales = Total Sales – Discounts – Refunds – Cancellations.
It’s the revenue that actually counts after deductions. In POD, this means your Shopify “Net Sales” number, not just “Total Sales.”
Gross Profit = Net Sales – COGS (Cost of Goods Sold).
In POD, COGS means what you pay Printify or Printful to print and ship the product to your customer.
Example: Same Net Sales, Different Gross Profit
Imagine two POD sellers each report $10,000 in net sales:
- Seller A: Sells hoodies. Each costs $20 to produce, sold at $50.
- Seller B: Sells mugs. Each costs $8 to produce, sold at $15.
Even though both have the same net sales, their gross profits differ:
- Seller A: $10,000 – $4,000 = $6,000 gross profit
- Seller B: $10,000 – $5,333 = $4,667 gross profit
This shows why you can’t just stop at net sales. Higher COGS can shrink gross profit quickly.
Why Net Sales Matter
- It reflects the real cash inflow after refunds and discounts.
- It shows how effective your promotions are (too many discounts lower net sales).
- It’s the first filter before looking at profit metrics.
Why Gross Profit Matters
- It shows if your products are priced for profit.
- It helps you decide which products to scale with ads.
- It gives you “room” to cover operating costs like ads, shipping, and fees.
How to Use Them Together
Smart POD sellers always look at net sales and gross profit together:
- Net sales tells you if money is coming in consistently.
- Gross profit tells you if each order actually makes sense to sell.
Example: If your net sales are high but gross profit is weak, your pricing or product costs are the problem. If both are strong but operating profit is low, your ads or shipping are too expensive.
Benchmarks in POD
- Net sales margin: Expect 90–95% of total sales (after discounts/refunds).
- Gross profit margin: Often 40–60% for t-shirts, hoodies, and mugs.
- Warning: A gross profit margin below 30% is risky—you may not have enough room left for ads and fees.
How to Track These Metrics (Manual vs Automated)
Manual (Spreadsheets)
- Export net sales from Shopify’s reports.
- Subtract refunds and discounts to confirm the number.
- Pull COGS from Printify/Printful (base + shipping).
- Subtract COGS from net sales to calculate gross profit.
Automated (PodVector)
With PodVector, you don’t need to run manual reports. The platform pulls Shopify net sales, refunds, and COGS automatically—so you can see net sales, gross profit, and operating profit in real time.
FAQs
Are net sales the same as gross sales?
No. Gross sales are before refunds and discounts. Net sales are after.
What’s the difference between net sales and gross profit?
Net sales measure actual revenue. Gross profit measures revenue minus product costs. Both matter for POD success.
Can net sales be high while profit is low?
Yes. Discounts, refunds, or high product costs can eat into profit even when sales are strong.
Does PodVector track both?
Yes. PodVector automatically tracks net sales, gross profit, and operating profit—so you can see all layers of profitability clearly.
Track Net Sales & Gross Profit Together
Don’t stop at sales—know your real profit. See net sales, gross profit, and operating profit in one dashboard.
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