Margin on best sellers

Selling a lot is not the same as earning a lot. The Margin on best sellers report takes the products that bring in most of your revenue and shows what each one leaves you after its cost.

Which products are listed

Your class A products by revenue: ranked from highest to lowest revenue over the last 365 days, the ones that together make up the first 80% of it. Usually a small part of the catalogue.

Products without a cost in Shopify are not listed. We can't say what they earn, and an unknown cost is not a zero margin.

The columns

• Units — units sold, net of refunds.
• Revenue — net revenue: after discounts and refunds.
• Cost — units sold × the product's unit cost in Shopify.
• Margin — revenue − cost.
• Margin % — margin as a share of revenue.
• Margin class — the class the product would get if all your products were ranked by margin instead of revenue.

The totals at the top add up revenue and margin across the listed products. Margin % there is total margin over total revenue, so a product that sold a lot weighs more than one that sold little.

What "falls to C" means

A product is class A on revenue — one of your best sellers — but class C on margin: it is among the products contributing least to your profit. The summary tells you how many of your best sellers are in that situation.

These are the products to look at first. Common reasons:

• The price is too close to the cost.
• It is sold with heavy discounts.
• Many units are refunded.
• Its cost in Shopify is outdated.

A best seller in class C is not necessarily a problem — it may bring customers who buy other things — but it is a decision you should make knowingly.

Why it asks for costs

The report is only shown when at least 80% of the products that bring in most of your revenue (the first 95%) have a cost in Shopify. With fewer, the ranking by margin would be wrong for too many products. Until then you'll see Costs are missing with the current percentage.

To add costs:

• in Shopify, in each product's Cost per item; or
• in this app: in Inventory filter by No cost, open a product and set its Unit cost. It is written to Shopify.

The long tail of products that barely sell does not count towards the 80%.

Ranking all products by margin

By default the app ranks your products into A, B and C by revenue. Once enough costs are in, you can switch to ranking by margin in Settings. That changes which products get more safety stock, not this report.