Health Routine — +34% net contribution in 6 months
Health Routine
Challenge
Health Routine is an Austrian direct-to-consumer supplements and topical care brand with a strong own-website presence and 500,000+ customers across 10+ European markets. After 18 months live on Amazon.de, revenue was growing but net contribution had compressed from 22% to under 12%. Their previous agency reported TACoS and ROAS. Nobody was reporting on margin. Ad spend had increased 60% year-on-year with no corresponding improvement in profitability.
Approach
We started with a full margin teardown: FBA fees, return rates by ASIN, ad cost per unit sold, and aged-inventory exposure. Three structural problems emerged — one product variation was generating 40% of ad spend and negative net contribution, their A+ Content had not been updated since launch and was losing to competitors on key ingredient claims, and their Sponsored Brands campaigns had no negative keyword structure, leaking spend into irrelevant queries. We restructured the ad account from the P&L up, deactivated the loss-making variation, rebuilt A+ Content with Rufus-optimised attribute structure, and implemented weekly contribution reporting.
The situation
Health Routine had built a loyal DTC audience — 500,000+ customers across Europe — but treated Amazon as a secondary channel managed at arm’s length. When they brought us in, Amazon revenue was €35K/month — but after accounting for FBA fees, returns, aged-inventory surcharges, and ad spend, the channel was contributing less to profit than a basic savings account.
What we found
The margin teardown revealed that one product variant — a smaller travel/starter size — was responsible for 41% of total Sponsored Products spend and generating −3.2% net contribution per unit after fees. It existed primarily to rank for discovery terms. The brand was paying to acquire customers who would never be profitable on Amazon.
A+ Content had been built at launch and hadn’t been touched since. Competitor brands had moved to Premium A+ with video, comparison modules, and structured ingredient claims. On key search terms, the client’s listings were losing the visual contest before a customer had read a single word.
What we did
We restructured the entire account around contribution, not revenue:
- Deactivated the travel-size variant from all paid campaigns and reduced its inventory to clearance levels.
- Rebuilt all Sponsored Products campaigns with ASIN-level contribution targets as bid constraints — bids adjusted weekly against net contribution, not ACoS.
- Redesigned A+ Content with Rufus-optimised ingredient attribute structure, clinical claim modules, and a comparison table positioning against the category leader.
- Introduced weekly contribution reporting: gross revenue, FBA fees, returns cost, ad spend, net contribution per ASIN — sent every Monday.
Results were visible by week six. Net contribution hit +34% above baseline by month six, with ad spend unchanged in absolute terms.
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