We Just Missed Out on $250,000
Well hello there,
I hope you had the most incredible weekend and if you didn’t I promise you’ll get another chance to make an epic one in just five days. I drank enough tequila for a small village this weekend while in San Miguel, Mexico celebrating the wedding of one of my best friends. Three days away from work. No service, no distractions, just living in the moment.
If you take away any advice this week its that finding some time for yourself to recharge, being with the ones you love and not getting drained from the stress of work, money, or whatever is keeping you up at night will do the soul well.
I’m now heading off to the lovely Katy, Texas to meet with Academy Sports for some 2023 planning. I’ve made some awful mistakes in my short career of selling into retail but none bigger than waiting so long to meet with your buyers in person.
If you’re currently selling into retail ask yourself these questions:
Have I met my buyer in person? If not, when will I?
Is the buyer happy with our account? What else can we do to make them happier?
When does the store start their next year planning? Make sure I have my product catalog for the year in their hands well in advance
Is the buyer missing anything in their section? For example one buyer is asking us to make traditional games like corn hole & croquet because he likes our branding better than the traditional shitty companies
I’ve made a small little package of what I’m presenting to Academy and would be more than happy to send it out to you all. Just hit reply here to check it out.
We’re Sold Out Again
One of the most difficult things of running a consumer goods business is running out of inventory. On one hand its a blessing because it means people actually care and are enjoying the product. On the other, you are missing out on so much money. Especially if your business has seasonality like ours. For the past few weeks we have been dealing with being sold our of CROSSNET H2O, our second most popular SKU. Due to port delays & COVID lockdowns we have now lost out on what will be upwards of $250,000.
I don’t need to tell you why being out of stock sucks. Customers lose trust in you, retailers mad you can’t ship, lost revenue, the list goes on.
Here’s a few steps that I wish we could do over:
Fully understand the current lead time from the date you place the order to the second you have it in the warehouse to ship. Standard turnaround times for most businesses that I talk to sourcing from China look like this:
40 Day for Production
3 Days to Arrange Transit
30 Days via Ship to Los Angeles
10 Days for miscellaneous mistakes
All In Time = 83 Days aka 3 months
2. Given the information above we should have tracked historical sales & advertising patterns and replaced an order just a few days into Spring.
3. At CROSSNET we are striving for a just in time model. What does this mean? We want to carry just enough inventory to get us to our next delivery window, without having too much extra. We want to have +/- 20% extra for safety stock but carrying any additional inventory just leads to inventory collecting dust in a warehouse.
4. How to pick a "perfect order date" and build out a timeline of events:
Here's an example narrative for you:
A 40’ container contains 2000 units. Lets pretend we are fully stocked and are selling 10 units a day.
Knowing that my lead time is 83 days and at 10 units a day I will sell 830 by the time any new inventory arrives.
Lets apply a safety stock of 20% extra to track for 996 units.
2000 units - 996 units = 1004 units
This means I need to place a new order when I get to 1004 units at are our warehouse, or 100 days from the day I start selling.
So if we’re starting this July 1st and we're consistently at 10 units a day without any changes, we will place my reorder on October 10th.
I’ll be placing my reorder around October 10th.
See the above situation? It’s hard as fuck. One little thing could go wrong and leave you without inventory. What if you go from 10 units a day to 20? Or in our situation 10 units a day to 250. Your goal as a marketer is to always blow past the inventory on hand and drive revenue. One or two massive days (a Sportscaster appearance anyone?!) could destroy all the good planning you had.
That’s why when the Cogsy team reached out to me after seeing my sell out issues, I was 100% down to try their product because nothing I could do was working. Marcella, the Head of Marketing at Cogsy, hooked it up to all my readers (almost 8000 now WTF?!) to get a free month and recurring 10% off for the entire year. Also if they are off by more than 5-10% they will refund you for anything you've ever paid.
Cogsy is essential a platform that brings marketing & sales data together so teams can as close as possible have the inventory they exactly need for any given period. We’re trying it now and so far no complaints. The biggest thing I’ve seen since being out of stock of CROSSNET H2O is that our CAC is almost up 2x in the past few weeks. Facebook ads are already expensive enough, going out of stock during an important promotional period will tank your margins and customer satisfaction.
The goal is simple, focus on your forecasting and ordering the right amount of product at the right time. If you can get a 12 month view of what you need for inventory you can then turn around to your manufacturers and negotiate better rates, terms and MOQs.
Test it out like me for a free month. Marcella also said she’d be down to do a BFCM deal where if there team is off by more than 5-10% then they will REFUND YOU for anything you've ever paid. Kinda dope. Try it out here.
What’s Been Working?!
The quick and dirty version:
A) Running Facebook & Tik Tok ads directly to Amazon. For limited SKU companies like us I am a hunter. I want to convert my customer now, not in four months. If sending them to Amazon, a site they trust way more then my shitty site is going to convert them 2x better, let my money work better.
B) Just switched to a new Amazon agency that is incredible. They’ve helped us spruce up our A+ content, spending more money on PPC then ever before, unlocking new categories to spend in, and focused on overall profitability. If you want the intro let me know.
C) Finally taking SMS serious. I don’t know about you guys but there’s only so much time in the day and planning SMS messages just never got the attention it deserved. We’re about 27 days into our first month and already seeing about a 4x ROI on the amount we spend in agency fees vs money coming in.
D) Using Hubspot to track all of our customers and finally have visibility across the org. For so long conversations were never recorded and either somebody is trying to figure out where a conversation is OR a past conversation died in a previous employees inbox. We will also be able to send out dedicated emails via Hubspot for promotional periods like back to school and new product releases.
E) Bi-weekly sales & marketing meetings. Get your head of revenue, head of marketing, graphic designers all in a war room for 30 minutes or so. Figure out what they need. What’s on the agenda coming up? There’s nothing worse then leaving shit to last minute and begging your designer to work on a Friday night.
Podcasts I’m Digging
If you got this far you are now legally obligated to send me a reply back with your favorite podcast. I’ve been listening to the same three on repeat and need to at least add one more to the rotation.
Check out mine here as well called My Biggest Lessons if you’re not already a weekly listener.
Homie for Hire:
I have an incredible friend named Mitko who was responsible for getting me onto my first 50+ podcasts. He’s been ramping up his boutique agency and I could not recommend it more to help get your company and personal name out. If it wasn’t for Mike and these podcasts, I wouldn’t have the readership I do for this newsletter and anywhere close to the personal brand. Send him a note at [email protected] or ask me for an intro.
FINALLY! I'm launching a new company called Good Sport this July. Go sign up for early access here. We are picking over 50 winners to receive a free care package on launch.
Go tell somebody you love them.
See you next week,
Chris Meade the First