Hey You! I Need a Favor
I looked into my junk mail yesterday and found over 100 responses from readers from last week. Not a single one made it to inbox and I’m so disappointed. If you’re a fan of this newsletter do me a quick favor:
Send me a quick email response back saying you got this newsletter.
A simple hi, what’s up, or hello works. If you have a question fire away.
This will help ensure that you continue to get CROSSED Commerce in your inbox weekly.
How was your weekend? Mine went too damn fast. I got suckered into driving an hour to a BBQ spot in the middle of no where Florida because my wife sent me this Tik Tok. I got there and there was a no exaggeration three-hour wait. Of course we didn’t do that, so then we drove 20 minutes to a different spot only for it to be a ghost kitchen for UberEats and not somewhere you can actually eat at. Can we make it a law to just not have ghost kitchens on Google Maps and confuse the hell out of people?
Ended up at Hometown BBQ, my favorite spot in Miami. A feast for a king.
If you aren’t familiar with the concepts of ghost kitchens they are fascinating and were just starting out back in my early days when I worked at Uber. You can read about them here.
Well this newsletter is not about ghost kitchens or bbq and more about setting up the rest of the year for success. So let’s rip into it.
This week’s newsletter is brought to you by my good friends at Tapcart!
We’re preparing for a product release over the next few weeks that will be exclusive on our app only for the first 72 hours. Every day across the summer we’ve seen app downloads increase and the Good Sport app become an incredible way to continue to reach our best customers essentially for free.
As we get closer to the holiday season, more brands are using mobile apps to boost their revenue and elevate their long-term retention strategy. As a marketer, our core goal becomes to increase app downloads & expanding push notifications.
I’ve seen firsthand how my good friends over at Chubbies, MUD/WTR, and the Obvi guys are crushing new revenue with their app. Tapcart just released a study that shows that app based users have a 2.3x higher conversion rate than standard mobile traffic & the average merchant sees a 43x ROI monthly!
Get a 30 day free trial and your own app built in just days with Tapcart now.
Wealth is What You Don’t See
A quote I read this week from The Psychology of Money really stuck with me.
Halfway through 2023 and I feel like I’ve been on a battlefield for years. Tons of scars, tons of memories, and tons of experiences that are going to make me a better leader in the second half of the year.
Staying in Stock:
You can’t make money if you’re not in stock. We’re all working for a just-in-time inventory model to avoid excess purchasing and storage fees, however, this perfect timing will never 100% work and can lead to big losses.
There are three dates I care about being in stock for the rest of the year:
Prime Day #2 - The second prime day of the year will be in mid-October. Every SKU must be in stock on Amazon by the first week of October.
I know my lead time is roughly 30 days of manufacturing, 10 days of arranging freight and waiting for boats to leave, 25 days to land the inventory at my warehouse. This week I am placing one of my final orders for 2023.
Understanding your Bottom Line:
I’m embarrassed to admit for almost three years we did not have our numbers dialed. As long as the bank account showed more than the previous week we were doing alright. This is the quickest way to destroy your business. It’s not sexy, but doing the grunt work of laying out the numbers and doing the math is the only way to actually grow.
Zoom in on this on mobile, its worth it.
You need to have a sheet like this that breaks down your full product costs to understand your true costs. From there you’ll build a second model to show your profit from an Amazon, DTC, and wholesale perspective. You’ll be able to model out specific situations at what happens when we spend $10 on marketing vs $40, and how many units you need to sell at what profitability level in order to cover your overhead.
Don’t Underestimate Logistics:
The amount of money CROSSNET has lost on mischarging for shipping and overall logistic mistakes could have bought me several Lamborghinis at this point. Customers are conditioned to expect free shipping. Customers don’t want to pay $25 to ship something but they also don’t want to pay ridiculously marked-up retail costs if we bake the cost in. It’s a damned if we do, dammed if we don’t situation.
Our products are heavy and they are expensive to ship. The customer doesn’t care. We’ve decided to take a hybrid approach where we blend roughly 35% of the shipping cost into the retail cost of the product, we then charge the other 35% as true shipping charges. We lose out on the remaining 30% of the shipping which can come out to be anywhere from $4-7, which absolutely sucks but it is what it is.
We are now set up in a situation where Amazon is profitable and we know that customers will shop there at nearly a 5 to 1 ratio. We are happy to accept DTC orders, but we will no longer do it at a loss where we get burned on shipping. I’d much rather have 15 orders a day instead of 30, if every single one of those orders are guaranteed profit and contributing to our bottom line. Give me $2M in revenue and $500k in profit, over $4M and $500k loss any day.
If It’s Not Working Now, It Won’t Work in a Few Months
Look at your P&L. What’s working? What’s not?
If you looked at CROSSNET’s in 2022, you’d be like what the hell are you guys doing? You’re overspending in marketing and grossly overstaffed. You want to be profitable each month then the fluff needs to go and it needs to go now.
Firing people. Slowing down spending. Doing the dirty things suck and it’s painful. The only thing I can promise is that it’s going to be that much harder to do 5 months from now when you’re forced to do it. Don’t wait to make the difficult decisions. Pull off the bandaid. We were “too nice” as managers and we’re hoping things would fix themselves after Q1 of this year. We showed nearly a $150,000 loss because we were stupid and just “waited things out”. Thats debt. Real debt. That we are now paying back. Dumb. Dumb. Dumb.
Homies for Hire
I’ve been very blessed to work with some amazing talent over the past few years that deserves more recognition. I’ve also worked with some of the shittiest, money-hungry, dbags that I wish I never trusted. Here’s a list of the good ones. The bad ones we can discuss over a bottle of gin.
Logistics: David Fry - [email protected]
This guy got our container rates down from $8000 to the low $2000s. Massive savings. They ship worldwide and can help you with importing containers and also trucking freight from your warehouse to anywhere in the world. We use them for all LTL & inbound freight shipments in the USA & Australia.
Amazon: Neema Guivian - [email protected]
The best Amazon agency we have ever used. We’ve been with these guys for two years and they’ve made us the #1 volleyball game in the world. I can’t recommend them enough. I honestly feel like they want us to win more than we do sometimes. Super fair price & A+ communication + strategy.
Copywriting & Outreach: Kevin Stefancyzk -[email protected]
Kevin’s been helping me out a ton lately on the personal brand side of things. Need help with copywriting, brainstorming, and outreaching to sponsors? Kevin’s become a swiss army knife at Chris Meade LLC and is somebody you’re going to hear more and more about in our space. Young, up-and-coming hungry talent who can help on an hourly basis.
Facebook Ads & Email Marketing: Grigori Boudenkov - [email protected]
Grig has been running CROSSNET & Good Sport’s ads now for nearly a year. In the past 365 days our return on ad spend has gone from a dreadful 1.5 to 4.5+ on a monthly basis. Grig runs an extremely boutique agency that only works with a handful of clients but gives you the hands on feel as if hes an in-house hire. I owe Grig ten newsletters worth of recommendations for how good he’s been at helping us turn our business around.
Hit these people up. Let them know I sent you. They have no idea they are being mentioned in this newsletter.
Thursday Q&A - 2PM EST
This Thursday I’ll be hosting a free hour long Q&A and mentorship session. I’m going to get back to doing these atleast once a month. Lets chat retail, e-commerce, Amazon, and anything and everything in between. I’d love to learn about you and your business.
Want to join? Reply back to this email.
If not, I hope you have an awesome week!
All the love in the world,