Yoga Gear Product Profitability Review: Which Items to Keep

Why Revenue Rank Misleads

Revenue rank is a useful starting signal, not a profitability verdict. A product can generate high sales value because it sells frequently or at a high ticket, while discounts, delivery costs, payment fees, refunds and fulfilment effort absorb much of that value.

For illustration only, 10 orders listed at AED 200 produce AED 2,000 in headline sales. After a 10% discount, one returned order and nine delivered orders, realized revenue is AED 1,620. If delivery costs AED 25 per delivered order and payment fees are AED 48.60, only AED 1,346.40 remains before product cost, advertising and internal fulfilment time. The return also creates handling and inspection work that a revenue leaderboard does not show.

Use each measure for the decision it can support. Revenue helps identify demand and cash-generating volume. Return rate highlights product or expectation problems. Delivery and fulfilment costs reveal operational burden. Profitability measures show what remains after the relevant costs. ORVX calculates delivered-order revenue only, reports return rate by units and refund value against revenue, and shows product-level profitability rather than revenue alone. It keeps your trading currency consistent, so AED figures are not mixed with another currency.

Build a Comparable Product View

Create one row per product or variant, then apply the same trading period, currency and cost rules to every category. Mats, blocks, straps, towels, apparel and bolsters should be compared using delivered-order results, not catalogue price or gross order value. Keep colour, size and material variants separate when their costs or return behaviour differ; otherwise roll them into a product family.

The comparable view should contain these fields:

• Net sales: delivered sales after discounts and refunds. This measures realised demand and excludes cancelled or returned orders from revenue.
• Units sold: the number of delivered units behind those sales. Use it to distinguish a high-value product from one that sells repeatedly.
• Landed cost per unit and total landed cost: the product cost plus directly attributable inbound costs, using one consistent treatment across suppliers and categories.
• Variable selling costs: costs that rise with each sale, such as payment fees, marketplace charges, fulfilment or shipping subsidies, and other per-order selling costs. Separate these from landed cost.
• Returns: returned units, return rate and refund value against revenue. Act on this field when a product’s sales look healthy but refunds are absorbing value; apparel sizing and bolster damage may require different investigation from a strap defect.
• Stock exposure: units on hand, remaining stock value and dead-stock status. Use it to identify cash tied up in slow-moving inventory, rather than judging a product only on past sales.

Contribution per Product

Contribution is net product revenue minus the costs that change when the item sells. Use revenue after discounts and refunds, and exclude VAT collected on behalf of the UAE government; VAT was introduced in the UAE on 1 January 2018 at a standard rate of 5% (UAE Ministry of Finance). Variable costs may include product cost, payment fees, packaging, fulfilment or delivery subsidy, and expected return costs. Apply the same cost rules to every product (Source: UAE Ministry of Finance).

Use contribution per unit to compare the economics of one mat, block or apparel item. Use contribution per order when basket composition, shipping or payment costs materially affect the transaction. Use contribution for the full review period to see the product’s total economic contribution: per-unit contribution multiplied by units sold, adjusted for order-level costs and any period-specific advertising allocation. Per-unit contribution can be high while total contribution remains small if sales volume is low.

If advertising is included, label it clearly as contribution after advertising rather than mixing it with the base measure. ORVX reports contribution after advertising by product and collection, using realized revenue from delivered orders only.

How to Read the Worked Example

Start with the example’s sales basis: confirm whether the figure is realized product revenue from delivered orders, after discounts and refunds, rather than gross orders placed. The same basis must apply to every product. For a UAE store, keep the trading currency consistent and do not include VAT collected as product revenue.

Next, follow the deductions in order. Subtract each listed variable cost, such as product cost, payment fees, fulfilment charges or allocated advertising, only as defined in the example. The remaining amount is the contribution available to cover fixed overhead and profit. Use the profit margin calculator to verify the arithmetic, not to replace the underlying cost rules.

Read the resulting measures for different decisions. Total contribution shows which product adds more cash in the period; contribution per unit helps compare products with different sales volumes; contribution margin shows how efficiently revenue converts into contribution; and contribution after advertising shows whether paid acquisition leaves value after spend. Before drawing a conclusion, check that discounts, refunds, shipping, payment costs and advertising were allocated consistently. A refund deducted from one product but not another, or advertising assigned only to selected products, makes the comparison unreliable. Also check that shared costs have a stated allocation method rather than being assigned informally.

Deciding What to Cut

Treat a weak product as a diagnosis, not an automatic deletion. First check contribution after advertising, then separate the cause: low margin, high returns, fulfilment effort, slow stock movement or avoidable catalogue complexity. Act only when the weakness persists across a consistent period and is not explained by a launch, promotion or stockout.

Use the measure that matches the decision. Contribution decides whether each sale is economically useful; return rate and refund value indicate whether the product needs a quality, sizing or listing fix; inventory position and dead stock show where cash is tied up. Fulfilment friction belongs in the decision when picking, packing, damage risk or customer support consumes disproportionate time.

• Before cutting, test whether the item improves a bundle’s total contribution or raises attachment to a profitable core product.
• Check customer-level profitability before removing an acquisition product: a low-contribution first order may be justified if repeat behaviour supports it.
• Retain an item for a documented strategic reason, such as completing a credible assortment, but set a review date and measurable threshold.
• Choose reduce, fix, bundle, clear or stop. Record the reason so a temporary issue is not mistaken for structural unprofitability.