> ## Documentation Index
> Fetch the complete documentation index at: https://docs.ocular.dev/llms.txt
> Use this file to discover all available pages before exploring further.

# Profitability & margins

> Triggers in Ocular for diagnosing true profit, channel-level margin, contribution margin, and marketing efficiency across your sales channels.

For each trigger below: **what happened, where to go, how to read it, the decision you're making.**

## What is my true profit after all costs?

**Trigger:** Topline revenue looks great — but you don't trust it until every cost layer has been deducted. Or finance asked for a defensible contribution margin number.

**Go to:** **P\&L → Waterfall Chart** {/* TODO: relink to /use-your-data/p-and-l once that page is published. */}

The waterfall walks from Gross Revenue through Discounts, Refunds, COGS, Platform Fees, Digital Advertising, and Influencer & Agency costs — landing at Contribution Margin. No other view shows the full picture in a single chart.

**How to read it**

| Symptom                                   | Root cause                           | Next action                                                                                                                                                                                 |
| ----------------------------------------- | ------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| Net Revenue ≪ Gross Revenue               | High discount or return rate         | Check Discounts and Refunds steps. Cross-reference in Chart Builder: Sales · `Average Discount Rate` or `percentage_orders_returned` by `product_category`.                                 |
| Gross Profit healthy but CM thin          | Platform fees or ad spend            | Expand Platform Costs and Digital Advertising; compare in Channel Comparison mode.                                                                                                          |
| Digital Advertising step disproportionate | Ad spend outpacing revenue           | Open **Ad & Campaign Performance** {/* TODO: relink to /use-your-data/ad-and-campaign-performance once that page is published. */} — Storefront Net ROAS vs. Ad Platform ROAS per campaign. |
| Other Marketing Expenses high             | Influencer or agency costs unchecked | Influencer Fees and Miscellaneous breakdown below the waterfall.                                                                                                                            |

**Source models:** Sales (Gross → Net → COGS → CM1), Meta Ads and Google Ads (Digital Advertising line), and your onboarding-configured platform fee rates.

**Decision:** Am I profitable at CM? If not, which cost layer is the biggest drag — and do I fix discounting, renegotiate platform fees, or cut ad spend?

***

## Which channel is actually profitable — not just the highest revenue?

**Trigger:** A channel generates strong revenue but you suspect costs have eaten the margin. Or leadership wants a margin-based investment answer, not a revenue-based one.

**Go to:** **P\&L → Channel Comparison mode** {/* TODO: relink to /use-your-data/p-and-l once that page is published. */}

Switch the toggle in the top right. The table shows every P\&L step (Gross Revenue → Contribution Margin) as a column per channel — Shopify, Blinkit, Zepto, Instamart, and others.

**Diagnosis workflow**

1. Find the channel with the lowest Contribution Margin.
2. Scan down its column — which step drops the most relative to other channels?
3. **Discounts** → channel is promotion-dependent. Check if promo orders have lower CM1.
4. **Platform Costs** → marketplace take rate is high.
5. **Digital Advertising** → check ROAS for that channel in Ad & Campaign Performance.

**Chart Builder alternative:** Sales · Measures: `Gross Profit (CM1)`, `Net Revenue` · Dimension: `sales_channel_name` · Grouped Bar.

**Decision:** Which channels deserve more investment, which need cost restructuring, and which should be deprioritised?

***

## Is my marketing spend proportionate to what it's generating?

**Trigger:** Marketing costs are rising. Are they pulling their weight, or is each additional rupee returning less? Usually comes up during budget planning or after a high-invoice month.

**Go to:** **P\&L → KPI cards → Digital Advertising breakdown** {/* TODO: relink to /use-your-data/p-and-l once that page is published. */}

The KPI row shows Marketing Costs alongside Total Sales and Net Profit with period-over-period change. If Marketing Costs grow faster than Total Sales, your **Marketing Efficiency Ratio is declining** — each rupee of spend generates less revenue.

The Digital Advertising breakdown below the waterfall shows where the spend sits (Meta, Google, other).

**Then cross-reference:** **Ad & Campaign Performance → KPI cards → Storefront Net ROAS** {/* TODO: relink to /use-your-data/ad-and-campaign-performance once that page is published. */}

The Storefront Net ROAS card shows revenue per rupee of ad spend **as measured by your storefront** (Shopify + GA4) — not what the platform claims. A declining storefront ROAS alongside growing ad spend is the clearest signal that spend is outpacing real returns.

**Decision:** Increase budget (efficient, with headroom), hold steady, or cut back on specific platforms/campaigns where MER is declining?

## Next

<CardGroup cols={2}>
  <Card title="Marketing & ad spend" icon="bullhorn" href="/overview/start-with-the-question/marketing-and-ad-spend">
    Platform vs. storefront ROAS, demographics, dayparting, geo.
  </Card>

  <Card title="Back to overview" icon="circle-question" href="/overview/start-with-the-question">
    All categories and the quick reference table.
  </Card>
</CardGroup>