What is the difference between gross and net profit on a marketplace?

Gross profit shows the result of operations on a marketplace after deducting the cost price and platform fees, while net profit is the money that actually remains in the business after taxes and all other expenses.

For a seller on Wildberries, Ozon, Yandex Market, and other platforms, both metrics are needed, but it is net profit that answers the main question: how much did the business earn "in hand."

What is a seller's gross profit on a marketplace?

Gross profit is the profit that remains after deducting the cost price of the product and all paid marketplace services. It shows how much money a product generates, considering the platform's commissions and logistics fees, but excluding external business costs and taxes.

In the Torgstat service, gross profit is calculated as follows:

Gross profit = Gross revenue − Marketplace services − Cost price

On Wildberries, "marketplace services" also include advertising expenses billed by the platform — this is important to consider to avoid overstating product profitability.

What expenses are included in marketplace services?

Marketplace services usually include all payments that the platform withholds or charges for its operations. These can be:

sales commission;

logistics (delivery to the customer and back, returns);

storage at the marketplace warehouse;

receiving and processing goods;

payment processing (acquiring);

internal promotion (advertising within the platform, promo tools);

other paid marketplace services.

Example of gross profit calculation Initial data:

Gross revenue: RUB 1,000,000

Marketplace services: RUB 250,000

Cost price: RUB 450,000

Calculation:

1,000,000 − 250,000 − 450,000 = RUB 300,000

Gross profit in this example is RUB 300,000.

This metric helps assess how profitable products are after accounting for the cost price and all expenses related to the platform.

What is net profit on a marketplace?

Net profit is the amount that remains with the business owner after taxes and all external expenses not reflected in marketplace reports are deducted from gross profit. Essentially, it is the company's final earnings for the period.

Formula: Net profit = Gross profit − Tax − External expenses

Net profit shows not just whether a product is sold profitably on the platform, but whether the business is making money overall.

What is considered external expenses?

External expenses are all costs that are not present in the financial reports of Wildberries, Ozon, Yandex Market, and other platforms. For example:

employee salaries (managers, warehouse workers, accountant, marketer, etc.);

advertising outside marketplaces (targeted ads, contextual ads, bloggers, websites);

contractor services (fulfillment, photographers, designers, ad specialists);

office, warehouse, or workspace rent;

bank fees and current account maintenance;

transportation costs (delivery to the marketplace warehouse, between warehouses, courier services);

other company expenses (communication, software, accounting, consulting, etc.).

Example of net profit calculation Initial data:

Gross profit: RUB 300,000

Tax: RUB 45,000

External expenses: RUB 85,000

Calculation: 300,000 − 45,000 − 85,000 = RUB 170,000

Net profit in this example is RUB 170,000.

This amount is the real financial result: how much the business kept for itself after all mandatory payments.

What is the key difference between gross and net profit?

The difference between gross and net profit lies in which set of expenses is considered in the calculation.

Comparison of metrics:

Gross profit	Net profit
Considers cost price and marketplace services	Additionally considers taxes and external expenses
Shows the effectiveness of sales on the marketplace	Shows the real profit of the business
Used for product analysis	Used to assess the company's financial result

Why should a seller calculate both gross and net profit?

Gross and net profit are used for different management tasks, and substituting one metric for the other leads to erroneous decisions.

Gross profit helps:

understand which product on the platform is sold profitably and which is "eaten up" by commissions and logistics;

assess the impact of marketplace conditions (commission percentage, storage and delivery tariffs);

compare products and categories with each other in terms of profitability specifically at the platform level.

Net profit helps:

see how much money ultimately remains with the business owner;

assess whether advertising, employees, rent, and other external costs are recouped;

decide whether it is possible to scale sales without killing profitability;

correctly plan the budget for purchases, marketing, and assortment expansion.

If you focus only on gross profit, you might not notice that due to taxes and external expenses, the business is breaking even or even operating at a loss. Net profit protects against the illusion of "high turnover with no real earnings."

How to check if a specific product is profitable?

Assessing product profitability on a marketplace involves two steps.

Step 1. Calculate the gross profit for the product.

If the gross profit for an item is positive, it means:

the product's revenue covers the cost price;

commissions, logistics, and other marketplace services for this product are recouped;

the product contributes to the store's gross profit on the platform.

Step 2. Account for taxes and external expenses at the business level.

Even if a specific product generates good gross profit, the company's final net profit may be modest or negative if:

external advertising costs are high;

there is a large fixed overhead for salaries and rent;

there are significant bank and other operational costs.

Therefore, the correct approach is to analyze both metrics simultaneously:

gross profit — to assess the effectiveness of products on the marketplace;

net profit — to understand the real profitability of the business.

How can a seller quickly calculate gross and net profit?

With a small number of products and one marketplace, calculations can be done manually: spreadsheets, exports, formulas. But as soon as you have:

dozens and hundreds of SKUs;

several platforms (WB, Ozon, Yandex Market, etc.);

different logistics schemes and commissions,

manual accounting starts to take too much time and becomes a source of errors.

The Torgstat service automates the calculation of both metrics:

pulls data from marketplaces;

accounts for the cost price;

adds taxes;

allows you to enter external expenses.

As a result, the seller sees gross and net profit for each product, brand, or store without manual report consolidation and complex spreadsheets, and management decisions can be made based on accurate figures.

Conclusion

Gross profit shows the result after deducting the cost price and marketplace services, while net profit shows the final profit of the business, including taxes and all external expenses. Both metrics are needed:

gross profit — for analyzing sales effectiveness and working with the assortment on the platform;

net profit — for assessing how much money the business actually brings to the owner.

Strategic decisions about advertising, assortment expansion, price changes, and scaling sales are logically made based on net profit, while cross-referencing with gross profit for individual products.

Frequently Asked Questions

Which is usually larger: gross profit or net profit?

Gross profit is usually larger than net profit because taxes and external company expenses are additionally deducted when calculating net profit. The higher these costs, the greater the difference between the metrics.

Can you focus only on gross profit?

No, this is insufficient for business evaluation. Gross profit only considers the cost price and marketplace services and does not show how much money remains after taxes, salaries, advertising, rent, and other external costs. A business may appear profitable based on gross profit but operate at a loss based on net profit.

What expenses are considered external on a marketplace?

External expenses include any costs not reflected in marketplace reports:

employee salaries;

office or warehouse rent;

contractor and fulfillment services;

bank fees;

advertising outside marketplaces;

transportation costs and logistics outside the platform;

other company expenses.

Why can a product with high gross profit yield low net profit?

This happens when a significant portion of the gross profit is "eaten up" by taxes and external business expenses. For example, large spending on external advertising, high fixed costs for personnel and rent can reduce net profit to a minimum, even if the product's gross profit looks very good.