solutions@subhashchakrobortty.com
For Amazon/D2C Founders Who Want to Build a Profitable, Predictable, and Scalable Business
PART 1: BUILDING A STRATEGIC P&L SYSTEM (NOT JUST A SHEET)
A Profit & Loss system is not a report. It’s a lens through which you control your business.
🔧 WHY NORMAL P&L FAILS
Most businesses run on:
- Bookkeeper-driven reports (post-mortem style)
- Quarterly or yearly snapshots
- Misaligned categories (e.g., ad costs under COGS, no returns impact)
This results in delayed, distorted, and unusable numbers.
🧱 SOLUTION: Build a 3-Level Strategic P&L Structure
🔹 Level 1: Standard P&L — For Founder’s Review
Structure:
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– Product Sales (Amazon, D2C, B2B)
– Refunds/Returns (–ve value)
= Net Sales
COGS
– Product Cost
– Packaging
– Inbound Logistics
– Fulfillment
– Commissions/Fees
– Return-Related Costs
= Gross Profit
OPERATING EXPENSES
– Salaries
– Ads (Breakdown: Amazon, Meta, Google)
– Office/Admin
– Software
– Utilities
= EBITDA
FINANCIAL COSTS
– EMI/Interest
– Depreciation
= Net Profit Before Tax
🎯 Tip: Add a “Per Channel” column to isolate Amazon vs D2C vs B2B.
🔹 Level 2: SKU-Level P&L
Your category might be profitable, but 5 SKUs might be loss-making.
You need:
- P&L by product group
- % of revenue vs % of profit
- Ad spend consumption by SKU
🔹 Level 3: Cohort-Level P&L (Advanced)
Used for:
- Repeat customer value tracking
- Ad budget ROI per cohort
- Launch impact of products over 90 days
🎯 Advanced but essential once you’re spending ₹5L+/month in ads.
PART 2: UNIT ECONOMICS 2.0 — PER SKU, PER STAGE
Profit doesn’t come from selling more. It comes from knowing what you should sell more of.
🧠 DEEPER FRAMEWORK: 4-Stage Cost Model
| Cost Type | Includes | Variable? |
|---|---|---|
| Product Cost | Raw material, manufacturing | No |
| Packaging & Logistics | Box, poly, courier, warehousing | Yes |
| Marketplace Costs | Amazon commission, fixed fee, ads | Yes |
| Customer Cost | Return rate impact, service issues | Hidden |
💡 TRUE NET MARGIN =
Net Selling Price – (Product + Packaging + Logistics + Commission + Ads + Return Rate Impact)
📍 ACTION PLAN:
- Select top 20 SKUs (by revenue)
- Calculate:
- Order-wise margin
- Return-adjusted loss
- Ad cost per sale (Acos blended)
- Categorize:
- ✅ Scalable SKUs (High margin, low return)
- ⚠️ Fixable (Mid margin, high returns or ad spend)
- ❌ Stop (Low margin, high operational waste)
PART 3: CASH FLOW CONTROL — SURVIVAL STRATEGY FOR GROWING BRANDS
The game is not revenue. It’s cash. Inventory eats cash. Delay kills business.
🔎 THE 4 ZONES OF CASH BURN (Hidden Leaks)
| Zone | Description |
|---|---|
| Inventory Lock | Paid 100% upfront, but not sold yet |
| Ad Float | Ads billed in advance, sales come later |
| Platform Float | Amazon pays in 7–14 days |
| Operational Drag | Salaries, tools, fees on Day 1 |
🧰 BUILD YOUR 3-VIEW CASH SYSTEM
1. Forecasted Cash Flow (2-Month Rolling)
- Predict inflow (Amazon, Shopify, B2B)
- Predict outflow (inventory, ads, salaries, rent, GST)
🎯 Updated weekly. Use categories, not just vendor names.
2. Live Bank View (Daily Pulse)
- Set daily balance alerts
- Track by bank account (Current, Razorpay, Paytm)
- WhatsApp reminders if below ₹X buffer
3. Emergency Liquidity Dashboard
- Credit card float available
- OD limit balance
- Cash reserves
🎯 Founders must know this at all times.
PART 4: REPORTING SYSTEM FOR FOUNDERS (NOT JUST ACCOUNTANTS)
Most founders see reports when it’s too late. Let’s flip the model.
🔄 DECISION CYCLE: WEEKLY | MONTHLY | QUARTERLY
| Frequency | Focus | Tool |
|---|---|---|
| Weekly | Cash status + inventory low stock + ad overspend | WhatsApp snapshot |
| Monthly | P&L + SKU margin + Ad ROI | Google Sheet dashboard |
| Quarterly | Strategy review, team realignment | Founder meeting with department heads |
🎯 DECISION-TRIGGER METRICS:
Set alerts for:
- Return rate > 8%
- Ad CAC > 40% of product price
- SKU-level margin < 20%
- Stockout risk within 21 days
- Over-inventory beyond 90-day sell rate
PART 5: DELEGATION & DASHBOARDS
Control doesn’t mean doing it all. It means setting up systems others can run, but you can trust.
🧠 TEAM ROLES
| Role | Task |
|---|---|
| Ops Lead | Updates inventory, tracks reorder alerts |
| Finance VA | Daily bank tracking, cash forecast entry |
| Ad Manager | Blended CAC per SKU, weekly ROI reporting |
| Founder | Monthly review, quarterly capital allocation |
🎯 Build SOPs and train once. Let reporting become habit.
BONUS: AUTOMATION IDEAS FOR SMART FOUNDERS
- Google Sheets + AppScript: Auto-pull bank data, payout CSVs
- Zapier + Email: Notify you when payouts hit / stock is low
- Google Data Studio: Real-time dashboards for P&L, margin, ad spend
- Notion/Trello: Financial review taskboards with checklists
SUMMARY: THE SYSTEM TO FOLLOW
- 📊 Monthly Decision P&L — Built for founders
- 🧮 Unit Economics by SKU — Updated every 15 days
- 💸 Cash Flow Forecast — 2-month rolling
- 🔄 Review Loops — Weekly (ops), Monthly (financial), Quarterly (strategy)
- 📈 Dashboards — Centralize visibility
- 👨👩👧 Team SOPs — Delegate reporting but retain control
FINAL THOUGHT: WHY THIS MATTERS
Sales show activity. Profits show ability.
Cash shows truth.
Clarity gives power.
And control gives peace.
If you’re serious about running a business like a real CEO—not just a seller—this is your system.
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