The vocabulary, defined and taught

Net revenue is the order total excluding VAT, also defined as the sum of all sold products prices after VAT and discounts. Whether your store sends revenue including or excluding VAT is a setting in Profitscaler, and getting it wrong shifts every figure downstream.

GM1 is gross margin after cost of goods: net revenue minus what the goods cost, with supplier rebates netted off, expressed as a share of net revenue.

GM1 is the rung that answers whether buying and pricing are working. Purchase price changes and discounting show up here, while shipping, payment fees and handling do not, which is what separates a sourcing problem from a fulfilment one.

GM2 is gross margin after all order costs: GM1 minus shipping, payment fees and handling. When Profitscaler says profit margin, this is the number we mean.

There are multiple levels to gross margin rather than one because they answer different questions, and a store needs them all. A store can hold GM1 steady while GM2 falls. A single "margin" figure hides exactly which one.

GP2 is the gross profit of one line item after every order-level cost has been allocated to it, in money rather than percent. An order's profit is the sum of its lines' GP2 and never a separate calculation, which is why the order report and the SKU report reconcile exactly, down to the last cent.

GP3 is profit after advertising: order GP2 minus the ad cost of acquiring the order. It is measurable in total or across traffic channels, and not directly attributable to individual SKUs.

GP3 is the rung where a profitable order can still be a loss-making sale. Ad cost cannot be attributed to a line item, so this is the point at which the ladder stops being a per-product number and becomes a channel or account one.

Projected GM2 is a forward-looking estimate of an item's GM2, projected per item in real time. Prices and discounts move daily, so a margin measured yesterday is not automatically today's margin. The projection is the figure that campaign segmentation can safely act on, and it is why the projected-margin feed exists at all.

ROAS, return on ad spend, is revenue divided by ad cost. It is the standard metric, and the blind spot Profitscaler exists for: it counts every unit of revenue the same, so a discounted low-margin order and a full-price high-margin one look identical to your bidding. Bidding algorithms try to maximise your revenue (and your ad spend) as long as it keeps hitting the target ROAS.

POAS is profit divided by ad cost, the category's answer to what ROAS cannot see: the same ratio computed on what an order actually earned rather than what it invoiced.

Bidding on profit directly is right for some stores and wrong for others, which is why Profitscaler measures profit whether or not you choose to bid on it.