Income statement for a marketplace store: a line-by-line template for sellers on Mercado Livre and Shopee

A marketplace store’s income statement is a staircase: it starts with revenue, goes down through tax and cost of goods sold (COGS), then through commissions, shipping, packaging, ads, and returns to contribution margin, and finally through fixed expenses to net profit. For a store with R$ 80 mil per month in revenue on Mercado Livre and Shopee, that staircase ends at R$ 5.520 in profit, 6,9% of revenue. Revenue was healthy; the steps determined the result.

I like income statements because they make you look at each step separately. The marketplace statement lumps almost everything into one net amount, while the tax payment slip and ad invoice arrive on a different day. In the income statement, everything has its place.

#The marketplace income statement model

#Completed example: a store with R$ 80 mil in monthly revenue

A gross profit margin of 50% looks great. That’s where most people stop looking. But the line items between gross profit and contribution margin add up to 33.6 percentage points: the marketplace and listings take more money than the store owner.

The difference between gross profit, contribution margin, and net profit is explained in gross, contribution, and net profit margins.

#How to read an income statement: three questions

1. Is gross profit enough? If COGS is more than 50% of revenue on a marketplace, there’s little left for commission, shipping, and listings. That’s a sign the product was bought at too high a cost or priced too low.
2. Does contribution margin cover fixed expenses? In this example, R$ 13.120 covers the R$ 7.200 with room to spare. If contribution margin falls below fixed expenses, the store loses money, no matter how much it sells.
3. Which line changed from the previous month? One month’s income statement alone doesn’t tell you much. Compared with other months, it shows that listing costs rose by 3 percentage points, returns doubled, or shipping costs increased because you added a heavy product.

#The most common income statement mistakes among online sellers

Using payouts as revenue. The marketplace statement shows the net amount. Revenue is what the buyer paid; commission and shipping are cost line items. Mixing the two hides how much the fees add up to.

Forgetting listings. The Mercado Ads bill and Shopee credit top-ups are charged outside the order. Without them, contribution margin looks 5 to 10 percentage points higher than it really is.

Using the last purchase price for COGS. The right figure is the average cost of the stock sold. I explained this in the costing mistake that inflates your margin and in COGS: what it is and how to calculate it.

Leaving out the owner’s salary. If the owner works at the store but doesn’t pay themselves, the income statement shows profit that is actually their salary.

Recording a return in the wrong month. A September sale returned and refunded in October distorts both months. Ideally, deduct the return from the original sale.

In practice. A home accessories seller put together an “income statement” by adding up the money deposited into their Mercado Pago and Shopee accounts and subtracting supplier purchases. In August, the result showed a profit of R$ 9 mil. When we built the income statement using gross revenue and separate line items, we found R$ 4.100 in listings paid by credit card that they hadn’t counted, plus R$ 2.300 in returns from the previous month. Real profit was R$ 2.600, so the decision to hire an assistant—based on the R$ 9 mil figure—was put on hold.

#Monthly income statement and margin per order

The income statement shows whether the store made a profit that month. It doesn’t show which products generated that profit. That’s why it works best alongside margin per order and per product: the income statement shows the size of the problem, while product margin shows where it is. Find out how many sales it takes to cover fixed expenses in the store’s break-even point.

Building an income statement in a spreadsheet takes hours because each line comes from a different report. Milewa builds your store’s income statement using real orders from Mercado Livre and Shopee: revenue, commissions, shipping, cost, tax, and Ads come straight from the orders, and you enter fixed expenses once in the Expenses module. Your monthly net profit appears without a spreadsheet, and you can view the margin for each order and product in one click to find what changed.