She Was Paying 22% Too Much. For Two Years.

Hey there,

I want to tell you a story that still gets me.

Last quarter, I started working with a founder. Let's call her Megan. She was doing $1.8M a year. Great product. Loyal customers. The kind of brand you look at from the outside and think, "They've got it figured out."

But when we got on our first call, she said something I've heard a hundred times:

"We had our best quarter ever. And I still almost missed payroll last month. How is that possible?"

That question sits with me. Because I hear it constantly. And the answer is almost always the same.

So we dug in. And what we found was... a lot.

She thought her margin was 48%. It was actually 30%.

Not because she was bad at math. But because the numbers she was looking at weren't the real numbers. They didn't include the full picture, the hidden costs that were quietly eating her profit.

Here's what was actually happening:

Her 3PL was charging $2.50 more per order than she realized. It wasn't in the contract. It had crept in through "miscellaneous fees" and rate adjustments she'd never questioned. Over thousands of orders, that added up to tens of thousands of dollars.

Her manufacturer had raised prices three times over two years. Small bumps each time. 5% here, 7% there. She'd approved them in passing, buried in email threads. Total increase? 15%. On her entire COGS.

And then there was the inventory. Four months of dead stock sitting in her warehouse. Products that weren't selling, taking up space, tying up cash. She'd ordered them "just in case" during a growth spike that never materialized.

None of this was visible in her Shopify dashboard. None of it showed up in her quick-glance P&L. It was all hiding in plain sight.

When I showed her the real numbers, she sat back and said something I'll never forget:

"I didn't know what I didn't know."

Here's what we did over the next 12 weeks.

Weeks 1-2: We built the real P&L.

Not the Shopify summary. Not the "revenue minus COGS" napkin math. The actual, all-in picture of what it cost to run her business. Every fee. Every rate. Every hidden line item.

This alone changed everything. Because you can't fix what you can't see.

Weeks 3-4: We renegotiated her 3PL contract.

I walked her through exactly how to approach the conversation. What to ask for. How to frame it. What leverage she actually had (more than she thought).

Result: $18,000 saved per year. Same 3PL. Same service. Just a better deal.

Weeks 5-6: We liquidated dead inventory.

This one was hard. Megan didn't want to touch it. That inventory felt like admitting she'd screwed up. But we found liquidation channels, ran a strategic clearance sale, and recovered $42,000 in cash that was just... sitting there.

That cash funded her next product launch.

Weeks 7-8: The conversation that changed everything.

Remember those price increases from her manufacturer? 15% over two years, buried in email threads?

Megan had never pushed back. Not once. She'd just... accepted them.

When I asked why, she said what I hear from almost every founder: "I didn't want to damage the relationship. They've been good to us. I didn't think I could ask."

Here's what I told her: You're not asking for a favor. You're having a business conversation.

Your supplier wants to keep you as a customer. They've invested in learning your products, your timelines, your quality standards. Finding a new customer costs them time and money. You have more leverage than you think.

But you have to know how to use it.

The Conversation Framework

Here's exactly how we approached it:

Step 1: Do your homework first.

Before Megan said a word to her supplier, we got competing quotes. Not because she wanted to switch, but because she needed data. She needed to know what the market rate actually was.

Turns out, she was paying 22% more than comparable suppliers were offering. Twenty-two percent. On her entire COGS.

Step 2: Frame it as partnership, not confrontation.

The email Megan sent wasn't aggressive. It wasn't threatening. It was honest:

"Hey [supplier], I've really valued our partnership over the past three years. As we're planning for next year, I'm doing a full cost review across the business. I've gotten some competitive quotes and I'd love to talk about how we can make our pricing work better for both of us long-term."

That's it. No ultimatums. No drama. Just a clear signal that she's paying attention and she's open to a conversation.

Step 3: Know what you actually want.

Before the call, we made a list:

Primary ask: 15% reduction in unit cost

Secondary ask: Better payment terms (Net 45 instead of Net 30)

Tertiary ask: Lower MOQs on slower-moving SKUs

You don't walk into a negotiation hoping to "get a better deal." You walk in knowing exactly what better looks like.

Step 4: Be willing to walk away. But don't lead with it.

Megan had her backup quotes. She knew she could switch if she needed to. But she didn't threaten it. She didn't even mention it unless asked.

The goal wasn't to burn the relationship. The goal was to reset it.

Step 5: Get it in writing.

Whatever you agree to (new pricing, new terms, new MOQs) goes in a document. Not a WeChat message. Not a verbal "yeah, we can do that." A written agreement that both parties sign.

This protects everyone. And it prevents the slow creep of prices going back up six months later.

The Outcome

Megan's supplier came back with:

12% reduction in unit cost (not the full 15%, but close)

Net 45 payment terms (giving her more cash flow breathing room)

30% lower MOQs on her bottom 5 SKUs

On her annual volume, that 12% cost reduction alone was worth $40,000 per year.

Forty thousand dollars. From one conversation.

Same supplier. Same products. Same quality. Just a different agreement.

Here's what most founders miss:

That $40K isn't just "savings." It's not money that disappears into a general bucket of "we're doing better."

That $40K drops straight to gross margin. Every single dollar of it.

Which means Megan's contribution margin per unit went up. Which means products that were barely breaking even suddenly became profitable. Which means marketing spend that didn't make sense before now had positive ROI.

This is the part I made Megan do immediately: update the P&L and remodel contribution margin by SKU.

Because when your COGS changes, your entire understanding of which products are worth pushing (and which ones are dragging you down) changes too.

That "hero SKU" she'd been scaling? It was actually her most profitable product now, not just her best seller. She doubled down on it.

That bundle she'd been promoting? Once she ran the new numbers, she realized it was barely breaking even. She killed the promotion and redirected that ad spend.

Renegotiated supplier terms don't just save money. They change your entire strategy, if you actually update your numbers.

Weeks 9-12: We built the reporting system.

The dashboards. The weekly check-ins. The early warning signals. So she'd never be surprised by hidden costs again, and so she'd catch it immediately if prices started creeping back up.

Her margin went from 30% to 48%.

On $1.8M in revenue, that's $324,000 more profit. Same business. Same products. Same customers. Same team.

Just a different system. And a few hard conversations she'd been avoiding.

I've seen versions of this story dozens of times. The numbers change, but the pattern is the same:

Smart founders bleed money they don't know they're losing, because nobody ever showed them where to look, or gave them the script for the conversations that actually matter.

This is exactly what we teach in the MOVE Accelerator.

Module by module, we build the visibility, the systems, and the skills to find your hidden profit, and keep it. Including the exact framework for supplier renegotiation conversations.

The next cohort is filling up. If Megan's story sounds familiar, this might be for you.

This Week's Action

Here's something you can do in the next 10 minutes:

Pull up your last 3 supplier invoices. Ask yourself:

1. When was the last time my unit cost changed? Do I know why?

2. Have I ever gotten a competing quote, just to know what the market looks like?

3. If I asked for better terms tomorrow, would I even know what to ask for?

If you haven't looked at your supplier pricing in over a year... there's probably money on the table.

You don't have to switch suppliers. You don't have to burn relationships. You just have to be willing to have the conversation.

And now you have a framework for how.

🎬 Want to go deeper?

I just posted a new video that ties directly into Megan's story.

Most DTC brands scale ads first, then panic when inventory runs out, cash disappears, and growth starts feeling fragile. Sound familiar?

Here's the thing: you don't have a marketing problem. You have a system problem.

In this video, I break down the Demand → Supply → Cash loop and show you how to design your supply chain for predictable growth, not just luck. This isn't theory. It's based on what actually works for DTC brands doing $1M to $10M+.

Until next time,

Lara

P.S. If you've ever had a supplier renegotiation conversation, whether it went well or terribly, reply and tell me. I'm collecting stories because I think founders need to hear more real examples of how these conversations actually go. The good, the bad, and the awkward.

P.P.S. If you know another DTC founder who's been accepting price increases without question, forward this to them. That $40K conversation might be sitting in their inbox too.