Case study 06 / Product analytics
Revenue is not profitability
Revenue was growing while profitability trended down. The problem was margin — and a range chosen by revenue rather than profit. I analysed margin, sales velocity and storage cost to decide what to promote, what to keep, and what to remove.
Eskwelabs data analytics case study. Figures are illustrative; no company data is published.
01 / The paradox
Revenue was up. Profit was down.
More sales looked like success until the margin line told a different story. Products were being promoted and stocked because they sold well, not because they made money — and slow-moving, space-hungry items were quietly absorbing cash and storage capacity.
The question was not "what sells most?" but "what earns most per unit of cash, space and attention — and what should leave the range?"
02 / The approach
Score every product on profit, speed and space.
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Margin first
Calculated product-level gross margin and contribution, so revenue rank stopped masking the products that were earning little or losing money after cost.
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Sales turnaround
Measured how quickly each product sold — velocity and sell-through — to separate fast movers from items that sat in the range without turning.
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Storage cost
Brought holding cost into the decision: a high-margin product can still be a poor choice if it occupies expensive space for months before it sells.
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Combine into one decision
Placed products on a margin-vs-velocity view with storage cost as the third dimension, then translated the quadrants into actions: promote and stock, keep selectively, reprice or renegotiate, or remove from the range.
03 / From analysis to range decisions
Every quadrant gets a different action.
The analysis only mattered because it changed the decision. Instead of a single revenue ranking, the range was reviewed on three signals at once:
| Margin | Velocity | Storage cost | Action |
|---|---|---|---|
| High | Fast | Low | Promote & stock |
| High | Slow | Low | Keep, bundle, or make to order |
| Low | Fast | Low | Reprice, renegotiate cost, or keep as a traffic driver |
| Low | Slow | High | Remove from range |
| Mid | Fast | High | Review — cash and space trade-off |
04 / What changed
The range started being managed for profit, not just sales.
- Promotion and stocking decisions moved to high-margin, fast-turning, low-storage products.
- Low-margin, slow-moving, space-heavy items were identified for removal from the range.
- Fast low-margin products were treated as a pricing or cost problem, not automatically as winners.
- Revenue growth could be judged against the margin it actually produced.
05 / Limitations
What this analysis is — and isn't.
Storage cost is an allocation, and different allocation rules can change the ranking. Velocity and margin both depend on the time window and on seasonality, and past sell-through is not a guarantee of future demand. The framework improves the quality of the range conversation; it does not remove the need for judgement. Figures here are illustrative and no company data is published.