Revenue is only the top line.
Revenue$25,000
Orders500
COGS32%
Ad spend$4,000
Return rate8%
Decision math
Resultmonthly profit = revenue − COGS − payment fees − fulfillment − shipping subsidy − expected returns − ad spend − fixed store costsmodeled monthly profit = $8,270.00modeled net margin = 33.08%The same revenue can support very different profit depending on the cost stack.
Decision
Judge growth from profit after the full store cost stack, not revenue alone.
Use the model to test whether higher ad spend, lower COGS, shipping changes or fewer returns improve the monthly contribution before scaling traffic.
Illustrative planning example only. Replace every assumption with current supplier, platform and operating data before making a decision.