What If It’s Not a Profit Problem?

Jen asked a question in our Inner Circle a few weeks ago, and it got my attention. She was doing her monthly bookkeeping and realized she’d lost money in October. 

“This isn’t working. It felt like I was doing all the right things, but not seeing the results I expected.”

She wasn’t angry or dramatic—just discouraged. Wondering if she should pack it in.

And I knew I could help her.

Because this feeling is so common. Most of us hit that wall at some point. But the next steps you take in that moment matter a lot. So I invited Jen on the podcast to do a live coaching call. We looked at her numbers, her site, her emails—the whole thing. And what we uncovered surprised her:

It’s not a profit problem. It’s a sales problem.

Let’s walk through it together—because Jen’s not the only one in this spot.

The Moment That Triggers the Spiral

Jen runs a healing crystal jewelry business. She started on Etsy in 2018 and transitioned to her own website about three years ago. Midway through this year, she let go of Etsy entirely. Now it’s just her site.

So when she saw October’s numbers showing a loss, her mind went straight to:
"Why am I doing this? Maybe this just isn’t going to work."

If you’ve been there, you know how fast your brain spirals. You question everything. You start to believe that all the effort you’ve poured in – all of the late nights, the personal funds you’ve invested – just isn’t paying off.

What made her post stand out is that Jen’s not a newbie. I see her name all the time in the Inner Circle. She shows up. She does the work. That told me: there’s something else going on here.

The Advice That (Almost) Made Things Worse

Her post got a ton of comments—many of them thoughtful and well-meaning. But most of them pointed in the same direction: cut expenses, try Profit First accounting,  check your money mindset. It was overwhelming.

And there’s nothing wrong with any of that in the right context. But here’s the problem: all of that assumes profit is the issue.

And nobody had looked at the root of what was actually happening in her business.

What Jen’s Numbers Actually Say

Jen had been tracking her numbers herself. No bookkeeper—just spreadsheets. And she’s done a good job. Her data was clean, which made it easy to spot what was working and what wasn’t.

Here’s what I found:

• Year-to-date sales: ~$27,000
  
• Net profit: ~$8,000
  
• Net profit margin: 29.6%
  
  

Now pause there. Because this is where most people gasp.

A really healthy profit margin in ecommerce is 20%. Most store owners aim for 10%. Jen? She’s at almost 30%.

So no—profit is not the problem.

The real issue is simple: She’s just not selling enough.

This is a great business that’s just too small right now. And that’s something we can fix.

A Few Things Hurting Her Profit—but Not Causing the Problem

That said, we did find a few money leaks that were worth patching up.

1. Shipping Losses

Up until October, Jen had been undercharging for shipping—by a lot. She’d spent $2,200 more on shipping than she collected from customers.

That’s a hole you want to plug fast, especially before scaling. Because if that gap grows with every order, your profits will vanish even faster as you grow.

Jen already made one good move: switching to a flat-rate shipping charge with free shipping over $60 (her average order value). Smart.

We also talked about adding a front-of-the-line shipping upgrade—an optional $5 fee to guarantee faster processing. A lot of customers will pay a bit more for speed or peace of mind. That small upsell could wipe out her shipping losses entirely.

2. Cash Accounting

Jen is using cash accounting, which means she expenses all her supplies the moment she buys them—even if she hasn’t sold the inventory yet.

She told me she has around $2,000 worth of materials on hand. In a perfect world, she’d only expense those costs as the products sell. That’s accrual accounting, and while it’s a bit more complex, it gives a clearer picture of monthly profitability.

For now, it just means her profit looks a little lower than it really is. Not a red flag—just something to keep in mind.

3. One-Time Expenses

She also paid for Reliable Revenue this year—a smart investment, but one that shows up as a chunky expense. When you factor that in, along with the shipping loss and inventory value, her profit for the year looks more like $12,000.

Again: profit is not the problem.
It’s volume. It’s traffic and conversions.

Where Her Sales Are Coming From

Let’s talk about what is working.

Jen implemented the strategies from Reliable Revenue, and it shows. We looked at her Klaviyo account together and here’s what we saw:

• 55% of her sales are coming from email.
  
• She’s earning $0.29 per recipient, on average.
  
• Her flows (automations) and her mini-campaigns are evenly driving sales.
  
  

This is not beginner-level email marketing. Jen is doing it right.

Even more impressive is that she sends weekly campaigns. She’s consistent. Her content is converting. She’s even hitting benchmark numbers we usually only see in more established shops.

So if the email engine is working this well, what’s the problem?

List Growth Is the Bottleneck

Between October and November, she grew her list by just 12 subscribers.

That’s the bottleneck.

When we dug into her popups and lead capture forms, we saw a clear issue:

• Her main popup had a conversion rate of 1.26%—too low.
  
• It had only 3,500 impressions in 6 months, despite her getting over 3,000 site visitors per month.
  
• Her exit intent popup was converting well (21%) but barely getting any impressions.
  
• Her gated sales page had a submit rate of just 2%—when it should be 50–60%.
  
  

So what does that tell us? Something’s broken.
Either the forms aren’t showing to the right people, or old forms are still running in the background, or the settings are off.

Fixing this one thing could completely change her revenue picture.

If her site’s getting 3,000+ visitors each month, a popup with a 5% conversion rate would bring in 150+ new email subscribers monthly. And with Jen’s email performance? That’s huge.

The Full Picture Looks Better Than It Feels

Here’s what else her numbers told us:

• Her website sales are up 200% over last year.
  
• Her returning customer rate is 21%—really solid for a business at her stage.
  
• Her site traffic is growing, and her email list—while small—is performing exceptionally well.
  
  

So even though it felt like October was a disaster, it really wasn’t. The business is trending in the right direction. It just needs a push.

Where to Focus Next (Just 2 Things)

1. Raise Average Order Value (AOV)

Her AOV is sitting around $52. That’s decent, but she has room to grow.

Here’s what we brainstormed:

• Raise the free shipping threshold to $70 or $75. That bumps order sizes up without discounting.
  
• Add an in-cart upsell. A second bracelet. A cleaning kit. A bundle. Think about what’s easy to say “yes” to.
  
• Use a free shipping progress bar. Apps like Slide Cart or MonsterUpsell can show how close a shopper is to the free shipping threshold.
  
• Raise prices on her top 10 products by just $2 each. Sometimes that’s all it takes.
  
  

If she lifts her AOV by even $5–10, it’ll compound quickly.

2. Fix the Conversion Funnel

Her funnel is strong after the add-to-cart stage. But too few people are taking that first step.

Right now, only 2.4% of visitors add a product to their cart. Ideally, we’d see that number closer to 4%.

One quick fix we discussed: add a small link right below the “Add to Cart” button that says,
“Save 15% on your order today.”

This simple nudge, linking to her opt-in popup, hits shoppers at the moment of peak intent. It can grow her list and lead to more sales.

The 4 Metrics to Watch Moving Forward

Jen doesn’t need 20 KPIs. Just keep your eyes on these four:

1. Popup submit rate
   
2. Add-to-cart rate
   
3. Overall site conversion rate
   
4. Return visitor rate (hers is already at 17%—aiming for 30%)
   
   

And no—she doesn’t need to increase her ad spend right now.

She’s currently spending 17% of revenue on ads, which is a little high, but okay given her margins. The goal now is to get more return for the money she’s already spending—by improving the quality of traffic and tightening the funnel.

Let’s Talk About Customer Acquisition Cost (CAC)

We also looked at what she’s paying to get a customer:

• She’s spent $4,700 on ads this year.
  
• She’s brought in 217 new customers.
  
• That’s a CAC of ~$22 per customer.
  
  

Honestly? Not bad at all.

But here’s where it gets interesting:
If she can raise her AOV to $70+, that first purchase becomes profitable on Day 1. Which means her email automations can turn those customers into repeat buyers—without added cost.

Jen’s Next Steps (Simple and Doable)

Here’s the plan we laid out together:

1. Fix the popups. Book a call with Claudia. Clean up the settings and forms.
   
2. Focus on AOV. Use upsells, pricing tweaks, and free shipping thresholds.
   
3. Track two key metrics. Popup submit rate + add-to-cart rate.
   
4. Adjust ads to send traffic to just one high-converting product.
   
5. Don’t increase ad spend until conversion rates improve.
   
   

She left with a list. No overwhelm, just clarity.

The Real Problem Wasn’t the Problem

Jen came in thinking she had a profit problem. One bad month had her questioning everything.

But when we looked at the full picture, this business is working.  It just needs some fine-tuning and scale.

And the same might be true for you.

RELATED LINKS:

See Jen’s website here: https://www.essentialjewelry4u.com/

How to get control of your $ https://www.thesocialsalesgirls.com/blog/how-to-get-control-of-your-episode-158

How to create profit goals https://www.thesocialsalesgirls.com/blog/how-to-create-profit-goals-episode-209

A step by step plan to double Louise's email list https://www.thesocialsalesgirls.com/blog/a-step-by-step-plan-to-double-louises-email-list-episode-303

You're probably more successful than you think https://www.thesocialsalesgirls.com/blog/youre-probably-more-successful-than-you-think-episode-295