We’re still paying for mistakes we made in 2022. 

Read that back. Mistakes we made two years ago are still impacting our business and it sucks. Sure we just had our best Amazon day of the year yesterday but we also had to let go of our head of operations on the same day. Running a company isn’t easy and if you’ve gotten this far congrats for just being in the arena. 

We have to adapt. We have to do what is necessary to survive. You have to have tough conversations. But ultimately you have to do what’s right for the business and numbers don’t lie. 

I appreciate all the incredible responses on last week’s newsletter. I hope the MER spreadsheet is helpful. As nerdy as it sounds, I’m so excited to jump out of bed and see how the business did yesterday. It’s the first thing I do every day when I get to my keyboard. 

So we’re five months into the year. Here’s where my head’s at…

We Launched into Costco!

We’re nationwide in Canada baby and it feels so damn good. We worked on this for two years, countless pitches, phone calls, millions of documents. To see our customers texting us photos of them checking out, standing outside the store, and seeing the pallets starting to get emptier and emptier every day is an awesome feeling.

This is a test. If we blow this out of the water we can be an annual feature in their stores and also expand to America. 

We have to do everything in our power to sell through the inventory. There’s no silver bullet, especially since there isn’t a ton of margin to play with on this order. Here are a few things we are doing: 

1. Posting constantly about it on all social media accounts

2. Utilizing my personal socials & now newsletter to promote it

3. Plain text, heartfelt messages from the founders 

4. Instacart ads. My boy Shray from Good Peeps swares by this so we’re getting set up on there

5. Weekly SMS reminders

6. Giveaways where we motivate people to go shop and reimburse a few lucky winners

7. Costco influencers - Just bought a massive promo video for $500

8. Update our welcome & abandon cart flows in Canada to mention they can just go to Costco and save $

9. Hammer the fact that this is the cheapest they will ever get CROSSNET $60 compared to $99.99 normally and this is ONLY available this summer

10. Praying to the gods that we have a long and beautiful summer 

Adapting the Business 🚀

So things are seemingly going well, why the personal change on the operations manager? Take a look around at your team. What positions would you consider seasonal or part time? We know that our retail orders slow down at the middle of July and come to a screeching halt in the Fall. No matter how good that person is (she’s DAMN GOOD), having them on salary makes little to no sense. Shitty comparison but it’d be like paying for a graphic designer for 5 months and having no work for them. You just wouldn’t do that. 

So we are working our best to build an A+ list of Avengers who we can flex on and off without having to worry about the overhead, filling up 40 hours of work and the seasonality. So compared to the 27 employees we had in 2022 this is what the current squad looks like:

• 3 Founders

• Freelance Graphic Designer - [email protected] 

• Freelance Website/Landing Page Designer

• Part time financial controller (20 hours a week)

• Freelance Media Buyer (Meta & Google)

• Freelance Email Agency (7-10 Campaigns a month)

• Amazon Agency called Arvanza - Best in the game - [email protected] 

• Part time operations manager to ship B2B orders  

Outside of the founder’s pay, the carrying cost from an overhead perspective has gone from a $1M payroll in 2022 to sub $15K a month; quite the change. Revenue has dropped, but profit is up. The only thing we care about as a bootstrapped business. 

Quick Tips 💡

Are you sitting on dead stock? Are you paying storage for that inventory. Sell it to a liquidator. We recently found out that we had one SKU that was sitting for nearly two years. It costs us thousands in storage fees over the lifetime of this product and even if we were to sell it at full price all the margin was already gone. Don’t chase good money with bad. You have to turn your inventory. Fast. 

Forecast inventory at least twice a month with your team. If you’re the one doing it get a second set of eyes and always be in sync with your media buyers. The easiest way to blow profit is by wasting your money on inventory and then its double jeopardy for paying for storage, freight, and customs on inventory that you didn’t need in the first place! This will be the first summer in CROSSNET history where we bring our inventory balance down to nearly nothing for the Fall. We don’t need $1M of inventory sitting in a warehouse collecting dust. It does nothing but kill us. 

Negotiate LTL & container prices every single time. Whenever we need to ship an order to Amazon, send product to a retail customer, or import freight we will send out a request for proposal to 4-5 different brokers. Best price wins, every single time. They know they are competing so we know we’ll get the best price. Make sure you are asking for the most affordable rate, best service, and payment terms that is key. Every business is at a different season but for me I need best price + longest payment terms. 

Negotiate payment terms with your supplier. Every order you should try to get closer and closer to having to pay for the goods after you sell them. We started having to pay everything down before they made a single thing. We have transitioned to paying nearly all of the order after we receive it and sell to the customers. Work towards getting Net-60 payment terms with your manufacturer. This gives you 60 days to sell your stuff and make money before the money is even due to the source. Best situation you can ever be in. You’re pre-selling inventory while having it. Don’t be scared to ask your supplier. Get comfortable with the uncomfortable. Things to consider, would you be open to paying $1 extra on your inventory if they stretched your payment terms by 15-30 days? Start thinking like that and find a compromise that helps your business, especially if you’re seasonal like us. 

Set a monthly marketing to revenue goal and stick to it. Our target is 20% monthly aka a 5 ROAS. You need to calculate at what velocity can I spend marketing dollars to bring in the proper revenue that is required to pay my overhead and yield a profit. Want help setting this number? I’m taking a few consulting clients at the end of this month. 

Join Walmart Marketplace

As we expand into the biggest retailers in the world we are continuing to send traffic to marketplaces for the ease of checkout and trust. Nobody wants to buy on our site. I know it. It’s slow. Clunky. Annoying. Nobody has the time for it. 

Walmart on the other hand. That’s a different story. 

When your brand creates adaptive apparel for people with disabilities, it’s important your products are available in more places, to remain more accessible as a company — just like No Limbits.

But being a seller in Walmart Marketplace’s eCommerce ecosystem doesn’t only help boost your online presence. It also gives you access to:

• Millions of our online customers

• Innovative programs that help you scale

• Walmart’s omnichannel advantage

And right now, new sellers who join can save up to 50% on referral and fulfillment fees.

So, open the door to opportunity like No Limbits and get started on Walmart.com today.

Follow the link for the full terms and conditions.

I’m just getting settled into an incredible AirBNB in Sedona, Arizona for my little brother’s bachelor party. We’re here with 8 of our best friends for an epic weekend that will 100% not involve e-commerce and driving ATV’s through the desert and cliff jumping.

This is our second time out here so if you have any good suggestions on restaurants, hiking, things to do let your boy know!

I hope you enjoyed this week’s edition of CROSSED Commerce. Do me a favor and send it to one friend that you think would enjoy this week’s tips.

Talk to you guys soon!

All the love in the world,

Chris