How to Identify Your Most Profitable Products
Ask most business owners which products are performing best and they’ll usually point to their biggest sellers.
But the products generating the most sales aren’t always the products generating the most profit.
In fact, some of your highest-volume products may contribute very little to your bottom line, while lower-volume products quietly deliver exceptional margins.
If you’re only measuring sales revenue, you’re only seeing half the picture.
The businesses that consistently improve profitability are the ones that understand exactly which products are making them money—and why.
Turnover Doesn’t Equal Profit
Whether you use Sage 50, Sage 200, Microsoft Dynamics 365 Business Central, Xero, Exchequer, Pegasus Opera, Dynamics NAV, SAP Business One, Brightpearl or another ERP system, your data contains everything you need.
The challenge is analysing it properly.
Business owners regularly ask questions like:
- Which products generate the highest gross profit?
- Which products have the best margins?
- Which products are becoming more profitable?
- Which products are losing profitability?
- Which product groups deserve more investment?
- Which products should our sales team promote?
- Which products should we stop stocking?
- Which products generate the highest profit per customer?
- Which suppliers provide our most profitable products?
These are exactly the questions that drive better commercial decisions.
Unfortunately, they’re also some of the hardest reports to produce using standard ERP reporting.
The Excel Reality
Most finance teams export product sales into Excel.
Then they export product costs.
Then discounts.
Then supplier information.
Then stock values.
The information is merged using formulas, lookups and pivot tables before someone finally produces a profitability report.
Next month…
The entire process starts again.
One Finance Director from an engineering company told us:
“We were spending two days every month producing profitability reports that nobody fully trusted.”
Profitability Changes Constantly
Product profitability isn’t fixed.
Supplier prices change.
Freight costs increase.
Discounts evolve.
Currency rates fluctuate.
Sales volumes rise and fall.
Customer buying habits change.
If you’re only reviewing profitability at month-end, you’re often reacting to problems that started weeks earlier.
Live profitability reporting allows businesses to respond far more quickly.
A Real Customer Story
A manufacturing business contacted Illuminis Insight Software because management believed one product range was driving company growth.
Sales volumes looked excellent.
Everyone assumed it was the company’s strongest performer.
After reviewing the customer’s existing spreadsheets, our consultants recreated their profitability reporting inside Octelas.
The results surprised everyone.
The flagship product range generated impressive turnover but relatively poor margins due to increasing supplier costs and customer discounts.
Meanwhile, another product range with significantly lower sales volumes was delivering substantially higher profits.
Management changed their sales strategy almost immediately.
The higher-margin products became the focus of promotions, sales incentives and marketing campaigns.
The Managing Director later commented:
“Without Octelas, we’d have continued chasing turnover instead of profit.”
The increased profitability more than justified the investment within the first year.
Another Customer Success Story
One wholesale distributor had always measured success by revenue.
When we recreated their management reports inside Octelas, we introduced live product profitability dashboards alongside their existing sales reports.
The results transformed their weekly management meetings.
Instead of asking:
“What sold the most?”
The conversation became:
“What made us the most money?”
The Finance Director later told us:
“It’s changed the way we make commercial decisions. Every pricing discussion now starts with profitability instead of turnover.”
We Don’t Replace Your Reports
Every business calculates profitability differently.
Some include carriage costs.
Some allocate overheads.
Some analyse by supplier.
Others by product group, customer sector or branch.
That’s why Illuminis Insight Software doesn’t believe in generic reporting.
We begin by understanding how your business already measures success.
We review your spreadsheets.
Understand your calculations.
Analyse your management reports.
Then recreate the reporting logic inside Octelas.
Your reports don’t disappear.
They simply become automated, live and significantly more powerful.
Why Businesses Need More Than Dashboards
Many SMEs investigating profitability reporting also look at Microsoft Power BI.
Power BI is excellent for creating visual dashboards.
But profitable reporting projects require much more than charts.
Someone still needs to understand your pricing.
Your margins.
Your product hierarchy.
Your business rules.
Your reporting requirements.
Then maintain everything as your business changes.
Without a dedicated reporting partner, many businesses find themselves continually relying on consultants every time a report needs updating.
Your Long-Term Reporting Partner
This is where Illuminis Insight Software is different.
We don’t simply deliver software.
We become part of your team.
We learn how your business works.
We understand how you measure profitability.
We recreate your reporting.
And we continue supporting you as your reporting evolves.
Need profitability by supplier?
We’ll build it.
Need product margins by customer?
We’ll configure it.
Need alerts when margins fall below target?
We’ll create them.
Need to combine ERP data with CRM, manufacturing or purchasing systems?
We’ll integrate it.
As your business grows, your reporting grows with it.
Focus on What Really Drives Profit
The products generating the most revenue aren’t always the products generating the most value.
Understanding the difference can transform pricing, purchasing, sales and strategic planning.
Octelas, developed by Illuminis Insight Software, automatically analyses data from Sage, Microsoft Dynamics, Xero, Exchequer, Pegasus Opera, SAP Business One, Brightpearl and many other ERP systems to help businesses identify their most profitable products in real time.
Instead of spending days building spreadsheets, your management team receives meaningful insights that improve pricing decisions, increase margins and help grow a more profitable business.
That’s why businesses across manufacturing, wholesale, distribution, engineering, construction and many other industries choose Illuminis Insight Software as their trusted reporting and data partner—because we’re not just helping them understand their data, we’re helping them build more profitable businesses.