How do I calculate gross margin by product category in Shopify?

Shopify doesn't offer a built-in gross margin by category report, so you have to build it yourself — but it's the most powerful buying signal you can pull from your own data. Export your Sales by Product report as a CSV file, then in Google Sheets add two columns: Category (dresses, denim, tops, accessories, etc.) and Cost of Goods Sold using numbers from your vendor invoices.

For each category, sum the net sales, subtract the sum of COGS, divide by net sales, and multiply by one hundred. Rank the categories and flag any that fall five or more percentage points below your store-wide average. This tells you which parts of your collection to lean into and which to scale back before spending on fall orders.

One important caveat: read margin alongside velocity. A seventy percent margin on two units sold in six months is worse than a fifty percent margin on two hundred units. High margin plus low sell-through usually indicates a pricing or fit problem, not a success story. If you haven't entered cost per item in Shopify, start with your top thirty SKUs — that covers the products that actually move.