Introducing NetNet: Profit Analytics for Shopify

NetNet is a Shopify profit analytics app for DTC brands. It calculates true profit per order by combining Shopify revenue with COGS, ad spend, shipping, refunds, payment and gateway fees, and custom costs.

This post explains why we built it around contribution margin specifically, and what it does not do.

The problem we kept running into

Every store we looked at could answer two questions and not the one in between.

What did we sell? Shopify answers this precisely.

What did we make? Shopify answers a version of this — gross profit, from the cost per item you enter — and then stops. It has no visibility into what you paid a carrier, what your gateway deducted inside a payout, or what you spent acquiring the customer.

What is one more order worth? Nothing answered this, and it is the question that governs almost every spending decision a store makes.

That third number is contribution margin: what remains after the variable costs of serving a specific order — shipping label, payment fees, packaging, fulfilment — but before rent, salaries and advertising. It is the ceiling on what you can pay to acquire a customer, and stores that do not have it end up bidding against gross margin instead, which overstates that ceiling by the entire cost of fulfilment.

What it calculates

Four layers rather than one number.

Gross profit — net sales less landed cost of goods. Whether pricing and sourcing work.

Contribution margin — after shipping, payment and gateway fees, packaging and per-order fulfilment. What one more order adds.

Marketing profit — after ad spend. Whether acquisition pays for itself before overhead is considered.

Net profit — after software, salaries and overheads. Whether the business works.

Each is calculated per order and aggregated, rather than derived from monthly totals. That matters because the useful findings are differences between orders — a weight band where delivery costs more than it charged, a discount code that only sells your thinnest-margin products, a region where failed deliveries are quietly expensive — and averaging is the operation that destroys differences.

The costs most profit figures miss

The reason a homemade calculation and a carrier invoice rarely agree is that several costs are deducted rather than billed. Nobody writes a cheque for them, so nothing prompts a row in a spreadsheet.

Tax charged on gateway fees. Foreign exchange spread on international payouts. Carrier weight and dimension adjustments, rebilled weeks after collection. Fees retained on refunded orders. Return freight on parcels that never arrived. Dispute fees, charged whether you win or lose.

Individually each is trivial. Together they commonly account for a few percent of net sales, which for a store running a single-digit net margin is a meaningful share of everything it keeps. NetNet reads them from payouts and carrier records and attributes them back to the orders that caused them, rather than to whichever month they happened to land in.

What it does not do

Worth stating as plainly as the rest.

It does not do attribution. It reads spend from Meta and Google and measures profit after it; it will not tell you which touchpoint deserves credit for a conversion.

It is single-store and Shopify-only. If you sell across several shops or on a marketplace, a multichannel tool will serve you better and we would rather say so here than after you have installed it.

It does not replace your accountant’s statement. It produces management figures for operating decisions — cash-basis conventions, simplified inventory treatment, no depreciation — which is a different document from the one that gets filed.

And it cannot invent a cost you have not entered. Uncosted variants are counted as pure margin, and no software fixes that.

Where to start

If you want the reasoning rather than the product, the learn library covers the arithmetic without requiring an account — how to calculate profit, what contribution margin is, and where the numbers come from.

If you want to know whether you need an app at all, the honest starting point is what Shopify’s own reports already cover. For a store with modest advertising and predictable shipping, they may be enough, and we would rather you established that first.