> ## Documentation Index
> Fetch the complete documentation index at: https://docs.sellysoftware.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Expenses & Profit

> How expenses flow through to your net profit calculation in Selly.

## The Two Types of Cost

Selly tracks costs in two places:

| Type              | Where it lives       | What it represents                            |
| ----------------- | -------------------- | --------------------------------------------- |
| **Cost of goods** | Inventory — per item | What you paid to acquire each item            |
| **Expenses**      | Expenses page        | Business overhead not tied to a specific item |

Both are subtracted when calculating your true profit.

## How the Calculation Works

```
Revenue
− Cost of Goods Sold  →  Gross Profit
− Expenses            →  Net Profit
```

**Example:**

* You sold \$2,000 worth of sneakers this month
* Those sneakers cost you \$1,200 to acquire (cost of goods)
* Gross Profit = \$800
* You spent $150 on shipping supplies, $80 in marketplace fees, \$30 on a storage unit
* Total Expenses = \$260
* **Net Profit = \$540**

## Where Net Profit Appears

Net profit is shown on:

* The **Performance** page — as the primary profit metric
* The **Dashboard** stat cards — after expenses are factored in

<Note>
  If you haven't logged any expenses, Selly shows gross profit everywhere. The numbers will look better than they really are until you add your overhead.
</Note>

## Expenses Are Period-Based

Expenses are allocated to the period in which you log them (based on the expense date). When you filter by a date range on the Performance page, only expenses dated within that range are subtracted from profit.

This means:

* Log expenses with the correct date, not the date you entered them
* If you're reconciling a past month, backdate expenses to when they occurred

## How Often to Log Expenses

For the most accurate real-time numbers, log expenses as they happen. At a minimum, do a monthly reconciliation:

1. Check your marketplace payout reports for fees
2. Add up any supplies you bought
3. Log your recurring subscriptions for the month
4. Log any one-off costs

<Tip>
  Set a reminder at the start of each month to log the previous month's expenses. It takes 5–10 minutes and gives you accurate monthly profit numbers.
</Tip>