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Crank UP Profitability on your Shopify Store

Crank UP Profitability on Your Shopify Store

Running a successful Shopify store requires constant vigilance, especially in terms of tracking sales and profitability. With various tools at your disposal, it becomes crucial to understand your metrics on a granular level. In this article, we focus on one of our stores to illustrate how you can accurately track your profitability and understand realistic outcomes given a specific scale.

Tracking Profitability: A Case Study

Let's dive into one of our Shopify stores as an example. During June, this store generated approximately $ 270,000 in sales. However, tracking profitability on a week-by-week basis offers more actionable insights. For this instance, we'll focus on the last week of June, from June 27th to July 3rd. During this week, the store generated $ 75,000 in sales.

To thoroughly track profitability, we utilize a Shopify app known as Lifetimely. This app allows us to dive deeper into our financials, providing a comprehensive view of our sales, marketing costs, and Cost of Goods Sold (COGS).

Using Lifetimely for Detailed Insights

  1. Opening the App: Start by navigating to the app section in your Shopify dashboard. Locate and open Lifetimely.

  2. Select Time Period: Once inside Lifetimely, preset the same time period you are analyzing, in this case, from June 27th to July 3rd.

  3. Analyze Metrics: Now, you can see not only the sales data but also the marketing expenses and COGS, which represent the two largest expense categories for any Shopify store.

  4. Calculate Net Profit Margin: After accounting for these expenses, you're left with a net profit margin. For this particular week, our store had a net profit margin of around 10%, translating into a take-home profit of approximately $ 7,500.

Keywords

  • Shopify
  • Profitability
  • Tracking
  • Sales
  • Lifetimely App
  • Marketing Costs
  • COGS
  • Net Profit Margin

FAQ

Q1: Why should I track my Shopify store's profitability on a week-by-week basis?

A1: Weekly tracking allows for more agile and responsive decision-making. You can quickly spot trends or issues and address them before they become significant problems.

Q2: What is Lifetimely and why is it useful?

A2: Lifetimely is a Shopify app designed to provide detailed financial insights. It helps store owners track their sales, marketing expenses, and COGS, making it easier to understand and improve profitability.

Q3: What are the two biggest cost buckets for a Shopify store?

A3: The two largest cost categories are typically marketing expenses and Cost of Goods Sold (COGS).

Q4: What is a realistic net profit margin for a Shopify store?

A4: While it can vary significantly depending on the industry and business model, a net profit margin of around 10% is a realistic and achievable target for many Shopify stores.

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