Problem: Reputation damage through bad reviews¶
Current P&L (2016 - 2018)¶
| P&L | |
|---|---|
| Revenue | 2,785,818 |
| Reputation Cost | - 1,976,650 |
| IT Cost | - 500,000 |
| Gross Profit | 309,168 |
Reputation damage amounts to almost 2,000,000 BRL.
Solution: Remove detrimental sellers and increase Gross Profit by 200%¶
| Before | After | |
|---|---|---|
| Revenue | 2,785,818 | 2,278,551 |
| Reputation Cost | - 1,976,650 | - 967,390 |
| IT Cost | - 500,000 | - 385,683 |
| Gross Profit | 309,168 | 925,478 |
Side effect: reduced serverload from detrimental sellers saves an additional 115,000 BRL in IT costs.
What is driving negative reviews?¶
Who is causing the bad reviews?¶
Reviews are not evenly distributed¶
Wide range of profits per seller¶
Which sellers to remove?¶
Current status: 3,000 sellers, 300,000 BRL Gross Profit¶
Maximum Profit¶
Balanced approach: 95% of max profit while removing only 188 sellers¶
Conclusion¶
- Removing only 188 sellers can increase gross profit by 3x
- Healthy balance between profitability and order volume
| Before | After | |
|---|---|---|
| Revenue | 2,785,818 | 2,278,551 |
| Reputation Cost | - 1,976,650 | - 967,390 |
| IT Cost | - 500,000 | - 385,683 |
| Gross Profit | 309,168 | 925,478 |