Episode 345 | The Profit Answer Man | Jessica Loseke
Your sales numbers this year look close to last year’s. You keep waiting for the tight feeling in your chest to go away once the deposit clears. It does not, and you have started to wonder if you are imagining a problem that is not there. Jess Loseke was not imagining it either. She just did not have the language for it yet. Her company was selling almost the same volume as two years earlier, for a third of the revenue.
The Number That Went Missing
Midwest Barrel Co is an eight figure business. Jess Loseke and her husband Ben built it from a side hobby buying and reselling used barrels into a company that sells to craft breweries, second fill whiskey producers overseas, and home hobbyists. Ben started it almost by accident, flipping used barrels the way other people flip garage sale finds, while he finished a PhD in viticulture. Jess joined full time in January 2019, and from that point the business grew more than 35 percent every single year, moving from Nebraska to Kentucky in 2023 to sit closer to the source of nearly all the world’s bourbon barrel supply.
Then the spirits industry hit a wall. A port strike backed up shipments, tariffs landed on top of it, and years of pandemic overproduction met a generation that simply drinks less. Distilleries in Scotland and Kentucky went quiet. Demand cratered.
Here is what makes Jess’s version of this story different from the usual downturn account. Her sales volume barely moved. The company is still moving close to the same number of barrels it moved two years ago. What changed is the revenue attached to each one. Today that same volume brings in about a third of what it used to.
That gap does not show up on a revenue trend line, because the trend line still looks roughly familiar. It shows up in the gross margin dollars, the actual cash the business keeps after each sale, and that number can quietly collapse while the topline chart looks stable enough to keep believing everything is fine.
Why Waiting Felt Like the Responsible Choice
Of course Jess did not cut fast. When a major Ireland customer canceled a large contract in June 2024, she had a waiting list of buyers ready to absorb the volume, so the math still worked. Her business partner had a bad feeling about it. She did not, not yet, because the numbers had not caught up to the feeling.
That is not a character flaw. It is what happens when a company has grown more than 35 percent a year, every year, for the better part of a decade. The instinct that had been right every single time before was to wait, absorb, and keep moving, because it always worked out. Nobody teaches an owner how to read the first quiet signal of a real downturn when every prior signal in their career turned out to be nothing. The signals looked the same. This time they were not.
It took most of a year for the difference to become undeniable. Jess describes watching customers in Scotland go from buying tens of thousands of barrels in the fall of 2024 to barely buying at all a few months later, and realizing only in hindsight that the annual barrel price negotiations that season were the real signal, not the noise around them. By the time it was obvious, the easy window to act on it had already closed.
Same Volume Is Not the Same Business
You already half know this if you have ever looked at your revenue and felt a flicker of relief that did not match your bank balance. Jess named it plainly. her company is selling nearly the same number of barrels today as it did two years ago, for a third of the revenue.
The evidence is in how her buy and sell prices moved. As the spirits industry consolidated and demand cratered, the price per barrel compressed hard, while unit volume held because Midwest Barrel Co still had the relationships and the supply chain to move product. Revenue and volume are not the same measurement, and a business owner watching only one of them can miss the other collapsing in plain sight.
The cost is not abstract. Gross margin dollars fund payroll, rent, and every hard decision a business needs cash to make. When the margin per unit shrinks and nobody is tracking it separately from total volume, the business can look healthy in a weekly sales meeting while it is actually running out of runway. What changes once you see it: you stop asking are we selling enough, and start asking are we keeping enough of what we sell.
The Lease She Signed Right Before Everything Changed
In April 2025, Midwest Barrel Co moved into a five year warehouse lease, a former Zappos facility that had never stored so much as a shoe. It made sense at the time. The company had outgrown a Kentucky sublease, spent a year and a half hunting for the right facility, and was still positioned to grow.
Then the market kept contracting instead of bouncing back, and the warehouse built for growth became a warehouse built for a business that no longer existed. Jess held onto the lease longer than the numbers justified, because breaking a lease means a hard conversation with a landlord, and hard conversations get postponed. The same pattern showed up in staffing. Rather than making one clear cut early, the team shrank through attrition, one departure at a time, with no plan to replace anyone. Fifteen months ago Jess had an executive assistant, a chief of staff, and a nanny supporting her. Today she has none of the three, and she is candid that she still has not fully rebuilt the systems that supported both the business and her family around those roles.
Here is what makes this pass the ownership test instead of the blame test. the decision was reasonable when she made it. The information that would have made it look reckless did not exist yet. What changed once conditions shifted is that the cost of waiting to renegotiate kept compounding, month over month, while the decision itself stayed exactly as hard as it always was. The fix is not perfect foresight. It is shrinking the gap between when a decision stops making sense and when you act on it.
The Ten Dollar Charge Nobody Was Supposed to Notice
Jess and her team run a real audit process on their freight bills, and it still missed something for who knows how long. One freight provider had been quietly adding a ten dollar residential delivery charge to every shipment. It never tripped the human audit, because ten dollars per shipment looked too small to flag against the company’s threshold.
Once they trained an AI system to audit invoices line by line instead of spot checking them, the pattern surfaced immediately. Across 544 shipments this year alone, that ten dollar charge added up to roughly five thousand dollars nobody had budgeted to lose.
Every business has a version of this. A software license nobody is using since an employee left. A vendor rate that crept up a fraction at a time. A recurring charge just small enough to sit under whatever threshold triggers a real look. The lesson is not that Jess’s team was careless. It is that a human audit process built around is this worth investigating will always miss the charges deliberately sized to stay under that line, and a line by line review catches exactly what a spot check is built to skip.
The System You Trust Can Still Be Wrong Underneath
In December 2022, Midwest Barrel Co implemented a new inventory management system. Jess has an MBA, not an accounting background, and she trusted her team to set it up. Years later, she is still discovering the implications. the system’s FIFO costing method breaks when a barrel is digitally moved between locations, because the move creates what looks like a brand new barrel record instead of pulling the oldest one first.
In a downturn, that quiet costing error matters more than it ever did during hypergrowth, because margin per unit is exactly the number everyone needs to trust right now.
Jess is candid about the actual mistake. not the software choice, but the decision to say I do not know enough about that, you handle it, instead of sitting down and understanding what the setup actually meant for how costs would be tracked. The fix is not learning accounting. It is asking enough questions about any system that touches your numbers to know what it will get wrong before it gets there.
What I Would Tell Her Across the Table
Here is what I see when I sit down with an owner in Jess’s position. the instinct is always to look at the topline first, because that is the number that has been on every dashboard since day one. Nobody built you a dashboard for gross margin dollars per unit, so you do not check it, so it becomes the exact place a real problem hides.
I would tell her this. the freight charge and the FIFO break are the same story told twice. Neither one is a mistake anyone would have caught by glancing at a P&L once a month. They are both what happens when nobody’s job is specifically to distrust the numbers a little. A tax deduction is never worth more than the cash it costs you, and neither is a system nobody double checked. The businesses that survive a downturn are not the ones with the best year. They are the ones who go find out what their numbers are actually saying before the bank account forces the question.
Start Here This Week
Pick one recurring vendor charge, one you have not personally reviewed line by line in the last twelve months. Freight, software licenses, a subscription service, a shipping surcharge. Pull the actual invoices, not the summary total, and check whether every line still matches what you think you are paying for.
You are not looking for fraud. You are looking for the version of Jess’s ten dollar charge. something too small to ever get flagged, that has been quietly compounding because nobody’s specific job was to notice it. Do this once, and you will know within a week whether there is money sitting in your business that a monthly financial review was never going to find on its own.
If your revenue looks close to last year’s and the feeling in your chest still has not caught up, you are not imagining the gap. You just have not found where it is hiding yet.
About Jessica Loseke
If you’d told Jess Loseke a decade ago that she’d scale a barrel company with AI, she would have laughed. Now it’s the thing people ask her to speak about.
Jess is the co-founder and CEO of Midwest Barrel Co., the e-commerce barrel marketplace and international supplier she and her husband Ben built from a storage shed on $50 and a dream. She’s an Enneagram 8 who would rather shake up an old industry than tiptoe around it, and she’s spent the last decade proving a traditional, handshake business can run on modern digital tools and AI. These days she helps other founders modernize the old without losing the human part that made it work. Jess is mom to two boys, Theo and Brooks, and devoted staff to the shop dog Willett. And she’s still proudly slingin’ damn good barrels.
Links
Websites: https://jessloseke.com/, midwestbarrelco.com
LinkedIn: https://www.linkedin.com/in/jessloseke/
Instagram: https://www.instagram.com/thebarrelgirl/
TikTok: https://www.tiktok.com/@thebarrelgirl
Profit Blueprint Calculator I Profit Comes First: https://lp.profitcomesfirst.com/profitblueprintcalc-page
Watch the full episode on YouTube: https://www.youtube.com/@profitanswerman
Sign up to be notified when the next cohort of the Profit First Experience Course is available!
Free Copy of the Profit Blueprint Book: https://lp.profitcomesfirst.com/landing-page-page
Monthly Newsletter signup: https://lp.profitcomesfirst.com/newsletter-signup
Relay Bank (affiliate link): https://relayfi.com/?referralcode=profitcomesfirst
Profit Answer Man Facebook group: https://www.facebook.com/groups/profitanswerman/
My podcast about living a richer more meaningful life: http://richersoul.com/
Music provided by Junan from Junan Podcast
Any financial advice is for educational purposes only and you should consult with an expert for your specific needs.