System 04 — accountability
Profit is an engineering problem.
The Profit & Pricing Engine keeps unit economics current — COGS refreshed on every PO, 14 fee types audited weekly, elasticity observed on stepped moves — and prices from the math. Contribution margin: +4.1 pts TTM, portfolio median.
per PO−$8.10
14 types−$6.42
allocated−$2.66
Demonstration ledger: price 24.99 dollars, minus 8.10 COGS, minus 6.42 in fees across 14 audited types, minus 2.66 allocated ads, leaving 7.81 contribution — 31.2 percent.
What it replaces
Priced at launch. Never revisited.
The price was set 3 years ago, ends in .99, and has survived 2 fee increases, a COGS jump, and a freight cycle. Nobody chose today's margin. It just happened.
Set once, defended never. COGS drift and fee changes eat margin invisibly. A competitor drops 8% and triggers a panic match — now 2 sellers lose money instead of 1.
The math moves first. Guardrails hold the floor and the ceiling; moves are stepped, observed, and reversible. Strategy stays human — the engine just refuses to let arithmetic be a surprise.
The mechanism
Guardrails first. Then the math moves.
Fees are where margin dies quietly. 14 fee types are audited weekly; discrepancies are filed for recovery, not absorbed.
Elasticity is observed, never assumed. Moves step ±4% max on hero SKUs, hold for a full demand cycle, and reverse if the curve says so.
The margin bridge is the report. Every point of margin change is attributed — price, fees, ads, mix — so the number is an explanation, not a claim.
Automation with judgment
What the machine runs. What it never will.
- Fee audit across 14 types WEEKLY
- COGS refresh ON PO RECEIPT
- Reprice execution within guardrails LOGGED · REVERSIBLE
- Margin alerts ≤15 MIN
- Guardrails — MAP floor, brand ceiling QUARTERLY REVIEW
- Portfolio positioning and strategy
- Elasticity test approval PER STEP
- Fee-recovery filings REVIEWED BEFORE SUBMIT
Typical results — 2025 cohort, installed ≥2 quarters
The bridge is the report.
TTM−1Price
2 stepsFees
recoveredAds
re-weightedMix
shiftEnd
TTM
4.1 pts, attributed. A margin number you can't decompose is a margin number you can't repeat.
Source: client scorecards · N=31 · 2025 cohortMargin bridge: start 19.3 percent; price contributed plus 1.8 points, fee recovery plus 0.9, ads re-weighting plus 1.1, mix plus 0.3; ending at 23.4 percent.
MAP-locked categories can't be repriced. Where the floor is contractual, the engine works fees, COGS, and mix — and the bridge shows a smaller price component. We say which lever is unavailable before the engagement prices it in.
Find out what a point of margin is worth on your P&L.
The audit builds your margin bridge from 12 months of settlement data. Median recoverable margin found: 2.3 pts.