The ads were generating sales. The company was losing money.

Hitchsource was a $5M direct-to-consumer retailer selling towing and hitch gear online. The owner built it in the era when search rankings drove ecommerce, and he won that battle: the site ranked, and the orders came. Then his attention turned to launching a microbrewery with other investors, and Hitchsource was left to run largely on its own.

That stopped working. As search became more competitive and paid placement became increasingly important, Hitchsource hired an outside agency to manage Google AdWords. The agency reported strong sales and attractive returns on ad spend from its campaigns. Meanwhile, the company lost approximately $200,000 in the three months before I arrived. As the owner put it:

I feel like I just drove a Ferrari off a cliff.

I sat down with the agency and asked to see the math behind its return figures. The agency measured sales against advertising spend and product cost, but its calculation did not fully account for shipping, credit card fees, and other transaction costs.

In this category, that gap was decisive. Hitches are competitive, carry thin margins, and are heavy and expensive to ship. Hitchsource offered free shipping, but shipping was never free to the company. Once freight, credit card fees, and the other costs of a sale were counted, many of the orders reported as wins were losing money. Traffic was not the problem. What was missing was a way to see what each sale actually earned.

Measure the true profit of every sale, every day, and let that drive the decisions.

That meant four moves. Build a daily P&L that captured every cost of every sale. Bring paid search in-house. Follow the margin, even away from the products the company was built on. And make phone calls a primary conversion objective.

I built the core instrument first, then the reports that grew out of it.

• Product and brand reports showing sales and profit by brand and package, used to decide what to stock, how much, and when.
• Call tracking across hundreds of phone numbers that tied inbound calls back to the ads and pages that drove them, because many RV package sales closed on the phone rather than in the cart.
• Phone-log analysis that captured each inbound line and caller number, which made follow-up systematic and gave the business a real phone conversion rate.

These systems took weeks to develop using the technology available at the time.

With the true economics visible, the team could make decisions that had been guesses before.

• Advertising. I brought paid search in-house. To the agency, Hitchsource was one client among many, managed from the data alone, with little understanding of what was being sold. Our in-house marketer started on the phones and learned the industry first. Once he understood the products and the customers, he could build campaigns that matched what customers were actually buying, and spend answered to the daily P&L instead of reported sales. That understanding was the key difference from the agency, and the investment paid for itself many times over.
• The RV-towing pivot. The sale-level view was blunt: once freight was counted, many hitch sales lost money or contributed very little margin, while RV towing sales earned well. We shifted the business away from high-volume hitch sales toward RV towing, and built packages that bundled everything a customer needed to tow a car behind a motorhome, so they could make one call and be done.
• Purchasing. The brand reports drove buying decisions: what to stock, and when to buy in bulk to earn better supplier terms. I also renegotiated the shipping and warehousing contracts.
• Braking systems. Braking systems were required in many towing configurations and jurisdictions. They also had substantially better economics than many of the heavier towing products. With better call information, the sales team raised them on every relevant call, and adding a braking system could roughly double the value of an order while contributing stronger margins.

Once the business could see the true profit of every sale, the decisions got clearer and the numbers moved.

A note on the name: Hitchsource.com no longer operates. After I left, the company was acquired by a competitor, which retired the Hitchsource brand and folded the business into its own. I was not involved in the sale, though a business that can show the true profit of every order, every day, is a far easier one for a buyer to evaluate and take on.