Profit Analyzer

When to use this

• Sales are strong but the bank balance is not growing.
• A seller wants to know which products carry the business and which drain it.
• Profit came in far below the per-unit math's promise.
• Deciding which SKUs to scale, fix, or cut.

The framework. The Profit Waterfall

Gross revenue
  minus  Amazon selling fees   (referral, fulfillment)
  minus  Cost of goods         (landed: factory + freight + duty)
  minus  Storage               (monthly + long-term storage fees)
  minus  Advertising           (the real ad spend attributed to the SKU)
  minus  Returns and refunds   (refunded amount + lost units + return processing)
  minus  Promotions            (coupons, deals, deal fees, discounts)
  minus  Hidden and overhead   (removal fees, reimbursements net, chargebacks, software, VA)
  =      True net profit

The leak finder

• Advertising far above the catalog norm. an ad-dependent SKU, the listing or conversion is weak.
• Returns far above the norm. a product, sizing, or expectation problem.
• Storage far above the norm. overstock or a slow mover, possibly facing long-term storage fees.
• Promotions far above the norm. discounting that has become a permanent crutch.

Step by step

1. Collect inputs. Per ASIN where possible: units sold, revenue, Amazon fees, landed cost, ad spend, returns, storage, promotion costs, and any account-level overhead to allocate.
2. Run the waterfall per ASIN. Produce true net profit and true net margin for each, not just for the catalog total.
3. Rank the catalog. Sort SKUs by true net profit. Identify the carriers, the break-even SKUs, and any loss-makers.
4. Run the leak finder on each SKU. Name the abnormal layer.
5. Recommend per SKU. Scale the carriers, fix the named leak on the break-even SKUs, and decide cut or fix on the loss-makers.
6. Surface the hidden layer. Account-level costs sellers forget. removal fees, long-term storage, reimbursement gaps, software, labor. Allocate and show them.
7. Run the quality check, then deliver.

Output format

## Profit Analysis. [catalog or ASIN]

### Per-ASIN waterfall
[ASIN] . revenue . fees . COGS . storage . ads . returns . promo . overhead . NET . margin%
...

### Catalog ranking
Carriers: [SKUs and their net]
Break-even: [SKUs]
Loss-makers: [SKUs]

### Leaks
[SKU] . abnormal layer . [the leak and the fix]
...

### Recommendations
Scale: ...   Fix: ...   Cut or rework: ...

Worked example

Quality check

• The full seven-layer waterfall is run, including ads, returns, promo, and overhead.
• Profit is computed per ASIN, not only as a catalog total.
• Each SKU's layers are compared as a percent of revenue to find the abnormal one.
• Loss-making SKUs are identified explicitly, even if they sell well by units.
• Account-level hidden costs are allocated and shown, not ignored.
• Each SKU gets a scale, fix, or cut recommendation.

Common mistakes

• Stopping at per-unit fees. The per-unit math says a SKU is fine while ads, returns, and promos make it a loss.
• Catalog-total thinking. A healthy total can hide a SKU bleeding money.
• Confusing units with profit. The best seller by volume can be the worst by margin.
• Ignoring overhead. Removal fees, long-term storage, software, and labor are real and rarely allocated.
• Scaling a treadmill. Pouring budget into a SKU that only moves because of ad spend.

Built by Jay GPT Pro