What to Do When You’re Making Sales But Still Feel Broke (Stop Profit Leaks & Start Paying Yourself)

Let me tell you about something that really messed with my head lately. It was a conversation I was having with a student, and we were going back and forth. Now she has. We're gonna call her Melissa just for the sake of the show, okay? And she is someone who's doubled her revenue year over year since last year. In fact, she's got some really big deals happening right now with major brands, okay? Amazing opportunities coming her way, and she's had her best months yet. But here's the part that's really messing with my head and messing with her head. She's like, where's the money? Because when she looks at her bank account, there's nothing left in the bank and there's nothing left to pay her. It's not like she's paying herself out a ton of money and there's nothing left in the bank. She's not paying herself and there's nothing left in the bank. So one of the things that we're going to talk about today in this episode is how do we fix that, right? How do we look at your numbers? How do we make sure that not only are you making sales and growing your business, but you also get to earn, you get to save. You get to make enough money to keep for you to pay yourself good money. Because, my friends, you deserve it to have in the bank to reinvest back into the business, to have enough save for taxes. Because when you pay taxes, it means you're making money, right? So that's what we're going to dig into in today's episode. Foreign. I'm Jacqueline Snyder. I am the host and the founder of the Product Boss and the Product Boss podcast. This is a place where we help small businesses all around the world who make anything, right? Maybe you make candles or jewelry or apparel, right? You make or you manufacture. And we know how to teach you how to market and how to sell without followers and without ads, no matter where you are and no matter what you sell. So when I was talking to Melissa, she was like, jacqueline, I know that the revenue's there. I know that I make sales. I see the sales. I celebrate the sales. But where is it? And I said to her, you know what? You're not alone in this. You are not alone. In fact, I've been in the same place before. I mean, some of us have money scarcity issues or. Or we have a fear of money and fear of knowing where our money goes. But when you don't know where it is, you don't know what's coming in you don't know what you're spending it on and you don't know where it goes. That means there's something that we get to fix. So I want to tell you, you're not alone. There's people out there listening right now that are like, yes, or maybe you've been this person in the past and you're like, gosh, I really want to clean this up because I am so tired of knowing I've made $7,000 in sales, $15,000 in sales, $25,000 in sales, and there's nothing left to show for it. All right, so let's dive in. So in this episode, I'm going to talk to you and show you where most money leaks are and where they're going. How you get to look at your margins for your products in the right way so that you are profitable and what tiny pricing tweaks you can make and offers to start generating money right away. So you're out there, you're making money, but you still feel broke. Right? You're not taking home the money that you started this business to make. You are putting things on credit cards or. Which is fine from a business perspective, but it just feels like, why am I leveraging money and not earning and not seeing the results in the bank account account. You think, gosh, I want to leave my full time job, but I need to make enough to be able to earn. So maybe you're making enough, but there's not enough left over for you to take home so you can live the life that you dream of. Right? So you can live this vision of the life of why you started. I'm also working with another student, so she actually joined the Product Boss collective. Okay. So she came into the program and when I was on a call with her and seeing if it was like the right fit her strategy call, I said to her, I was like, okay, so what's your revenue? And she's like, she, she sells a higher ticket product. She's like, I'm making a million dollars. Amazing, amazing, amazing, great. But her problem was that she wasn't paying herself. I think she was maybe like 5ish percent profitable. So imagine that you're bringing in a million dollars and you were only making 5% and you're not paying yourself at that point. Your business, that revenue number is just a vanity number. It's just a number that you can say, yeah, my business made a million bucks. But you know what's better than your business making a million bucks? Your business making half a million Dollars and you keeping $200,000 after it. Right. The number at the end doesn't matter. Right. The total amount of revenue generated is great. But what I really want you to lean into and start to think about is the profit. What profit is left over. There's vanity and then there's success, Then there's profitability, then there's freedom behind the profit. So let's say it like this. Revenue numbers are vanity. Profit is freedom. And that's where I want you to focus now before you're like, like you might feel some shame or something's come up for you. Like, listen, this is not your fault. How are you supposed to know? Did you study economics? Did you go to business school? Even people that I know that have their degrees in business, this is not something that's just built into that. Maybe you're CFO or CPA and like bookkeeper. You're like, numbers are my jam. Awesome. So awesome. But a lot of us were creatives and it's not your fault that you don't know how to run your business like this yet. And there's not a lot of coaches out there or programs or education companies that are really teaching the concept of profitability behind physical product based businesses. Physical product based businesses. So people come all the time. Like, they'll show up in my boot camps and my challenges. They'll. They'll hop on a fitting call with me and they'll say, hey, I'm, you know, I work in direct sales. Can this program help me? So, so many of my, my, so much of my coaching, what I teach. Absolutely. Can help you. Or if you're on print, on demand, absolutely, it can help you. But here's the difference. When you are making or manufacturing a product, you're dealing with cost of goods, you're dealing with labor. So let's say you're in direct sales and you're selling Doterra. Doterra, like you yourself, as a, in this, in this version of it, you're buying a certain amount of product from them as if you're the wholesale buyer. So you're buying a certain amount of product from them like a shop, and then you're reselling it to an end customer. Okay. You have no risk or liability for cost of goods or labor. You're buying a finished product and now you get to resell it. Now though, my expertise, what I'm a coach and what I've done for 20 years, but actually grew up in this industry is, is from the starting point, we have the idea, we have the design, we have whatever it is. And now we have to figure out the materials, the cost of goods, the manufacturing way that we're doing it, all of the labor that goes into it, and holding the product, right? Holding the raw goods and holding the finished product before you even sell it wholesale or before you even sell it retail. So this is where profitability gets eaten up the most, I'd say. And that's really what I teach. We teach about margin math. We teach about that. So going back to the coaches out there, there are people who are crafty and. And maybe they're etsy coaches and they're telling you, hey, go to Michael's and buy whatever and glue it together into whatever, and then try and sell it. Well, great. But you're buying the product at retail prices. You're making things that can't be bought all the time, and you're not even thinking about the margins. And a lot of times they're telling you, price cheap, be competitive. It's not making sense. That's where the profit is missing. Or you could be like, my mom. My mom. I remember when I used to coach her. Coaching your mom in businesses is super fun. Eventually, she listened to me. Took a long time. But when I was coaching her, she valued her time so high. She's like, I want to get paid 150 an hour. And it's like, great. You totally can. But you, the business owner, the CEO, the person who runs the company, your amount that you get paid is separate than the cost of the labor that goes into the individual product. So think about that. Okay? We think about our labor. So let's say you are a maker and you're doing all the things. Even though you are so worth, like, more than $100 an hour, you're worth thousands and thousands of dollars. Like, you were worth infinite. You were worth infinite. But for labor into product, there has to be a cap to that. So a lot of times I'll coach people and say, all right, well, how much would you pay someone to do that role for you? Let's say they were doing your laser cutting, or they were pouring the wax, or they were beating the bracelets. What would you pay someone? Now we all have different amounts. Why? Because we live in different places. Come to LA, it's like 17, 18, minimum wage, and then in other states, it's $11. So wherever you are in the world, think about what your minimum wage is. And most likely it might be higher than minimum wage for this particular labor, or maybe not. So then what you do is you sub in your labor costs to what that price would be if you paid someone else. So yes, you are worth so much more than that. But the product cannot bear the weight of what you're worth. So if we were to replace you with someone that we hired, that's what we would do, right? So maybe you're $20 an hour, and that $20 an hour cost for labor goes into your cost sheet. If you're not costing, if you're not working with a cost sheet and really itemizing every single thing here and looking at every part. So in fashion, we included thread, we included how much it costs to die. If I had send outs to make binding, for example, buttons, fusing, different parts and elements, right? So there was just like there was the fabric and the trimming, zippers, all of that. Then there was the labor. There was a labor of like doing the fusing. There was the labor of cutting and sewing. There was, there was labor of marking and grading and then packaging or hang tags, right? Because like each garment had a hang tag and a label put on. So that had a price and a cost of labor. And then there were other things like poly bags, all the stuff. I know I'm getting really into the weeds here, but what I'm saying is that those are all of the parts that end up on your cost sheet as you're calculating what the cost of that product is. And if you need support around that, then this is something that we can support you in. Maybe you want to hop on a call with one of my growth specialists and you can book a free call now@the productboss.com bookacall the productboss.com bookacall if you're like, you know what, I want more support. Because what we're switching into here at the product boss is really creating a space. We're creating the collective, which is my group coaching program, which I want to be the ultimate group coaching program in the world for product based business owners. So if you're like, gosh, I still want to work through all of this and I need support and you are making a minimum of $2,000 a month in your business. $20,000 a month, $80,000 a month, $200,000 a month, this group might be just the perfect fit for you. So head to the productboss.com bookacall if you're like, gosh, I need more help figuring this out. So that is a major massive part. Now my students in my programs, especially the sales accelerator and, and my other programs, you have access to this, Kashi and in the collective, the collective actually includes all of my programs. So when you join this group coaching program where you're going to get live coaching, there's also all of the information, all of the templates, all of the coaching. So it's all in there. But while we talk about what you need to do, that's what you need to do. We really need to look at the. The costs to know what our profit is so that we can pay ourselves so we have something to take home. Now, as I'm talking about this, you can see that more sales is not going to fix a profit issue. Do you see that? So even if I made more sales, but I wasn't making money, so the million dollar business, she can make more and more sales, but if she's not bringing home a profit, she's just working for nothing, right? She's making more sales. But what is it actually doing? It's actually probably causing more of a headache, more stress, more time spent when, like, she really could pull back and think how to, how do I grow a profit? So how do we clean this up? Well, first, okay, these are the different parts of how I would coach you, right? Or my team coaches you, my coaches coach you. So I would say, all right, let's look at the product, let's look at the cost. Let's look at what your cost sheet says that this thing is the cost of it, what you would sell it for wholesale, what you would sell it for retail. Then we look at the end customer and we say, does this match? Does this match? Now, if your pricing feels wonky or off, we're going to dig into that and we're going to say, okay, are there prices that can come down? Can we stop buying from places like Michael's and buy directly from wholesale places that are selling it to you at bulk for wholesale prices? Because if you're selling wholesale, you should be buying wholesale, not retail. That's just going to skyrocket your sale. So we would first analyze your cost sheets and say, what can we lower the costs on? Can we lower the cost on labor? Are there certain things we can pull out of this? Maybe it's priced incorrectly. Maybe we need better yields on the product we're using. Maybe we can lower our cost by getting other vendors in fashion. We would have entire meetings on costing a garment to the point that we calculated every seam to be 30 cents. So when you added up a garment and you thought, what is this going to cost in labor? So as a designer, I'M designing, and I can't design willy nilly. I have to think what's going to hit the price point. So I would look at it and say, all right, should we get rid of this seam? That seems nice, but does. Is it necessary? So the more we could minimize the seams. Right. That sewing. We had to sew a seam that cut down 30 cents. 30 cents is significant to the end price. So that's the first part. If I was coaching you, we'd pull it apart. We'd be like, what can we lower here? All right, let's say we lower it. We bring things down as much as we can, and we're like, okay, okay, well, this is where we're at. Then we look at the price and we say, all right, are we priced correctly? What's the margin? What's the customer? We may need to uplevel the customer. We may need to realize that what we're selling it for. For example, I coached a student who sells candles. She shows up to a farmer's market. She tries to sell $90 candles. At this farmer's market, she's like, ah, I can't sell my 90 candle. She's like, I'm price. Maybe my price is wrong because I can't sell them. There are so many people who buy $90 candles, $200 candles, $500 candles. Right? The price can keep going up, up, up, up, up, up. It doesn't mean there's no market for the $90 candle. It means that she wasn't in the right market. Her ideal customer wasn't there. So once we hone in on the price, we get it to the lowest cost. Then we say, what is the price and does it match the end customer? Are you selling where the end customer is? If you can see how this all connects together, it's not one thing. So if you're trying to sell your products and you're selling at local markets, you're like, this isn't working. Well, maybe your customers aren't there. We have a student who was in the Pacific Northwest, and she was trying to sell her products, and she couldn't sell them. She said, to save her life, no one would buy it. They didn't understand it. They were like, that's crazy. That's a crazy price. Like, Jacqueline, I follow the pricing. I follow the cost sheets. Like, but they won't buy it because of the price. And so I said, all right, well, maybe they're not your customers just because it's consistent, convenient to you to sell in person. At your local farmer's market doesn't mean the product you've created has met it. So as the boss of your business, and if I would coach you on this, I'd say, well, let's really dig into who this customer is, where they are and where they're shopping and what they want to buy. So what we looked at was like, actually, they were in New York, they were in la, they were in San Francisco. They understood the product, they understood the price point. They were already paying a lot more for normal things than in other small towns. So she started to fly and do bigger markets in these cities, right? These like Renegade Craft Fair or Unique la. Right. She was doing these markets where the customers were and she sells out. Not only does she sell out, she sells out of three packs of what she sells. In fact, she ended up telling her husband, we're moving back to California. Okay, so that's how we got someone to California. And you know who you are if you're listening, but that's the concept here. So. So the beauty, the beauty of the product boss, and what I coach through in my programs is the idea of multiple places to sell. I think a lot of us go to the easiest start to start. The easiest are places like Etsy. Etsy was the easiest for my mom to get started on. She didn't have to build a website, she didn't have to drive her own customers. It just made sense, it was easy. And in person markets, those are two very easy places to sell. And I'll add a third, fair. The reason fair has been so popular is it's connected people like you with retailers. I made it easier to sell wholesale versus the traditional way of wholesaling, which is what I did where I was calling stores, I had sales reps, I did wholesale markets, right? So all these places are easy, but easy is flooded, Easy is busy. And easy doesn't always work. So what the premises of what I coach is, yes, if you want to keep selling in these places, great. But what would be possible if you could start selling online, if you could make sales every day, if you were selling to retailers and wholesale buyers were contacting you and they were buying and they were doing reorders and then they're selling to their customers in their shops and those customers are discovering your brand and they're coming back and they're buying from you online. So why I say all of this is as you're looking at your business and what you do with it before you tell yourself that your pricing isn't right. Before you tell yourself that, you just gotta lower it and then you'll sell more. It's not true. We really have to decide, is it the right product market fit? Do you know who? Do you know what they want, why they want it, when they want it, and where they are? The who, what, where, when, why? Okay, you need to know all five of the W's. The five W's. And if you don't know how, maybe you need a coach. Maybe you need more education around it, right? I'm sharing so much in this episode. So. But also, what would it look like to get customized support? What would it look like to dig into your business, to be able to ask questions that were specific? And so that's really what you get to think about. If you don't know this, then how are you going to find out? And so if you don't know how you're going to find out, you get to think, am I going to research it? How long is it going to take? Am I going to watch more YouTube videos and find podcast episodes? Are you just going to collapse timelines and say, all right, I'm ready for support? Because you get to deserve and you get to know how to do this? And I can't tell you all on this podcast because you all have such different businesses selling such different things in so many different places that there's no way I can coach all of you through this episode. So that's what I'm really excited about, for you to really figure out the who, the what, the where, the why, when, the when, when are they buying what you have to sell, right? Who, what, where, when, why. And then you get to figure out the how. So let's talk about how you can really quickly from this episode, increase margins quickly, right? How you can do it quickly. So I told you I have an entire cost sheet inside of my programs, and I'm not gonna be able to give that to you here because people invest in this and they think it's just so incredibly amazing. But I am gonna give you a quick tip. Let's just go off of cost of goods times two, times two. It's not completely accurate because we wanna make sure that your cost of goods are calculated for and depending on what you sell and where you sell it. Like, for example, a Chanel bag is like a 7 times markup, a 10 times markup, a 20 times markup, right? So like, you can expand as high as you want just based on the end customer and how you build the brand. But let's say you take your cost of goods. So let's say your cost of goods is $10. It's $10 for labor. And to make your product times two would put you at $20. So that means your wholesale would be around $20. And then times two again would be 40 bucks. And $40 would be your retail. So that's really quick down and dirty math on trying to think, okay, where am I even at? If you're looking at these numbers and you're quickly doing the math and you're like, that puts me like way higher than what I usually sell for. Then you gotta do the work to figure out how am I pricing, what's my labor, what are my cost of goods? Or you might be thinking, wow, it's 40. But I've been selling them for $80. Awesome. You don't have to lower your price if customers are buying them for 80 bucks. Great. Now I just coached some students on this recently. They have greeting cards and they're selling them the six pack for $32. And they're selling. But we looked at it and we said, all right, but during the holidays, do people want more than six? They might want a dozen. So can we figure out how to raise the price but offer them more and see where we end up? If we offer them 12, right. So it's like a higher price point or if they still want to sell six, can they bring the price down? So it makes sense. I had another student that was an in person market, launched a brand new product, sold it for $42. And really people were looking at it. They loved it because we know it's a bestseller, but the $42 was kind of like it just wasn't moving the product for where they were. They moved it to $38. We're still within their margin. We're still within their price point margin. And at $38, they instantly sold like 15 of them. So that is all possible. And so we play, right? Let's treat business like a sandbox and like, like little kids. And they get a sandbox, like go build a sandcastle. And, and they build a sandcastle. They're not like, is the sandcastle so specific? And so. Right, right. Like they're, they, they're just, they play. And so I want you to play in the sandbox of product based business. I want you to play with your numbers, play with what makes sense to your customers and then just test and try. You can always go up, you can always go down, but what I really want you to do is be Profitable. Okay, so now that you've worked out, are you profitable? Right. Which is the number one thing that's keeping the money out of your bank? Cause you're like, where's the money going? Well, there's no profit in the first place. So let's say we clean that. The next thing that we get to do, another profit lever, right, A money making lever that you get to try in your business is getting customers who are already buying from you to buy more. So what does that mean? That means you get to raise the average order value of your customer. So let's say they on average are spending $25 with you. If you can even get that customer to buy 5 to $10 more worth of product with raising the average order value, you will instantly see your sales increase. Instantly. What does that do? The more you make, the lower your cost of goods should be and the more you're making per customer. So now in order to hit your revenue goals, you actually need less customers. You just need to sell more to them. So in real life, we can think about, how does this play out? Well, imagine going to the grocery store. You're in the aisle checking out, there's magazines, there's gum, there's candy, there's gift cards, there's soda bottles. There's just random stuff. Always while you're waiting in line, while they have your attention. So that gets you to just add something. Like my daughter always adds gum. Those three to five dollars, I wasn't planning on spending that. That store just made three to five dollars more because they added to the cart, they raised the average order value. So this is another thing that you really get to think about. All right, how do I keep raising my average order value? How do I get people who are buying from me already to spend just a little bit more? And that's how you'll start to see your revenue shoot up without even having to worry about getting new customers. Just get the customers that are already buying to buy more when they're checking out. Another way that I support my students in this, and it's kind of a similar concept, it's another profit lever is if you're selling online, one, I could do a whole episode on this. Do not offer free shipping on your entire website unless you're a very advanced business and you have tons of customers. And this is strategically put in. Do not offer free shipping on everything and do not charge people shipping free for everything. What we really want to do, what we want to implement and create a strategy around, is a free shipping Threshold. A free shipping threshold. So what does that mean? That means if your average order value is 35, can you create a free shipping threshold of $50 to get them to raise their average order value and check out and add something more to cart? Right. So we offer them free shipping as an incentive to spend more. Let's say people are always spending 100 bucks with you. Can your free shipping threshold go to $125? Now we've gotten them to spend $25 more with you. Do you see how raising average order value or getting them incentivized to raise the average order value so they don't have to pay for shipping is going to instantly increase your revenue. And if you're priced right, it's going to increase your profit. This is really, really important. And you know this to be true. I know this to be true. Nobody wants to pay for shipping. You don't want to pay for shipping. Your customers don't want to pay for shipping. So if they can be incentivized to buy more from you, they will. Now, of course, there's items and objects that are excluded. Like, if you ever going to buy from like Pottery Barn or furniture company, there's going to be free shipping. But plus excluded items, like, you're not going to get couches shipped to you for free. They're going to have a shipping fee. But that's because the customer is aware of that. So just think about your product. Think about that. Now, if you're one of my students and you're in the sales accelerator or you're in the collective, we do have a free shipping threshold calculator in there. So if you're wondering and you're already a student of mine and you're like, okay, I want to work this out, go find the calculator. So it helps you calculate what the number should be so that you are still profitable and you're able to offer free shipping to raise the average order value. So when you're in this place that you're thinking, I've just given you tips to make more money. But when you're in this place of thinking, okay, I look at my bank account and it just doesn't make sense. This is where I really want you to switch into this concept of what do I need to fix what needs attention. It's just a symptom if your business is generating revenue. Amazing. You're making sales. You're doing an incredible job. Now your job as a steward of your company gets to be that you look at the Numbers. And you say, all right, how do I run this? Right? How do I balance my budget? How do I know my numbers? And so your job is to fix this part of your business. So one of my students that I'm working with in the collective, we, you know, I think I said this, but we create 10 week sprints. So over the next quarter, the 10 weeks, it's not, I'm going to add more, I'm going to do more, I'm going to sell more. We already know that she's selling. We already know it's her season, her big game changer sprint is to look at her numbers. And at the end of the 10 weeks, she's going to hire a bookkeeper. She's going to have that bookkeeper give her reports once a month of her profit and loss statement so she could look at it. She's going to know her numbers, she's going to know what her expenses are, she's going to know what her revenue is and what her profitability is. And just starting to shift Your profitability by 1%, 2%, 5% is going to be significant in the long term. So if you don't pay attention, you don't know. So first you get to know your numbers, you get to look at reports from Shopify, from Etsy, from Stripe, you get to look at your reports, you get to be supported by hiring someone who actually knows what they're doing with numbers. You don't have to do that. It doesn't have to be you. There's lots of options out there to support you when it comes to accounting and you get to be given reports so you just understand the numbers and you could look, it's like a health checkup. It's a health check. Where am I? What have we brought in? What have we spent? What's our profitability? It's as simple as that. Her goal is to get that, like get the support, get the report sent to her. Then the other part of this is we're looking, like we talked about with the price sheets, we're looking at our cost of goods. And so we're working, we're working on trying to find a secondary manufacturer that could bring the cost down and the packaging that the product comes into, we're looking at other sources. So do you think that when you start to create a game changer goal like this and you work it out the way that you're working or you get coached through it, right, to work it out, do you think that in 10 weeks you could accomplish this? I Think you can. So she's lowering prices. She's looking for better manufacturers to lower prices. She's getting reports and knowing her numbers. And at the end of the 10 weeks, she came up with a number of what she wants to pay herself. She figured out, oh, oh. She's also lowering her shipping costs. That was another thing. She's like, I'm going to go look for better shipping, better shipping costs, better packaging. Okay, so the whole gamut over 10 weeks so that she makes more money, she's got more money left over in the bank so that she can do what's the most important thing and pay herself. Right? Pay herself. So it's not always about making more, making more, selling more. If you're not profitable and there's nothing left over, there's still going to be zero plus zero is zero. There's still going to be like nothing left. A hundred plus zero is zero. So what would it be like if you could be profitable and do this? And that's on the other side of a choice, on the other side of figuring out, how do I want to fix this? Maybe you need support and coaching through it. Maybe you're like, I've got this. I'm going to do it on my own. Amazing. And. And I've walked you through the whole thing so that hopefully by the end of this year and rolling into the new year, you are more profitable than you've ever been. Because you know where your money is going. You're the steward of it. You're able to keep it in your bank account. You're able to know exactly what you need, what you're spending on, and it doesn't have to be hard. My life coach, because money was a whole big story for me and a whole big issue. She used to say to me, jacqueline, math, not drama. Math, not drama. And it is something that I share with all of you all the time. Math, not drama. So look at the numbers. There's no drama around it. There's no emotion around it. You're just creating that. We're just looking at the numbers like a 5th grade math problem and saying, how does the math math? And that's as simple as you need to take it. And I hope that this is really supportive to you. I hope that you have so much profit left over. I hope that your bank accounts are full after the sales of the season and you are rolling into the new year feeling confident, knowing how to stay profitable, knowing the money moves that you get to make, and knowing that you know exactly what to do. All right, my friends, if this is helpful, make sure that you're subscribed to the show. Maybe you're catching us on YouTube. And if you're curious how the product boss can support you and you're thinking, you know what? I really do think I want customized coaching. I really do think that I want all of the curriculum and access to, you know, cost sheets and calculators and full level of support so that you can be all in on your business and you could really roll into the new year. Then head to the productboss.com bookacall the productboss.com bookacALL and book a strategy session with me or my team so that we can really roll in and find out what do you want, what the vision of your life is, what's getting in your way, what you wanna create, and see if the collective is the right fit for you to help you make 2026 and the rest of this year the best year yet. All right, my friends, I'll see you in the next one.