EightyTwenty+ guide
Product profitability analysis: revenue size and profit contribution are different questions
Product profitability analysis compares revenue with cost and calculated margin at product level. A high-revenue product is not automatically a high-margin product, and a low-revenue product is not automatically economically unattractive.
Keep revenue and margin classifications separate
Revenue describes commercial size. Margin describes contribution after recorded cost. Combining them into one hidden score makes the result harder to audit.
Look for mismatches
A product that ranks highly by revenue but weakly by margin deserves a different question from a small product with strong margin.
Retain relationship context
Before acting on margin alone, check whether the product supports major customers, category strength or important dependencies.