Shrinking Profitability and Market Competitiveness
Rhino Fine Foods is a gourmet food retailer. They’re on a mission to make it easy and convenient for customers to get premium-quality, sustainability-sourced food products from different small businesses around the world.
Rhino Fine Foods is all about bringing regional brands to the national stage to help people enjoy food products that are delicious and environmentally friendly. But the food market is really volatile. Rhino Fine Foods was struggling to maintain profitability because of unpredictable raw material prices and shipping costs.
For years, Rhino Fine Foods tried to solve their profitability problems by just getting more sales. But they soon realized that selling on low margins was never going to make them profitable.
Plus, they were losing the battle against other Amazon sellers who were racing to have the lowest prices possible. “A lot of sellers on Amazon aren’t sophisticated; they lose money by having really low prices,” says Paul Crouse, Owner and CEO. “But it’s hard to compete against these sellers.”
Rhino Fine Foods simply couldn’t compete in this race-to-the-bottom pricing war. And they didn’t want to—they wanted to turn a healthy profit.
In the past, the food retailer tried to go it alone by manually changing their prices a couple of times a month. But this repricing strategy was time-consuming and never ended up improving their profit.
Rhino Fine Foods needed a new repricing strategy to help them: 1) increase their prices and 2) stay competitive in the market.
Harnessing Profasee’s Data-Driven Approach
Rhino Fine Foods started using Profasee’s AI repricer to dynamically adjust their selling prices. This was just what the food retailer needed to get out of the red and into the black.
First, Profasee’s algorithm analyzed Rhino Fine Foods’ sales and cost data. It then consolidated a Profit and Loss (P&L) Statement of Account. This analysis revealed that the food retailer’s old pricing strategy was on track to give them a negative profit (at worst) or a break-even profit (at best).
In just one month, Profasee’s repricer helped Rhino Fine Foods meet their profitability goals by increasing both their prices and their market competitiveness.
According to Crouse, it’s Profasee’s data-driven approach that made the difference.
“Profasee brought us from doing things manually to actually understanding where profitability lies. Thanks to their data, we learned which ACINs weren’t profitable that we needed to let go and which ACINs we needed to spend more time, effort, and resources on,” said Crouse.
Unlocking More Profitability in Just a Month
After using Profasee’s dynamic AI repricer for just a month, Rhino Fine Foods saw an incremental annual profit increase of $15,000 (or 5X ROI) on 11 ASINs.
This boost in profitability was a game-changer for the food retailer. Not only did Profasee take Rhino Fine Foods out of the red, but we also gave them a strategy to keep their margin intact despite fluctuating costs. Plus, Rhino Fine Foods was able to reduce both the time and manual effort they used to spend on recalculating costs.
“As an online retailer in the food industry, we face a lot of unexpected challenges, like food inflation, freight costs, and Amazon’s decision-making process,” explained Crouse “Profasee helped us take these uncontrollable variables and put a leash on them. With Profasee’s AI technology, we can dynamically adjust our margins and pricing in real time with a level of accuracy that’s simply impossible for humans to achieve. Thanks to Profasee, we’ve maximized our profit and have generated more money than we ever did before.”