Pricing & Revenue
Revenue
The total income from sales before any deductions. Also called the top line or total sales.
Formula
Revenue = Price × Quantity SoldWhat is Revenue?
Revenue (also called the top line) is the total income your business generates from selling products or services, before any costs are subtracted. It's the starting point for all profitability calculations.
Revenue is Not Profit
The most common mistake in e-commerce is confusing revenue with profit. A store doing $1M in revenue might only have $50K in net profit after all costs. Revenue is vanity — profit is sanity.
Gross Revenue vs. Net Revenue
- Gross revenue: Total sales before any deductions
- Net revenue: Total sales minus returns, discounts, and allowances
Example
You sell 500 units at $40 each. Revenue = $20,000.
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