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Calculating Net Profit

Margins

You can use Easy Insight to accurately calculate profit down to an order line level, factoring in not just the COGS from your inventory system but also actual shipping costs from your shipping system, channel marketplaces fees from your e-commerce system, and any additional costs such as advertising or warehouse expenses that you want to allocate across orders.

For each inventory management connection in Easy Insight, a set of prebuilt reports under the 'Margins' section shows you the number of orders by gross margin range, the number of orders by net margin range, the margins by channel, and the net profit by sales channel and month. You can use these reports to identify which particular sales channels or orders might be coming in at a negative net margin or find which particular combinations of products and channels are the most lucrative for your business.

How do I add shipping costs?

To pull shipping costs, you'll need a connection to your shipping system. Right now, we support ShipStation, StarshipIt, and Ship Logic.

Once you have your shipping system connected, go to your inventory system data source in Easy Insight and click on Configuration, then click on 'Set Up Shipping':

Shipping Cost Setup

To actually use the configured shipping cost values, the fields will depend on your data source:

  • For Cin7 Core, it will be Shipping Cost under Invoice/CR Lines, and Net Profit for profit factoring in that shipping cost under Invoice/CR Lines.
  • For Cin7 Omni, it will be Shipping Cost under Sales/CR Lines, and Net Profit for profit factoring in that shipping cost under Sales/CR Lines.
  • For Finale Inventory, it will be Line Shipping Cost under Line Fields, and Line Net Profit for profit factoring in that shipping cost under Line Fields.
  • For Katana, it will be Shipping Cost under COGS Fields, and Net Profit for profit factoring in that shipping cost under COGS Fields.
  • For Order Time Inventory, it will be Line Shipping Cost under Line Fields, and Line Net Profit for profit factoring in that shipping cost under Line Fields.
  • For SOS Inventory, it will be Line Shipping Cost under Line Fields, and Line Net Profit for profit factoring in that shipping cost under Line Fields.

If you're missing prebuilt templates that are necessary to map in the shipping costs, please contact our support team and we'll be happy to help.

Click on the enable costs link and Easy Insight will look at your data to identify how shipping costs map back into your inventory management sales and invoices. Assuming it can map the data together, it will create the connection and update your reports. The Shipping Cost and the Net Profit fields in your inventory system will update accordingly to help you track your true profit.

How do I pull channel fees?

You can pull in your channel fees to help calculate true profit and identify just what it's costing you to sell on a given marketplace. For example, you could pull in your FBA fees from Amazon to identify how much profit you're making on Amazon orders. By default, Easy Insight can pull your fees from Amazon and Shopify. If you want to pull in fees from another marketplace like Faire or Iconic, you can put in your own flat and % fees, or you can use an entirely custom calculation.

To get started, go to your inventory system data source in Easy Insight and click on Configuration, then click on 'Set Up Shipping':

Channel Fees

Based on the appropriate source field in your inventory system, you can choose the channel mapping and costs. If you have the marketplace connected in Easy Insight, you can choose to automatically pull in the fees. Otherwise, you can specify the fees or to use a custom calculation.

Channel Fees

Click on the Save button after configuring your channel fees. Once you save, it'll update the supporting calculations feeding into the channel fees in your reports, including updates of the net profit calculation to include channel fees.

To actually use the configured channel fee values, the fields will depend on your data source:

  • For Cin7 Core, it will be Channel Fee under Invoice/CR Lines, and Net Profit for profit factoring in that channel fee under Invoice/CR Lines.
  • For Cin7 Omni, it will be Channel Fee under Sales/CR Lines, and Net Profit for profit factoring in that channel fee under Sales/CR Lines.
  • For Finale Inventory, it will be Line Channel Fee under Sales/CR Lines, and Net Profit for profit factoring in that channel fee under Line Fields.
  • For Order Time Inventory, it will be Line Channel Fee under Sales/CR Lines, and Net Profit for profit factoring in that channel fee under Line Fields.
  • For Katana, it will be Channel Fee under COGS Fields, and Net Profit for profit factoring in that channel fee under COGS Fields.
  • For SOS Inventory, it will be Line Channel Fee under Sales/CR Lines, and Net Profit for profit factoring in that channel fee under Line Fields.

How do I allocate additional costs across orders?

You can also allocate additional costs across your orders. For example, you could allocate:

  • Advertising costs
  • Warehouse costs
  • Shipping operation costs
  • Sales commissions

To do this, you'll need to first pull over the base cost data as a data source. This could be a CSV upload or a report source based on the profit and loss data from your accounting integration like QuickBooks Online or Xero. Add this data source to youe inventory data source as a child source.

After adding that source, edit the Accounting Allocations report. There are three possible strategies for allocating costs:

  • Allocate across all orders
  • Allocate a value across all orders where a grouping contains a certain value, for example allocating a monthly shipping operation cost across all non-Amazon FBA orders
  • Allocate a value per matching grouping, for example assigning cost data to each sales location and allocating the costs across orders from each respective location
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