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Gross Revenue vs Net Revenue
Practical guidance on gross revenue vs net revenue for Shopify app founders.
Program Design · ~5 min read
If you pay partners a percentage, you have to answer one question in your terms: a percentage of what, exactly? Gross revenue is what the merchant pays you. Net revenue is what's left after deductions — typically Shopify's revenue share and any refunds or chargebacks. The gap between them is small for many apps, but ambiguity about it erodes partner trust fast.
Gross revenue
Commission on gross means the partner earns a percentage of the merchant's full payment, before any deductions. It's simpler to explain, more generous to the partner, and matches the intuitive meaning of 'revenue share.' Most partners assume gross unless told otherwise.
Net revenue
Commission on net means you first subtract Shopify's cut and refunds, then apply the percentage. It protects your margin — you never pay commission on money you didn't keep — but it's a smaller, less predictable number for the partner and takes more explaining.
The Shopify-specific wrinkle
Under Shopify's revenue thresholds, the platform's share of app revenue is small, so gross and net are close for many apps. That means paying on gross is often barely more expensive than net, while being simpler and more attractive to partners. The bigger real-world deduction is usually refunds and failed charges, not the platform fee — decide whether your commission is clawed back when a charge is refunded.
State it plainly
Whatever you choose, write it explicitly in your partner terms: 'X% of gross revenue' or 'X% of net revenue after platform fees and refunds.' Partners read the terms, and nothing sours a partner relationship faster than a payout that's smaller than they expected because 'net' was never defined.
Practical checklist
- ✓Chosen gross or net deliberately, not by accident
- ✓Terms state exactly which one, and what 'net' deducts
- ✓Decided whether refunds/chargebacks claw back commission
- ✓Confirmed the gross-vs-net gap is small enough not to over-engineer
Common mistakes
- ✕Leaving gross vs net undefined in your terms
- ✕Saying 'revenue share' but quietly paying on net — partners assume gross
- ✕Over-optimising net when the real difference for your app is negligible
How this works in PartnerDock
PartnerDock computes commissions on the gross revenue the Shopify Partner API reports — matching the 'revenue share' wording partners expect — and only ever pays on real, charged revenue (never on trials), so payouts are predictable and defensible.
Try PartnerDock FreeFAQ
Should I pay partners on gross or net revenue?+
For most Shopify apps the difference is small because the platform's revenue share is low, so paying on gross is simple and partner-friendly. Whichever you pick, define it explicitly in your terms.
Do I pay commission if a merchant gets refunded?+
That's your call — state it in the terms. Many programs don't pay (or claw back) commission on refunded charges, since you didn't keep that revenue.
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Revenue Share vs Fixed Rewards
Practical guidance on revenue share vs fixed rewards for Shopify app founders.
Commission Structures for Shopify Apps
Revenue share, fixed per-install, first-year vs lifetime, tiers — how to pick a structure that motivates partners without wrecking your margins.
Payout Models
Recurring, one-time, hybrid, and bonus payouts — choosing how and when you pay partners.