Module 2

Diagnose before you fix

8 lessons, 34 stepsOne instruction at a time, each with the result to expect. Tick steps as you go; Helix remembers.

Outcome: you can name the one thing holding your profit back and pick the right kind of fix.

Related SOPs: 03 Constraint diagnosis

In plain words

Stage: Grow (keep more of every sale, then scale). Every lesson below is tagged with its stage; see Attract, Convert, Grow.

What it is: Before you change anything, find the one thing holding profit back.

Why it matters: Fixing the wrong thing wastes weeks. Usually only one problem is the real blocker at a time.

Do this:

Look at your numbers: visits, conversion rate, order value and ad costs.

Find the weakest one compared with a healthy range.

Fix only that one this week, then check again.

Words to know:

Conversion rate: Out of every 100 visits, how many end in an order. 2% means 2 orders per 100 visits.

AOV: Average order value: total sales divided by number of orders.

CPA: Cost per acquisition: how much ad money it took to get one sale.

All words are explained in the glossary.

Lesson 2.1: Three kinds of constraintGrow

In short

A constraint is the one thing limiting your profit right now.

Do this now

Step 1: Open the Dashboard on Month .

Why this matters

A constraint is the one thing limiting your profit right now. Fixing anything else first wastes time and money. Many stores are short of sales even when the owner thinks they have an "ads problem".

Step 1 of 30 of 3 done

Open the Dashboard on Month. Write down orders, net sales, MER and contribution margin (contribution profit divided by net sales).

Expected result

You have four numbers to diagnose from.

Tips

Shortcut: Open your growth dashboard.

MER: Helix shows it as all ad spend divided by all sales, as a percentage. MER 25% means $25 of ads for every $100 of sales. Many tools flip it to sales divided by ad spend, so 25% shows as 4x.
Margin: The share of each sale you keep after product cost. A $100 sale with $40 product cost is a 60% margin.
Profit: Usually means contribution profit: what is left from sales after product cost, shipping, payment fees, discounts, refunds and ads. Net profit also takes off fixed costs.

Good to know

Kind	What it looks like	What fixes it
Throughput (not enough sales)	Your cost ratios are healthy, but you get too few orders.	More visitors, better ads, a better-converting site, new channels.
Efficiency (costs too high)	One or more cost ratios are too high.	Better prices, cheaper product cost, cheaper shipping, bigger orders, better ads.
Capacity (cannot keep up)	Products sell out, cash runs short, orders ship slowly.	Stock planning, a cash forecast, better supplier terms, faster fulfilment.

Lesson 2.2: The five situationsGrow

In short

The same tactic can help one store and hurt another.

Do this now

Step 1: Check your net profit % for the last 30 days on the Dashboard.

Why this matters

The same tactic can help one store and hurt another. Your scorecard puts you in one of five situations, and each has a different next move. Picking the right one stops you scaling a leaky store or cutting a healthy one.

Step 1 of 30 of 3 done

Check your net profit % for the last 30 days on the Dashboard. If it is 10% or more, your profit is healthy. Grow, and win every customer you can serve at a profit.

Expected result

You know whether you are in the healthy group.

Tips

Shortcut: Open your growth dashboard.

Profit: Usually means contribution profit: what is left from sales after product cost, shipping, payment fees, discounts, refunds and ads. Net profit also takes off fixed costs.

Lesson 2.3: Fixing variable costsGrow

In short

Variable costs come with every order, so a small fix pays back on every sale for good.

Do this now

Step 1: Email your main supplier.

Why this matters

Variable costs come with every order, so a small fix pays back on every sale for good. Most stores can take several points off without customers noticing. Work down the list and stop when VCR is back under about 45%.

Step 1 of 60 of 6 done

Email your main supplier. Ask for the price at the next order size up, and a price for simpler packaging.

Expected result

You have a written price. Compare it with the cash a bigger order would tie up (MOQ means minimum order quantity).

Tips

MOQ: Minimum order quantity: the smallest order a supplier will accept.

Lesson 2.4: Fixing fixed costsGrow

In short

Fixed costs stay the same however many orders you get.

Do this now

Step 1: Download your bank and card statements for the last 3 months.

Why this matters

Fixed costs stay the same however many orders you get. Cutting waste helps, but the bigger fix is often growing sales so fixed costs become a smaller share. Do both deliberately.

Step 1 of 40 of 4 done

Download your bank and card statements for the last 3 months. List every subscription and what it costs each month.

Expected result

You have one list of every recurring charge.

Lesson 2.5: Fixing marketing costs (high MER)Grow

In short

High MER means ads eat too much of your sales.

Do this now

Step 1: Look for a short-term shock in the last 7 days.

Why this matters

High MER means ads eat too much of your sales. Changing the ads is often the wrong fix. The problem can be the site, the offer or a short-term shock. Follow these steps in order before you touch a campaign.

Step 1 of 60 of 6 done

Look for a short-term shock in the last 7 days. For example: your best seller is out of stock, or it is the slow week after a sale. Or a rival is having a sale. It could also be the season, tracking that stopped counting sales, or your site being down.

Expected result

You have either found a shock (fix it or wait it out) or ruled one out.

Lesson 2.6: When several KPIs are high at onceGrow

In short

A KPI (key performance indicator) is one of the key numbers you track.

Do this now

Step 1: For each bad number, imagine it went back to normal.

Why this matters

A KPI (key performance indicator) is one of the key numbers you track. When several are bad at once, trying to fix them all spreads you too thin. Fix the one worth the most dollars first.

Step 1 of 20 of 2 done

For each bad number, imagine it went back to normal. Guess how much more profit you would make a month. For example: MER from 38% to 30% on $40,000 sales = $3,200.

Expected result

You have a dollar figure next to each bad number.

Tips

Profit: Usually means contribution profit: what is left from sales after product cost, shipping, payment fees, discounts, refunds and ads. Net profit also takes off fixed costs.
MER: Helix shows it as all ad spend divided by all sales, as a percentage. MER 25% means $25 of ads for every $100 of sales. Many tools flip it to sales divided by ad spend, so 25% shows as 4x.

Lesson 2.7: The scale testGrow

In short

Scaling means spending more on ads to get more sales.

Do this now

Step 1: Write down your spend steps, for example $300 a day, then $600, then $900.

Why this matters

Scaling means spending more on ads to get more sales. Done as a planned test with a worst case decided up front, it is safe. Done as a leap, it is how stores burn cash.

Step 1 of 50 of 5 done

Write down your spend steps, for example $300 a day, then $600, then $900.

Expected result

You have three planned spend levels.

Example

A store makes $50,000 a month. MER is 20%, VCR 40%, FCR 30%, and profit 10%.

The store doubles sales to $100,000. Fixed costs stay the same in dollars, so FCR drops to 15%.
While growing, MER rises to 30%. That is normal.
New profit = 100 - 30 (MER) - 40 (VCR) - 15 (FCR) = 15%.

What it shows: the store's problem was heavy fixed costs. Growth was the fix, even though ads got less efficient.

Lesson 2.8: Why each extra ad dollar buys a bit lessGrow

In short

Your first $100 of ads reaches the people most likely to buy.

Do this now

Step 1: Open your scorecard. Write down your weekly ad spend and new orders for the last 8 weeks.

Why this matters

Your first $100 of ads reaches the people most likely to buy. Each extra $100 reaches people who are a little less keen. So cost per order creeps up as you spend more. Know where that line is, and you can grow without losing money.

Step 1 of 50 of 5 done

Open your scorecard. Write down your weekly ad spend and new orders for the last 8 weeks.

Expected result

A small table with 8 rows of spend and orders.

Self-check

Which kind of constraint do many stores have, even when they blame the ads?
Name three fixes for high shipping cost.
RPV is $3.20 and MER is high. Is it the site or the ads?
Outbound CTR is 0.4%. What do you change?
What is the most you can lose in a scale test?

Answers

Not enough sales (throughput).
Ask for better carrier rates, use boxes that fit, raise the free shipping amount. Also: charge for express, or use a warehouse closer to your customers.
The ads. An RPV of $3.20 is healthy.
The ad itself: the picture or video, the message, or the offer.
The extra ad spend.

Words to know in this module

Profit: Usually means contribution profit: what is left from sales after product cost, shipping, payment fees, discounts, refunds and ads. Net profit also takes off fixed costs.
Conversion rate: Out of every 100 visits, how many end in an order. 2% means 2 orders per 100 visits.
AOV: Average order value: total sales divided by number of orders.
CPA: Cost per acquisition: how much ad money it took to get one sale.
MER: Helix shows it as all ad spend divided by all sales, as a percentage. MER 25% means $25 of ads for every $100 of sales. Many tools flip it to sales divided by ad spend, so 25% shows as 4x.
Margin: The share of each sale you keep after product cost. A $100 sale with $40 product cost is a 60% margin.
Product cost: What one item costs you to make or buy, including freight to your warehouse.
Cash forecast: A week-by-week list of money coming in and going out, so you can see tight weeks early.
Fixed costs: Bills that stay the same each month, like rent, software, staff and your own wage.
Variable costs: Costs that grow with every order: product cost, shipping and payment fees.
Bundle: Two or more products sold together, often with a small saving.
Campaign: The top level in an ad account. It holds the goal, like getting sales.
CTR: Click-through rate: out of every 100 people who saw your ad, how many clicked.
Frequency: How many times, on average, the same person saw your ad.

All words to know