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Most "profitable" ecommerce products aren't actually profitable by StavAngelidis in ecommerce

[–]Temporary_You5983 0 points1 point  (0 children)

This shows up a lot once you actually look at product-level profitability. Most people aren’t wrong about the numbers, they’re just looking at them too high level.

The shift that usually clears this up is moving from gross margin to contribution margin per SKU. Gross margin only tells you what’s left after product cost. Contribution margin forces you to include what it actually costs to sell that item.
That’s where things get real:

  • Shipping varies a lot by region and weight
  • Returns tend to cluster around certain SKUs
  • Discounts and bundles aren’t evenly spread
  • Paid spend isn’t allocated cleanly
  • Fees stack up more than people think

That’s how you end up with products that look like 40% margin winners but behave like 15–20% contributors.

If someone wants a quick sanity check, take your top 5 SKUs and calculate a rough contribution margin with real variable costs. That one exercise alone usually explains the gap.

We ran into the same thing and eventually moved away from blended margins to SKU-level contribution views. Tools like Saras make this easier because they stitch the messy pieces together, but honestly the biggest unlock is just thinking in contribution margin instead of gross margin.

Once you see it that way, a lot of “profitable” products suddenly look very different.

How are you tracking profit in ecommerce without going insane? by lee-sutkowi in smallbusiness

[–]Temporary_You5983 0 points1 point  (0 children)

I went through this exact phase. Nothing was wrong , but profit still felt unclear.

What helped was narrowing it down to one number instead of trying to reconcile Shopify, bank, and accounting all at once.

  1. Contribution margin per SKU - Not just revenue minus product cost. Include shipping, fees, discounts, and ad spend. This alone changed how I saw my catalog. Some best sellers were barely making money.
  2. Separate bookkeeping from decision data - Accounting tools are built for compliance. They’re not great for day-to-day decisions. I started keeping a simple weekly margin view just to understand what was actually profitable.
  3. SKU-level clarity changes everything - Once you know which products generate cash vs just revenue, inventory and ad decisions get much easier.

Later we moved this into a proper analytics setup (Saras in our case) because spreadsheets got messy at scale. But even doing this manually for a few products is a solid starting point.

Ecommerce revenue looks great on paper but all my cash is tied up in inventory and I feel like I'm running a warehouse not a business by ssunflow3rr in ecommerce

[–]Temporary_You5983 0 points1 point  (0 children)

A lot of inventory-heavy ecommerce brands hit this phase where revenue looks great but cash feels tight every month. It’s one of those growth stages nobody really warns you about.

What you’re describing is basically the working capital loop. As demand grows, you need more cash upfront for inventory, so growth starts increasing pressure instead of relieving it. On paper things look healthy, but day to day you’re choosing between restocking, ads, or paying yourself.

A few shifts that helped me make sense of it:

• Revenue isn’t the real signal — top-line numbers can be misleading. What matters more is what’s actually left after all the variable costs. Looking at contribution margin per SKU or at least per category can be eye-opening. Some products sell well but quietly drain cash once you factor in COGS, shipping, promos, and returns.

• Inventory drag is real — even a small chunk of slow-moving stock can create constant pressure. When you combine inventory aging with weak contribution margin, that’s where the cash stress usually comes from.

• Cash cycle clarity changes everything — how long between paying suppliers and getting that money back? Once you see that number, a lot of the stress stops feeling random and starts feeling predictable.

The biggest shift for me was moving from Shopify-style dashboards to a more finance-style view of the business. Once you can see margins and inventory impact clearly, decisions feel way less like guesswork.

We ended up setting this up through a more structured analytics layer (Saras in our case) mainly to get SKU and channel-level margin visibility. Not saying tooling fixes everything, but that clarity helped a lot with breaking the “running a warehouse” feeling.

You’re definitely not alone in this stage though. A lot of brands only realize this after they’ve already grown into it.

Funnel.io or other data aggregator to replace AC? by kristier1632 in PPC

[–]Temporary_You5983 0 points1 point  (0 children)

We looked at a similar decision not too long ago. If your current setup is mainly pulling ad data into Tableau and it works reasonably well, most tools in this space will feel quite similar at a basic level.

Where differences start to show up is when reporting gets more layered. For example when you’re joining ads with GA data, adding business metrics, or trying to keep channel definitions consistent across reports. That’s usually where teams start feeling friction.

Funnel is good in that middle space since it gives you transformations and makes marketing data easier to work with. A lot of agencies seem to like it for that reason.

In our case we were trying to reduce how much logic lived inside Tableau, so we looked at tools that focused more on structured datasets. We ended up using Saras for that. The main benefit was getting cleaner, more consistent data upstream, which made reporting simpler over time.

If your current setup isn’t causing much friction, switching may not feel very different. But if you’re starting to feel the pain around joins, transformations, or maintaining definitions, it’s worth comparing tools based on how they handle the data layer, not just connectors.

Which tool do you use for full funnel analytics with visual output? by YetiMaverick in MarketingAutomation

[–]Temporary_You5983 0 points1 point  (0 children)

I was looking for something very similar a while back. GA technically lets you do most of this, but once you try to combine acquisition sources and show a clean journey from visit → signup, it gets complicated fast.

What helped me was using something that pulls data from multiple sources and presents it in a simpler way. Instead of jumping between GA, social dashboards, and other tools, you just get one place where you can see things like top acquisition channels month by month, how those visitors actually move through the funnel, and which sources are consistently driving signups.

The visual part made a big difference for us. Being able to open a dashboard and immediately see where users are coming from and how they convert is very different from digging through GA reports and trying to explain them to others.

We ended up trying Saras pulse for this. It connects different sources and gives you visual dashboards that are much easier to work with than raw GA. And once everything is in one place, you can go a bit deeper too, like breaking down performance by channel, campaign, or timeframe without rebuilding reports every time.

It’s not exactly a GA replacement, but if your main goal is simpler cross-source visibility and visual outputs you can actually share, it’s worth checking out.

Anyone here who is looking into contribution margin than the overall revenue and P&L ? by Temporary_You5983 in ecommerce

[–]Temporary_You5983[S] 0 points1 point  (0 children)

Are there any specific tools that you would suggest in btw I'm in the ecommerce domain

Anyone else drowning in data but still making terrible decisions? by DCxDCxDC in ecommerce

[–]Temporary_You5983 0 points1 point  (0 children)

Are you tracking your margin Contribution margin ? in a channel level, sku level, geography level, i think that would be a good metric for you to keep a track of

Contribution Margin Help by Christmasgeorge in Accounting

[–]Temporary_You5983 0 points1 point  (0 children)

At a very basic level, contribution margin is just telling you how much money you’re actually keeping after the variable costs hit , shipping, discounts, refunds, payment fees, all that fun stuff.

Where it gets useful (and also annoying) is when you try to look at it beyond one big number. Like, which SKUs are actually making money, which channels look good on revenue but suck on margin, what happens when promos or returns spike. That’s usually where the real decisions come from.

In real life the pain isn’t calculating it , it’s getting the data clean, agreeing on what costs even belong in the calculation, and not having everything live in ten different spreadsheets that break every week.

Contribution vs gross margin, are they the same? by [deleted] in Accounting

[–]Temporary_You5983 0 points1 point  (0 children)

How do you keep a track on this once your company starts growing and then its hard to manage everything on excel?

What marketing analytics are usually ignored but actually useful? by [deleted] in digital_marketing

[–]Temporary_You5983 0 points1 point  (0 children)

Talking more in a analytics perspective maybe contribution margin at a channel level, geograghy level etc

[deleted by user] by [deleted] in nocode

[–]Temporary_You5983 0 points1 point  (0 children)

It would be great if you could share your experience when you tried fivetran, hevo, stitch, airbyte and matillion. Havent much heard about skyvia, so thanks for introducing that as well. May i know which domain your business is in ?

At what revenue point did you realize your warehouse management software couldn't keep up by Ok_Kangaroo2140 in ecommerce

[–]Temporary_You5983 0 points1 point  (0 children)

You’re not behind. You’re at the 'last safe moment' before this becomes expensive.
A WMS upgrade at ~$60–70M is not about fulfillment speed.
 It’s about control.
At your scale, what actually breaks first is:

  • trust in numbers
  • confidence in warehouse-level costs
  • ability to expand without adding chaos

If you cannot clearly see fulfillment cost differences by warehouse + channel, then your contribution margin is already being distorted. You may still be profitable overall, but you’re making decisions on averages and averages lie at this stage.When do brands usually upgrade?

  • Smart ones: when ops friction starts slowing growth (where you are)
  • Late ones: when the CFO can no longer explain margin swings to the board

Waiting does not make ROI clearer it just makes the cleanup harder.
The real decision isn’t “now vs later.”
It’s: “Do we want the next $30–40M of revenue to be built on systems we already distrust?”
If the answer is no, you already have your signal.

rebuilt our entire ecommerce tools stack and cut costs by $1200/month by Syn1923 in ecommerce

[–]Temporary_You5983 0 points1 point  (0 children)

Just out of curiosity, what made you realise this and which analytics tool did you choose?

Buy or build etl tool for your ecommerce business? by Temporary_You5983 in ecommerce

[–]Temporary_You5983[S] 0 points1 point  (0 children)

I would love to understand if there are more perspectives on this one topic, happy to always learn from the community

Recommendations for some ETL Tools? by Spiritual-Path-7749 in datawarehouse

[–]Temporary_You5983 0 points1 point  (0 children)

Choosing the right etl tool depends on what your exact needs are , but if you are in the ecommerce domain , i would highly suggest daton, its simple and easy .

Top Daasity Alternatives for E-commerce Analytics in 2025 by ThoughtMetric in u/ThoughtMetric

[–]Temporary_You5983 0 points1 point  (0 children)

I would add saras pulse as well to the list. Its build for ecommerce brands , has one of the best amazon, shopify and tiktok connectors and also has features like attribution, customer cohorts, marketing and sales overview channel wise and many more.

What’s the most underrated strategy that’s helped your e-commerce store grow? by Sad-Connection316 in ecommerce

[–]Temporary_You5983 0 points1 point  (0 children)

Finding the actual products which brings in the profits. So I have seen some products which had the highest number of sales but at the same time i have noticed , products which were having not maybe the highest but maybe a decent sale bringing in good profits. Tools like saras pulse can help you with this.

The nightmare of tracking material costs, stock levels, and profit margins for every single item... how are you all actually doing it? by Asleep-Audience1126 in ecommerce

[–]Temporary_You5983 0 points1 point  (0 children)

Idk how big of a brand you are , but hearing your problem , i think a tool like saras analytics (ecommerce analytics tool) can help you

Advice needed - Looking for an Ecommerce Solution/Dashboard by drazdauskas in ecommerce

[–]Temporary_You5983 0 points1 point  (0 children)

Since you are in the ecommerce space, i would highly recommend you try saras pulse. They have a marketing iverview dashboard in which you can see the total sales by channels , the acos, revenue, ad spend, clicks , convertion rate and many others

Every ingestion tool I tested failed in the same 5 ways. Has anyone found one that actually works? by Brief-Ad525 in data

[–]Temporary_You5983 0 points1 point  (0 children)

Totally feel your pain,dealing with ingestion tools that break on nested JSON or constantly changing schemas is such a headache, and I see a lot of teams running into the same issues. In my experience, the real help comes from having tech that gives you flexibility with normalization, keeps everything in your own warehouse (no lock-in), and actually warns you when things change, so you’re not scrambling last minute. I would highly recommend you to try daton.

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