tl;dr
One of the foundational ideas of Klar is that we want to empower our customers to not just drive revenue, but profitability.
Using the configuration of your costs structure, we can generate an always up to date Profit & Loss statement you use to understand how your margin structure and overall profitability is developing over time.
From GMV down to EBITDA. Including deep-dives into discounts, returns, logistics, marketing & more.
Obviously this report cannot replace your P&L done by accounting, but our goal is to get this to be 98% accurate so that you can reliably work with it to improve profitability.
Update November 2023:
Added overhead costs to see P&L down to EBITDA
Added drill-downs of
Price Reductions: % of orders with price reductions
Discounts: % of orders with discount codes
Shipping revenue: % of orders with shipping revenue
Returns: Full return rate, partial return rate, order cancelled rate, order partial cancelled rate, items return rate
Net Revenue: first time customer revenue rate & net revenue, repeat customer revenue rate & net revenue
COGS: sold items, replacement items
Logistics costs: general costs, shipping costs, packaging costs, picking costs, return costs, new customer costs, other costs
Marketing costs: MER, aMER, new customers, CAC, performance/brand/other marketing
Overhead costs: type of costs like agency, rent, salary, software, operations, other
What can I analyse:
The dashboard is divided into two different sections. An overview and a detailed Profit & Loss statement.
Overview
The overview focuses on your core four profitability metrics:
Net Revenue = Revenue excluding discounts, returns and taxes
Contribution Margin 1 = Net Revenue - Cost of Goods Sold
Contribution Margin 2 = Net Revenue - COGS - Logistic Costs - Transaction Costs
Contribution Margin 3 = Net Revenue - COGS - Logistic Costs - Transaction Costs - Marketing Costs -> CM3 is your profit after deducting all variable costs
The are being shown as a total for the selected time period as well as displayed in weekly total in a graph so you can see how they have developed over time.
Profit & Loss
Time Frame Toggle:
You can use the toggle to define if you want your P&L to be summarized in total for the selected time period or instead be broken up per:
Week
Month
Quarter
Once that is decided, you can look through your P&L. Many of the displayed KPIs have a " as % of ..." below them which expresses them as a percentage of a previous total/subtotal. This allows you to analyze the various percentage improvements over time.
The following KPIs are shown in the P&L:
Gross Merchandise Value - The original value (RRP) of all items sold before any discounts & deductions.
Price Reductions Value - The total value of price reductions (not discounts or vouchers) of all product sold.
Discount Code Value - The total price reduction through discount/voucher codes and cart rules.
Shipping Revenue - The revenue made from shipping charges excl. discount.
Gross Revenue - Revenue after discounts but before taxes and refunds
Gross Orders - The number of all successful orders placed.
Gross AOV - Gross AOV = Gross Revenue / Gross Orders
Taxes - The VAT you need to pay.
Return Value - The Net Revenue of all items that were refunded.
Return % - Return Value / Gross Revenue
Net Revenue - Revenue excluding discounts, returns and taxes
Net Orders - Number of not-returned orders
Net AOV - Net AOV = Net Revenue / Net Orders
Cost of Goods Sold - The landed product costs of all items sold.
Contribution Margin 1 - Net Revenue - COGS
Logistics Costs - Costs for Shipping, Picking, Returns etc. of sold items.
Transaction Costs - Costs incurred from Payment Providers
Contribution Margin 2 - Net Revenue - COGS - Logistic Costs - Transaction Costs
Marketing Costs - Marketing Costs from all connected datasources
Contribution Margin 3 - CM3 is your profit after deducting all variable costs
Overhead Costs - all other costs like salaries, rent, agency costs, software etc. entered in the custom costs sheet
EBITDA - Earnings before interest, taxes, depreciation & amortization
What can I use this for:
Like mentioned before, this report is create in order to understand how your margin structure as well as overall profitability is developing over time.
You can also use these details to derive your targets for your MER (see Klarcademy article on setting targets for your marketing team).