Hello friends!

I hope you’re having a nice, stress free week compared to the shit storm that I’ve been dealing with this week at CROSSNET. As the team scales back down to a healthy and profitable size, it feels like I’ve worked 200 hours in the last week. Good to be in the fire but damn I need the weekend.

Last night I arrived in Chicago to host another sold out Founder’s Club dinner. This dinner was originally planned for 50 people and there were 72 on the guest list so let’s say things got interesting quick!

It’s my first time in Chicago in like 10 years so if you have any suggestions on places to go (besides the Bean), coffee spots to work at, and must-go to restaurants I’ll be here until Sunday.

Outside of the dinner, I’m attending a three-day trade show for True Value with my brother Greg. For those of you that don’t know, True Value is a hardwoods distributor who sells directly to Ace Hardware and a bunch of other hardware accounts. We’ve been negotiating this deal now for almost a year so I’m excited to start selling into these stores. The coolest thing about this trade show is its the first time were selling at a show where we are already and approved vendor and we get to meet hundreds of buyers from stores who can simply open up their catalogue and purchase our games. Essentially it’s on me and Greg to impress as many buyers as possible this weekend and get as many sales as possible.

This week has given me a brand new perspective about the importance of a good operations team and getting orders out on time. March is typically the busiest b2b month for CROSSNET as we’re stocking up all of our Spring customers and most of them have a 3/15 cut off date. For those of you that don’t know, a 3/15 cut off date means that the orders need to be routed & shipped before 3/15…. If not, you have to crawl back to the buyer, beg for forgiveness, provide a good excuse on why it was late and ask for an extension. The worst thing is that they could then cancel the order or reduce it which means lost income.

I have to send an email today to a buyer that we are going to be 152 CROSSNET H2O’s short for a few of their orders and we won’t be able to ship it for two weeks. They won’t be the happiest and may cut the order in half or 0, resulting in potentially $11,400 of missed revenue.

Retail is a beast. It’s challenging. Demanding. Scary. But the nice thing about it is it’s somewhat predictable and has allowed us to build an operating plan that is profitable and scalable. We know the B2B business is profitable, so we have to do everything in our power to make the DTC & Amazon business equally as profitable, while making sure to spend enough on ads (without a loss) to create demand and sell thru at retail. We’re also hoping the $2M+ that we’ve spent in ads over the past years do help with us being a household name in the space and a lower CAC (customer acquisition cost) over time.

Speaking of retail, I have some exciting news that I haven’t shared yet. SmashNet our newest game will officially be available in Walmart this June! The team has been busting their ass to make this deal happen and we are going to have our own pallet in the middle of the store during the peak summer months. We’ve been working with a buyer who specializes in bringing creator led brands into the store and the thesis is that Danny Duncan’s audience will be able to flood Walmart during the summer, looking to buy the game and of course sell us out immediately. We can’t wait to get started and the new boxes look incredible.

As we grow this new brand Good Sport, first order profitability is our North Star and with really reduced operational expenses we’ve decided we’d rather slow things down each month and squeak out as much profit as possible rather than burning through our inventory. As a new company (no full time payroll yet) we know we have generate $12,000 in profit each month to support the carrying cost of the business. Anything over $12K is pure profit in the bank. I’ve been obsessed with checking the Triple Whale dashboard lately as our current target is a 4 ROAS on a $80 product and charging $12 shipping.

If you ship a heavy product how do you do it? Do you charge the customer shipping? Do you charge a certain % of the shipping?

For the past few months we’ve been offering free shipping on something that costs us $17 to ship. No matter how good our ROAS was, we were still losing $17 of margin on an $80 sale every single time. We knew we had to change something and we had to start getting closer to collecting that shipping cost. Rather than raising the retail price of the product, we simply decided to charge 70% of the true shipping costs. We have since implemented this on CROSSNET’s DTC store as well. Our shops conversion takes a bit of a hit, but at least we can guarantee we aren’t selling products at a loss. The name of the game is pure profit, stacking contribution margin, and how to make enough to cover your overhead and any debt.

Speaking of making improvements, the squad at Triple Whale just dropped their new function called Lighthouse. Essentially it gives you daily recommendations on ways to improve your ad performance and business. As a nonmedia buyer this is super helpful as I may not know what ads to cut, what ones to increase spend on, and when we need to introduce fresh creative.

This tweet breaks it down big time.

Use code Meade to get 15% off Triple Whale here.

Random pro tip: Work with your design team to support your retailers or partnerships. Whether its a small partnership for a giveaway, a retail store, or a collab, your partner want to see that you’re driving traffic and attention. Spend the time to do things the right way. Check out our release for Scheels next week!

Partner of the Week:

impact.com - Want to know how the world’s leading brands like Adidas, Yeti, and AirBNB all manage their affiliate, influencer and partnerships? They all use impact.com.

If you’re like my team, on any given week you are wearing 40 different hats. There isn’t enough time in the day to organize your work, outbound, update your team, and most importantly track and grow your ROI on your hard-earned dollars. This is where Impact comes into play.

Jerry Liu from Canva says that since starting with impact.com in September 2019 their partnerships channel revenue has doubled nearly month over month. They are now organizing over 11,000 partners working across multiple networks, publishers, bloggers, and YouTubers. It sure beats my messy, outdated spreadsheet.

1) Influencer Management: Discover, recruit, and manage the entire partnership, plus track clear deliverables

2) Affiliate Growth: Bring in thousands of dollars in new revenue with affiliates who will promote your product or brand to their audiences. I’ve just started working with affiliates to get more eyeballs on CROSSED Commerce and increase my weekly readership.

See your influencer & affiliate revenue skyrocket with impact.com here.