In an attempt to increase their bottom line, internet retailers can make the mistake of focusing solely on trying to drive revenue higher assuming elevated profits will automatically follow. Lowering sales prices in an attempt to push revenue higher results in decreased margins. This does not necessarily lead to increased profits. It could result in simply working harder to make less. The spread of automated algorithmic repricing on marketplaces such as Amazon has resulted in more efficient markets for consumers but greater stress on margins for sellers. The race to the bottom means that sellers should carefully monitor their repricing strategies and the resulting margins to ensure that they are achieving the ultimate goal of increased profitability, not just higher revenue.

The Decision Model feature enables MarginDriver users to evaluate the sales results generated from decisions to change product sales prices and shipping charges. This feature allows the user to compare gross profits and margins that existed before changes are implemented (Base Dates) to the results generated after the changes are implemented (Comparison Dates). 

There are three rows of order-related data on the Decision Model page: one for each of the time frames being compared (Base Dates and Comparison Dates) and a row revealing the delta between the two (Difference).

User can choose to view the results in the Difference line as totals or as averages per day or per order.

As always, the bottom line with MarginDriver is gross profit therefore the result/difference for this metric is color-coded – red for a decrease and green for an increase.

Please note: you must select GO after making any changes to the channels, date ranges or other filters in order to execute the query and render updated results.

Select Metrics

Under the Select Metrics button the user can choose additional filters including Shipping Carrier, Shipping Country, Shipping Weight and SKU Number. When the user clicks on the Shipping Weight or SKU Number metric options, two boxes will appear allowing the user to select orders with weights between certain ounces and orders with SKU Numbers that fall within a specified range. The SKU Number metric can also be used to compare the results for an individual product in the Base and Comparison Dates by entering the same SKU Number in each of the two boxes. Custom filters can be applied to all of these metrics simultaneously The list of the active filters can be viewed beneath the Select Metrics box once the drop-down menu has been closed.

Graph

This Decision Model Graph provides a visual aid for comparing the Base and Comparison date ranges. The graph displays the results in total amounts only due to the fact that the average per day and average per order results are in fact averages for the period and therefore the numbers on the Y axis will be unchanged for the dates indicated on the X axis.

Users can view a unique graph for each individual metric by clicking on the metric title in the comparison table.

7-Day Moving Average

Finally, the Decision Model Graph results can be viewed as Actual values or 7-Day Moving Averages. The 7-Day Moving Average option takes into account the weekly ecommerce sales cycle. As most sellers know, ecommerce sales volumes industry-wide vary by the day of the week. Mondays tend to be the highest volume day while weekends tend to be the lowest volume days. The 7-Day Moving Average option controls for this fluctuation by providing an average for the prior seven days. For example:

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