Happy Sunday to all 10,000+ of you!

Wherever you’re reading this from, I hope you had a great weekend and were able to disconnect even just for a few hours.

I spent four hours yesterday at the Little River Flea Market where I watched my wife try on about 47 different shirts and pants while I stood there like a human clothes line. Today was my day so we got to go to the Smorgasburg food market in Miami and get some amazing Turkish food.

This week was amazing for many reasons, but on Friday I recorded a podcast with my boy Ron from Obvi and Tom Shea from Adgile in a glass truck that was driving around in downtown Times Square. Tom hit us both with hard questions for over an hour as we had tens of thousands of people walk on by and listen in. I’ve been on hundreds of podcasts since starting CROSSNET and this was by far the coolest experience ever.

So besides ripping the podcast in NYC, receiving a 5000 unit order from the Today Show and finally receiving our Spring purchase orders from Dillards this week was also amazing for the pure fact that we finally got our payment terms updated with our manufacturer.

The Best Thing to Happen to CROSSNET

I’m no cash flow expert but I wanted to let you guys know about the best thing that’s happened for CROSSNET in years. We got our payment terms switched with our factory from 10% down and 90% at the Long Beach port to 15% down and the remaining 85% thirty days after customs clearance at Long Beach.

This is going to be a massive game changer and here’s why:

We can now start manufacturing close to $1M of inventory for $150,000 down. We then are able to take purchase orders that we already have in hand from the mass retailers and bring them to the bank and finance them for up to 50% of the value.

For example and easy maths sake - If I have a $300,000 order from DICKS, I can finance this with a bank and receive up to $150,000 in advance to go ahead and manufacture this inventory for roughly a 3% penalty.

I then give this money to the supplier to start making inventory and then ship the order to DICKS the second it arrives. Depending on our cash situation after we ship the inventory, we can then take our invoice to DICKS which takes up to 60 days to pay and factor that with the same bank to receive the money instantly for a 1.25% penalty.

For those new to this terminology, factoring is when a bank will buy your invoice off of you and pay you early if you can’t wait for the retailer to pay you. Typically they will pay you 80% of what the purchase order is and hold the remaining 20% until the retailer finally pays for insurance if there are any chargebacks or deductions. So if I factor a $100k, I can get up to $80k immediately for a 1.25% fee.

Although you don’t want to get into a habit of factoring and PO financing all the time, it absolutely helps big time. With all the interest from the banks we may lose 5% of the Purchase Order but atleast we’re fulfilling profitable orders and getting more products out into the world!

Short-term debt that can be paid off with guaranteed invoices > mid-long term debt that you’re just keeping in your bank account as working capital when you truly don’t need it and paying interest on it.

Name of the game this year = stretch each dollar and don’t borrow money unless absolutely needed

How to Save $15,000+ Annually

Last January we made a massive SMS tech switch from Postscript to Recart. Postscript was an incredible partner for years, but our number one company goal this year was to reduce monthly expenses and to save the company money in order to increase profitability. A few months later I can proudly say this was one of the best moves we’ve made in Q1.

Why?

Well, Recart is an amazing SMS platform that has allowed us to save over $15,000 a year on SMS, while getting a better product and a managed service.

How so?

In December of last year, I went to every one of my tech vendors and said “Hey, this is too expensive and we can’t justify the cost anymore.” Recart took a look at our bill and was able to cut the price of each SMS send nearly in half.

Ultimately, I care about two things:

1. Are customers receiving the company’s text messages in a timely fashion?

2. Is SMS getting the priority that it should be and are the text messages being sent out regulary?

Although we’re only three months in I’ve been blown away with Recart’s tech and it seems like every week they are rolling out massive upgrades and listening to their customers. For starters, this alert that goes out every single time before I hit send on a text allows me to understand how much of my marketing budget I am spending. If you don’t have a monthly SMS budget, I suggest you dial this in immediately before you just keep blasting send…this is real money you’re spending and if it’s not converting you’re just shooting yourself in the foot.

CROSSNET Rule = No Spending without a 4x ROAS

I know that every time I use the company’s money and send a message for $100, I better be receiving a bare minimum of a 4 ROAS or $400. Your North Star may be different and it absolutely should be based on your COGS (cost of goods sold) & your overhead.

Crazy enough as this seems like a very basic feature, no other SMS provider currently is upfront about the cost per send when you’re blasting out a campaign. This allows me to hold myself and our marketing team accountable for each and every send.

Next but most important is that Recart provides an entire managed service. Let’s face the facts, I’m busy as hell and so is our team. The majority of our money is made with our retailers & Amazon, and candidly SMS is just a small drop in the bucket (our goal is to get it to be 10% of DTC revenue) that sometimes it goes forgotten or untouched.

NOT ANYMORE!

With Recart we have an entire dedicated team that is working as an extension to our team at CROSSNET & Good Sport. Each month we share with them our marketing calendar (Includes events, retail launches, sales, product drops) and they come back to us with a proposed SMS calendar for the month. They come back with pre-drafted campaigns, ideas to fill in the empty spots on our calendar and also the recommended times & groups to send these texts to.

Before Recart we were lucky if we were coming up with 2 SMS campaigns a month, now we’re shooting for several a week and making more strategic messages catered to people who opened and clicked the last SMS, versus inactive SMS users who may need a steeper discount or motivation.

Recart’s also been an amazing advocate & sponsor of CROSSED Commerce.

Save time, increase profit, and make more money with Recart today.

Get 21 days of Recart for free here.

I’m back in Miami for the next 48 hours and then heading off to San Diego on Tuesday to see some of my best friends get married. I should have some free time on Wednesday so if you’re local and in San Diego come say whats up as I’ll probably be slaving away on my laptop at my go to spot Holy Matcha.

If you’re in need of a new Netflix show you need to go watch The Night Agent! I haven’t been this addicted to a show in a long time and binged through 10 episodes in less than two days.

Finally, do me a favor and forward this newsletter to two friends. They can quickly click this link to sign up. My goal is to always keep CROSSED COMMERCE 100% free and this is the best way to make this possible.

Have a good week and hit me up if you need anything!

All the love in the world,

Chris