OneTaskBy Tim King · Updated
Revenue Calculator
Net Revenue After Discounts and Returns, Gross Profit and Gross Margin
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How the Revenue Calculator works
This revenue calculator turns units sold and a price into gross and net revenue. Take off the average discount and the share of sales refunded to see what you actually keep, and add a cost per unit to see gross profit and gross margin.
Revenue calculator formula
Gross revenue is units times price. Discounts come off that, and returns come off what is left:
Gross revenue = units × price Net revenue = gross − discounts − returns Gross profit = net revenue − cost of the units kept
Returned units are assumed to come back to stock, so their cost is not counted against gross profit.
Worked example: an online shop
1,200 units at 45 is 54,000 gross. A 5% average discount takes 2,700, and 3% of the rest is refunded, 1,539, leaving net revenue of 49,761. At a cost of 18 a unit on the 1,164 units kept, gross profit is 28,809, a gross margin of 57.9%.
Worked example: high returns
500 units at 20 with no discount is 10,000 gross. A 10% return rate takes 1,000, leaving 9,000. At a cost of 8, the 450 units kept cost 3,600, so gross profit is 5,400 and the margin is 60.0%.
Revenue reference table
Gross and net revenue on 1,000 units, after a 5% discount and 3% returns.
| Price | Gross on 1,000 units | Net after 5% discount and 3% returns |
|---|---|---|
| 5.00 | 5,000 | 4,608 |
| 10.00 | 10,000 | 9,215 |
| 15.00 | 15,000 | 13,823 |
| 20.00 | 20,000 | 18,430 |
| 25.00 | 25,000 | 23,038 |
| 30.00 | 30,000 | 27,645 |
| 35.00 | 35,000 | 32,253 |
| 40.00 | 40,000 | 36,860 |
| 45.00 | 45,000 | 41,468 |
| 50.00 | 50,000 | 46,075 |
| 55.00 | 55,000 | 50,683 |
| 60.00 | 60,000 | 55,290 |
| 65.00 | 65,000 | 59,898 |
| 70.00 | 70,000 | 64,505 |
| 75.00 | 75,000 | 69,113 |
| 80.00 | 80,000 | 73,720 |
| 85.00 | 85,000 | 78,328 |
| 90.00 | 90,000 | 82,935 |
| 95.00 | 95,000 | 87,543 |
| 100.00 | 100,000 | 92,150 |
Quick answers
- 1,000 units at 25 is 25,000 of gross revenue.
- A 5% discount and 3% returns together cut revenue by about 7.9%.
- Revenue is the top line; profit is what remains after costs.
- Net revenue is the figure to compare month to month.
- Raising price 10% adds 10% to revenue if volume holds.
- Divide a revenue target by price to see how many units you must sell: 50,000 at 25 is 2,000 units.
FAQ
What is the difference between gross and net revenue?
Gross revenue is every sale at full price. Net revenue takes off discounts, returns, refunds and allowances, so it shows the money the business actually earned from sales.
Is revenue the same as profit?
No. Revenue is the money coming in from sales. Profit is what is left after the cost of the goods and every other expense, so a business can have high revenue and still lose money.
Should shipping charged to customers count as revenue?
Usually yes, if the customer pays it to you, and the cost of the postage then counts as an expense. Keep the treatment the same every month so the figures stay comparable.
See also: all Profit & Growth tools, Rates & Pricing, Invoicing & Payments.
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