Ecommerce · Pet
Bestsellers were priced below their true landed cost.
This marketing & margin audit surfaced $59k in recurring annual margin in a DTC / Ecommerce business, evidenced, senior reviewed, and delivered in 6 days.
The business
A pet supplies retailer had built its reputation and much of its volume on a handful of bestselling SKUs, and hadn’t revisited their pricing in roughly two years. That period happened to coincide with a sharp, sustained rise in inbound freight and packaging costs, exactly the inputs that determine whether a low priced, high volume product still makes money on each unit sold.
What triggered the audit
A frustrating pattern had emerged: the more the bestsellers sold, the flatter total profit looked. That only makes sense when your winners are quietly losing money on every sale, so the audit rebuilt unit economics for the top SKUs from the supplier invoice upward, rather than trusting the standard cost figures the pricing had been based on years earlier.
What the audit found
The rebuild exposed an uncomfortable truth about the very products the business was proudest of. Once current inbound freight, duties and packaging inflation were fully loaded into each unit, the retailer’s three top selling SKUs were priced below their true landed cost. Every additional unit sold, the thing the whole merchandising effort was optimized to do, actively destroyed margin. Because the original prices had been set against stale, lower cost assumptions and never refreshed, the erosion had crept in invisibly while volume kept rising and masking the damage in the blended numbers. The bestsellers had, in effect, become loss leaders nobody had chosen, costing roughly $59k a year in foregone margin across their combined volume.
What we changed
Rebuilt unit economics on current landed cost, freight, duties and packaging included, and repriced the affected SKUs back to a healthy positive contribution.
Staggered the increases and paired them with merchandising and bundling support, so volume held steady through the change rather than dropping sharply.
Set a quarterly landed cost review, so pricing now tracks real freight and input costs instead of drifting on last year’s assumptions.
Added landed cost alerts on the highest volume SKUs, so a future cost spike triggers a pricing review before it erodes margin unnoticed.
The result
The before and after margin is contribution after fulfillment, fees, returns and advertising. $59k a year recovered on the products that sell the most, an annual figure equal to 10× the $5,950 Audit + Sprint fee. For any founder proud of their bestsellers, the finding is a gut check: rising volume was hiding the fact that each unit lost money, because prices were set against costs that no longer existed. If you haven’t rebuilt landed cost since freight inflation hit, your winners may be your biggest losers, and every extra sale deepens the hole. A fixed fee audit rebuilds it from the invoice up in days, before another quarter of volume compounds the damage.
From kickoff to signed off findings: 6 days.
What the client said
$59k a year found in 6 days
Contribution margin on the three bestsellers: −2% → +7%
“The more our bestsellers sold, the flatter profit looked. Victoria rebuilt landed cost from the supplier invoice up, and our three top SKUs were priced below cost after freight and packaging. We repriced in stages and volume held.”
Victoria MillerSenior Auditor · signed this audit off