Ecommerce gross sales or revenue, an essential part of ecommerce accounting, includes all the income generated by your online store from sales and other services before any deductions like refunds, returns, or transaction fees (and before taking various costs into account). This metric gives you an understanding of how much your business is earning before accounting for necessary deductions. Ecommerce gross revenue is essential for gauging the performance of online sales channels, marketing efforts, and your overall reach. But it’s also essential to consider your net revenue to truly understand how much of that income is kept by your business.
In the world of ecommerce, gross revenue is typically generated from selling products directly through your website or third-party platforms like Amazon. However, it can also include services or additional fees like shipping income or membership subscriptions. This figure is great for getting a sense of sales activity, but like any gross metric, it needs to be broken down into net revenue for a clearer picture of profitability. Gross revenue is a key first step in understanding the financial health of your ecommerce business.
Read our in-depth article on ecommerce gross sales.
Ecommerce Gross Sales Formula
Gross Sales = Price per Unit × Quantity Sold
Gross sales is calculated by multiplying the price of goods or services by the quantity of sales.