How to use · Business & profit
Follow the change in profit to your next decision
Case background
A skincare retailer is reviewing September. Sales, advertising, refunds and fulfillment records are available. The follow-up explores a one-week moisturizer promotion.
CaiGeekSales are up. Why is profit down?
CaiGeekOperating profit fell by $116,400. Higher ad spend was the largest downward driver.
What changed operating profit
USD, thousandsLocate the main drivers, then examine the economics of individual products.
Could a different promotion price work better for our moisturizer?
CaiGeekCompare price and volume together. The $95 scenario contributes more, provided the assumed 30% volume increase is achievable.
Moisturizer · One-week promotion
ContributionUnit costs: $63; platform fee: 5% of price. Fixed costs and income tax excluded.
Where would you like to take this?
At $95 for the moisturizer, how many units would match the original contribution? Review the $95 scenario every Monday at 9 a.m.At $95 for the moisturizer, how many units would match the original contribution?
CaiGeekThe baseline is 1,000 units at $99, contributing $31,050. At $95, at least 1,140 units are needed to match it.
Assumes $63 unit costs and a 5% platform fee. Actual demand needs validation. Fixed costs and income tax excluded.
Where would you like to take this?
Could a different promotion price work better for our moisturizer? Review the $95 scenario every Monday at 9 a.m.Review the $95 scenario every Monday at 9 a.m.
CaiGeekAs arranged, compare actual volume, unit costs and contribution each week. Continue from the results to examine causes and consider adjustments.
Moisturizer promotion review
“We sold only 1,100 units this week. Is it worth continuing?”
You choose the timing and focus, and can adjust them in the conversation.
Where would you like to take this?
Could a different promotion price work better for our moisturizer?Start with a change you noticed. Follow the answer, add context, try an assumption or arrange ongoing follow-up.
Start with my own question