Revenue Development

Understanding the difference between your gross and your net revenue will tell you how successful you are at controlling your expenses… and generating profits. Stay on top of your financials with our Revenue Development report!

Definitions

Before delving into data analysis, let's align on our understanding. By default, both gross and net revenue exclude sales tax, shipping fees, and discounts. The prefixes "gross" and "net" refer to revenue before or after product returns.

Of course, we highly recommend you to stick to our pre-defined revenue calculation, but in case they are not matching your requirements, you are able to change the gross revenue and net revenue definitions under Company Settings > Revenue Definition. Please note that any changes you make will trigger an immediate reimport to clean up your already calculated data.

Your gross and net revenues are shown as a color-coded column chart followed by absolute figures. Trends get even more clear by the growth rate comparing each data point with the previous period.

With the activation of RX Forecast™ you will additionally receive three forecast scenarios for the coming months. To enable predictions, simply book the add-on Forecast Plus.

Use Cases

Measuring both gross and net revenue is crucial for several reasons:

1. Holistic Financial Picture:

   • Gross Revenue: This metric is essential for understanding the overall financial health and success of the business without factoring in returns.

   • Net Revenue: Offers a more realistic view by accounting for product returns. It reflects the actual money retained after deducting returns, presenting a more accurate representation of revenue.
     
     

2. Operational Efficiency:

   • Gross Revenue: Helps assess your ability to generate sales and attract customers. A healthy gross revenue indicates effective marketing, sales strategies, and product appeal.

   • Net Revenue: Allows the evaluation of your operational efficiency in handling returns. A lower net revenue compared to gross revenue may suggest challenges in managing product quality, fulfillment processes, or customer satisfaction.
     
     

3. Marketing and Sales Performance:

   • Gross Revenue: Indicates the overall success of marketing and sales efforts in driving product awareness and attracting customers to make purchases.

   • Net Revenue: Provides insights into the effectiveness of these strategies considering customer satisfaction and the impact of product returns on the bottom line.
     
     

4. Customer Satisfaction:

   • Net Revenue: A decrease in net revenue might signal issues with product quality, fulfillment, or customer expectations. Monitoring net revenue helps identify areas for improvement to enhance customer satisfaction and loyalty.
     
     

5. Strategic Decision-Making:

   • Gross and Net Revenue: Together, these metrics empower decision-makers to formulate strategies for improving overall sales, refining marketing approaches, and enhancing customer experiences.

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