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Superstore Profitability Analysis
Where does the business make and lose money?
Kehinde Odewabi | Python project
The big picture
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Notebook: Section 5
$2.30M
Sales
$286K
Profit
12.5%
Profit margin
9,994
Order lines
Healthy overall. Profit leaks in specific places.
US retail orders, 2011 to 2014. 5,009 orders, 793 customers.
Key insights
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Notebook: Sections 5 to 15
2.5%
Furniture margin, against about 17% for the other categories
-$17.7K
Tables: the largest loss of any sub-category
20%
Discounts above this lose money on average
18.7%
Of order lines lose money, $156K in total
37% vs 20%
Average Tables discount, East vs West
10 of 49
States lose money; TX, OH, PA, IL lose the most
Most of the leakage traces back to deep discounting.
Furniture: big sales, thin profit
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Notebook: Section 6
2.5%
Furniture margin
17%
Technology and Office Supplies
Three sub-categories lose money
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Notebook: Section 7
-$17.7K
Tables
-$3.5K
Bookcases
Discounts above 20% lose money
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Notebook: Section 8
30%+
Average profit turns negative
-$311
Worst average, at 50% discount
Where the discount damage sits
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Notebook: Section 8
+$321K
Earned with no discount
-$135K
Lost on discounts above 20%
One in five lines loses money
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Notebook: Section 9
18.7%
Of order lines lose money
-$156K
Total loss on those lines
Tables: it's the discount
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Notebook: Section 10
+$184
Per line at 0% discount
-$239
Per line at 50% discount
Tables lose most in the East
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Notebook: Section 10
-$11.0K
Tables profit in the East
+$1.5K
Tables profit in the West
Central: weakest margin
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Notebook: Section 11
Central earns 7.9% margin and discounts 24% on average.
Ten states lose money
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Notebook: Section 12
-$25.7K
Texas, the largest state loss
-$70.9K
TX, OH, PA and IL combined
Profit grew every year
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Notebook: Section 15
Technology drives the growth. Furniture stays small.
Peak sales, not peak margin
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Notebook: Section 16
Nov: top sales, 10.3% margin. Feb: best margin, 17.1%.
Segment is not the problem
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Notebook: Section 13
11.5%
Consumer, the lowest margin
14.0%
Home Office, the highest margin
Recommendations
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Cap discounts at 20%
Profitable on average up to there
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Review Central and East discounts
24% and 37% averages
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Reprice Tables, Binders and Machines
Largest loss-making lines
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Audit TX, OH, PA and IL
$71K combined loss