Finance & Analytics

How to Analyze Returns and Net Profit in PayHelm

Updated 11/10/2025
profitability, returns, margins, cogs, shipping, reports, custom metrics

How to Analyze Returns and Net Profit in PayHelm

Running sales campaigns with big discounts? Offering free shipping? Dealing with returns? These factors all impact your bottom line, and understanding your true profitability after accounting for them is critical to making smart business decisions.

PayHelm makes it easy to track returns, refunds, discounts, shipping costs, and cost of goods sold (COGS) so you can calculate your real net profit and margins—not just gross sales.

This guide will show you how to build a profitability report that gives you the full picture.

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Why Tracking Net Profit Matters

Gross sales only tell part of the story. Your actual profit depends on:

  • Discounts & Promotions – How much revenue you gave up to close sales
  • Returns & Refunds – Products that came back and money you had to return
  • Cost of Goods Sold (COGS) – What you paid to acquire or manufacture products
  • Shipping Costs – What you paid carriers vs. what customers paid you
  • Fees & Expenses – Payment processing, platform fees, and other costs
    By tracking all these factors, you can:
  • Identify which campaigns are truly profitable
  • Spot products with high return rates eating into margins
  • Understand if free shipping promotions are worth the cost
  • Make data-driven decisions about pricing and discounts

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What You'll Need

To track profitability in PayHelm:

  • Ecommerce Platform Connected – Your store data (Shopify, WooCommerce, BigCommerce, etc.)
  • Product Costs Imported – COGS data for your products
  • Shipping Costs Tracked – Carrier costs from ShipStation or your shipping integration

PayHelm automatically tracks returns, refunds, and discounts from your ecommerce platform.

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Step 1: Create a Profitability Report

Let's build a report that shows all the key metrics for calculating net profit.

How to Create the Report

  1. Go to Reports.
    2. Click Reports in the main navigation.
  1. Create a New Report.
    2. Click the Create a New Report button.
  1. Choose Source Type: Overview.
    2. Select Overview as your source type to access comprehensive sales and cost data.
  1. Select Report Type: Pivot & Group.
    2. Choose Pivot & Group so you can group by date, product, or campaign and create custom profitability calculations.
  1. Group Your Data (Optional).
    2. Decide how you want to view profitability: - By Date – Track profitability over time (daily, weekly, monthly) - By Product – See which products have the best margins - By Campaign – Measure profitability of specific promotions - By Order Source – Compare profitability across sales channels
  1. Add Core Metrics.
    2. In Report Column, select these key metrics: - Gross Sales – Total sales including shipping (before discounts and refunds) - Total Sales – Sales after discounts (excluding shipping and tax) - Total Discount – Amount discounted across all orders - Total Refunds – Money refunded to customers - Total Cost – Cost of goods sold (COGS) - Total Shipping – Shipping charged to customers - Shipment Cost – What you paid for shipping labels - Total Tax – Tax collected
  1. Apply Filters.
    2. Use Filters to focus on: - Specific date ranges (e.g., your Black Friday sale period) - Particular products or categories - Specific campaigns or promotions
  1. Run the Report.
    2. Click Run Report to see your data.

You now have all the raw metrics needed to calculate true profitability.

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Step 2: Add Custom Columns for Profitability Metrics

Now let's create custom calculated columns to show Net Revenue, Gross Profit, and Net Margin %.

Custom Column: Net Revenue

Net Revenue is what you actually keep after discounts and refunds.

How to Create:

  1. Open Report Configuration at the bottom of your report.
  2. Click the Custom Columns tab.
  3. Click + Add Column.
  4. Name it Net Revenue.
  5. Click Edit to open the calculation editor.
  6. Leave the Condition field blank (this calculation applies to all rows).
  7. In the Calculation field, enter: gross_sales - total_discount - total_refunds
  8. Click Save.

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Custom Column: Gross Profit

Gross Profit is your net revenue minus the cost of goods and shipping expenses.

How to Create:

  1. In Custom Columns, click + Add Column.
  2. Name it Gross Profit.
  3. Click Edit to open the calculation editor.
  4. Leave the Condition field blank.
  5. In the Calculation field, enter: total_sales - total_cost - shipment_cost
  6. Click Save.

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Custom Column: Net Margin %

Net Margin % shows your profit as a percentage of net revenue.

How to Create:

  1. In Custom Columns, click + Add Column.
  2. Name it Net Margin %.
  3. Click Edit to open the calculation editor.
  4. Leave the Condition field blank.
  5. In the Calculation field, enter: ((total_sales - total_cost - shipment_cost) / (gross_sales - total_discount - total_refunds)) * 100
  6. Click Save.

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Custom Column: Shipping Profit/Loss

See if you're making or losing money on shipping.

How to Create:

  1. In Custom Columns, click + Add Column.
  2. Name it Shipping Profit.
  3. Click Edit to open the calculation editor.
  4. Leave the Condition field blank.
  5. In the Calculation field, enter: total_shipping - shipment_cost
  6. Click Save.

A positive number means you're charging more than shipping costs. A negative number means you're subsidizing shipping.

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Custom Column: Return Rate %

Track what percentage of your sales are being returned.

How to Create:

  1. In Custom Columns, click + Add Column.
  2. Name it Return Rate %.
  3. Click Edit to open the calculation editor.
  4. Leave the Condition field blank.
  5. In the Calculation field, enter: (total_refunds / gross_sales) * 100
  6. Click Save.

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Custom Column: Discount Rate %

See how much you're discounting as a percentage of gross sales.

How to Create:

  1. In Custom Columns, click + Add Column.
  2. Name it Discount Rate %.
  3. Click Edit to open the calculation editor.
  4. Leave the Condition field blank.
  5. In the Calculation field, enter: (total_discount / gross_sales) * 100
  6. Click Save.

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Step 3: Analyze Your Profitability

Once you've built your report with custom profitability columns, you can start making smarter business decisions.

Example Profitability Report

Here's what a completed profitability analysis might look like:

| Campaign | Gross Sales | Discounts | Refunds | Net Revenue | COGS | Shipping Cost | Gross Profit | Net Margin % | |-----------------|-------------|-----------|---------|-------------|---------|---------------|--------------|--------------| | Black Friday | $50,000 | $15,000 | $2,000 | $33,000 | $20,000 | $1,500 | $11,500 | 34.8% | | Summer Sale | $30,000 | $6,000 | $1,000 | $23,000 | $12,000 | $800 | $10,200 | 44.3% | | Regular Pricing | $25,000 | $1,000 | $500 | $23,500 | $10,000 | $700 | $12,800 | 54.5% |

What This Tells You

    Black Friday Campaign:
  • High gross sales ($50,000) but heavy discounting ($15,000 = 30% discount rate)
  • Net margin of only 34.8% after accounting for costs
  • $11,500 in gross profit on $50,000 in sales
    Summer Sale:
  • Lower gross sales but more moderate discounts (20% discount rate)
  • Better net margin (44.3%) than Black Friday
  • Fewer returns
    Regular Pricing:
  • Lower volume but highest profitability (54.5% net margin)
  • Minimal discounting and returns
  • Most efficient use of marketing spend

Insight: While Black Friday drives the most revenue, regular pricing is more profitable per dollar sold. Consider whether deep discounts are worth the volume increase.

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Step 4: Identify Problem Areas

Use your profitability report to spot issues:

High Return Rates

    Filter or sort by Return Rate % to find:
  • Products with quality issues
  • Items with sizing problems
  • Categories that don't meet customer expectations

Action: Improve product descriptions, sizing guides, or quality control.

Low Margin Products

    Sort by Net Margin % to identify:
  • Products where COGS is too high
  • Items that require excessive shipping costs
  • Products frequently sold at steep discounts

Action: Negotiate better supplier pricing, adjust retail prices, or discontinue low-margin items.

Shipping Losses

    Check Shipping Profit/Loss to see:
  • If free shipping offers are sustainable
  • Whether shipping fees cover actual costs
  • Which products are expensive to ship relative to their value

Action: Adjust shipping rates, set minimum order values for free shipping, or renegotiate carrier rates.

Discount Effectiveness

    Compare Discount Rate % against Net Margin %:
  • Are heavily discounted campaigns still profitable?
  • What's the sweet spot between volume and margin?

Action: Test smaller discount percentages, or focus on value-adds instead of price cuts.

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Tips for Better Profitability Analysis

Compare Campaign Profitability

Create separate reports for each major campaign (Black Friday, Cyber Monday, Mother's Day, etc.) to see which promotions deliver the best net profit, not just the most revenue.

Track Profitability Over Time

    Group your report by Month or Week to identify:
  • Seasonal margin trends
  • Impact of new pricing strategies
  • Long-term profitability improvements

Analyze by Product Category

    Group by Product Category to see:
  • Which product lines are most profitable
  • Where to focus your marketing efforts
  • What to stock more (or less) of

Factor in All Costs

    For a complete picture, consider adding:
  • Payment processing fees (gateway fees, store fees)
  • Marketing costs (if using the Traffic & Advertising add-on)
  • Labor costs (fulfillment, customer service)

You can create custom columns for these as well. For each, leave the Condition field blank and enter the formula in the Calculation field:

Net Profit After Fees: Calculation: total_sales - total_cost - shipment_cost - gateway_fees - store_fees

Set Profitability Targets

    Once you know your average net margin, set targets:
  • Minimum acceptable margin per product (e.g., 35%)
  • Target margin for new campaigns (e.g., 40%)
  • Threshold for discontinuing products (e.g., below 20%)

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Advanced Profitability Formulas

Here are additional custom formulas for deeper analysis. For each of these, leave the Condition field blank and enter the formula in the Calculation field:

Contribution Margin

Revenue minus variable costs (COGS + shipping), excluding fixed costs:

Calculation: total_sales - total_cost - shipment_cost

Profit Per Order

Average profit per transaction:

Calculation: (total_sales - total_cost - shipment_cost) / total_orders

Breakeven Revenue

How much you need to sell to cover costs (if you track fixed costs):

Calculation: total_cost + shipment_cost + fixed_costs

Effective Discount Rate After Returns

True discount percentage including refunds:

Calculation: ((total_discount + total_refunds) / gross_sales) * 100

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Troubleshooting

"COGS shows as $0"

  • Ensure product costs are set in your ecommerce platform
  • Check that PayHelm has synced cost data
  • Manually add product costs if your platform doesn't track them

"Shipping Cost is missing"

  • Verify your shipping integration (ShipStation, etc.) is connected
  • Make sure shipping label purchases are being tracked
  • Check that your date range includes completed shipments

"Net Margin % looks wrong"

  • Verify all metrics are using the same date range
  • Check for division by zero errors (if net revenue is $0)
  • Ensure COGS data is accurate and up to date

"Refunds don't match returns"

  • Partial refunds may not equal full order value
  • Some refunds may be for non-product issues (e.g., overcharges)
  • Allow time for refund data to sync from your platform

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Real-World Example: Optimizing a Flash Sale

Scenario: You ran a 48-hour flash sale with 40% off everything and free shipping.

    Results:
  • Gross Sales: $100,000
  • Discounts: $40,000 (40% off)
  • Refunds: $5,000 (5% return rate)
  • COGS: $45,000
  • Shipping Cost: $3,000 (you absorbed all shipping)
  • Net Revenue: $55,000
  • Gross Profit: $7,000
  • Net Margin: 12.7%

Analysis: While the sale generated $100k in revenue, you only netted $7k in profit—a 12.7% margin. Regular pricing typically delivers 35-40% margins.

    Decision: For future sales, you could:
  • Reduce discount to 25-30% instead of 40%
  • Offer free shipping only on orders over $75
  • Exclude already low-margin products from the sale
  • Target the sale only to email subscribers (lower acquisition cost)

By adjusting these levers, you could maintain similar volume while improving net margin to 25-30%.

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Need More Help?

If you have questions about tracking profitability, setting up COGS data, or interpreting your margin calculations, contact our support team. We're here to help you get the most out of PayHelm!

Happy analyzing!

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