Store sales may rise while profitability declines because of channel commissions, delivery, discounts and returns. Useful analysis starts with a defined unit: order, product or channel, separating net revenue from amounts collected for other parties.
Build a consistent order-cost view
- Determine net revenue after discounts and returns on a consistent accounting basis.
- Link merchandise and packaging costs to the order where possible.
- Include payment, platform and delivery fees borne by the business.
- Allocate campaign costs on an explicit basis without attributing all period sales to them.
- Separate direct and variable costs from shared fixed overhead.
From order margin to business profitability
Calculate order contribution after variable costs, then show how shared expenses affect business profit. Do not compare channels if one includes returns or marketing costs and the other excludes them. Reconcile settlement timing and fees to platform reports.
Decisions that can be tested
Test free-delivery thresholds, discount policies or product mix on a limited scale while monitoring margin, conversion and returns. Include customer-service cost in the comparison and avoid pricing decisions based on misleading averages.
Prof Accountant supports cost-centre design, channel reconciliation and profitability reporting, making assumptions and data limitations explicit so management can compare alternatives.