How to Track Your Profitability

Revenue is easy to see and often misleading. Plenty of sellers with strong sales are making far less than they think, or losing money, because the costs are scattered across fees, ads, returns, and cost of goods that never show up next to the sales number. Tracking profitability means watching what you actually keep, so you're steering by profit rather than the vanity of revenue.

Net profit is what's left after every cost, and it's the number that actually matters. A product can have rising sales and falling profit at the same time, as ad costs climb or fees creep, and you'd never know from the revenue line. Track profit and margin per product, not just total sales, so you can see which products are really carrying the business and which are quietly draining it.

• Net margin per product. What each product keeps after everything, so you know your real winners.
• TACoS. On Amazon, ad spend against total revenue tells you whether advertising is building the product or just renting sales.
• Returns and refunds. A rising return rate eats margin and warns of a listing or quality problem.
• Fee changes. Platform fees drift over time, so a product that was profitable can slip without any change you made.

The point of tracking profit is to act early. A product sliding toward break-even is easy to fix while it's still profitable, through a price tweak, an ad cut, or a fee-driven repackage, and painful once it's losing money and dragging on your cash. Review your profit regularly, product by product, and you'll catch the slow leaks before they become real losses.