PRODUCT & TECHNOLOGY
RETAIL / UNIT ECONOMICS
Revenue grows, profit does not. We bring sales, discounts, returns and logistics into one view so assortment decisions reflect their contribution to the business.
A Fermi & Frost product concept
CONTEXT
Category managers see sales, marketing sees acquisition cost, and operations sees delivery and returns. These costs meet too late at the individual-product level. A promotion that looks successful by revenue may be a poor business decision.
The best-selling item does not necessarily generate the most money. Assortment decisions need the full cost of a sale.
02 / PRODUCT DECISION
The focus is each item’s contribution after discounts, returns and variable costs. Revenue stays in the interface but stops being the only basis for a decision.
OUTPUT → Category economics and the next buying scenario
Recalculate one promotion before increasing its advertising budget.
POLKA / NEXT MOVE
NEXT STEP / IN PROGRESS
Economic model · September / working parameters
INTERFACE CONCEPT / SCENARIO PARAMETERS
INSIDE THE SOLUTION
01
Compare categories over the same period and show the effect of promotions separately.
02
Returns, delivery and discounts are included in the same row as sales.
03
Every category has a next move: expand, revise the terms or stop the promotion.
VALIDATION
Test whether the model changes a buying decision. Compare regular sales and promotions using the same cost components, then observe actual contribution in the selected category.
Recalculate one promotion before increasing its advertising budget.
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