Calculate Expenses and Profit of Each Product

Having calculated your profit margins, the next step in understanding your business’s financial health involves analyzing out-of-pocket costs, gross sales, and overall profits. Add three new column headings to your spreadsheet: Out-of-Pocket Costs, Gross Sales, and Profit. The Out-of-Pocket Costs column will reveal the total expenditure for producing your entire stock of each item. Start by entering a formula in cell H2. Begin with an equals sign, then add the cell number for Original Stock (B2 in this example), followed by an asterisk to indicate multiplication, and finally, the cell for Total Cost Per Unit (E2). After pressing Enter, the result will appear in the cell. Ensure the accuracy of the calculation before dragging the formula down to fill the rest of the column. Then, focus on calculating gross sales in cell I2. Type an equals sign and multiply the total number of items sold by their retail price. After pressing Enter, extend this formula down the column. Understanding profitability is vital for any business, online or otherwise, as a company cannot sustain itself without generating profit. Profit is essentially your gross sales minus out-of-pocket costs. To determine this, go to cell J2, type an equals sign, and then subtract costs from sales. After pressing Enter, replicate this formula for the entire column.

As your spreadsheet becomes larger and more complex, consider employing freeze cells to enhance readability. This feature keeps specific rows or columns static as you scroll through the spreadsheet. Start by highlighting the row containing your column headings and freeze it, ensuring these headings remain visible no matter how far down you scroll. Next, freeze the column that lists your product types. Through this activity, you have gained valuable insights into calculating your inventory and expenses, which are crucial for making informed business decisions. Reflect on this data to determine which products are most beneficial for your business. Remember, even if you are fond of a particular item, if it is not yielding a profit, it may not be a viable product to continue selling.