Home & Living
Catalogue margin and delivered margin are not the same number.
Bulky items, breakage, long consideration and sharp seasonality mean the gross margin in your product data rarely survives contact with the courier.
Why this changes the advertising decision
What is different here isn't the channel. It's the economics underneath it.
Delivery and breakage eat the margin
Contribution after real fulfilment cost, including damage and redelivery, is often far below catalogue margin on exactly the items that sell best.
Demand is seasonal and room-led
Categories peak at different points in the year. One annual target manages the average and misses every peak.
Consideration is long and visual
Shoppers browse, save and return. Credit lands on the final click and the early work goes unfunded.
Bulky clearance is a space problem
Slow bulky stock costs warehouse space every week it sits. That cost belongs in the decision to advertise it.
One product, one decision
The decision looks like this.
Illustrative example. Not a client result.
Oak dining table, 180cm
- Catalogue margin
- Looks strong
- Contribution after delivery
- Materially lower
- Breakage and redelivery
- Non-trivial
- Stock cover
- Long
What changed
Delivered cost reconciled against catalogue margin.
This line was being scaled on a margin it never actually earned. Corrected, it is a good profit line, just not a growth one.
Nothing here happens automatically. The data flags the change; the job change is a decision we make with you.
What we do about it
The execution follows the economics, not the other way round.
Delivered contribution replaces catalogue margin
Fulfilment, breakage and redelivery are reconciled into the contribution figure before anything is scaled.
Seasonality is planned by category
Budget follows your own category demand calendar rather than a single annual efficiency target.
Slow bulky stock is treated as space
Holding cost is part of the case for clearing a line, which usually means acting earlier than the margin alone suggests.
Evidence
-64%
Creation Furniture
Cost per acquisition, alongside conversion rate moving from 0.7% to 1.4%.
A furniture brand with the same bulky-delivery and long-consideration economics.
- Period
- Post-restructure period against the preceding equivalent period.
- Basis
- Conversion rate moved from 0.7% to 1.4%. Average order value and cost per acquisition measured on the restructured account.
- Source
- Client account data.
Kitchenware and drinkware: Thermos shows how correcting conversion measurement and separating product economics changed account decisions. Read the Thermos case study for the reported results and comparison limits, or see Google Ads for kitchenware brands.
The Method - BOI®
How BOI® applies here.
The problem
Bulky delivery economics, long consideration and seasonality all hit margin differently in home and living.
The BOI® answer
Compact best-sellers run as Profit. Hero pieces run as Scale. Slow bulky stock runs as Recovery.
Next step
We'll tell you what your account is doing to your home & living margin.
A commercial review reads your account against your own product economics, and tells you where the next pound should go. Brands we work with typically spend around £10k a month on Google Ads, but that is guidance, not a gate. If you are below it and the question is real, ask anyway.
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