Beauty Co. Profitable Scale

Scaling from $8M to $22M in revenue while improving margins by 15 points through strategic profit optimization.

The Challenge

Beauty Co. had achieved impressive revenue growth but was trapped in the 'growth at any cost' mindset. Despite reaching $8M in annual revenue, profit margins were declining with each new product launch. The team was burning through cash, and the founders were considering outside investment just to maintain operations.

The Diagnosis

Our deep diagnostic uncovered systematic profit erosion: 1) Product portfolio bloat with 60% of SKUs generating negative contribution margins, 2) Fulfillment costs consuming 18% of revenue due to inefficient logistics, and 3) Customer acquisition costs had increased 180% year-over-year while customer lifetime value remained flat.

The Solution

We executed a comprehensive portfolio rationalization, eliminating 40% of underperforming SKUs while doubling down on the top 20% profit generators. Simultaneously, we redesigned the fulfillment network, consolidated suppliers, and implemented a profit-first product development framework that ensured every new launch met strict margin requirements.