Account profit can hide product losses
Strong products can offset weak ones in the total account result. Without a SKU view, a seller may keep buying inventory or advertising a product that consumes cash while appearing harmless inside overall growth.
Build the statement in layers
- Net sales after discounts and customer-facing taxes.
- Amazon selling and fulfillment charges mapped to the SKU.
- Advertising and promotion costs assigned by product and period.
- Landed product cost and returns allowance.
- Contribution profit before shared operating expenses.
- Allocated overhead shown separately from directly traceable costs.
Keep allocation rules stable
Shared software, labor, and warehouse costs can be allocated by units, revenue, orders, or activity. No method is perfect, but changing the rule whenever a result looks uncomfortable destroys comparability. Document the rule and review it on a set schedule.
Connect the result to a portfolio action
Classify each SKU as scale, repair, maintain, or exit. Use the classification to guide purchase orders, ad budgets, price work, and listing investment. A profit report becomes useful when it changes resource allocation.