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Urban Roots - D2C / E-commerce

Cultivating Growth: Urban Roots' D2C E-commerce Expansion

Bookkeeping
Inventory Management
MIS & KPI Tracking
Cultivating Growth: Urban Roots' D2C E-commerce Expansion

Key Results

: Profitable and Scalable Growth

The transformation was dramatic. By building a solid financial foundation, Urban Roots was able to turn chaotic growth into profitable, sustainable scaling.

  • 200% Increase in Online Sales: With a clear understanding of profitability and marketing ROI, the founder was able to invest confidently in the right channels, leading to a tripling of sales through her own website.
  • 40% Reduction in Inventory Holding Costs: Optimized inventory planning and liquidation of old stock freed up significant working capital.
  • 15% Improvement in Gross Margin: Strategic pricing adjustments and a focus on profitable channels led to a direct improvement in the bottom line.
  • 90% Reduction in Time Spent on Financial Admin: Automation of bookkeeping and reconciliation freed the founder to focus on product development, brand building, and customer engagement.

The Urban Roots story shows that for a D2C brand, operational excellence is just as important as a great product. By implementing robust bookkeeping, inventory management, and reporting systems, Nexa Consultancy provided the financial clarity and control the founder needed to take her brand to the next level.

The Client: Urban Roots

Urban Roots is a direct-to-consumer (D2C) brand specializing in organic, artisanal food products. Started by a passionate foodie from her home kitchen, the brand had grown rapidly through word-of-mouth and a popular Instagram presence. They were selling across their own Shopify store and multiple online marketplaces like Amazon. While sales were booming, the financial back-end of the business was in chaos. The founder was drowning in spreadsheets, struggling to track inventory, and had no clear idea of her actual profitability.

The Challenge: The Perils of Rapid, Uncontrolled Growth

Urban Roots was a victim of its own success. Their rapid growth had completely outpaced their operational and financial infrastructure. The founder was a brilliant product creator and marketer, but the financial complexity of running a multi-channel e-commerce business was becoming overwhelming.

Key Challenges:

  • Inventory Chaos: Inventory was tracked manually on a spreadsheet. This led to frequent stockouts of popular items (lost sales) and over-ordering of slow-moving products (tied-up cash).
  • Zero Visibility into Profitability: The founder knew her revenue, but had no idea of her true profit margins. She couldn't accurately calculate the Cost of Goods Sold (COGS) for each product, nor could she determine the profitability of each sales channel after accounting for marketplace fees, shipping, and marketing costs.
  • Reconciliation Nightmare: Manually reconciling payments from multiple gateways (Shopify Payments, Amazon, etc.) with bank statements was taking days each month and was prone to errors.
  • Inability to Plan: Without reliable financial data, she couldn't make strategic decisions about which products to promote, which channels to invest in, or how to price new items.

The Solution: Building a Financial Foundation for a D2C Brand

Urban Roots engaged Nexa Consultancy to bring order to their financial chaos. We focused on implementing the fundamental systems and reporting necessary to run a modern D2C business effectively.

Phase 1: Clean-Up and System Implementation (Months 1-2)

The first step was to move away from spreadsheets and build a single source of truth.

  • Accounting System Setup: We implemented a cloud-based accounting system and integrated it directly with their Shopify store and bank accounts. This automated the process of recording sales and expenses.
  • Historical Bookkeeping Cleanup: Our team undertook the painstaking process of cleaning up six months of historical transactions, accurately categorizing every sale and expense to create a reliable financial baseline.
  • Inventory Management System: We helped them select and implement a dedicated inventory management software that synced with both Shopify and their accounting system. For the first time, they had real-time visibility into stock levels across all locations.

Phase 2: Process Automation and Reporting (Months 3-6)

With the core systems in place, we focused on automation and generating actionable insights.

  • Automated Reconciliation: We set up rules and processes to automate the reconciliation of payments from different channels, reducing a multi-day manual task to a few hours.
  • COGS and Margin Analysis: Using the new inventory and accounting systems, we were able to calculate the precise COGS for each SKU. We then built a report that showed the gross margin for every single product and every sales channel. This was a revelation for the founder, who discovered that some of her best-selling products were barely profitable on certain marketplaces due to high fees.
  • Monthly MIS Reporting: We delivered a concise monthly MIS report that went beyond a simple P&L. It included key D2C metrics like Average Order Value (AOV), Customer Acquisition Cost (CAC), and repeat purchase rate. We also included a channel profitability analysis, which clearly showed which sales channels were driving the most profitable growth.

Phase 3: Strategic Decision-Making (Months 7-12)

With accurate data at her fingertips, the founder could finally make strategic, data-driven decisions.

  • Pricing Strategy Overhaul: Armed with the margin analysis, she adjusted her pricing on several products and strategically removed unprofitable SKUs from high-fee marketplaces, immediately boosting overall profitability.
  • Optimized Marketing Spend: By understanding channel profitability, she was able to reallocate her marketing budget away from low-margin channels and double down on the ones that were driving the most value, significantly improving her return on ad spend (ROAS).
  • Inventory Planning: Using historical sales data from the new systems, we helped her create an inventory forecast. This allowed her to optimize purchase orders, dramatically reducing both stockouts and the amount of cash tied up in slow-moving inventory.

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