Pricing & Revenue
Net Revenue
Total revenue minus returns, refunds, discounts, and allowances. The actual income you keep from sales.
Formula
Net Revenue = Gross Revenue - Returns - Refunds - Discounts - AllowancesWhat is Net Revenue?
Net revenue (also called net sales) is your total revenue after subtracting returns, refunds, discounts, and any other sales adjustments. It represents the actual money you receive from customers.
Why Net Revenue Matters
Gross revenue can paint a misleadingly positive picture. If you have a 25% return rate and offer frequent discounts, your net revenue might be 30-40% lower than your gross revenue.
All profitability calculations should start with net revenue, not gross revenue.
Example
Gross revenue: $100,000. Returns: $15,000. Discounts: $8,000. Net revenue = $77,000.
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