Sales Channel Analysis showed TikTok was burning cash

This brand was doing about $4M a year in revenue and starting to really push growth. They ramped up ad spend on Shopify and TikTok, and on the surface, things looked great—revenue was climbing on both channels.

The problem was… cash kept getting tighter.

We split everything out by channel and went deeper than just top-line performance. We looked at channel-specific revenue, TikTok discounts, product COGS, fulfillment and shipping costs, merchant fees, ad spend, and even fixed marketing costs. Once we lined it all up, the issue became obvious:

Every incremental TikTok order was losing money.

TikTok was driving volume, but heavier discounts and higher costs meant they were underwater on each order—even though total revenue was going up.

From there, we made a few key changes:

• Pulled back TikTok ad spend

• Increased AOV on TikTok so orders actually made sense

• Shifted more budget toward their stronger Shopify channel

TikTok revenue dropped, but this time it was intentional—and more importantly, every TikTok order became profit-positive. Cash flow stabilized, and they could grow again knowing exactly where their money was being made.

The big win wasn’t just fixing one channel—it was giving them confidence that growth was actually helping the business, not quietly hurting it.