Measurement Planning
Product performance analytics
Compare product interest, purchases, retained sales, margin and physical returns with clear units, time periods and cost coverage.
Product performance analytics helps a store decide which products to improve, promote, replenish or investigate. Compare interest, qualifying purchases, retained product sales, costs and physical returns at a consistent product or variant level. No single measure settles the decision: a high-revenue product can have weak margin, while a widely viewed product may have few purchases.
Build the product view
Choose a reporting period, sales channel, currency and qualifying-order rule. Keep stable product and variant keys, including a record of identifier changes. Show the counting unit beside each measure.
| Decision question | Measure to inspect | Check beside it |
|---|---|---|
| Is the product attracting interest? | Observed item views | Event coverage and repeated views |
| Is it selling? | Qualifying orders containing the item and units ordered | Order status and availability |
| What sales value remains? | Product sales after included discounts and adjustments | Amount definition and adjustment cut-off |
| Does it earn enough? | Gross profit or a defined contribution | Cost coverage and included expenses |
| Are goods coming back? | Physically returned units | Original ordered units and follow-up time |
These figures may come from different records. Shopify sales reports include pending and unpaid orders. Apply the order rule required for your decision before comparing the sources.
Product Performance Metrics: Key Measures and Definitions
- Is the product attracting interest?
- Observed item views (event coverage, repeated views)
- Is it selling?
- Qualifying orders containing the item and units ordered (order status, availability)
- What sales value remains?
- Product sales after discounts and adjustments (amount definition, adjustment cut-off)
- Does it earn enough?
- Gross profit or defined contribution (cost coverage, included expenses)
- Are goods coming back?
- Physically returned units (original ordered units, follow-up time)
Read sales measures by definition
Shopify defines gross sales as product price multiplied by quantity, before taxes, shipping, discounts and sales reversals. This differs from the amount retained after discounts and adjustments; label the chosen value clearly when comparing products.
In Shopify sales reports, an order is counted on the date it was placed. Pending, cancelled and unpaid orders are included, while test and deleted orders are excluded, so this order count may not represent completed or paid purchases.
Shopify discounts include line-item discounts and a share of order-level discounts. An order-wide discount is allocated proportionally across that order’s sales, and discounts are applied before taxes.
Shopify defines units per transaction as net quantity divided by total orders. Average order value is gross sales excluding adjustments, less discounts excluding adjustments, divided by the number of orders; neither measure should be mistaken for product-level units or retained sales.
Shopify Sales and Profit Reporting Definitions
- Gross Sales Definition
- Product price × quantity, before taxes, shipping, discounts, and reversals
- Order Count Basis
- Date order was placed; includes pending, unpaid, but excludes test/deleted orders
- Discount Allocation
- Line-item discounts + proportional share of order-level discounts (applied before taxes)
- Units per Transaction
- Net quantity ÷ total orders
- Average Order Value
- (Gross sales excluding adjustments − discounts excluding adjustments) ÷ number of orders
Keep timing and coverage visible
One order may contain several units, and one shopper may view the same item repeatedly. Purchased units divided by item views is an activity ratio, not the share of viewers who bought. A viewer-to-buyer rate needs a defined viewer group, a purchase window and a permitted way to link views to qualifying orders.
Use a trading-period view for sales and adjustments recorded during a period. Use an order-cohort view when the question is what remained from items originally ordered in that period. Follow those order lines through a stated adjustment cut-off, and mark recent cohorts provisional.
Check costs before ranking products by profit. Shopify's gross-profit-by-product report includes only variants with cost recorded at the time of sale, so its sales coverage can differ from a sales report.
Missing cost is unknown, not zero. If the decision needs fulfilment or return-handling costs, calculate and label contribution separately.
Interpret product profit coverage
Shopify describes product cost for a resold item as the amount paid to the manufacturer, excluding taxes, shipping and other costs. For a product made by the business, the entered cost can be based on labour and material costs; keep the chosen basis consistent when comparing products.
Shopify calculates gross profit by subtracting product cost from net sales. This is a product-cost measure, not a complete contribution measure: if the decision requires additional expenses, show those separately rather than treating unrecorded costs as zero.
Considerations for Product Profit Analysis in Australia
- ProsShopify's gross-profit-by-product report uses consistent cost records at time of sale; enables fair comparison across products with recorded costs.
- ConsMissing cost is unknown, not zero. Unrecorded fulfilment or return-handling costs may distort profitability if not separately calculated and labelled.
Choose the next investigation
Check a low-selling product's availability, offer and observed path before changing its page. Review discounts and costs before acting on a high-revenue, low-margin product.
For an apparent return problem, separate physically returned units from sales reversals, which Shopify defines as order adjustments that result in a negative monetary value. Recorded return reasons suggest what to inspect; they do not prove a defect.
For each product, record the proposed action, supporting counts, definitions, missing data and the date for checking the result.
Next Steps for Product Investigation in Australian Ecommerce
- Review low-selling product availability, offer, and observed path before changing its pageEnsure product visibility, pricing, and page experience are optimised
- Check discounts and costs before acting on high-revenue, low-margin productsEvaluate margin sustainability and potential for cost reduction or pricing adjustment
- Separate physical returns from sales reversals when diagnosing return issuesPhysical returns reflect logistics; sales reversals indicate transactional adjustments (e.g., refunds)
- Record proposed action, supporting data, definitions, missing information, and review dateEnsure auditability and accountability in decision-making
In this guide
- Comparing product views with actual purchasesCompare product-view and purchase counts, identify when a viewer-to-buyer rate is possible, and investigate gaps without mislabelling the measure.
- Analysing conversion by product variantDefine a variant conversion denominator using identified, available options and matched orders, with clear treatment of later purchases.
- Finding products with high revenue but weak marginScreen high-selling products for weak margin using comparable retained sales, dollar profit, cost coverage and adjustment dates.
- Linking returns to product-level performanceLink recorded physical returns, reasons and product-value reversals to original order lines using comparable follow-up windows.
