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Illustrative ExampleSKU Profitability and Marketing Economics

Separating the products that grow revenue from those that grow profit

A brand scales paid acquisition across its catalog without knowing which SKUs still contribute after fulfillment, fees, and ad spend.

Profile
Hypothetical DTC and marketplace brand
Channels
Shopify · Amazon · Meta and Google ads

This is an illustrative example describing how ProfitBooster may approach a common situation. It is not a completed client engagement, and it does not represent or promise any specific result.

The situation

Gross margin is tracked at the company level only. Shipping, payment fees, marketplace fees, and advertising are not assigned to products, so best-selling items may be masking weaker economics.

Questions the founder is asking

  • What is contribution margin by SKU after variable costs?
  • How do blended MER and channel ROAS relate to product margin?
  • Which products justify more acquisition spend?

How the work could be approached

  1. 1

    Build the cost stack

    Assign landed cost, fulfillment, fees, and returns to each SKU.

  2. 2

    Allocate marketing

    Agree a documented method for attributing ad spend.

  3. 3

    Rank contribution

    Compare SKUs by contribution dollars and margin percentage.

  4. 4

    Review with marketing

    Discuss spend guardrails alongside product economics.

Typical deliverables

  • SKU contribution model
  • Cost allocation methodology
  • Marketing efficiency view
  • Pricing and bundling review notes

Decisions it informs

  • Where to shift ad budget
  • Price, bundle, or discontinue options
  • Target acquisition cost by product group

Next illustrative example

CPG Cash Conversion

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