Commercial strategy consultancy for beauty brands

The measure that matters here is contribution: what each sale leaves after its cost of goods and the costs of selling it, such as discounts, the retailer's margin or commission, fulfilment, returns, retailer marketing support and payment charges. Read it both as a rate per sale and as a cash total, because the two can move in opposite directions.

When revenue grows and the rate shrinks, more than one of these can be true at once:

• The channel mix has shifted. A larger share of sales goes through wholesale or a marketplace. Whether those channels contribute less is something to calculate, not assume.
• Acquisition has got more expensive. The first customers came cheaply through word of mouth and the founder's network. Each new customer now costs more in paid media, creators and affiliate commission, and repeat purchases are not yet covering the difference. Whether marketing is buying growth or simply renting it shows in acquisition cost and repeat rate tracked against each other over time.
• Discounts have deepened by degrees. For example, a promotion that ran twice a year now runs most months. Whether customers have learned to wait for it shows in the split between full-price and promotional purchases over time.
• Unit cost has moved. New packaging, a reformulation or a smaller production run changed the cost of goods, and the price stayed where it was.
• Selling costs have grown faster than sales. Fulfilment, returns and retailer support can rise per unit, not just in total.

The check is contribution by product and by channel for two equivalent periods side by side, with the change built up from four parts: the mix of products and channels, the prices actually realised after discounts, costs per unit, and marketing spend per new and returning customer. A change explained mostly by mix points at the channel plan. One explained by realised price points at promotions. One explained by cost points at the supplier or the pack. One explained by marketing points at acquisition efficiency and retention, and at whether growth is being bought rather than earned. Working out which products and customers actually make money covers how to allocate the selling costs. If the answer is to slow the fastest-growing channel, the revenue given up belongs in the same sum as the margin protected.

A range where one product earns most of the profit is not a problem in itself. It becomes one when the rest of the range costs more to hold than it returns, or when the hero depends on a single retailer.

The hero may simply be the brand, with the other products there to earn more space from a retail buyer. The other products may have been added for a retailer request or a seasonal moment and never found customers of their own. They may be priced in a way that gives a hero buyer no reason to trade across. Or the hero may be slowing, with nothing yet ready to take its place.

The check starts with what hero buyers buy second, and how often they come back for anything else. Then separate three figures for each other product: its contribution, the stock already held, and the production or packaging the brand is committed to buying. Stopping replenishment reduces future cash tied up; the stock already held still needs a plan to sell through or clear. If a retailer ranges the brand partly on its breadth, that conversation comes before any line is cut.

This shows up as direct sales softening while a retailer runs a promotion, or as a buyer asking why the brand's own site is cheaper. Three explanations are worth separating: the same range at different prices in different places, the brand paying to find customers online who then buy in store, or the two channels needing different things from the brand, which when direct and wholesale want different brands sets out.

The check covers a full promotional cycle: prices, promotions, stock availability and sales in every place the product is sold, side by side. Where a retailer shares any customer data, use it, and where it does not, say what that leaves unknown. Asking direct customers where they first saw the brand helps, though it misses people who only ever bought in store. Once the cause is clear, the channel decision itself, which range goes where and at what price, is its own piece of work, and taking a beauty brand into premium retail covers the retail side.

A flat line after strong first weeks can be read four ways: the launch reached the founder's network but not yet wider demand, the product lasts longer than the window being measured, a retailer moved it after its launch placement ended, or it is not bringing people back.

Start with the two that need no new data. Split first purchases by where they came from: the founder's own audience and followers, or customers new to the brand. A launch carried by the first group has proved interest, not yet demand. Then lay any retail placement dates over the sales line, since a drop that starts the week a launch display comes down tells its own story. The timing question comes next: compare repeat purchases against how long the product lasts in use, for a group of customers who have all had time to run out. Then check whether stock was available when customers would have reordered, whether they bought through another channel, and what they say about not reordering. Weak product appeal is one hypothesis still standing after those. Extra spend before then can amplify whichever problem is unresolved. The sequence that lowers this risk before launch is in how to launch a skincare brand.