Workflow: Contribution Margin Price Check (Cost & Fee Protection)

1. User Benefits

This workflow automatically checks every price against purchase costs, fees, and target contribution margin. It prevents “error prices” where products are sold below cost or below your minimum margin – even after promotions, discounts, or repricing.

• Automatic detection of loss-making prices before they go live
• Protection of minimum margin per SKU, brand, or category
• No more manual margin checks in spreadsheets
• Safe interaction with repricing, coupons, and discounts
• Clear visibility of which SKUs are profitable and which are not

Result: Price automation becomes safe – you can move fast without accidentally selling below cost.

2. How the Workflow Works

2.1 Data Inputs per SKU

For each product, the workflow aggregates all cost-relevant data:

• Net purchase price (EK)
• Marketplace fees (commission, listing fees, closing fees)
• Shipping costs (own cost or fulfillment fees, e.g. FBA)
• Platform-specific costs (payment fees, handling fees)
• Target contribution margin and minimum margin
• Current and planned selling price (incl. promotions)

2.2 Contribution Margin Calculation

The workflow calculates the contribution margin for each price:

• Revenue minus purchase price
• Minus all known fees and shipping costs
• Result: absolute margin and margin in %

This calculation is applied for:

• Current prices
• New prices coming from repricers
• Campaign prices (e.g. sale, vouchers, promotions)

2.3 Rule Engine: Price & Margin Limits

The workflow validates each price against your defined thresholds:

• Is the price below purchase price? → hard block
• Is the margin below minimum threshold (e.g. 10%)? → warning or block
• Is the margin within the target corridor (e.g. 20–40%)? → OK

Rules can be configured by:

• Marketplace or channel
• Brand, category, or supplier
• Campaign type (standard vs. clearance)

2.4 Error Handling & Alerts

If a price violates the margin rules, the workflow:

• Blocks the update (price is not sent live), and/or
• Falls back to a safe minimum price, and/or
• Sends an alert via email/Slack/Teams with details

Example alert:
“SKU 12345: proposed price 19.90 € results in -3.20 € margin. Minimum allowed price for 5% margin is 24.50 €.”

2.5 Export to Feed / API

Only validated, margin-safe prices are:

• Exported via CSV/XML to marketplaces and shops, or
• Sent via API to your pricing and channel systems

A log of all blocked or corrected prices can be written to Airtable/Sheets or a BI system for later analysis.

3. Time Savings for the User

Typical manual effort for margin checks:

• Collecting cost & fee information per SKU: 2–5 minutes
• Calculating margin for each new price: 1–3 minutes
• Correcting prices and re-uploading feeds: 2–5 minutes

Total: easily 5–13 minutes per SKU per pricing round

With this workflow:

• Effort per SKU: 0–1 minute (only reviewing exceptions)

Typical weekly time savings:

• 100 SKUs with frequent price changes → approx. 8–12 hours saved
• 500 SKUs → approx. 30–40 hours saved
• 1,000+ SKUs → 50+ hours saved

More important: the workflow not only saves time – it prevents direct margin loss from “bad prices” and gives you full control over profitability per SKU.