Most ecommerce sellers know their company is profitable. Few can answer which SKUs are dragging that profit down. The difference is what separates a business that scales from one that grows revenue while shrinking margin.
SKU profitability is the per-unit contribution margin of a specific product, calculated by subtracting all variable costs from the selling price. It includes manufacturing cost, freight, tariffs, fulfillment, marketplace fees, advertising allocation, and a returns reserve. It does not include fixed costs (rent, software, salaries), those are operating expenses that aren't allocable to a specific SKU.
The output is a number per unit and a percentage of revenue, tracked over time and across channels. A SKU profitable on Amazon at 18% might be losing money on TikTok Shop at -3%.
Four data sources combine to produce per-SKU profit:
Start with a single source of truth for every SKU: an internal SKU code, the marketplace-specific SKUs (Amazon ASIN, Shopify variant ID, Walmart Item ID, eBay item number), the selling price by channel, and the current variable cost per unit.
Keep one row per SKU per channel. The same product on Amazon and Shopify is two rows because the fulfillment cost differs.
Each marketplace exports unit-level sales differently. Amazon: Seller Central → Reports → Business Reports → Detail Page Sales and Traffic by Child Item. Shopify: Admin → Analytics → Reports → Sales by product variant. Walmart: Seller Center → Analytics → Item Performance. eBay: Seller Hub → Performance → Sales report. TikTok Shop: Seller Center → Analytics → Product Performance.
From each marketplace's settlement report, attribute the fees to the units that produced them: Amazon FBA pick-pack fee, referral fees, payment processing on Shopify, FBA storage fees (approximation; allocate by units shipped).
This step is where most sellers stop because it's the hardest. For Amazon, attribution is decent: Amazon Advertising reports show spend by ASIN. For Shopify with Meta or Google ads, the attribution is messier. Two pragmatic approaches: direct attribution (cleaner but underestimates) or pooled allocation (simpler but spreads cost). Most sellers use direct attribution for Amazon and pooled allocation for paid social.
For each SKU-channel combination: Net contribution per unit = Selling price - Variable COGS - Marketplace fees per unit - Fulfillment per unit - Advertising allocation per unit - Returns reserve (2-5% of revenue). Net contribution margin % = Net contribution per unit / Selling price.
The output is one row per SKU per channel, sortable by margin. The top of the list is where to push inventory and ad spend. The bottom is where pricing changes, channel exits, or SKU rationalization decisions get made.
Run this same calculation weekly. The dashboard view you want is per-SKU contribution margin this week vs same week last month vs same week last year. Margin compression rarely shows up suddenly; it creeps in 0.5% per month as tariffs land, fees increase, and ad costs rise.
The six steps above describe what ConnectBooks does automatically. Every settlement is parsed, every fee is allocated, every ad-spend dollar is attributed to the right SKU (Amazon direct, Shopify pooled), and the per-SKU per-channel contribution margin is calculated and displayed weekly. The morning briefing from Crunch surfaces the SKUs whose margin moved most this week before anything else.
See SKU profitability inside ConnectBooks. Real-time per-SKU contribution margin across all your marketplaces, with weekly trend tracking. 30-day free trial, no credit card required.
Running an e-commerce business comes with plenty of challenges, but ConnectBooks is here to make your life easier. With real-time insights, seamless integrations, and detailed tracking of your profitability and inventory, you can stay ahead of the game. Whether you’re selling on Amazon, Shopify, Walmart, TikTok or eBay, ConnectBooks helps you manage your finances with 100% accuracy and confidence, so you can focus on growing your business.
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