Quick question. Do you know your contribution margin by SKU? Not your gross margin. Not your blended margin. The actual dollars you keep after every variable cost, per unit sold.
Most founders don’t. And if they do, they’re often wrong. The real margin, after product cost, fulfillment, merchant fees, returns, and everything else that moves with each unit, is almost always lower than what they think. Sometimes dramatically lower. And that gap is the reason the bank account tells a completely different story than the P&L.
That’s not a marketing problem. That’s a math problem.
Which is exactly why I started this business. Because most physical product brands don’t need better ads, they need a better profit model.
My Background
I started as a direct response copywriter back in 2008. For almost a decade, I wrote sales copy for damn near every industry, but mostly physical products. After almost a decade of doing that work across damn near every industry, I’d gotten good enough at it that the craft stopped challenging me, and I found myself wanting to understand how businesses actually worked beyond just the acquisition side.
So in 2017 I took what looked like a marketing director job at an eight-figure supplement company. It turned into something much closer to a partnership. I was involved in the P&L decisions, the operations, the strategy, all of it. While I was there we launched a supplement that did $8 million in its first 12 months. We took one offer from 15 sales a day to 450. We ran a promotion that did just under $150,000 by lunchtime and stopped only because we sold out on both the website and Amazon. Among many other incredible wins.
Then I left to start my own supplement company, Peak Biome. We launched in December 2019. Did $30K a month in the first three months. Then launched a second product and went from $30K to $1M per month in three months. At that time, it was just 3 people running a million dollars a month in physical products.
It was insane, but I learned more in that stretch than in the decade before it.
I sold Peak Biome in July 2025. Then I wrote a book called The Scalable Profit Model that captures everything I’ve learned, roughly $200 million in sales across my own businesses and clients. And launched Scale Advisors to help physical product brands do what most of them are failing to do: keep the money they generate.
The Problem Nobody Is Solving
Here’s what I see everywhere in this industry.
If you’re getting advice on the marketing side, those people are looking at Return on Ad Spend (ROAS), conversion rate, average order value (AOV), etc. They’re optimizing for revenue.
The problem is, nobody is asking how much of that revenue you’re actually keeping.
If you’re getting advice on operations, they’re looking at fulfillment and headcount. Not how those decisions ripple into your margins or your cash position.
If you’re working with a bookkeeper or accountant, they’re giving you historical data. Not a forward-looking profit model.
Nobody is looking at everything as one connected system. And that’s the issue. Because what kills physical product brands isn’t usually one catastrophic failure. It’s five levers being pulled in isolation, or not at all, while the founder tries to solve a math problem with more marketing.
The Five Levers That Control Every Dollar of Profit
This is the framework I built Scale Advisors around. Every dollar of profit in your business flows through one of these five levers. Ignore any of them and you’re leaving money on the table, or actively losing it.
1. Contribution Margin
If you don’t know this number by SKU, you are losing money right now. Period.
Contribution margin is simple. Let’s say you sell a product for $100. After variable costs, meaning product cost, fulfillment, merchant fees, returns, shipping, and anything that changes with each unit sold, how much do you actually keep?
Most founders think they know this number. Most are wrong. The real number, after you account for every variable cost, is almost always lower than what they think. I’ve had clients who believed they were running at 40% contribution margin who were actually at 14%. That’s not a rounding error. That’s a completely different business.
2. Acquisition Economics
Two things here. First, how efficiently are you converting visitors into customers and how much are you generating per transaction? Second, what can you actually afford to spend to acquire a customer while remaining profitable?
That second number is what I call your Allowable Customer Acquisition Cost (ACAC). Most founders don’t know it. They’re running ads against a ROAS target someone told them was “good,” with no idea whether that ROAS actually produces profit after all the costs their ad platform doesn’t see.
Not a great way to run a business.
3. Lifetime Value (LTV)
Getting a customer once is the expensive part. What happens after that is where the real money lives.
Lifetime Value (LTV) in this space isn’t just about revenue. It’s about contribution margin dollars per customer over time. Repeat purchase rate, subscription revenue, reorder sequences, bundle architecture – all of it compounds. Yet most brands have almost no systematic post-purchase revenue system. They’re acquiring customers and then essentially hoping they come back.
4. Operational Efficiency
If you add $1M in top-line revenue, how much do your fixed costs increase? If you add $1M and your overhead goes up $500K, you kept $500K. If your overhead only goes up $250K, you kept $750K. Same revenue growth, yet one has $250K more profit. That’s great operational efficiency.
But there’s a second part to this that you can’t put a dollar on. Can you step away from your business for 10 days with no communication and trust that things won’t fall apart?
Most founders I work with can’t. It drives them crazy, but they’ve accepted it as normal.
Personally, I don’t care what’s normal. I care what’s possible. And it’s ABSOLUTELY possible to build a business that runs without you being the keystone holding everything together.
5. Capital Return Velocity (CRV)
You’ve probably heard of the cash conversion cycle. Capital Return Velocity (CRV) is a more complete version of that concept, and it matters more for physical product brands than almost any other metric.
Here’s the problem most founders in this space face that software companies and service businesses don’t: inventory. You might pay for your product 60 or 90 days before you break even on the acquisition costs to sell it. So when people say they’re “breakeven on day one,” that’s not what’s actually happening. You’re 90 days in the hole before that clock even starts.
Capital Return Velocity measures the full cycle: cash goes out of your pocket, inventory gets purchased, product gets sold, contribution margin gets collected, acquisition and overhead get covered, and cash comes back. The faster that cycle moves, the healthier your business is. And every one of the other four levers directly accelerates it.
Where You Are Determines What You Need
Not every physical product brand faces the same problem, and it’s worth naming that directly.
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- Under $1M, you’re mostly trying to find product-market fit. You need to validate your messaging converts, and you need to understand your unit economics well enough to know the business is actually viable. The five-lever framework still applies, but the constraint is almost always acquisition and product clarity. Everything else is secondary until that’s solved.
- In the $1M to $5M range, you’ve usually hit a ceiling. You can’t spend more on ads without Customer Acquisition Cost (CAC) spiking. Cash flow gets tight every time you try to scale. The constraint here is almost always unit economics and capital velocity, and they’re tangled together in ways that aren’t obvious until you pull the whole thing apart. Fix those and the ceiling disappears. Keep trying to market your way through it and the ceiling gets lower.
- From $5M to $10M, operations is usually where things break. You’ve grown to the point where you are the bottleneck. Every system runs through you. Scaling further means removing yourself from the critical path, and that’s less about tactics and more about how the business is fundamentally structured (plus a lot of mindset issues the founder has to get through). The people who figure this out keep growing. The ones who don’t just get more exhausted.
What I’m All About
Look, there are a lot of people in this space giving advice on ads, on email, on influencer marketing, on whatever channel is hot this month.
That’s not what I teach.
My work exists because most physical product founders know how to generate revenue, but they don’t know how to take that revenue and turn it into actual profit and positive cashflow. There is a real skill gap there, and it’s costing people who’ve built genuinely good businesses a disgusting amount of money.
My goal here is to close that gap. Not with generic advice that applies to any business. With the specific levers, the specific math, and the specific systems that determine whether a physical product brand actually works financially.
If that’s what you’re looking for, you’re in the right place.