Amazon Product-Level Profit & Loss Analysis

Calculate the true profitability of every product in your Amazon catalogue with forensic P&L accuracy.

Most Amazon vendors track revenue by ASIN but lack visibility into true net profitability at the product level. Without complete P&L analysis that accounts for vendor chargebacks, shortage deductions, co-op fees, advertising costs, returns, and all Amazon-related expenses, you cannot make informed decisions about pricing, product development, or portfolio strategy. Products that appear profitable on gross revenue often reveal negative margins when all costs are properly allocated.

Our Product-Level P&L Analysis service creates comprehensive profit and loss statements for every ASIN in your catalogue. We extract all cost data from Vendor Central, allocate expenses accurately to individual products, and deliver clear visibility into which ASINs drive profit and which destroy margin. This granular financial analysis enables Finance Directors to make strategic decisions based on true unit economics rather than incomplete revenue data.

For vendors managing extensive product catalogues, this detailed P&L visibility transforms financial control and strategic decision-making.

Key Takeaways

Complete Cost Visibility: We identify and allocate every cost element affecting product profitability, including vendor chargebacks, shortages, co-op deductions, advertising spend, returns processing, and all Amazon fees. This comprehensive approach reveals true net profit contribution per ASIN, enabling accurate financial planning and product strategy decisions based on complete economic data.

Accurate Revenue Attribution: Beyond simple sales reporting, we attribute all revenue streams to individual products including base sales, promotional uplifts, and subscription revenue where applicable. This accurate revenue recognition, combined with complete cost allocation, delivers true net profit calculations that support confident strategic decision-making.

Unit Economics Clarity: We calculate key unit economics metrics including contribution margin, net profit per unit, and profit per order for each ASIN. These metrics enable comparison across products with different price points, cost structures, and volume profiles. Finance Directors gain clear visibility into which products generate the most profitable contribution per transaction.

Cost Driver Analysis: Our analysis identifies which cost categories most significantly impact profitability for each product: advertising waste, excessive chargebacks, high return rates, or operational inefficiencies. This cost driver insight directs improvement efforts toward the highest-impact opportunities for margin recovery.

Strategic Portfolio Insights: Product-level P&L reveals patterns across your catalogue: which product categories are most profitable, which price points deliver best margins, and which suppliers or manufacturers contribute strongest profit performance. These strategic insights inform product development, sourcing decisions, and portfolio expansion strategies.

The Problem

Hidden Loss-Making Products: Many vendors discover that 20-30% of their product catalogue operates at negative margins once all costs are properly allocated. These loss-makers often subsidise profitable products, destroying overall portfolio margin. Without product-level P&L, Finance Directors cannot identify which specific ASINs to exit, reprice, or optimise.

Inaccurate Strategic Decisions: Product development, pricing, and marketing investment decisions made without true P&L data often amplify problems rather than solve them. Vendors invest in scaling products that appear profitable on revenue metrics but actually lose money at unit level. Advertising budgets amplify losses on fundamentally unprofitable products.

Incomplete Cost Allocation: Most vendor financial reporting aggregates costs at account level rather than allocating to individual products. Chargebacks, shortages, and co-op deductions are reported as lump sums without product attribution. This prevents understanding which products drive costs and which costs can be reduced through product-specific improvements.

Opaque Amazon Costs: Amazon's vendor cost structure is deliberately complex, with chargebacks, shortage claims, price reductions, and promotional fees buried in dense financial reports. Extracting and allocating these costs to individual ASINs requires specialist expertise and automated data processing that most finance teams lack in-house.

Our Process

Step 1: Comprehensive Data Extraction

We extract complete financial data from Vendor Central including all sales transactions, vendor deductions (chargebacks, shortages, price reductions), co-op fees, advertising costs, and returns by ASIN. Our proprietary tools process thousands of transaction lines to create comprehensive cost profiles for each product.

Step 2: Cost Allocation & P&L Calculation

We allocate all direct and indirect costs to individual ASINs using appropriate attribution models. Direct costs (advertising spend, product-specific chargebacks) are assigned exactly; shared costs (account-level fees, operational overhead) are allocated proportionally based on revenue or volume. This rigorous approach creates accurate product-level P&L statements.

Step 3: Profitability Analysis & Segmentation

We analyse profitability across your entire catalogue, segment products into profit tiers (star performers, marginal contributors, loss-makers), and identify key profitability drivers and detractors. Our analysis reveals which products, categories, price points, and suppliers deliver strongest margin contribution.

Step 4: Strategic Recommendations & Reporting

We deliver comprehensive P&L reports with clear profitability metrics per ASIN, actionable recommendations for margin improvement, and strategic insights for portfolio optimisation. Our dashboards enable ongoing profitability tracking and support continuous margin improvement through data-driven product decisions.