Imagine Making $702,000 in One Day

Hi friends 👋

Long time no talk! I’m writing today on a flight back to New York. I lost my grandfather the other day, so I'm heading north to be with my family and am taking the next 48 hours off. Life happens, getting old sucks. If you take anything out of today’s send please send a text or make a call to somebody you love. Even if you haven’t talked to them in years, I promise you won't regret it. You truly never know when it’s going to be the last time. 

On a more positive note, let's talk about eCommerce baby! That’s why you’re here and reading each and every week. If this email was forwarded to you take a second to subscribe here. If you’re one of the thousands of weekly readers I appreciate you from the bottom of my heart. 

I had the privilege last week to interview the CEO of Dude Wipes, Sean Riley. He came onto the podcast on a Thursday afternoon sipping a cold beer after just crushing a $702,000 day on Prime Day. Imagine that….$700,000 in one day. The one key? He said his team makes just a few very smartly calculated at-bats all year and they swing hard as F$CK when they come up. 

Honestly, his mindset about slowing things down and preparing for those one or two massive moments rather than trying to do a million things at once really put things in perspective. I’m still learning, but when something goes wrong or revenue numbers are down, we typically scramble, get off course and try to reinvent the wheel every week. Sound familiar? If we see a drop in performance we overreact and make crazy new plans that change 14 days from now. When you’ve been running a sophisticated org for 10+ years, you’ve seen the ups & downs and are able to just keep your eye on the ball. 

It's not even a shameless plug, this was the best podcast episode I've ever recorded. I know you'll love it.

So Let's Get Into It! 

Sean opened my eyes to a lot of things we are currently struggling with. If you’re doing any of the below I promise you, you’re not alone. 

Problem #1: Releasing Too Many Products & Moving on Too Quickly

We’ve been primarily a one SKU company for the past four years and in 2021 we made it our mission to innovate our product pipeline and bring over 10 new SKUs to market. That’s A LOT of work, preparation, and cash for a company that historically only had one or two products. So what did we do? We released a bunch of new products based on MOQs from our factory or what could fit in a 20’ container and now we have a ton of product sitting in our warehouse. We didn’t pre-sell inventory because we didn’t want to take customers' cash in advance and make them wait, but we did pre-sell some units to retailers and advised them of a 90-120 day lead time. 

The Solution:

Step 1) Review our trailing 30-60 day sale history and see how each SKU is performing & at what traffic level 

Step 2) Build out a traffic plan for your site & Amazon and then build out a sales forecast for the remainder of 2022

Step 3) How many units will we sell a day until we are out of inventory & do we want to bring this product in again? 

Step 4) Weekly meetings with your media buying team to see are we ahead or behind on forecast and most importantly with WHAT MARGINS! It’s amazing to be ahead of pace by 25%, but if it means you overspent by 70% to get to that number then you’re just shooting yourself in the foot and making the situation worse. 

How many sales would you get a day if you stopped running ads completely? 

Well I’m about to find out!

As of yesterday, I’m going through something which will be a fun memory. We are 80% to our July goal with 11 days left in the month. Sounds pretty good right?! But we are 100% to our spend level. Our controller is shutting off our cards and we are now going to get to 100% of our revenue target only through organic traffic in order to maintain profitability. 

2022 is the year of profitability and making more with less. In my eyes, for 7-8 figure brands unless you are building some crazy company that you “somebody hope to make profitable” while burning Vc cash, there is no sense in inflating your top line revenue to just continue to shrink profits and get farther away from your goals.

Problem #2: Setting unrealistic revenue goals & planning spending based on these goals.

We sell hard goods for a living. We purchase inventory based on forecasts and if we over forecast or be too optimistic we will put ourselves in terrible cash constraints. On the other hand you under forecast you have no product to sell and leave money on the table.

The Solution: Ask Yourself These Questions

1. How often are you reviewing sell-through and forecasts? 

2. Who is involved in those meetings? 

3. Are you spending your money on things you need right now in the present day? 

4. Who in the meeting is going to give the team a reality check if needed? 

The name of the game is stretching your dollars as long as possible. It’s as simple as that. Don’t overstock. Don’t overspend. Create profit in every moment, while maintaining enough cash in to keep the lights. 

Parker to the Rescue - No Not Spiderman! 

Speaking of cash flow. Have you heard of Parker? I saw this card going viral all over my Twitter and finally decided to check it out. Essentially it’s the best credit card I’ve ever seen for Facebook & performance marketing ad spend. Parker allows you to be Net-60 on truly every transaction. From the moment you make one purchase, you have 60 days to pay that exact line item.

Now imagine pairing your Net-60 with Facebook's Net-30 terms, you’re now not paying your credit card bill from June until September. Talk about keeping your cash alive.

I thought I was already on good net terms with my credit card companies but my guy Ron from Obvi proved me dead wrong. If you're using an Amex (guilty) and make a transaction at the beginning of your billing cycle you will get a full 30 days to pay it off, maybe 45 if you have super favorable terms. But what happens when you drop $20,000 on ads with just three days left in the billing cycle? You’re shit out of luck. That bill is due in three days, not 30. 

Parker stretches everything out from the moment you click pay for 60 days.

Conversion is King 

• If my site converts at 1% I make $150 every time I get 100 customers

• If my site converts at 3% I make $450 every time I get 100 customers

Why do we spend more time pumping dollars into Facebook, than spending time optimizing our site?

A few weeks back I sent out a report that the team over at Oddit did to probably 100+ people. Essentially they tore apart my website, provided some incredibly helpful best practices, and left me honestly shocked that I had so many blatantly obvious mistakes. 

Check out some of these changes. It’s honestly night and day. 

It's your job to make the customer feel as if they are walking on the red carpet.  Educate them on what they are looking at, why they need your product, and why they should buy now. If you refer back to my newsletter from the other week, make sure you bake in some of the eight essential biological desires. 

I still have the Oddit report on my desktop and am happy to send it over for free to the first 5 people who email me back. I know you'll find it incredibly useful. 

My Quick Tests to Improve Conversion:

1. This week we are testing sending people DIRECTLY to check out when they hit Add to Cart, rather than going to the cart page. This will eliminate the hardest step and will get them in the purchasing mindset faster.

2. Simplifying the navigation on mobile. We had so much shit in it. Less is more

3. Review your site on mobile & desktop and click every button. I’m embarrassed to say I had several broken links and “Best Seller” links going to “Accessories” 

4. A/B test your headlines with Google Optimize or Theme Scientist

The Most Helpful Guide of All Time

Last year I fucked up bad. If you worked at CROSSNET you knew. We ran our DTC marketing at a .8 ROAS for a long, long time. I was a first time operator running a massive DTC, Amazon, and retail business. I figured as long as we got close to $1 back for every $1 we spent on crossnetgame.com, we’d make up the difference of the COGS & operating expenses with retail sales & Amazon. 

In theory, this works for some brands and can even work for a few months of the year at CROSSNET. But the entire year? Possibly a death sentence. 

A few weeks ago, I told you about my friend Aaron Orendorff and Common Thread Collective’s Ecommerce Enterprise Scaling Guide and it’s crazy but he actually proved me wrong. 

They created a 100-page guide that is either 1,000% dangerous bullshit. Or the most brilliant, analytical, and tactical examination of what it takes to break through $50M in online revenue ever created. 

The Guide Focuses On: 

Principle: Whoever fronts the highest CAC possible while remaining profitable through a three-tiered approach to revenue wins.

Law: Profit comes from predictable 60-Day LTV — measured incrementally — against CAC + the all-in cost of delivery (COD).

Tool: Something they call the “Growth Map” — a one-year forecast anchored in a Hierarchy of Metrics.

They are also using a tool called Statlas that will put your company through a Growth Map that shows you exactly how low you can possibly go and still scale profitability. It’s honestly amazing. 

Ive been reading the guide nonstop between meetings all week and if you enjoy my writing, you’re going to love Aaron’s. He is the #1 person in all of ecommerce that I stop and read everything he writes. Whether its an incredible blog or a Twitter thread where he tries to mock my sarcasm and mid-twenties slang, the dude simply gets it and puts out incredibly helpful content.

Common Thread is offering the Ecommerce Enterprise Scaling Guide + 30-days free on Statlas for preorder at $995. Once the real thing goes live, it’ll jump to like $2k.

(Or, snag the free sample and then buy it before the price goes up.)

I hope you guys enjoyed! Hit me up for that Oddit report. I'll see you next week :)