Sales management · Performance evaluation
Count what each rep, territory and customer costs before you celebrate what they sell.
Profitability analysis takes sales revenue and subtracts product cost, selling cost, discounts, schemes and freight to show which reps, territories and customers actually make money. This page lays out the sheet, the cost allocations to agree, and the keep, fix or drop review that follows.
Scope, fee, reporting and term are agreed in writing after we have read your brief and spoken to you.
In one paragraph
Profitability analysis takes sales revenue and subtracts product cost, selling cost, discounts, schemes and freight to show which reps, territories and customers actually make money. This page lays out the sheet, the cost allocations to agree, and the keep, fix or drop review that follows.
A packaged-snacks distributor in Lucknow has a territory that sells more than any other. After the schemes passed on to retailers, the van's diesel and a rep who travels three days a week to cover it, that territory loses money on every carton.
Sales and profit are different columns, and the owner only looks at the first. Profitability analysis builds the second, starting from revenue and subtracting each real cost that belongs to that rep, territory or customer.
The owner and the accounts head build it together, because the sales manager does not see the cost side and the accountant does not know which territory a van serves. It replaces the single company-wide margin figure, which hides the winners and losers inside it.
It follows the volume and Pareto tables and comes before pricing and coverage decisions. Territory design and incentive pay both use its result.
Where this sits
Topic 12 of 14 in sales management: performance evaluation. Judging reps and the business fairly and regularly.
- The topic before
- Territory management
- The topic after
- Legal and ethical issues
If you want this done for you
Nobody outside the sales team can say why deals are won or lost here.
The work
What this is actually like.
“Margin on paper is not margin after schemes”
If you give the distributor a scheme that the distributor passes on, or a free-goods offer at quarter end, the invoice margin is not what you earned. Subtract schemes, credit notes and returns per customer, or the table flatters the biggest buyers.
“Allocation rules decide the answer”
Rep salary, vehicle cost and marketing spend must be split across territories by a rule, such as visits or kilometres. Choose the rule before you see the result and write it down, so nobody can argue with the table afterwards.
“Freight and credit days are real costs”
A customer who pays in ninety days costs you the interest on your working capital. A customer in a remote district costs you freight. Add both columns, even as estimates, and watch which accounts change places.
“Dropping a loss-maker has its own price”
Some low-profit customers cover fixed costs, supply a brand name, or lead to a bigger customer. Test by asking what falls away if you stop serving them, not by reading a single total.
What we do
What you end up with.
The documents this topic produces, what each one is for, and how you know it is finished.
The cost allocation note
One page naming each cost line, the rule used to split it, and who agreed it. Written before any numbers are filled in, and signed off by the owner.
Result: Finished when someone who was not in the room can recompute a territory's cost from the page.
The profitability sheet
Rows for rep, territory and customer in three tabs. Columns for revenue, product cost, schemes and discounts, freight, selling cost, credit cost and profit. Built by accounts with the sales manager.
Result: Finished when the profit of all territories adds up to the company's gross profit less selling cost.
The keep, fix or drop list
Every row marked with one of three words, a reason, and a named owner for each fix. Written in a half-day workshop with the owner and the sales manager.
Result: Finished when every drop has a plan for its customers' stock and receivables.
The rep comparison
A fair table for each rep, adjusted for the territory they were handed, so a new rep in a thin territory is not set against one in a rich one.
Result: Finished when each rep has seen their own row and agreed it is fair.
The review date
The next run, by whom, and which figures will be updated.
Result: Finished when the date is in the calendar of the person doing it.
Why us
Why owners pick GullySales over an agency.
Marketing and sales, as one job
Most agencies stop at the enquiry. We also fix what happens after it: the reply, the follow-up, the quote and the CRM.
The person on the first call does the work
No account managers in between. You are never handed to someone you have not met.
A baseline before anything starts
Your numbers are written down on day one, so every later report compares against something honest.
The fee in writing, split three ways
Our time, your media spend and production on separate lines. You always see what goes to us.
No guarantees we cannot keep
The term is agreed in writing and never a default twelve months. We never promise a ranking or a lead count, because nobody controls those.
One office, and we say so
Nagarbhavi, Bengaluru. We work across India by call and WhatsApp and travel when a session needs to be in person.
#257, 3rd floor, Sri Nanjundeshwara Complex, Nagarbhavi 8th Block, Outer Ring Road. How we work.
Your brief
Tell us what you need, and we will read it before we call.
Eight short steps about your business, what you want and who decides. Most questions are a tap, and you can skip any you would rather answer on the call.
FAQ
Questions owners ask before they call.
Not here? More answers, or ask on WhatsApp.
Is this worth doing for a small business?
What if my costs are mixed up in one account?
Should I drop my least profitable customer?
How does the rep's pay fit in?
How long is the contract?
How soon will we see results?
Who will actually do the work?
What do you need from us?
What if we are not happy with the work?
Where to go next
The work that carries this topic further.
The rest of performance evaluation
Or read all of sales management.
Your next practical step
Tell us what you are trying to grow, and we will read it before we call.
Eight short steps, mostly taps. Skip anything you would rather answer on the call.