cost-allocation-analysis

Enter landed cost in the Cost per item field for each variant, then view Analytics → Reports → Profit by product for gross margin. For fully-loaded margins including shipping and ad spend, install a profit app like BeProfit, Lifetimely, or TrueProfit.

Calculate a monthly overhead rate by dividing total overhead by total net revenue, then apply that percentage to each order's net revenue. Use a rolling 3-month average revenue to avoid wild rate fluctuations in low-volume months.

Gross margin subtracts only COGS from net revenue, while contribution margin also deducts fulfillment costs, payment processing, marketplace fees, and direct marketing spend. Contribution margin reveals whether an order is profitable before fixed overhead.

WooCommerce does not include a cost field by default. Use the Cost of Goods extension or the free ATUM Inventory Management plugin to add COGS tracking, then connect Metorik for per-product and per-order profitability reports.

Amazon orders often show positive gross margin but turn negative once FBA fulfillment fees ($3–$8 per unit), referral fees (8–15%), and advertising spend are allocated. Model marketplace fees as a cost layer in the waterfall, not a revenue reduction.

Updating a single cost field retroactively changes margins on past orders. Use time-effective cost records that store the cost as of the order date; most profit analytics apps like BeProfit track historical cost changes automatically.