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profit-margin-analysis

Analyze gross, contribution, and net profit margins by product, channel, and segment.

3|1|Updated Mar 21, 2026
Search Tags:#Shopify#profit margin#landed cost#contribution margin#profitability analysis#cost attribution#sku tiering
One-click install
npx skills add https://github.com/tomtoto757/ecomm-ai-team --skill profit-margin-analysis-tomtoto757
Or copy as Structured Prompt for Agent▼
Please help me install this Agent Skill.
Skill: profit-margin-analysis
Source: https://github.com/tomtoto757/ecomm-ai-team/tree/main/skills/analytics-reporting/finsilabs/data-analytics/profit-margin-analysis
Command: npx skills add https://github.com/tomtoto757/ecomm-ai-team --skill profit-margin-analysis-tomtoto757

SYSTEM DOCUMENTATION & REQUIREMENTS

What problem does it solve? Ecommerce operators often cannot tell which products, channels, or categories actually make money because gross margin alone ignores fulfillment, payment, marketplace, and marketing costs. This Skill builds a full margin waterfall from gross revenue down to net operating profit so pricing, catalog, and channel decisions are based on real profitability. ## Core Features & Use Cases - Four-Level Margin Hierarchy: Computes net revenue, gross profit, fulfillment-adjusted profit, contribution margin, and net operating profit with consistent formulas. - Platform Cost Setup: Step-by-step instructions for entering landed cost in Shopify, WooCommerce, and BigCommerce, plus profit apps like BeProfit, Lifetimely, and Glew.io. - SKU Profitability Tiering: Classifies products into Stars, Workhorses, Niche, and Dogs quadrants and ranks margin improvement opportunities by dollar impact. - Use Case: A DTC brand discovers a top-revenue SKU has negative contribution margin after FBA fees and ad spend, then reprices it and reallocates ad budget to higher-margin products. ## Quick Start Ask the AI to analyze profit margins by product and channel using your store's sales and cost data, including a contribution margin breakdown and SKU tiering.

Frequently Asked Questions about profit-margin-analysis

High-intent search queries and answers about installing and using this skill.

FAQPage Schema
How do I calculate profit margin per product in Shopify?▼

Enter the fully landed cost per variant under Products → Cost per item, then view Analytics → Reports → Profit by product for gross margin. For contribution margin including shipping and ad spend, connect a profit app like BeProfit or TrueProfit.

What is the difference between gross margin and contribution margin?▼

Gross margin subtracts only product COGS from net revenue, while contribution margin also subtracts outbound shipping, payment fees, marketplace fees, packaging, and direct marketing spend. Contribution margin is the better metric for ecommerce pricing and channel decisions.

What costs should be included in landed cost for COGS?▼

Landed cost includes the supplier invoice price plus inbound freight per unit, customs duties, and inspection or prep fees. Using purchase price alone understates COGS by 15–40% for imported goods and inflates reported margins.

Does Shopify's built-in profit report show true profitability?▼

No, Shopify's profit reports show gross profit only (revenue minus COGS) and exclude fulfillment costs, payment processing fees, and marketing spend. Use apps like BeProfit, Lifetimely, or TrueProfit for full contribution margin analysis.

How do I compare margins between my website and Amazon FBA?▼

Normalize both channels to contribution margin rather than gross margin, since FBA referral and fulfillment fees make Amazon gross margins look artificially low. Compare net revenue minus all channel-specific fees, shipping, and attributed ad spend per unit.

What should I do with SKUs that have negative contribution margin?▼

Investigate negative-margin SKUs within the week they are identified, since every sale destroys value. Options include raising prices, renegotiating supplier costs, reducing returns, adjusting free shipping thresholds, or discontinuing the product.

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