You are a senior ecommerce operations analyst who specializes in finding the margin leaks that don't show up on a simple P&L. Your job is to identify which SKUs are silently destroying profit — not the obvious losers, but the ones that look fine until you factor in the costs operators routinely ignore. I'm going to provide SKU-level data below. For each SKU, calculate true profitability by layering in the following cost categories in order: LAYER 1: Base margin - Sell price − COGS − inbound freight per unit = gross margin LAYER 2: Amazon fees - Gross margin − referral fee − FBA fulfillment fee = post-fee margin LAYER 3: Return cost - Return rate % x (return processing cost + lost margin on returned unit) = return cost per unit sold - Post-fee margin − return cost per unit sold = return-adjusted margin LAYER 4: Storage cost - Monthly storage fee x average months in storage = storage cost per unit - If long-term storage fee applies (inventory aged 180+ days), add it here - Return-adjusted margin − storage cost per unit = fully-loaded margin Output format: A table with columns: SKU | Sell Price | Base GM% | Post-Fee Margin% | Return-Adj Margin% | Fully-Loaded Margin% | Flag Where Flag is one of: - HEALTHY (fully-loaded CM% > 20%) - MARGIN LEAK (fully-loaded CM% 10-20% but 10%+ lower than base GM% — the hidden cost drag is significant) - AT RISK (fully-loaded CM% 0-10%) - LOSS LEADER (fully-loaded CM% < 0%) After the table, produce a "Hidden Loss Leaders" section listing only the SKUs flagged MARGIN LEAK, AT RISK, or LOSS LEADER, with a one-sentence explanation of what's killing the margin on each (returns? storage? fees?). Close with a "What to do" section: 3-5 prioritized actions across the catalog, ranked by dollar impact. Think through the layered calculations step by step before producing your final answer. BEFORE YOU EXECUTE: 1. If any required input is missing, unclear, or looks malformed, stop and ask me a specific clarifying question before proceeding. Do not guess or fill in plausible values. 2. If you are less than 95% confident you understand what I'm asking for, ask me to clarify before executing the task. 3. If the data I've provided contradicts itself, flag the contradiction and ask how to resolve it before continuing. 4. If executing this task would require information you don't have access to, tell me what's missing instead of fabricating it. 5. Verify every arithmetic calculation by working it twice. Do not round intermediate calculations; round only the final figures to two decimal places. 6. If any SKU shows a fully-loaded margin more than 20 percentage points below its base gross margin, flag it as a high-priority anomaly and identify which cost layer is responsible. 7. After completing the task, note any assumptions made and flag anything that looks unusual under a "Caveats" section. ===== PASTE YOUR SKU DATA BELOW. For each SKU include: sell price, COGS, inbound freight per unit, Amazon referral fee %, FBA fulfillment fee, return rate %, return processing cost, monthly storage fee per unit, average months in storage, and long-term storage fee if applicable. If a value is unknown, write "unknown" and I will note it as an assumption. [YOUR DATA HERE]
SKU: YOGA-MAT-PRO Sell price: $38.00 COGS: $9.50 Inbound freight per unit: $1.20 Referral fee: 15% FBA fulfillment fee: $6.10 Return rate: 18% Return processing cost: $4.00 Monthly storage: $0.18 Avg months in storage: 2.5 Long-term storage fee: $0 SKU: FOAM-BLOCK-SET Sell price: $22.99 COGS: $5.80 Inbound freight per unit: $0.90 Referral fee: 15% FBA fulfillment fee: $4.95 Return rate: 6% Return processing cost: $3.50 Monthly storage: $0.22 Avg months in storage: 4.0 Long-term storage fee: $1.50
The return rate and average months in storage are the two inputs most sellers don't have ready. Pull return rate from your Returns Report (last 90 days) and storage duration from your Inventory Age report in Seller Central.
A high return rate on a low-margin product is almost always a loss leader in disguise. The math usually makes it obvious once you run it.
Run this quarterly — storage costs and return rates shift seasonally, and a SKU that was healthy in Q1 can be a loss leader by Q4 if inventory ages through a slow period.
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