Margin Analysis
Order Profitability
By Herzel MishelFounder, AgentisLast reviewed
Definition
The true net profit of a single order after deducting all variable costs: COGS, shipping, discounts, payment fees, fulfillment labor, and return allowances.
Order profitability is the unit-level metric that reveals whether an individual transaction creates or destroys value. It differs from aggregate margin metrics by capturing every cost component specific to that order: the actual COGS of each line item (not category averages), the real shipping cost based on freight zone and package dimensions, the exact discount applied, payment processing fees, pick-and-pack labor allocation, and a statistical return allowance based on product category. Most mid-market merchants lack true order-level profitability visibility because the required data spans multiple systems: ERP for COGS, shipping platforms for freight costs, commerce platforms for discounts, and payment processors for fees. Assembling this data in real time is what margin intelligence platforms do, and it forms the foundation for meaningful profit floor enforcement. Without order-level profitability, merchants are making checkout decisions based on incomplete cost pictures.
Related Terms
Margin Analysis
Gross Margin
The percentage of revenue remaining after subtracting the cost of goods sold, a foundational profitability metric that excludes operating expenses, taxes, and interest.
Margin Analysis
Contribution Margin
The revenue remaining after deducting all variable costs associated with fulfilling an order, including COGS, shipping, payment processing fees, and pick-and-pack labor.
Cost Management
Landed Cost
The total cost of a product delivered to the customer, including COGS, freight, duties, tariffs, insurance, and handling fees.
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Related Solutions
Agentis Solution
Ecommerce Margin Intelligence
Real-time visibility into per-order, per-SKU, and per-channel profitability using live data from your ERP, logistics, and FX systems.
Agentis Solution
Multi-Channel Margin Management
Get a single view of profitability across Shopify, Amazon, and wholesale channels. Agentis enforces per-channel profit floors with live cost data from your ERP.
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