# How to Calculate Net Sales in BigCommerce

BigCommerce is a popular ecommerce platform that allows users to create online stores and sell products to customers worldwide. One of the most important metrics for any online business is net sales, which is a measure of the company's revenue after deductions such as discounts, returns, and allowances are made. In this article, we will explore how to calculate net sales in BigCommerce, and why it is important to do so.

## Understanding Net Sales

Before we dive into calculating net sales in BigCommerce, it's important to understand what this metric means. Net sales refer to the total amount of revenue that a company generates from the sale of its products, after deductions are made for returns, allowances, and discounts. This metric is critical for ecommerce businesses, as it provides an accurate picture of the company's true revenue.

### Definition of Net Sales

Net sales can be defined as the total revenue generated by a business, minus any deductions for returns, allowances, and discounts. This metric provides a clear picture of a company's sales performance, as it factors in the cost of returns and discounts offered to customers.

For example, if a company generates \$100,000 in revenue from the sale of its products, but \$10,000 is deducted for returns and \$5,000 is deducted for discounts, the net sales would be \$85,000.

### Importance of Calculating Net Sales

It is essential for ecommerce businesses to calculate their net sales, as this metric provides a more accurate picture of their financial performance. By deducting returns, allowances, and discounts from the total revenue, businesses can identify areas for improvement and make data-driven decisions to optimize their sales performance.

For instance, if a company notices that a significant portion of their revenue is being deducted for returns, they can investigate the reasons behind the returns and take steps to improve their product quality or customer service to reduce returns and increase net sales.

Moreover, net sales are often used as a key performance indicator (KPI) to measure the success of sales and marketing efforts. By tracking net sales over time, businesses can evaluate the effectiveness of their sales and marketing strategies and make adjustments as needed.

### Difference Between Gross Sales and Net Sales

It's important to note the difference between gross sales and net sales. Gross sales are the total amount of revenue generated from sales, without any deductions. On the other hand, net sales are the total amount of revenue generated after deductions are made for returns, allowances, and discounts.

Therefore, gross sales provide an incomplete picture of a company's sales performance, whereas net sales are a more accurate representation of the true revenue generated. For example, if a company generates \$100,000 in gross sales, but \$10,000 is deducted for returns and \$5,000 is deducted for discounts, the net sales would be \$85,000.

It's important for businesses to track both gross sales and net sales, as they provide different insights into their sales performance. Gross sales can help businesses understand their revenue potential, while net sales provide a more realistic view of their actual revenue.

## Setting Up Your BigCommerce Store

The first step to calculating net sales in BigCommerce is to set up your online store. This involves choosing the right plan, configuring your store settings, and adding products and categories.

### Choosing the Right Plan

BigCommerce offers a range of pricing plans, each with different features and capabilities. It's important to choose a plan that meets your business needs and budget, whether you're just starting out or are a larger enterprise-level business. Make sure to review each plan in detail and choose the one that best fits your requirements.

Once you've signed up for BigCommerce, it's time to configure your store settings. This includes adding your company logo, setting up payment and shipping options, creating tax rules, and customizing your site's appearance. You can do all of this through the BigCommerce control panel, which is user-friendly and easy to navigate.

Now it's time to add your products and categories to your store. This involves creating product listings, uploading images, setting prices and SKUs, and categorizing your products to make them easy for customers to find. Make sure to optimize your listings for search engines, and provide detailed product information to help customers make informed buying decisions.

## Integrating Sales Channels in BigCommerce

Once your store is up and running, it's time to start integrating sales channels to reach a wider audience and drive more sales. BigCommerce offers a variety of options for connecting to marketplaces, setting up social media sales channels, and utilizing point of sale systems.

### Connecting to Marketplaces

BigCommerce allows you to connect your store to popular marketplaces such as Amazon and eBay, making it easy to reach a wider audience and increase sales. These integrations streamline the process of managing orders and inventory across multiple channels, saving you time and effort.

### Setting Up Social Media Sales Channels

Social media platforms such as Facebook and Instagram have become increasingly popular channels for ecommerce sales. BigCommerce allows you to set up social media sales channels, enabling customers to purchase products directly from your social media pages. This integration also allows you to track and analyze your social media sales performance.

### Utilizing Point of Sale Systems

If you have a physical retail location, you can integrate your BigCommerce store with a point of sale (POS) system to facilitate in-store sales. This allows you to track inventory across multiple channels, provide seamless checkout experiences, and offer in-store pickup options for online orders.

## Calculating Net Sales in BigCommerce

Now that your store is set up and your sales channels are integrated, it's time to start calculating your net sales in BigCommerce. This involves identifying your sales data, deducting returns, allowances, and discounts, and analyzing your net sales performance over time.

### Identifying Sales Data

BigCommerce offers detailed sales reports that provide insights into your store's sales performance. To calculate your net sales, you'll need to track your total revenue and identify any deductions for returns, allowances, and discounts. This information can be found in your sales reports, which can be customized to show data for specific time periods or product categories.

### Deducting Returns, Allowances, and Discounts

Once you've identified your sales data, you can deduct any returns, allowances, and discounts from your total revenue to calculate your net sales. Returns refer to items that customers have returned for a refund, while allowances are price reductions offered to customers for damaged or defective products. Discounts are price reductions offered to customers for promotions or special deals. Deducting these items from your total revenue provides a more accurate representation of your true sales performance.

### Analyzing Net Sales Over Time

It's important to analyze your net sales performance over time to identify trends, spot areas for improvement, and make data-driven decisions. BigCommerce offers a variety of reports and analytics tools that can help you track your net sales performance, including revenue by product, revenue by customer, and revenue by channel. By analyzing this data, you can make informed decisions to optimize your sales and grow your business.

## Conclusion

Calculating net sales in BigCommerce is an important metric for ecommerce businesses, as it provides a clear picture of the company's true revenue after deductions are made. By setting up your store, integrating sales channels, and tracking your sales data, you can accurately calculate your net sales and make data-driven decisions to optimize your sales performance. With the right tools and strategies, you can grow your business and drive more revenue through your BigCommerce store.

## Use ThoughtMetric to Calculate Net Sales

Try ThoughtMetric and start understanding the performance of your e-commerce marketing today.