Olist - Brazilian e-commerce challenge
Increasing Olist's profits using in-depth data analysis
Language: Python
1 Problem
How to increase Olist’s (Brazil’s largest department store) monthly profits while maintaining a healthy order rate?
2 Solution
This Data Analytics project makes use of the Brazilian E-Commerce Public Dataset to provide applicable solutions for increasing Olist’s monthly profits in a healthy and sustainable way.
3 Objectives
To address the problem, two objectives have been set:
- Identification of the main sources of loss (low-performing sellers)
- Simulation of two loss-reduction solutions
4 Results
4.1 Identify the worst-performing sellers
The worst-performing sellers have been identified as the sellers with the highest monthly orders, usually with more than 80 orders per month.
4.2 Loss-reduction solutions
Solution 1: limiting strategy
By limiting a seller’s number of monthly orders to 30 when their share of 1-star reviews are >10%, Olist’s monthly profits sustainably increase by 0.8%.
Benefits:
- no sellers are banned –> Olist doesn’t lose customers
- Reduce “bad sellers” negative impact by 3.5 factor
Trade-offs:
- Low impact on monthly profits: only 0.8% increase
Solution 2: ban strategy
By banning the worst-performing sellers from the online platform, Olist’s monthly profits increase by 17%.
Benefits:
- High impact on monthly profits: 17% profit increase
Trade-offs:
- Olist loses customers and monthly orders