Overview

Follow this guide to learn how to calculate the Profit Margin Fallback. The Profit Margin Fallback is the backup profit percentage Elevar uses when COGS (Cost of Goods Sold) is not available for a given product. This fallback ensures that Profit Optimization continues to run accurately even when product cost data is incomplete or temporarily missing from your Shopify catalog.

You should determine your fallback value by estimating the average profit margin across all products in your catalog. The calculated percentage is then entered in your Profit Optimization settings.

Understanding the Profit Margin Fallback:

The Profit Margin Fallback is used whenever Elevar cannot retrieve COGS for a product. This may happen when a product in your Shopify product catalog does not have cost data entered, or for a brief period while adding a new product, and your data is being synced.

When a Fallback Value is used:

A fallback value is required for all merchants, but it is especially important if:

• You do not consistently store COGS across all products.
• You have a large catalog with frequent new product releases.
• Your team manages cost data outside of Shopify.
• Some products have variable cost structures, making COGS difficult to maintain.

How to Calculate Your Average Profit Margin:

Calculate Average Profit Margin for Optimization:

• When calculating your profit margin, it should be the estimated average across all of the products you sell.
• We recommend calculating your profit margin fallback by determining your estimated average profit margin across all products and setting this as your fallback.
  • Perform the calculation by taking your Gross Profit and dividing by your net revenue. Multiple this by 100 to get the percentage value you enter as your fallback profit margin.

How to Use Product Catalogue Sync for Profit Optimization

Update Shopify Source:

• Once you have calculated your fallback profit margin, begin on your Elevar homepage and use the left-hand navigation menu to click on the "My Tracking" tab.
• Navigate to your list of sources and click on the "Shopify" box. Use the "Setup Steps" navigation box and click on the "Settings" tab.
  • Locate and click on the "Advanced Options" drop-down menu. Then, locate and click to enable the "Allow Product catalogue sync for profit optimization" option.
  • Use the text box labeled "Profit Margin Fallback %" to enter your previously calculated profit margin fallback.
  • Once you have entered all of the required information for setting up and enabling product catalogue sync for profit optimization, be sure to save your changes by locating and clicking on the "Save" button located at the bottom of the section.
    • (See Figure 1)

_Figure 1_