Lesson 1 of 5
Revenue vs Profit
Why a $10,000 sales month can still leave you broke — and how to separate top-line revenue from real profit.
~6 min
Revenue is the total money customers paid you. Profit is what is left after every cost — fees, materials, shipping, ads, refunds, taxes — is removed. They are not the same number, and confusing them is the single most expensive mistake new sellers make.
The two formulas
Revenue
Revenue = Units sold × Price per unit
Profit
Profit = Revenue − (COGS + Platform fees + Shipping + Ads + Refunds + Overhead)
A quick example
You sell 100 mugs at $20 each. Revenue is $2,000. But each mug costs $6 to produce, Etsy takes ~9% in fees, shipping eats $4 per order, and you spent $200 on ads. Real profit looks closer to $400 — a 20% margin, not the 100% the revenue number implied.
Key takeaways
- Revenue is money in. Profit is money kept.
- List every cost — fees, shipping, ads, refunds — before you celebrate a sales number.
Related Guides
- Profit guideBusiness PlanningHow To Calculate Handmade Business Profit
Work out what your handmade business actually keeps after materials, labor, packaging, shipping, fees, and taxes.
- Profit guideBusiness PlanningWhat Is A Good Print-on-Demand Profit Margin? Complete POD Profit Margin Guide (2026)
What a good POD profit margin looks like in 2026 — gross vs net margin, every POD cost, formulas, worked t-shirt/hoodie/mug/poster/tote examples, pricing tables, and common mistakes.
- Profit guideBusiness PlanningWhat Is a Good Profit Margin?
What counts as a healthy profit margin — and how it changes depending on what you sell and where.
Related Calculators
- CalculatorPrint-on-DemandProfit Margin CalculatorUniversal profit, margin, and markup for any product or channel.Open calculator →
- CalculatorBreak-Even CalculatorSales needed to cover your startup costs.Open calculator →
- CalculatorProfit Margin Difference CalculatorCompare two prices or products by profit and margin.Open calculator →
Help Me Decide
Troubleshooting
Recommended Downloads
- ResourceWorkbookSeller Profit WorkbookTrack revenue, expenses, fees, profit margins, break-even points, and product performance across any online selling business.Open resource →
- ResourceWorksheetTikTok Shop Profit WorksheetA beginner-friendly worksheet for estimating TikTok Shop fees, costs, and profit per product — plus monthly sales targets and break-even checks.Open resource →
- ResourceWorksheetBreak-Even Planning WorksheetCalculate break-even points, profit cushions, and sales targets across any selling platform.Open resource →
Continue Learning
- Courseuniversal-sellerReturns & Refunds for SellersWhat a return actually costs, which resolution to choose, and when returns become a profit problemOpen course →
- CourseShopifyYour Own Online StoreA channel decision made on your numbers, and a store built to launchOpen course →
- CoursehandmadeHandmade & Craft FairsOne product priced from real costs, and one event planned as a business decisionOpen course →