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.

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 does not receive COGS for a product. Your team needs to supply the cost of goods sold (cogs) with your purchase event data. We highly recommend this to be done using server to server events to keep this information out of the browser and private. If you've already implemented server to server events you'll need to add the cogs parameter to your product array data on your dl_purchase event to begin passing the information.

Follow this guide to learn how to set up server to server events.

If you are already using server to server events, see the product array reference, for an example of cogs data being passed on the product array.

How to Calculate Your Average Profit Margin:

Calculate Average Profit Margin:

When calculating your profit margin, it should be the estimated average profit 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 Update your Profit Margin

Update API 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 "API" 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