Client

Canadian multi-channel retailer, $4M revenue, three channels

Problem

40% revenue growth with persistent cash shortages, no SKU or channel margin visibility, and no forward cash model

Services

Fractional CFO engagement to rebuild SKU-level economics, implement channel margin visibility, restructure working capital, renegotiate supplier terms, and establish a 13-week cash flow model

Results

  • Freed $430K in working capital within six months without reducing revenue or inventory
  • Improved net margin by 3% on a growing revenue base without adding new SKUs or customers
  • Exited or repriced 14 negative-contribution Amazon SKUs, materially improving channel profitability
  • Established 90-day forward cash visibility, updated weekly

Full Case Study

The situation

Revenue was growing. Cash was not.

A Canadian multi-channel retailer selling across Shopify, Amazon, and wholesale had grown from $3M to $4M in 12 months. New SKUs were added each quarter. Customer demand was expanding across all three channels.

The founder was consistently short of cash. Large inventory orders created immediate pressure. Wholesale purchase orders, which should have felt like wins, raised the question of how to fund the stock required to fulfill them.

Nobody could explain why.

When a Fractional CFO was brought in, the first question was simple: which parts of this business are actually making money?

There was no clear answer.

The challenge

Four issues had compounded as the business scaled.

Revenue was reported as a single blended number. Costs were pooled. Some SKUs generated margins above 55%. Others fell below 8% once Amazon fees, shipping, returns, and advertising were properly allocated. Capital was being deployed across all SKUs and channels without understanding which ones justified it.

The cash pressure was structural. Suppliers were paid in 30 days. Wholesale customers paid in 60 to 90 days. Amazon sell-through cycles ranged from 45 to 75 days. Inventory was consistently funded before it was sold and collected.

Amazon costs were tracked at the channel level rather than by SKU. Several high-volume SKUs generated less than 4% net margin once fully costed. The volume was real. The contribution was not.

Cash was managed from the bank balance. There was no forward model linking inventory commitments, supplier payments, sell-through, and collections into a projected cash position.

What was actually at risk

A business growing at 40% without margin visibility and working capital control is not becoming stronger. It is scaling the same problem.

Growth was not solving the issue. It was accelerating it.

What Wefinx did

Wefinx led the engagement, working alongside the founder over six months before transitioning into ongoing advisory support.

A SKU-level margin model was built incorporating landed cost, channel fees, shipping, fulfillment, returns, and advertising. 14 Amazon SKUs that appeared profitable at a gross level were generating negative contribution once fully costed. At the same time, several lower-volume SKUs were identified as the highest-margin products in the catalogue.

Supplier terms were renegotiated for the highest-volume SKUs, extending payment from 30 days to 45 and 60 days using formal purchasing data for the first time. A revolving working capital facility was introduced, aligned to the actual inventory cycle. Together, these changes addressed the timing mismatch driving cash pressure.

A 13-week cash flow model was introduced as a core management tool. Inventory commitments, supplier schedules, sell-through, and collection timing were connected into a single forward view, updated weekly.

The 14 negative-contribution Amazon SKUs were exited, repriced, or removed from FBA. Advertising spend was reallocated toward higher-margin products. One wholesale relationship generating $280K in annual revenue was operating below a 3% net margin once working capital cost was considered. It was renegotiated on terms that reflected the true cost of serving it.

What the engagement produced

$430K in working capital was freed within six months. Cash pressure, previously constant, became visible and manageable.

Net margin improved by 3% while revenue continued to grow. The improvement came from understanding which products and channels were worth scaling.

Amazon revenue declined modestly after unprofitable SKUs were removed. Contribution to net income increased significantly.

The founder now operates with a 13-week forward view of cash. Inventory decisions, SKU launches, and channel expansion are evaluated against margin and cash impact before capital is committed.

Growth only works when the economics underneath it are clear

The business had demand. It had product. It had channels.

What it did not have was visibility into the economics driving them.

In this case, six months of work freed $430K in working capital, improved margins, and gave the founder control over how growth translated into cash.

The founder was building something real. Six months of work made it visible. Growth started working for the business instead of against it.