Exchange automatically displays your business's lifetime revenue, but it's up to you as the person selling their business to let buyers know what your total profit is after expenses. Shopify does not calculate your costs for you, so it's a great idea to take the time to thoroughly calculate all the costs involved in running the business in your listing. This helps buyers see that you're a trustworthy seller who's fully prepared to hand their business over to the right buyer.
To start, you need to add up your monthly expenses. Your profit is your total revenue minus expenses. When calculating your expenses, make sure to include the following:
pri of your store's monthly Shopify subscription plan
total cost of recurring charges for apps used by your business
total amount you spend on advertising each month
total cost of goods sold on an average month
amount that you pay any freelancers or employees
Add up the total cost of these expenses and subtract it from your total revenue to get your profit amount.
Keep in mind that your average monthly profit is displayed on your listing to give buyers a rough idea as to how much it costs to run your business and how much they could make themselves. Including this information in your listing greatly improves your chances of finding a quality buyer.
Because this number is only an average amount, you should also be prepared for buyers who ask for more detailed information about your monthly expenses. It's always a good idea to prepare for this by generating a profit and loss statement. For more information, see Profit and loss statements.
Average profit margin
To give buyers a better understanding of your business's potential, you should include your average profit margin in your listing. This is the percentage of profit that you make after all your expenses are deducted from your total revenue.
The profit margin is displayed on your listing as a percentage. Although most business's profit margins vary month to month and product to product, you should give buyers an idea of what your total margins are on average.
To calculate your profit margins, calculate your profit (the sales you made minus all the money you spent running the store) and then divide that by the total amount you make in sales. After you have that, multiply that number by 100 to get the percentage.
Profit and loss statements
The Profits and Loss statements (P&L, Income Statement, or Statement of Earnings) is a summary of your business's total profits and expenses for a specific period of time. This statement gives you the bOTTOm line profit or net loss of your business. It's important to let potential buyers know if your business is profitable, and if so, show them just how profitable it is. The fit and Loss statement is the easiest way for someone that is interested in buying your business to understand this at a glance.
Generating a profit and loss statement
You can easily export and upload your profit and loss statement to your listings using an accounting software.
Both Quickbooks and Xero integrate with Shopify, letting you quickly calculate your business's profit and generate a P&L statement. Here are instructions on how to do:
Exporting a profit and loss statement from Quickbooks
If you use the Quickbooks integrated app for Shopify, then you can quickly export a profit and loss statement from your QBO account.
From your Quickbooks online account, click on the Reports tab then click the Profit and Loss link within your Business Overview reports. This opens your profit and loss report.
Inside the Profit and Loss report, there are options to filter the report by specific dates. Because Exchange displays your business's lifetime revenue on your listing, we recommend that you export a report that shows your profit and loss of the lifetime of your business.
Export your Profit and Loss statement as a PDF file so that it can be uploaded to the financial documents section of your Exchange listing.
Generating a profit and loss statement from Xero
If you've used the Xero app in Shopify to integrate your orders to the Xero accounting software, then you can quickly export a Profit and Loss report from Xero.
First, click Profit and Loss from the Reports drop-down in the main menu of your Xero dashboard. Select the timeframe for that you want your profit and loss statement to report. Because Exchange displays your business's lifetime revenue on your listing, we recommend generating a report for your profits and losses from the beginning of your business's lifetime.
Within the report, you'll see the option to export it. Export your report as a PDF file and upload it to the Financial Documents section of your listing.
Understanding your business's revenue data
The data displayed is gathered from full month periods only. The report updates automatically by the second day of each month to show the previous month’s data. If your business makes any sales while it is listed on Exchange, then the information doesn't contribute to your listing's revenue figures until the start of the next month.
If you notice that the revenue from your listing does not match other reports, then it could be because the revenue is updated at the beginning of each month. If you list your business midway through the month, the sales you make during that month won't be reported until the beginning of the following month. The sales that are calculated include only the information that is available to and can be verified by Shopify. Verified sales are orders that are made through Shopify that Exchange is able to verify.
Verified sales include sales made through your online store, the Buy button, Shopify POS, and Facebook Shop. If you have questions about your revenue and whether or not a sale can be verified, then send an email to exchange-support@shopify.com.
Exchange also pulls revenue data from sales made through some third-party apps. Unlike the sales verified through the channels listed above, Exchange can't guarantee that the revenue generated through these apps is correct because it relies on third-party applications built outside of Shopify. These verifiable apps are:
Other than the channels and apps listed here, sales generated from a checkout system hosted outside of Shopify can't be verified.
The sales data on listings can't be modified. We recommend including information about third-party sales in your listing's description and upload any screenshots that might validate these sales.