Profit is the residual value gained from operating your business. Specifically, it is your sales revenues minus the expenses associated with producing those revenues. The formula we use for calculating operating profit from a direct marketing business is…

Profit = Gross Sales - (Fulfillment + Marketing + Returns + COGS + Sales & Service + Overhead).

A unique feature of the FreeRFM.com™ website is that it allows you to calculate Profit using your own values for each of the cost variables.