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Should I track profit or gross sales on e-commerce tracking

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# 1
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Say I was building myself an e-commerce platform for my own company tailormade for it.

Because it is my own products, I know the exact profit per item (sale price - VAT - Cost of product.) that I sell.

 

When implementing the E-commerec Tracking should I put through the sale amount or should I only send the profit amount.

 

I know all e-commerce systems send the gross sale amount but ideally should we be sending the profit?

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Accepted by topic author Zevi S
September 2015

Re: Should I track profit or gross sales on e-commerce tracking

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# 2
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Hi Zevi, if you can do it, and do it "robustly" (i.e. so it works reliably when you add new products/change prices, etc.) then yes, using a Net profit value for your conversions will give you a more instant view of profitability, so is probably preferable.

 

I think the primary reason most packages use the Gross amount is that the amount of Net profit varies from product to product, and often from customer to customer (for example, where shipping costs vary by location and/or by the weight/number/cost of products purchased).

 

Downsides?  I can't think of any immediately other than the difficulty in creating and maintaining such a system with a large product range.  

 

Are you going to include staff costs, heating, lighting, etc?  

 

Jon

AdWords Top Contributor Google+ Profile | Partner Profile | AdWords Audits

Re: Should I track profit or gross sales on e-commerce tracking

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# 3
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Jon, thanks loads for helping me out here.

What I wrote was just an example to simplify the matter and understand.
In my reality case, 95% of the customers convert offline.

I will then have them go to a thank you page after they leave my store and record the conversion there. By that time I will know the exact profit of his sale including all his shipping costs etc. So in that page I will write the code i want for each customer based on the value of his sale.

These are very large products on average over $2000, and there wont be more then a couple a day. Easy enough to maintain.

Do you think I should do it as Goals/Conversions or as a full fledged E-commerce tracking?

Re: Should I track profit or gross sales on e-commerce tracking

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# 4
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I agree with Jon (not a surprise really ) in that profit is a better number of it can be done. The reason for this is that Google pushes a whole bunch of numbers back at us for ecomm - such as the return on investment - but this can be very misleading since it only takes into account the cost of the ads - or better, the cost of the conversion - and puts that up against the value of the sale. Of course, the value of the sale doesn't take into account any of the costs, and if you are in a low margin product this can be massively misleading.

I can't think of any downsides either - the reporting will be far more meaningful.

Re: Should I track profit or gross sales on e-commerce tracking

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# 5
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Hi Stickleback,

And would you set this up as an E-commerce system as normal and just submit the profit values rather then the gross sales?

Or would you set this up as unrelated goals/conversions with Values being the profit?

Re: Should I track profit or gross sales on e-commerce tracking

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# 6
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As suggested earlier, this would depend upon how many products you have to manage.

It also depends upon how readily an ecomm solution would allow you to output the profit element....

If they are limited products with a fixed profit margin then I would suggest their own conversions since, as Jon suggested, you could then consider other costs to really hone down the true value of a sale.

Re: Should I track profit or gross sales on e-commerce tracking

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# 7
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Thanks Steve,

Probably just easier to do standard conversions then. Appreciate your advice.