---
title: "Net revenue: definition, formula and example"
description: "Revenue after refunds: what orders brought in, less what was given back. The revenue that profit is worked out from."
url: https://offersuite.io/glossary/net-revenue
updated: 2026-10-13
---

# Net revenue

Revenue after refunds: what orders brought in, less what was given back. The revenue that profit is worked out from.

## In plain words

Net revenue is what you keep of your sales once refunds are taken out. An order booked at $40 with $10 refunded has a net revenue of $30.

It is the right starting point for profit, because refunded money was never really earned. And it has to be worked out per order: the refund belongs to the order it was given on, however much later it was issued. A month's sales less that month's refunds mixes one month's orders with another's returns.

## Formula

- Net revenue = gross revenue − refunded revenue
- Realized profit = net revenue − realized cost

## Worked example

The $40.00 bag's order books $40.00 of revenue. A $10.00 refund leaves $30.00 of net revenue.

The order's cost is still $22.64, because the bag shipped. The engine puts its realized profit at $7.36, where the same order without a refund realizes $17.36.

### The example order

A $40.00 bag of coffee, shipped free, every cost counted

Revenue $40.00 to contribution margin $15.36 (38.4%)

Revenue

$40.00

Cost of goods

−$12.00

Pick and pack

−$1.18

Packaging

−$0.50

Shipping label

−$7.50

Card fee per order

−$0.30

Refunds

−$2.00

Card processing

−$1.16

Contribution margin

$15.36

2 declared kinds cost nothing on this option

Computed by the margin engine in Offer Suite's own code, in whole cents, from a $40.00 bag of coffee with a $12.00 unit cost.

## Net revenue is not net of costs

It is revenue after refunds and discounts, before any cost is subtracted. Net revenue less the product cost is gross profit, and less every cost of the order is contribution margin. The word net has a different meaning at each line of the statement.

## Using it

Tie each refund back to its order, and to the offer and option that sold it. Then you can see net revenue per offer and notice the one that sells well and refunds badly. Keep discounts out of it: a discount was never revenue, while a refund was revenue that came back.

## In Offer Suite

Offer Suite nets each refund against the order it was given on, read after discounts and before tax. Realized profit is net revenue less realized cost, and cost is not reduced by a refund.

Source: Offer Suite's money definitions, checked against real Shopify orders.

## Related

- [Glossary **Glossary of offer economics** The terms behind offer profit, defined plainly with their formulas and a worked number: contribution margin, profit per visitor, break-even lift and more.](https://offersuite.io/glossary)
- [Calculator **Gift with purchase profit calculator** What a free gift costs per order, after its unit cost, its extra pick and its handling, and how much conversion it has to add to pay for itself.](https://offersuite.io/calculators/gift-with-purchase-profit)
- [Glossary **Gross revenue: definition, formula and example** An order's revenue as Offer Suite books it: line prices after discounts plus shipping charged, tax excluded, frozen at the sale as placed.](https://offersuite.io/glossary/gross-revenue)
- [Glossary **Refunded revenue: definition, formula and example** The part of an order's revenue given back, counted after discounts and before tax, and never taken off the order's cost, because the goods already shipped.](https://offersuite.io/glossary/refunded-revenue)
- [Glossary **Realized profit: definition, formula and example** The profit orders actually made: revenue net of refunds, minus the cost of every unit shipped, per offer and per option, first orders and renewals apart.](https://offersuite.io/glossary/realized-profit)
- [Glossary **Refund rate: definition, formula and example** Refunded revenue as a share of revenue. A point of refund rate costs more than a point of margin, because refunded orders keep their costs.](https://offersuite.io/glossary/refund-rate)