Weekly Margin Review Template

Why Weekly, Not Monthly

Monthly margin review is reactive. By the time the P&L closes, a product has already burned 4 weeks of margin at a loss. Weekly review catches margin drift before it compounds.

DTC brands operate on thin margins (30 - 50% gross margin is typical). A 2 - 3 point margin slip on a top SKU can erase weekly profit in 7 days. Weekly cadence forces real - time cost visibility.

Shopify's API and most accounting integrations (Shopify Flow, Zapier, native reports) can surface margin data within 24 hours of transaction close. The infrastructure exists; the discipline does not.

Core Metrics to Track

Gross margin is revenue minus cost of goods sold (COGS). For DTC: Revenue - (Product Cost + Fulfillment Cost + Payment Processing Fee) / Revenue = Gross Margin %.

Track three layers: (1) Product - level margin (COGS only), (2) Channel margin (product COGS + channel - specific fulfillment), (3) Blended margin (all revenue, all costs).

Set baseline thresholds before the week starts. Margins below threshold trigger investigation, not panic—but they require a decision by end of week.

Product margin floor: Usually 50 - 60% for apparel, 40 - 50% for electronics, 35 - 45% for food/beverage.
Channel margin floor: Shopify direct should be 5 - 10 points higher than paid ads (lower fulfillment variance).
Blended margin floor: 30% is survival; 35%+ is sustainable for most DTC brands.
Payment processing: Assume 2.9% + $0.30 per transaction for Shopify Payments; audit actual rates weekly.

Weekly Review Checklist

Run this audit every Monday morning or Friday afternoon (pick one, stick to it). Time required: 30 - 45 minutes if data is clean.

Pull last 7 days of sales by product and channel. Compare to prior week and to YTD average. Flag any product or channel that dropped >2 points from baseline.

Export Shopify sales report (Products > All Products > Profit Margin column, if using Shopify Plus or third - party app).
Cross - check COGS in inventory system (Shopify, Inventory Planner, or accounting software). Verify no stale costs.
Audit fulfillment costs: If using 3PL, check weekly invoice for rate changes. If in - house, calculate labor + packaging + shipping per unit.
Verify payment processing fees match Shopify dashboard (Settings > Payment Providers).
Calculate blended margin: (Total Revenue - Total COGS - Total Fulfillment - Total Payment Fees) / Total Revenue.
List all SKUs with margin <baseline. Note reason: COGS increase, fulfillment spike, channel mix shift, or discount/promotion.
Document one decision per flagged SKU: reprice, renegotiate COGS, shift fulfillment method, or discontinue.

Common Failure Modes

Margin creep from fulfillment: 3PL rates rise, shipping costs spike, or packaging weight increases—but COGS stays static in Shopify. Result: Margin appears flat while actual margin drops 3 - 5 points.

Channel blindness: Paid ad channel has lower margin than organic, but reporting bundles them. Operator doesn't see the gap until blended margin collapses.

Discount leakage: Promotions (% off, bundle deals, loyalty discounts) are applied at checkout but not reflected in COGS. Margin looks healthy; actual margin is 5 - 10 points lower.

Inventory write - off: Dead stock, damaged goods, or shrink are not tied to weekly margin review. They hit the P&L later, masking true product margin.

Seasonal blindness: Winter fulfillment costs (peak season, carrier surcharges) are higher than summer. Operator compares Week 45 to Week 20 without adjusting for seasonality.

Decision Rules

If a product's margin is 2 - 3 points below baseline: Investigate COGS and fulfillment. If both are in line, reprice +3 - 5% and monitor conversion for 2 weeks.

If a product's margin is >3 points below baseline: Either renegotiate COGS (if supplier rate increased), shift fulfillment method (e.g., in - house to 3PL or vice versa), or discontinue if neither is viable.

If a channel's margin is consistently 3+ points below other channels: Audit fulfillment routing, payment processing, and discount application for that channel. If structural, consider deprioritizing or repricing.

If blended margin drops >1 point week - over - week: Audit channel mix (did paid ads grow faster than organic?) and product mix (did lower - margin SKUs sell more?). Adjust forecast and pricing accordingly.

Template Structure

Use a simple spreadsheet or dashboard. Columns: Product SKU, Last 7d Revenue, Last 7d COGS, Last 7d Fulfillment Cost, Last 7d Payment Fees, Calculated Margin %, Baseline Margin %, Variance, Channel, Decision.

Add a summary row: Total Revenue, Total COGS, Total Fulfillment, Total Payment Fees, Blended Margin %, Prior Week Blended Margin %, Variance, Notes.

Keep a running log of decisions and outcomes. If repricing a SKU, note the old price, new price, and margin impact after 2 weeks. This builds institutional knowledge and prevents repeated mistakes.

Integration with Operations

Weekly margin review is not a finance function—it's an operations function. The operator (or ops lead) owns the review, not the accountant. Accountants audit; operators act.

Share results with product, fulfillment, and paid ads teams. If a product's margin is low due to fulfillment cost, the fulfillment team owns the fix. If it's due to paid ad CAC, the ads team owns the repricing decision.

Set a weekly standup (15 min) to discuss flagged SKUs and decisions. Document decisions in a shared log. This prevents margin drift from becoming a surprise at month - end.

Questions

FAQ

How do I account for returns and refunds in weekly margin?

Exclude refunded transactions from the weekly review. If return rate is >5%, calculate a separate 'net margin' that deducts return processing cost (restocking, inspection, reshipment). Track return rate by product and flag products >10% return rate as margin risks.

Should I include marketing spend in margin calculations?

No. Margin is COGS + fulfillment + payment processing only. Marketing spend is a separate P&L line (CAC, ROAS). However, track blended margin by channel to see if paid ads are pulling lower - margin products. If so, adjust paid ad targeting or repricing.

What if my COGS is variable (e.g., commodity prices)?

Use a rolling 4 - week average COGS, not spot price. Update weekly. This smooths volatility and prevents false margin signals from price spikes. If commodity prices swing >10% in a week, flag it separately and model repricing scenarios.

How do I handle bundles and kits in margin review?

Calculate margin on the bundle as a whole (total bundle revenue - sum of component COGS - fulfillment). Compare bundle margin to the margin of selling components separately. If bundle margin is <5 points lower, consider repricing or discontinuing the bundle.

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