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Sometimes profitability per product is not enough

Map out the perfect product mix

A core challenge for retail companies is to find the perfect product mix that satisfies the ideal customer set. Decisions about brands and products need to be made, which are complicated by intense competitive pressures and strict supplier directives. Securing favorable purchase prices is necessary for a high gross margin, but is it sufficient for long-term profitability?


Hidden indirect costs

There's another often overlooked aspect of large-scale retail: the more complex the assortment and the more heterogeneous the customer base, the larger the indirect costs become. These costs, including IT systems for inventory management, product traceability, and online transactions, are challenging to attribute to individual customers or products. This leads to a complicated gross margin and costs that are difficult to analyse and evaluate. As a result, it becomes challenging to identify combinations of customers and products that are profitable - and those that are not.

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The significance of Customer and Product Analysis

Solely focusing on directly profitable products can result in a fragmented offering that loses its appeal - potentially causing your customers to turn to a competitor with a more comprehensive range. To avoid this, a sophisticated profitability model is required that integrates both product and customer aspects.

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What we do in Retail

Astrada Product Costing

Take control of hidden indirect costs and their structure throughout the entire calculation process with Astrada Product Costing.

Costing & Profitability

Gain a deeper understanding of the factors driving the overall profitability of your business across all relevant business dimensions. With Astrada Profitability Analysis, you can continuously simulate and examine the profitability impact of changes in your mix of products and customers.

Astrada Group Allocations

With Astrada Group Allocations, you can seamlessly transfer ownership from central units such as IT and properties to the appropriate business area, legal entity, or owner - already in the monthly closing. The solution is tailored according to the structure of your current booking system.

Want to learn more?

If you have more questions or are curious about how an implementation of our products actually looks like in Retail, please feel free to contact us for a demo

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