Profit leakage · start here

Margin leavesthrough named holes.

Nobody decides to lose margin. It leaves through a price that never moved, a markdown that started late, a stockout that sent demand somewhere cheaper. The holes are enumerable — and each one has a decision that closes it.

Where it goes

Seven causes.One of them is biggest.

Revenue enters whole and leaves smaller. What matters is not the total — it is which hole is largest, because that is where the first decision goes. The scan establishes rank, and rank is what it is entitled to claim.

Illustrative scan · relative severity · not measured

01UnderpricingPrice sits below what the position and the demand would carryPricingCompetitive position, elasticity, cover
02Late markdownClearance starts after the sell-through window has already closedMarkdownTerminal sell-through, seasonal curve
03Stockout substitutionDemand arrives and buys the cheaper thing, or nothing at allReplenishmentCover, lead time, substitution matrix
04Return costReverse logistics and restocking outrun the margin the sale carriedReturns / RTOReturn rate by reason, handling cost
05Supplier fillCommitted volume does not arrive, and the plan built on it is already wrongVendor & SupplierFill rate, SLA band, dispute history
06Allocation driftSupply sits where demand is not, and the transfer costs more than the marginAllocationLocalised demand, transfer cost
07Promotional wasteSpend continues against inventory that cannot be deliveredPromotionAvailability by place, spend by channel
What it returns

A diagnosis,not a dashboard.

A dashboard tells you a number went the wrong way. A diagnosis tells you which mechanism caused it, what decision closes it, and what evidence that decision still needs — which is the difference between knowing and being able to act.

Ranked, not totalled

Causes ordered by how much margin each is costing, because the first question is where to look — not what the sum is.

Each cause names its decision

A leak is only useful if something closes it. Every cause resolves to the cartridge that answers it and the evidence that cartridge needs.

Gaps are reported, not estimated

Where a required signal is missing, the scan says so and caps what it will claim. It does not interpolate a number to fill the row.

Nothing is dispatched

The scan is a diagnosis. Every decision it points to is prepared for review and signed by a person, or not taken.

Start with one category

Find out which holeis yours.

One category, your evidence, your policy. You will get the causes ranked, the decision each one points to, and an honest list of what could not be resolved — advisory and dry-run, so the only thing at risk is an assumption.