SurfaceNet Business Pulse

Business Pulse — metrics & opportunities

Canonical basis throughout: the 8-status "Orders We Count" filter, net revenue = product + shipping (ex tax), Phoenix-calendar order dates — the basis that reproduces Brightpearl's own monthly report to the penny. Margin appears on two bases: Brightpearl's book COGS, and the order-recon actuals captured per shipment (true supplier cost + real freight) on the reconciled sample.

Revenue & margin

Monthly net revenue

Steady $380–490K band with a rising floor: 2026 months are beating their 2025 counterparts almost across the board. October and March are the seasonal peaks.

Annual net revenue

Growth has flattened: +38% in 2021 and +21% in 2022, but only +2–4%/yr since 2023. 2026 is pacing to ~$5.2M.

True contribution margin order-recon actuals, by year

The only margin shown is the honest one: real supplier cost + real freight, from reconciled shipments. Brightpearl book margin (~50%) is deliberately not displayed — its COGS misses freight entirely and surplus book costs are near zero. Bars are labeled with the reconciled sample's share of all shipments; the sample is staff-selected and freight-heavy, so treat these as the conservative floor.

Monthly true margin recon sample, last 24 months

True margin holds in a tight low-to-mid-30s band every month — the problem is structural (freight priced below cost), not seasonal. Each month reconciles ~75–190 shipments (~20–30% of all shipments that month); hover any point for the exact sample size and coverage. Thin months swing a few points — trust the band, not single dots.

Shipping economics order-recon actuals, reconciled shipments since 2024

Freight: charged to customer vs actual cost, by month

The subsidy runs $6–14K every month with no improvement trend over two years. Recovery bounces 35–58% and never approaches break-even. Phone-quoted shipments recover 43% vs 50% on web — the humans are discounting freight harder than the website does.

Funded freight recovery explicit charge + freight built into product prices

The explicit shipping line is only half the story: delivered pricing bakes freight into the product price itself ($0–$675 vendor freight bundles on premium dropship sheets; a $50/piece constant on surplus and overstock). Crediting that built-in funding — imputed at today's pricing rules — total freight funding covers ~93–96% of actual freight cost: the delivered model nearly breaks even by design, and the real gap is ~10× smaller than the explicit line suggests. Shown quarterly, because the trend is the point: funded recovery has slid almost monotonically from ~99% (early 2025) to ~92% (Q2 2026) — about a point per quarter — while the explicit line stayed flat, i.e. freight inflation is outrunning built-in amounts that never move (the surplus $50 constant dates to ~2013). Premium vendor bundles fund >100% of their freight; surplus funds only ~86%. The July 2026 rate increases should be the first thing to bend this line back up. Imputed dollars are reallocated out of product margin, not new money, so quote funded recovery and product margin together, never both at face value.

The benchmark: LTL freight per square foot shipped

This is the number to watch month to month. Actual LTL freight runs $2.80–$4.50 per sqft (sample-wide $3.83) and is drifting upward — while the explicit freight line has been charged a flat ~$1.50/sqft for two years. Note: "charged" here counts only the separate shipping charge — with delivered pricing, part of freight recovery is built into the sheet price. The P&L chart below nets everything out. Hover for sample sizes.

Per-sqft P&L of an LTL shipment nets out shipping built into the product

The test of whether built-in shipping increases keep pace: over two years, delivered revenue rose ~$3/sqft (the increases are real and visible in the blue line) — but material rose ~$2 and freight ~$0.50, so what's left per sqft slipped from ~$8.60 (2024 H2) to ~$8.10 (2026). The increases have been defensive: they absorb cost inflation, but they never close the original ~$2/sqft freight gap. Thin months swing hard (Apr 2026 = 25 shipments) — watch the level, not single points.

LTL freight cost as % of product revenue vs the LTL market index

Orange = actual. Dashed = where freight % would sit if costs had simply tracked the national LTL market (BLS PPI, long-distance LTL, rebased to our Jul–Sep 2024 level). Through early 2026 the two move together — the drift was mostly market inflation. But the market spiked ~12% in April 2026 and is now ~24% above Jul 2024: expect sustained cost pressure in H2, which makes fixing recovery more urgent, not less.

Freight recovery by order size

The leak is a large-order habit: orders under $500 recover 90% of freight, orders over $2,500 recover just 19% — free or token freight is being thrown in to close big jobs. That one band accounts for most of the subsidy.

LTL recovery by ship-to state top 10 by freight spend

No state recovers well, but long hauls are worst — Washington 32% (and the highest cost per shipment, ~$500), Oregon 36%, Virginia 36%, Texas 39%. Zone-based LTL rates would price this correctly by construction.

Where the freight subsidy comes from

It's an LTL problem, not a parcel problem: LTL shipments given away free or undercharged account for nearly all of the loss, while parcel roughly breaks even. The "shipped free" row alone is ~460 LTL shipments averaging ~$370 of real freight each.

What sells line-level item revenue by product family

Product mix by year

Premium full sheets carry the growth ($1.0M → $4.0M, now ~2/3 of item revenue). Surplus has eroded every year since 2021; vanity tops collapsed after 2023; and the "unclassified" slice — SKUs with no product type — has grown to ~$0.4M/yr (see the data-quality suggestion).

Data table

Sheet brand momentum last 12 mo vs prior 12 mo

HI-MACS, Hanex and Formica are growing — but Avonite collapsed (was the #3 brand all-time) and Staron fell hard. Corian is roughly flat and still #1.

Data table

Top styles, last 12 months

Whites and creams dominate — nearly all top-10 sellers are white/neutral colorways. Keep these premium listings stocked and priced sharp.

Channels & customers

Revenue by channel

Phone is 8% → ~21% of revenue since 2020 at roughly 3× the web AOV — a quiet shift toward larger, quoted trade jobs.

Where it ships last 12 mo

CA, FL and TX lead; the top 10 states carry about half of revenue. This is a national business — which is exactly why freight pricing (see margin) matters so much.

Who buys customer type, last 12 mo

Among tagged customers the trade dominates — cabinetmakers, contractors and fabricators are ~75% of tagged revenue. But most revenue is untagged, so this view is a sample, not a census (see the CRM suggestion).

Surplus program health

On-hand surplus by listing age

The bimodal shape is the problem: over half of live listings were created 3+ years ago — stock that has already proven it doesn't sell at current price.

Sheet pieces sold per year surplus vs premium

The mix has flipped: surplus sell-through fell from ~1,290 pieces (2021) to 864 (2025) while premium sheets sold nearly doubled (~2,400 → ~4,600). Growth is all in premium; surplus is a shrinking, aging book (2020 excludes a one-off catalog bulk-load).

Suggestions each tied to the numbers above

Serious · margin

Shipping is priced below cost — and it's specifically free LTL on big orders

The shipping-economics section pins the leak precisely: 462 LTL shipments went out with $0 freight charged (−$171K) and 623 more were undercharged (−$120K), while parcel roughly breaks even. By order size, freight recovery falls from 90% on sub-$500 orders to 19% on orders over $2,500 (−$187K) — free freight is the default closing concession on exactly the orders where it costs ~$370 a shipment. Phone quotes (43%) discount harder than the website (50%).

Do: three moves, in order. (1) End blanket free LTL above $2,500 — price delivery off the benchmark: actual cost runs ~$3.80/sqft while customers pay ~$1.50/sqft, so freight tiers (or sheet prices) need to close a ~$2/sqft gap. (2) Give phone reps a live LTL cost lookup and a floor: no quote below ~80% of tariff without sign-off. (3) Move web LTL rates to zone-based (WA/OR and long-haul East are worst at 32–39%). On the recon sample, each 10 pts of recovery ≈ $55K/yr of pure profit.

Critical · revenue

Find out what happened to Avonite

Avonite fell from $694K to $162K in one year (−77%) after ranking #3 all-time ($6.6M lifetime). Only 46 premium Avonite SKUs are currently published. If supply broke, this is the single largest recoverable revenue line in the data.

Do: confirm distributor/supply status, then either restore the premium listings or steer its lookalike colorways (whites/creams) to HI-MACS and Hanex, which are already absorbing share.

Serious · margin

Reprice against real cost, not book cost

Even on Brightpearl's optimistic basis, margin fell 59.8% → ~48% since 2020 — and recon shows the true level is 15–19 pts lower still. The erosion is within both channels (pricing/cost), not mix. Surplus pricing is the extreme case: near-zero book COGS makes every surplus sale look ~85% margin when recon says ~50–60%.

Do: quarterly repricing of the premium catalog against current replacement cost (start with the top-10 styles), and use recon-actual margins — not BP book margin — as the yardstick everywhere internally.

Opportunity · inventory

Clear the 3-year-old surplus stock

Over 1,100 listings (~4,500 sheets, half of live listings) have sat for 3+ years while surplus revenue eroded from $1.05M (2021) to $675K (2025). 2026 is pacing better — momentum worth feeding.

Do: run a stepped clearance on everything listed before mid-2023 (−15% now, −30% at 90 days), add an age-based auto-markdown rule — and remember recon's warning: price surplus to cover real freight, or clearance sales can go out the door at a loss.

Opportunity · attach

Push adhesive attach past 40%

Only ~35% of sheet orders include adhesive (up from 30% in 2020), yet every install needs it and the color-match mapping (adhesives_styles) already exists in the catalog. Consumables are ~$380K/yr of high-margin revenue that ships cheap — the best kind of revenue given the freight problem.

Do: surface "matched adhesive + tips" as a one-click add-on on every sheet product page and in the cart. Each +5 pts of attach ≈ 100 extra orders/yr.

Opportunity · channel

Invest in the phone/quote channel

Phone orders average ~3× web AOV and grew to ~21% of revenue. Repeat customers already produce 54% of all revenue — the account-management motion demonstrably works.

Do: formalize quote follow-up (every quote gets a call within 48h) and assign the top ~200 repeat trade accounts an owner. Watch phone margin — growth here must come with freight-inclusive pricing discipline, not discounting.

Data quality · reporting

Type the untyped SKUs & scale up order recon

Order lines with no product type grew from $37K (2023) to ~$410K/yr — mostly newer N-prefix SKUs created without a Brightpearl product type. And order recon, the only source of true margin, covers ~25% of shipments since 2024; its value grows with coverage.

Do: make product type required on SKU creation and backfill the null-type lines. For recon, prioritize reconciling every LTL/freight shipment — that's where the money leaks — and consider auto-importing carrier invoices (the flag-3 LTL import path already exists).

Data quality · CRM

Tag customer types at order entry

Nearly two-thirds of last-12-mo revenue comes from customers with no type tag, so segment analysis runs on a ~36% sample. The tagged sample says trade pros are ~75% of revenue — worth knowing for real.

Do: add a required customer-type picker to phone order entry and a one-question survey to web checkout; backfill the top 500 untagged accounts by revenue first.