In this article, we outline how all the profitability metrics in Billy Grace are calculated. These metrics are only available for those who have authorized Channable in Integrations and who have an integration with an e-commerce platform.
Gross Profit
In Billy Grace, gross profit is calculated as follows:
Gross Profit = original price - discount - shipping cost - taxes - unit cost
The 'original price' of the orders is obtained from the purchase event
The discount, shipping costs, and taxes are retrieved from the e-commerce store
The unit cost is obtained from Channable
When the unit cost is not available for a product that is recently sold, Billy Grace will automatically calculate a unit cost percentage based on an average of the category group.
Profit
In addition, profit is calculated as follows:
Profit = original price - discount - shipping cost - taxes - unit cost - ad spend
The 'original price' of the orders is obtained from the purchase event
The discount, shipping costs, and taxes are retrieved from the e-commerce store
The unit cost is obtained from Channable
When the unit cost is not available for a product that is recently sold, Billy Grace will automatically calculate a unit cost percentage based on an average of the category group.
Profit Over Ad Spend (P.O.A.S.)
The formula for this metric in Billy Grace is as follows:
P.O.A.S. = (original price - discount - shipping cost - taxes - unit cost)/ ad spend
You can find these metrics in the performance tables of your various Billy Grace dashboards:
Additionally, you can use the (gross) profit metrics in your automations:
Frequently asked questions
Could I see the profit calculation for a specific order?
Navigate to settings -> E-commerce
Open the 'orders' tab.
On this page you can see the following:
For each order, the table displays the Value (original price), Shipping Cost, Tax and Unit cost. When hovering on 'Product Info', you will see the individual products and their respective unit costs.
What unit cost is used when a product is not in my product feed?
When no unit cost is found, we look at the average unit cost over all your products and use that. If you prefer a set margin that is determined by you in these cases, please contact our support team.
How is profit for products and keywords calculated if the profit is calculated on order level?
Our keyword and product views provide insights into the performance of product and keyword advertising. For instance, consider a scenario where a Google ad for product X results in a touchpoint, and our attribution models assign 50% of the credit for a subsequent order to this touchpoint. In such cases, half of the order's profit is allocated to product X.
This example underscores a crucial point: the profit from a product isn't solely attributed to purchases of that specific product. It's possible for someone to click on one product but end up purchasing a different one, possibly with a different profit margin, during the same web session.
The tax for shipping costs paid by my customers is not included in the 'Shipping Cost' value
Whether this is included or not, depends on the set-up of your CMS. Enabling this to be removed can also be done by contacting our support team.