Margin Audit Projects
We were brought in to analyze business cash flow issues.
Revenue, Pricing, Overall Gross Margins, Reorder Frequency — All looked fine.
Here's what turned up after calculating Product-Level Margins ...
Marketing and Product-Mix was not one-size fits all
Thirteen stores, thirteen point-of-sale systems that did not reconcile. Centralizing the data made the locations comparable for the first time — and showed marketing spend returning in some and disappearing in others.
Read the projectBest-selling add-on: biggest Margin leak
Per-product margin showed that the most popular add-on was among the least profitable. Re-sourcing one item lifted profit by the equivalent of 5% of revenue.
Read the projectAging AR also hid eroding Margins
Freight, duties and currency movement made landed cost invisible. Rebuilding the books gave margin at two levels — by product and by account — and put a number on what sampling returned.
Read the projectHigh Margins slowed inventory turnover, tying up cash
Margins sat above industry standard, yet cash was tight against high fixed rent. Digitizing two years of paper supplier invoices and reconciling POS processing fees confirmed the root cause: sell-through was too low, held back by the pricing itself.
Read the project