E-Commerce True Margin Dashboard

AYF Automate YourFinance
NovaSkin DTC — True Margin Analysis
$8M Revenue · SKU-Level Contribution · April 2026
⚠ Reported GM: 42% → True GM: 30%
Reported Gross Margin
42%
As shown on P&L
Before fulfillment reclassification
True Gross Margin
30%
▼ 12pp hidden below line
After all fulfilment costs above line
Hidden P&L Gap
$960K
12% × $8M revenue
Misrepresented in management accounts
Best SKU Contribution
48%
Serum Pro — Scale this
32% of revenue, 41% of true profit
Loss-Making SKUs
3
Negative contribution margin
$124K annual drag on portfolio
True Margin Stack — Where the 12 Points Go
Reported 42% GM → True 30% — step by step
-12pp gap
Revenue
$8.0M
— Product COGS
-$4.64M
= Reported GM (42%)
$3.36M
COSTS BELOW THE LINE (should be above):
— Inbound freight / unit
-$240K
— Pick & pack labour
-$320K
— Last-mile shipping
-$400K
— Returns processing (14%)
-$200K
= TRUE Gross Margin
30% / $2.4M
True Margin by Channel
Where you're actually making money
DTC vs Amazon
What happens if returns hit 20%?
True Gross Margin 30.0%
True Gross Profit $2.40M
vs. Reported ($3.36M) -$960K gap
At 14% returns: runway looks comfortable. This is the scenario your P&L currently shows.
SKU-Level True Contribution Margin
Rebuilt from unit economics — landed COGS + all fulfilment costs
3 loss-makers found
SKU / ProductRevenueReported GMTrue CMGapAction
Strategic Actions & P&L Impact
Based on true margin rebuild
+400bps potential
1. Reprice Serum Lite & Eye Cream (+200bps)
Both SKUs have true CM of 18–22% despite 38% reported GM. A 12% price increase captures real cost. Impact: +$192K gross profit annually.
2. Discontinue 3 loss-making SKUs (+120bps)
Travel Kit, Sample Set, Bundle C all have negative true contribution. Combined drag: $124K/year. Discontinue or reprice with new cost awareness.
3. Shift marketing to Serum Pro (+80bps)
Serum Pro has 48% true CM and low return rate (6%). Every $1 of marketing spend here generates $0.48 contribution vs. $0.22 on Moisturiser Classic.
Combined impact if all 3 actioned
True GM: 30% → 34% +400bps
=$320K additional annual gross profit on same revenue base

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Built by automateyourfinance.cloud · Illustrative data · Madhav Mohta, CA FRM, Ex-Deloitte