What’s up friends?!

I hope you had the most epic Memorial Day weekend and some how settling back into work.

If you follow me on Instagram (@chrismeade) then you know I was out in Vegas all week celebrating a belated Mother’s Day with momma Meade. I flew her out for her first weekend in Vegas and we went to the Sphere to see Dead & Company. She was a huge hippy back in the day so loves jam bands and then on our last night I surprised her with floor seats to see Maroon 5, her second favorite band!

In between teaching her how to play craps & roulette, where we may or may not have won some of the ticket money back, it was just an epic weekend. I lost my dad when I was 17, so I try these days to spend as much time with her as much as possible. It’s a huge priority and means more than ever as we get older and older.

This week’s newsletter is going to be shorter than normal but super tactical. I hope it helps big time.

Over the past two weeks, I’ve got to spend some good 1vs1 time with two of my favorite media buyers & agency operators that I know, Shray Joshi & Joel Padron. I gave them a behind-the-scenes look at our financials and whats going on and I walked away with some good tips that I never thought about.

How Do I Know How Much to Scale?

Thankfully as the weather warms up, each day we are making profit and no longer running a lemonade stand. As I look at daily revenue, spend, and left over margin I constantly ask myself and our team “are we happy?”

Happy with what is the interesting question you need to ask yourself. The top line revenue, the profit, the units sold, the new customers acquired.

Is $20,000 in revenue AND $3,000 in profit better than $15,000 in revenue and $3500 in profit? What about if we double our ad spend and do $40,000 in revenue with the same number of profit?

It’s a constant guessing game. What happens when I put more money into the ads? Am I scaling the ads the right way? Am I blowing money? If you’ve felt this way then you’re not alone and you’re going to like this.

Chicken or the Egg?

For us we have daily revenue, profit and spend targets. Ideally we would be looking and adjusting our numbers every 7 days, but since we are a seasonal business every day really counts. For us we operate on a 48-72 hour window. If we see that sales, profit and spend stay consistent for 2-3 days then we will scale 20-30%.

Real-life example:

• $13,000 Revenue

• $3,750 Ad Spend

• $2,500 Cost of Goods

• $1,800 Profit

In this situation, we did these numbers for essentially three consecutive days. So we will increase ad spend to $4500 with the assumption that profit will grow to $2100+. We think this is the best direction for the business given our inventory positions and wanting to bring as much cash into the business to line our bank account during the summer months. If we did not have inventory, then I’d want to slow down ad spend to yield more profit per unit.

Joel took it one step further tho and I LOVED THIS. This is the nugget for you readers.

Normally I would just tell the media buyer crank it up and he would spread the $750 ad increase across all of the ads. This is a SHIT idea and the easiest way to corrode profits. Since we are a limited SKU company (really only sell 2 products at scale - CROSSNET & CROSSNET H2O), he suggests that we build out actual micro P&L’s for each SKU. From there we will be able to actually see what products & ads are actually crushing it.

From a zoomed out perspective the Amazon business is up 100% YOY… but is it really just one SKU that’s dominating? One ad set? So here’s what we’ll be doing instead going into June.

Tracking the following daily in two separate documents (One for CROSSNET & one for CROSSNET H2O)

• Sales dollars for each SKU

• Units sold by SKU

• COGS for each SKU

• Marketing Spend on Facebook, Google, and Amazon by SKU

• Estimated UPS invoices by SKU

From there we will actually see what product is bringing in contribution margin. Of the $1800 profit I mentioned above, I can confidently say these two products are not bringing in an equal $900 split.

My new daily goal is to figure out what product is actually crushing it financially and scale up the ad sets from there by creating micro-P&Ls.

I’m thinking about creating a 30 minute free session on this next week. Would you be interested in joining? Shoot me an email back!

Making the Most $$$ Per Visitor

If you couldn’t tell, one of my biggest goals this summer is to squeeze out as much profit per visitor as possible. If I’m paying 25 cents or sometimes a dollar per visitor, I better be doing everything and anything in my power to collect their email address & phone number so I can convert them later on in case they don’t buy on the first visit.

With all the software companies actually costing you more money than they are worth, I found one that actually brings you in money and is super ROI positive. It’s called Revenue Roll and it’s live on my site now.

In simplest terms, Revenue Roll fattens your list, filling it with your highest-intent buyers by putting you back in touch with them.

The founder Mike Diesu, just moved down to Miami and I’ve been spending more and more time with him as helped us with what is the easiest set up of all time. His team can help you get more at-bats with your highest intent customers. It’s totally compliant, doesn’t burn brand or delivery server reputation, and integrates easily into existing workflows.

They are kicking off the summer with a 3-month money-back ROI guarantee for all new customers that come through from my newsletter. Take a look for yourself here or send him a note yourself at [email protected]. Honestly, if you’re scratching your head at how to make more money this summer, start with your existing customers who are visiting your site. I’d expect them to add 3-5x more emails and imagine the money coming in if email is 10-20% of your current revenue.

Onward & Upward

I’m getting more and more messages about joining the Founders Club and it makes me so happy. Last night we hosted our biggest Los Angeles dinner we’ve ever thrown and the quality of brands that showed up was out of this world. I made so many new friends and I can’t wait to the day when we have 500+ members.

In short - we’re here to help you level up. Pick 2-3 things you really want to work on this year (eg. Get into retail, expand internationally, etc.) and we’ll match you with 6-8 other people from the group who are doing what you want to do, but way better. Learn from them, level up, and make your next million.

You can apply here now. We are accepting only 15 new members for the entire month of June. Good luck!

Have a great rest of the week,

Chris