Introduction

Understanding what drives profit is at the heart of any retail or e-commerce strategy. Using the popular Superstore dataset from Kaggle, I conducted a profit analysis to uncover which factors contribute most to business performance, and which ones negatively impact profits. Using Looker Studio, a tool I have been practicing using in the last month, I explored key dimensions such as category and subcategory performance, customer segments, and geographical trends, sales. With this project, I aimed to provide valuable business insights by identifying which regions, cities, products, and customer segments are most worth investing in and focusing on, and which ones should be avoided. I also sought to strengthen my skills in data visualization and dashboard design.

You can explore the full interactive dashboard here on Looker Studio.

1. Profit Analysis and Key Findings

I explored several key dimensions that influence profitability, including customer segments, geographical regions, product categories and sub-categories, sales trends over time, and the effect of discounts. Below are the main insights derived from each perspective.

1.1 Regional Insights

The data clearly indicates that the West and East regions are the profit powerhouses of the Superstore, respectively with $108.4K and $91.5 profits, and margins of 15% and 13.5%. These results are specifically driven by high-yield states like California, New York, and Washington, respectively with $76.4K, $74K, and $33.4K profits, and major metro areas such as New York City ($62K profits) for the East, and Los Angeles ($30.4K profits), Seattle ($29.2K profits) and San Francisco ($17.5K profits) for the West. These regions combine high sales volume with efficient operations, resulting in the largest positive profit contributions. The business should implement a strategy for these areas focused on increasing inventory investment and marketing focus on the most successful product categories to capture even greater market share. Conversely, certain states and cities are major contributors to total loss, demanding immediate attention, most notably Ohio and Pennsylvania, both in the Easter side of the United States and both with losses over $15K. Loss-leading cities include Philadelphia, with $13.8K losses and a negative margin of -12.69%. Despite generating substantial sales volume, the significant negative profit in these locations points to critical issues like excessive discounting or high logistical costs. Management should immediately review and reduce excessive discounts and re-evaluate the shipping and logistics costs for high-loss product categories.

The analysis of the Central and South regions shows a positive overall profitability, with the South leading at $46.7K and the Central region following with $39.7K, driven by strong performance in key states such as Michigan ($24.5K profit, 32% margin) and Indiana ($18.4K profit, 34% margin) in the Central area, and Virginia ($18.6K profit) and Georgia ($16.3K profit, both over 25% margin) in the South. However, this performance is severely undercut by concentrated losses: the Central region suffers massive drains from Texas (over $25K loss) and Illinois ($12.7K loss), including cities like Houston ($10.2K loss, $-15.74% margin, where a critical pattern emerges showing that the cities with the largest quantities sold are also those recording the highest losses, a phenomenon attributed to aggressive, poorly targeted discounting aimed at moving high-cost items and attracting volume; similarly, the South contends with notable losses in North Carolina and San Antonio (around $7K each). Despite these weak points, other cities remain solidly profitable, indicating that a strategy of localized initiatives, focusing on optimized pricing, refined product mixes, and targeted marketing in the most profitable areas, while urgently fixing the severe volume-loss paradox in the Central loss centers, is essential before considering any scaling across these regions.

1.2 Customer Segments

The three customer segments (Consumers, Corporate, and Home Office buyers) reveal different purchasing behaviors and profitability patterns, each shaping a unique role within the business landscape.

Consumers clearly form the backbone of overall performance, with the highest number of customers (5,191). They generate the highest sales (1.2M) and highest profits (134.1K) by a wide margin (11.55%), especially through Technology and Office Supplies (margins of 17.42% and 15.48% respectively), two categories that consistently deliver strong returns. Their buying behavior leans heavily toward high-volume, frequently replenished items like binders and paper, while profit is largely driven by high-value sub-categories such as copiers, phones, and accessories. Interestingly, Furniture remains a weak spot, offering minimal profit (7K) despite its sizeable sales contribution (391K). The Consumer segment is large, high-volume, and represents the bulk of the business. Even if their profit margin isn’t the highest, the sheer quantity of customers and sales volume drives the largest absolute profit.

Corporate customers, while smaller in number (3,020), operate very differently. They purchase less frequently than consumers, yet each transaction tends to be more margin-efficient. Their overall sales (706.1K) and profit (92K) totals are lower than those of Consumers, but their profit margins are consistently stronger, especially within Technology and Office Supplies, both over 17%. Once again, the preferred sub-categories are binders and paper, as well as copiers, phones and accessories.

Home Office customers sit somewhere between these two worlds but with a profile of their own. They represent the smallest segment (1,783), yet they deliver the highest profit margins of all three groups (14.03%). Their purchasing habits echo both the Consumer and Corporate segments: high engagement in Technology products, steady demand for Office Supplies, and the profitability of these purchases is markedly stronger, respectively with margins of 16.63% and 20.84%. Despite their smaller scale, Home Office buyers offer an outsized profitability opportunity.

1.3 Category and Sub-Category

Across all product categories, performance varies significantly in terms of both sales volume and profitability. While Technology and Office Supplies are the strongest contributors to overall profit, Furniture remains the weakest performer due to low or negative margins in several subcategories.

Technology: A Strong Performer with Room to Grow

Technology leads with $836.2K in sales and $145.5K in profits, with a healthy margin of 17.4%. All subcategories (Phones, Accessories, and Copiers) are performing well, though Machines fall behind with a slim margin of 1.79%. Technology overall performs strongly, but the gap between sales and profits shows that high-value products often come with higher costs and tighter margins. Machines, in particular, struggle with profitability, whereas Phones and Accessories benefit from better margins and stronger sales. The business should keep promoting high-margin items like Phones and Accessories, while reviewing pricing strategies and supplier contracts for Machines to improve profitability.

Office Supplies: High Margins in the Right Places

Office Supplies follow closely, generating $719K in sales and $122.5K in profits, with a margin of 17%. Certain subcategories shine. Subcategories like Paper and Binders drive most of the value, thanks to their combination of high volume and strong profitability. Smaller segments such as Envelopes and Fasteners also maintain excellent margins above 40%, despite lower sales figures. The only notable weakness is in general Supplies, which record a small -2.5% margin. However, their overall impact on profitability is minimal compared to the heavier losses within the Furniture category. The business here should focus on high-margin subcategories and consider reducing low-performing items. Also, it should explore bundling or cross-promotion of top-selling items to boost overall returns.

Furniture: Sales Are High, Profits Are Low

The Furniture category is a different story. Despite $742K in sales, profits barely hit $18.5K, giving a margin of just 2.5%, the lowest across all categories. The problem lies in subcategories like Tables and Bookcases, which account for over 40% of Furniture sales but generate negative profits. This is because these large, bulky items often carry higher shipping, storage, and discount costs that erode margins. On a positive note, subcategories like Chairs and Furnishings remain profitable, with margins of 8% and 14%. Here, the business should reassess pricing and supplier costs for underperforming items, reduce or discontinue consistently unprofitable SKUs, and focus inventory and marketing efforts on profitable subcategories.