Which customers really make you money?
Gross margin tells you what a customer is worth before you serve them. Enter up to five customer groups or channels and your yearly serving costs, and see the margin each one leaves once order handling, delivery, returns and account management are counted.
This is an estimate from the figures you enter. Nothing you type is sent anywhere unless you choose to send it with the form.
Enter at least one customer group and your serving costs to see the margin each group leaves.
The sums, in plain sight.
Each cost pool is shared out by what drives it: order handling by number of orders, delivery by number of deliveries, returns by value returned, and sales and account management by revenue. This is a simple form of activity-based costing, the standard way to estimate cost to serve.
Margin after serving is gross margin minus the share of each pool. A group with high gross margin can still lose money if it orders small and often, wants frequent deliveries or returns a lot.
The split is only as good as the drivers. A full cost-to-serve study uses your order and delivery data line by line, and tests the effect of changing minimum orders, delivery days or charges.
Know what every customer is worth.
Waterfront Advisory builds cost-to-serve models from your own order and delivery data.