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Have contribution margins calculated
Identify the margin killers with DataWow [Werbung]
Calculatingthe contribution margins with DataWow, breaking down in detail how the individual contribution margins are made up and identifying margin killers – that is the content of this screencast tutorial. In this way, we optimize our product range sustainably and generate more profit.
Let DataWow calculate contribution margins and identify margin killers
One of the most important tools of DataWow is the calculation of the contribution margin and the visualization of the whole thing in a contribution margin scheme, where it is then also divided into DB I / II and III. This is just so interesting for you as a retailer, because margin killers can be identified through the exact cost allocation. Let’s take a look at how detailed this can be done.
Analyze contribution margin I in the dashboard
So for our example, we now want to find the products or also the platforms that cause negative margin numbers and thus cause us problems. We see in the DataWow dashboard the contribution margin for November 2020 which is €52,000 in total, which doesn’t provide us with that much information for now, but this can be changed with the contribution margin scheme. Here the whole thing already looks different. We see in detail how we actually arrive at our 52,000€ contribution margin.
The contribution margin scheme
We have once the sales volume, 172.000€ product sales, discounts that were given, both shipping and total sales, but also on the other side the shipping and material costs. So our gross margin is around 74,000€, to which we add variable costs like the platform commissions and others, so I end up with a total of 121,000€ in variable costs – so a DB I of 52,600€, which we already got visualized in our dashboard.
Have contribution margins calculated: The DB II and DB III
Separated from the sales process, we still have fixed costs such as pick and pack costs, marketing investment, etc., so that in the end around 36,000 € DB II comes out. Administrative and fixed return costs are then deducted again from this, with which we have determined the final DB III for the month of November.
This is of course interesting and important to see, especially what comes out in the end, but it should be even more important to determine which items are causing the problems, in order to increase steadily.
This is how detailed DataWow breaks down your sales platform data
We can view the top and flop items in DataWow. We decide for the second and see there first the “Glass bowl L brown modern”, which has brought us a turnover of 5.300€, but has a contribution margin I of “-531”. The DB II is then already at over “- 26%”. Let’s delve deeper into the article and take a look at the DB scheme for this. Via the DB I we can now, for example. take a look at which platforms it was sold on. And we already see for our store and eBay we have a positive balance, which we can’t say for Amazon. Thus, in a very short time, we have identified a weak point in the product range with DataWow, as well as which platform this product should better not be sold on in the future.
This way you can make your product portfolio sustainable, better and more sales-oriented with DataWow, so that you can show a better balance sheet month after month.
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