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Revenue to Profit
Net Revenue
Net Revenue = Gross Revenue - Discounts - Refunds + Shipping Revenue
Unlike Shopify's Net Sales, Bloom's calculation includes Shipping Revenue. This addition is made so that we report the total revenue that belongs to the Shopify Merchant, excluding taxes, which is collected on behalf of the government.
Cost of Goods Sold
This product cost is automatically retrieved from Shopify if it was entered there. If the product cost was not entered in Shopify, you can add it in bulk on the Cost Settings page within Bloom.
Marketing Costs
The Ad spend across all platforms, such as Meta, Google, Snapchat, Pinterest, TikTok, and others. It represents the overall investment in driving traffic and sales through paid marketing channels.
Operating Expenses
Total operating expense is the money spent on daily operations, including both fixed and variable costs. These costs include salaries, rent, interest payments, professional fees, platform fees, and others.
Understanding these total overhead costs will help estimate how much we can spend on future inventory. To add any custom expenses, please utilize the Operating Expenses section.
Net Profit
The final profit the store earns after subtracting all operating expenses from CM3.
It represents what's left after covering product, fulfillment, marketing, and operational costs. This metric shows the store's overall profitability and financial health.
Total Revenue
Bloom's Total Revenue matches the Total Sales in Shopify.
Total Revenue = Net Revenue + Taxes + Duties & Tips
CM2
Contribution Margin 2 = Net Revenue - Product Cost - Order Fulfillment Costs
This metric represents the profit remaining after deducting both the product cost and the order fulfillment expenses from the Net Revenue. It illustrates the amount the business retains after covering these core costs.
Gross Profit (CM1)
Gross Profit (CM1) = Net Revenue - Product Cost
Gross Profit represents the revenue remaining after deducting the direct cost of the goods sold.
Gross Margin (CM1%)
Gross Margin (CM1%) = Gross Profit / Net Revenue
Gross Margin shows the percentage of profit remaining after the cost of the product is subtracted from revenue.
Generally, a Gross Margin of around 75% or higher is considered a strong indicator of healthy product-level profitability.
CM 2
Contribution Margin 2 = Net Revenue - Product Cost - Order Fulfillment Costs
This metric represents the profit remaining after deducting both the product cost and the order fulfillment expenses from the Net Revenue. It illustrates the amount the business retains after covering these core costs.
CM 2 %
Contribution Margin 2 % = CM2 / Net Revenue
A CM2 of 60% or more is typically regarded as a healthy target, although this benchmark can fluctuate based on the specific product assortment and pricing strategy.
CM 3
CM3 = Net Revenue - Product Cost - Order Fulfillment Costs - Marketing Spend
This metric represents the profit remaining after accounting for product, fulfillment, and marketing expenditures.
CM 3 %
Contribution Margin 3 % = CM3 / Net Revenue
A healthy CM3% generally falls between 30% and 45%. However, this optimal percentage may vary depending on the brand's particular growth stage and marketing strategy.
Profit Margins
CM 1
CM 1%
CM 2
CM 2%
CM 3
CM 3%
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Marketing Performance
MER (ROAS)
MER (Marketing Efficiency Ratio) is a key metric that measures the effectiveness of marketing investment in generating revenue. MER = Net revenue divided by total marketing spend.
A higher MER signifies superior marketing performance, demonstrating that the business is generating more revenue for each dollar allocated to advertising.
aMER (NC ROAS)
aMER (Acquisition MER) = Net Revenue from new customers / Total Marketing Spend.
aMER measures how effectively marketing spend generates new customer revenue.
A higher aMER indicates that ads are performing effectively in acquiring new customers relative to the money spent.
MPR (POAS)
This metric indicates the profit generated for every dollar spent on marketing.
MPR (Marketing Profit Ratio) = CM2 / Total marketing spend.
A higher MPR signifies that marketing efforts are more profitable and efficient.
aMPR (NC POAS)
aMPR (Acquisition MPR) measures the profitability of new customer acquisition. It represents the profit generated from new customer orders for every dollar spent on marketing.
aMPR = CM2 from new customer orders / Total marketing spend.
CAC
The average amount spent to acquire a new customer. It is calculated by dividing total marketing spend by the number of new customer orders.
A lower CAC indicates more efficient marketing and better return on ad spend.
First-Order Contribution Margin
Measures the profit generated from new customers, calculated as the net revenue of new customers minus their COGS and the total ad spend. It shows whether revenue from new customers covers your advertising costs and indicates if acquiring new customers is profitable.
BEROAS (Breakeven ROAS)
The Break-Even Return on Ad Spend (BEROAS) is the minimum return the store needs on ad spending to cover product costs and avoid a loss. It is calculated by dividing Net Revenue by Gross Profit.
A BEROAS of 1 signifies that ad expenditure precisely covers product costs. Any BEROAS value greater than 1 indicates profitability.
New Customers %
The percentage of first-time buyers.
Marketing Performance Trend
MER
aMER
MPR
aMPR
CAC
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Revenue & Customer Metrics
Net Orders
Net orders represent the true order volume. This metric is calculated by taking the total orders received and subtracting any orders that were fully refunded.
New Customers
The total number of first-time buyers.
New Customer Revenue
The total revenue generated from first-time buyers.
New Customer AOV
The average order value of customers making their first purchase.
Discount Rate
The percentage of orders that included a discount.
Repeat Customer Revenue
Revenue earned from returning customers.
Repeat Customer AOV
The average order value of customers who have purchased before.
Return Rate
The percentage of orders that were returned.