Net profit is the bottom line: revenue minus everything — the cost of goods sold, overhead, payment and marketplace fees, and taxes. It is the money the business actually earned and the number that determines whether the work is paying off, as opposed to gross profit, which only accounts for direct product costs.
The distance between gross and net profit is where many maker businesses get a surprise. A product line can show strong gross margins while net profit is thin or negative once rent, software, booth fees, and marketplace commissions — which can run anywhere from roughly 10% to 25% of revenue depending on the platform and whether advertising is involved — are subtracted. Net profit is the figure that survives all of those.
Tracking net profit honestly depends on capturing the unglamorous costs — transaction-method fees, overhead, and adjustments for waste — rather than just price minus materials. Ardent Seller records those alongside sales so the bottom line reflects reality.
Related terms
Gross Margin
Gross profit expressed as a percentage of the selling price — what fraction of each dollar of revenue is left after the direct cost of the goods sold.
Overhead
The ongoing costs of running your business that are not tied to any single product — rent, utilities, software, insurance, and similar fixed expenses.
COGS (Cost of Goods Sold)
The total cost of materials, labor, and overhead directly tied to producing the goods you sell. Tracked automatically through purchases, recipes, and production runs.
Transaction Method
The payment method used for a transaction, such as cash, credit card, PayPal, or Venmo. Can include fixed or percentage-based fees for accurate cost tracking.