The challenge
This client came with one goal: increase profitability. Their numbers looked healthy on the surface, over $1.8M in quarterly sales, but the profit trend told a different story. Net profit was down 31.4% year-over-year in Q4. Ad spend was high, waste was buried in the campaigns, and every dollar of margin improvement required digging. We didn't just improve profitability. We reversed a declining trend and delivered more profit than the previous quarter, with less ad spend.
What we did
We started with a full ad account profitability audit — not just ACOS, but true profit impact per campaign, per SKU, per targeting type. Significant ad spend was being wasted on low-margin products and non-converting placements. We restructured budgets around the highest-margin SKUs, reduced spend on products where contribution margin didn't justify the ad investment, and tightened targeting across the board. The result: $34K less in ad cost, $87K more in net profit, and a profit trend that went from accelerating decline to clear growth.
Why it worked
Profit lives at the SKU level. Allocating budget by contribution margin instead of ACoS alone, and cutting spend on low-margin products and non-converting placements, reduced ad cost by $34K while net profit rose $87K and the year-over-year trend reversed.
Services behind this result
This result came from coordinated work across Account management, Amazon PPC. One team owned the whole channel, so changes to listings, ads and operations happened in the right order.