Making money but not making profit
Isabella adored her small Shopify store. Her eco-friendly kitchenware line sold out month after month, yet her bank account never caught up.
One sleepless March night she finally faced the truth: Gross Profit was a razor-thin 18 %. If nothing changed, she’d run out of cash before summer.
What follows is the seven-step turnaround that saved her business—and the “mini-moments” that gave each step its urgency.
These are the lessons she learned along the way
COGS first—operating leverage turns pennies saved into dollars earned.
- Freight strategy can double margins overnight.
- Test prices; fear is expensive.
- Demand real data—gut feelings belong in the kitchen, not the P&L.
- Paid ads = lab time—learn fast, then scale organically.
- Compound small tweaks.
- Know when to quit a product.
1. Negotiate Down Your COGS
(Cost of Goods Sold)
Before Isabella opened a single spreadsheet, she asked, “Who actually controls the cost of every unit I sell?” The answer was obvious— her suppliers.
Every dollar she shaved off COGS would flow straight to profit thanks to operating leverage: her fixed costs (software, rent, salaries) stay the same while variable costs shrink, so each sale now contributes more margin.
What She Did:
- Volume & Early-Pay Terms – She doubled her order size and agreed to net-30 payments; her supplier dropped unit cost 12 %.
- Alternative Vendors – A regional manufacturer quoted 8 % lower landed cost on her fastest-moving SKU.
- All-in Landed Cost Tracking – She bundled freight, duties, and packaging into one “true cost” number to spot hidden leaks.
Result:
Unit COGS down $0.92; GP jumped to 25 %.
2. Tame Your Freight Bill
The Invisible Margin Leak
Isabella often made use of air freight to make sure she had enough stock on hand. But each mile by air chewed away profit she never got to see. Freight costs rarely show up on the product page, but they scream on the P&L. Isabella had a choice, she could invest the capital she had in larger orders that were optimized for sea freight, or she could face the pain of high per unit shipping costs due to Air Freight. She took a deep breath and chose the sea freight option.
What She Did
| Freight Tactic | Impact on GP |
| 100 % by sea, 0 % by air |
Shipping cost per unit fell from $2.80 → $1.05 |
| Consolidated containers | Eliminated double-handling fees |
| Lane-specialist forwarder | Better routing, fewer accessorials |
Result: GP climbed past 30 % without hurting customer satisfaction.
3. Pressure-Test Your Pricing
When Fear Meets the Calculator
Raising prices feels like squeezing a balloon—push too hard and it might pop. Yet most founders have no data proving that fear is real. Isabella discovered the money lost by not testing a higher price dwarfed any backlash she imagined.
What She Did
- Split-tested $24 vs. $29 landing pages using Facebook ads.
- 75+ orders on each page for statistical power.
| Price | Conversion | GP / Unit |
| $24 | 3.6 % | $8.00 |
| $29 | 3.1 % | $12.50 |
Result:
Site-wide price set to $29; GP leapt toward 40 %.
4. Collect Enough
Data Before You Pivot
Turning Hunches into Facts
Early results are emotional; real results are numerical.
Ten sales feel like a trend; 100 sales tell the truth. Isabella’s new rule—no decision before 100 orders or a full sales cycle— kept her from panicking over noise.
What She Did
- Let tests run the distance,
even if early numbers looked shaky. - Reviewed results only after
hitting significance thresholds.
Result:
Fewer knee-jerk pivots, steadier growth.
5. Use Paid Ads as Your Lab
Because Science Needs Control Groups
Organic traffic is like the weather—great when it’s sunny, useless for experiments. Paid ads gave Isabella the dials and levers of a lab: controlled audiences, fixed budgets, and repeatable tests.
What She Did
- Ran micro-budgets on Facebook, Instagram, and TikTok to validate headlines, creatives, and price points.
- Used split-tests to isolate single variables—no more guessing which tweak moved the needle.
Result:
Reliable insights in days, not weeks.
6. Iterate, Don’t Knee-Jerk
Stacking Small Wins into Big Margins
The end of one experiment is the start of the next.
Isabella learned to layer tiny 2 % gains—cheaper boxes here, an upsell there—until her GP looked unrecognizable.
What She Did
- Introduced a checkout upsell and cross sell that lifted Average Order Value by 9 %.
- Switched to padded mailers that shaved $0.18 per shipment.
- Automated reorder points to avoid costly stock-outs.
Result:
Compounded tweaks pushed GP past 50 %.
7. Admit When Product-Market Fit Isn’t There
Cutting Your Losses to Save the Store
Some SKUs are brilliant ideas trapped in the wrong market. Clinging to them is like keeping a leaky lifeboat because you painted it yourself. When Isabella retired her under-performing bamboo set, she freed cash—and focus—for winners.
What She Did
- Liquidated the stubborn SKU at breakeven.
- Reallocated inventory budget to her hero product, which now financed the brand’s expansion.
Result:
Cash cycle shortened; stress level plummeted.
Six-Month Epilogue
Isabella’s store now funds growth instead of choking it—proof that profit problems aren’t destiny; they’re puzzles.
| Metric Measured |
March (Start) | September (6 mo) |
| GP% | 18 % | 54 % |
| Cash on Hand | 2 weeks | 2 months |
| Ad Budget | $0 | $10 k / month |