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Case Study  ·  Home & Kitchen

$420K a Month in Revenue. Barely Breaking Even.
The Answer Was Hidden in Plain Sight.

  • Net Profit Nearly Tripled From $33K to $89K
  • Net Margin Improved From 7.9% to 19%
  • 6 Margin Negative SKUs Eliminated
  • $19K Monthly Ad Waste Eliminated
→  START WITH A FREE GROWTH ANALYSIS
Kitchen Organization & Storage
Industry
Home & Kitchen
Products
Kitchen Organization & Storage (17 SKUs)
Revenue at Start
$420K / month
Monthly Ad Spend
$118K

$420K in monthly revenue, 28% TACOS, and only $33K left over at the end of the month. The business was working hard and going nowhere.

60% of SKUs were contribution margin negative after all real costs, and a handful of winners were covering for all of them.


On paper this brand looked like a success. $420K a month in sales. Growing year over year.
Then you looked at the bank account.

They had tried everything. Cut ad spend. Raised prices. Launched promotions.
Margins kept shrinking. Nobody on the team could explain where the money was going because nobody had ever mapped where it actually went.

They were running 17 SKUs, advertising all of them, and had no idea that most of them were actively destroying the profit the winners were generating.


SKU-Level Contribution Margin Analysis

Nobody had ever built a real number for each product. Not COGS alone. Everything. We built it.

  • Mapped every SKU against true contribution margin: landed cost, FBA fees, Amazon fees, return rates, allocated PPC. The real number.
  • 6 SKUs were margin negative after all real costs. They were being funded by the winners without anyone knowing.
  • 3 hero products were generating over 100% of actual business profit. The rest were eating it.

Strategic SKU Elimination & Portfolio Rationalization

Once you can see what's destroying your profit, the decisions make themselves.

  • Cut 6 margin negative ASINs. Repositioned 2 borderline SKUs as bundles attached to hero products.
  • Went from 17 SKUs to 11. Smaller portfolio. Healthier business.
  • Freed up $19K/month in ad spend that was being torched on products that could never win.

Hero Product Optimization & PPC Reallocation

We rebuilt the winners to convert harder, then put all the money behind them.

  • Rebuilt main images, titles and A+ content around what actually makes buyers click add to cart
  • Set TACOS targets per SKU based on actual margins. Not one blanket number for everything.
  • Every freed dollar went to the 3 products that could actually return it.

Profit Nearly Tripled. Ad Spend Dropped $19K.

Less SKUs. Less waste. More profit. The numbers speak for themselves.

Results Achieved

+$56'000 EXTRA PROFIT PER MONTH
from $33K to $89K (2.7x)
137% NET MARGIN IMPROVEMENT
from 8% to 19%
6 SKUs ELIMINATED
from 17 to 11 profitable products
$19K AD WASTE ELIMINATED
per month

  • $420K in revenue means nothing if $33K is all that's left
  • Most Amazon portfolios have a small SKU minority generating 100% of profits
  • Ad efficiency improves automatically when spend is tied to actual product margins
  • Strategic elimination often outperforms addition in maturing businesses

This brand's problem wasn't growth. It was focus.
We built complete financial transparency at the SKU level, made the cuts that needed to happen, and turned a bloated, barely profitable operation into a lean one.
Revenue grew modestly.
Profit nearly tripled.
Ad spend dropped $19K.
Sometimes the best growth move is subtraction.
Less but focused work.
Healthier Business.

START WITH A FREE GROWTH ANALYSIS

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