Building SKU-Level Profitability Across 800,000+ Custom SKUs
A spreadsheet proved the cost rules. A production model was what made them usable across thousands of standard products and a much larger custom catalog.
Zachary O'Donnell · · 1 min read
Product profitability is easy to discuss and awkward to calculate once products are configurable. Size, material, shape, and adjustments change cost. A single average margin does not tell you whether the custom work is worth taking.
I helped take that problem from an Excel MVP to a production application covering about 3,000 standard SKUs and more than 800,000 custom combinations.
Start where people can argue with the rule
The workbook was not a prototype I was embarrassed by. It was the place finance and operations could point at a product and say the cost was wrong. Those corrections were the specification.
Shipping software first would have frozen a guess.
Leave the workbook when the combinations leave it
Three thousand standard rows can be governed. Hundreds of thousands of generated combinations cannot. Once the rules were stable enough to trust, they had to live somewhere the pricing review, the advertising review, and the weekly scorecard could share.
The model separated inputs that change — rates, materials, codes — from the logic that reads a SKU. Standard and custom products used the same cost language. If an input was missing, the honest output was a gap, not a made-up cost.
Adoption is a stakeholder problem
Business partners knew which costs were real. Operations knew which attributes changed the product. Engineering partners knew what would still run at that volume. I kept the first release inside the products where margin uncertainty was most expensive, then expanded as the rules held.
The outcome that mattered was visibility: cost and margin at a level people could use when they set a price or judged a campaign. The interface was how that visibility stayed available after the spreadsheet’s author was in another meeting.