What is Net Sales?
Net sales is a metric that tells businesses what their total sales are minus returns, allowances, and discounts. For example, if your store has gross sales of $150,000 for a given month minus $3,500 in discounts, $1,200 in allowances and $1,500 in returns, your net sales for that month are $143,800. Tracking your net sales is an important practice because it represents the bottom line of how you business is doing. Most of the ecommerce metrics, that you’ll find in Peel and other analytics tools, are individual ways of looking at your customer data, order data, etc., which is all in service of increasing your net sales.
How to calculate net profit
To calculate your company’s net profit, take your gross sales (total sales before any deductions) and subtract discounts, returns, and allowances. Net sales = gross sales - discounts - returns - allowances. Peel’s net sales metric is an automated revenue tool that allows you to see your net sales for a given period. This takes the calculation off your plate and provides you with a clear view of your net sales in a single click. From there, you can segment to see your net sales from things like specific customer cohorts or how certain discount codes.