Ecommerce Coffee Break – The Ecom Marketing & Sales Podcast STOP Losing Money: How to Implement Profit First — Karl O'Brien | How To Find Your Hidden Cash Cows, What “Profit First” Means, How To Use Contribution Margin, Why Discounting Harms LTV, And Why Acquiring Customers For Retention Is Key (#450)
Nov 24, 2025
In this insightful discussion, Karl O'Brien, Co-founder of Store Hero and former digital marketing agency founder, reveals how e-commerce businesses can shift their focus from revenue to profitability. He highlights the common 'profit shock' merchants face at month-end and explains the importance of understanding contribution margins. Karl unveils strategies to identify hidden cash cows and the dangers of discounting. Additionally, he stresses that successful Q4 strategies should prioritize profit rather than just sales.
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Profit First Beats Revenue-Only Thinking
- Many marketing teams optimize for revenue while owners judge by profit, causing a disconnect in decision-making.
- Store Hero was created to close that gap by focusing analytics on profitability rather than raw sales.
Add Real Costs To See True Profit
- Input product-level costs and operational expenses to see true profit across store, product, and order levels.
- Use that visibility to double down on profitable items and reduce spend on losses.
Contribution Margin Bridges Teams
- Contribution margin bridges marketing and finance by including product and variable costs plus marketing spend.
- It gives a proactive, comparable metric to evaluate order-level economics across teams.