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Where did my ecommerce profit go?

Merchant Owners who cannot track NET PROFIT are dangerously exposed. Net Profit should be the singular guiding hand in ecommerce for every decision in teams, technology and services.
Author
13 September 2022 - 3 min read

Most Merchants do not know where their profit went - but now they will

When the monthly accounts come in, Owners ask, Where has my profit gone?  It is the right question but by that time it is too late. Merchants are now demanding to be profitable.

Costly invoices arrive from Google, Facebook and Agencies - from companies that have built their products and services around their own profit. So after all the long hours and hard work Merchant Owners end up with no profit to show for the effort.  They have effectively ended up working to pay others and transfer profit.

This problem has persisted for decades because Merchants lack control over their sales and costs - they have no way to determine if their ecommerce business is profitable until it is too late. But this ecommerce profit problem is now solved - there is a way to track true ecommerce performance…

STEP 1 - eCommerce must put Merchant Owners interests first

The Merchant bears the risk so must be the beneficiary

The first step to a profit centric approach is to clearly state in whose interest everyone works - everything should be built round the Merchant Owner.

The Merchant Owner is the risk bearer who must be rewarded for putting their capital on the line.

The Merchant Owner is the RISK BEARER 
All market participants must work in their INTEREST

Services and overheads silently eat away at profits until they leave little for the merchant. More technology simply raises the bill and paying more people just adds to the cost. Any underperforming services increases the opportunity lost and depletes Merchant Owner profit.

With so many providers promising services that deliver sales, it is critical to know which return profit and which are simply eating profit.  They only exist to deliver profit for the Merchant Owner.

STEP 2 - An accounting standard built around profit

Select services based on performance and profitabilty 

Merchant Owners want to sell their products at an acceptable margin to create profitable business. To achieve this they must have full visibility of sales and control of all ecommerce costs.

If we have already acknowledged that the merchant is at the centre of ecommerce and everyone else is there to assist - we now need to be able to measure services for their profit contribution.

Profitability requires a universally agreed model of attribution and accounting.  This enables both consistent measurement and relative performance. Every service provider must justify their cost and ROI to justify their continued inclusion in the merchant’s ecosystem.

If you cannot MEASURE PROFIT contribution - you are effectively working in the DARK

Accounting for Ecommerce

STEP 3 - IRP Technology exposes real time profit contribution

When Merchant Owner Profit is the objective and clear measurement exists - IRP brings everything together

More 3rd party technology simply raises the bill and adds to the complexity.  Paying more people just adds cost and reduces profit. 

If technology and services only exist to contribute to Merchant Owner profit then everything has a clear objective and a clear measurement standard. IRP then brings the data together around sales, cost and profit allocation in real time.

This is how ecommerce is solved.  This is how ecommerce transitions from a state where it is built in the interests of service providers and technology companies - to existing only in the interests of the Merchant Owners.

IRP Trading Terminal changes ecommerce thinking completely.

SOLVING ECOMMERCE NET PROFITABILITY

Read the Whitepaper

Accounting for Ecommerce | Ecommerce Solved | IRP Service Marketplace

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