The most important benefit business intelligence can bring to a retailer is exact knowledge about real margin achieved for every product sold in any shop in any day. Though it can seem trivial at first sight it is a major challenge when you try to do it.

Calculating the basic gross margin in fact is really easy. You just have to know the stock price and a price of the transaction.

Even when you have on stock a product purchased more times with different prices the stock price can be calculated simply either by FIFO (first in first out) method or by weighted average. In computerized warehouse you have no problem to have exact price for every item issued. Similarly for each sales transaction you have the exact price, so you can know the exact margin for it.

The difficulty is in bonuses and additional discounts that depend on sales cumulated over a certain time period. A very simple example can be a very common case of additional discount that a retailer receives at the end of the year if he sells a certain number of units. This additional discount affects the purchasing price of the product but since it depends also from the future sales in the moment of the transaction you do not know it. How to deal with it?