Make it Make Sense
This year has flown by. If you’ve been reading since day one thank you. From time to time I get writer’s block on this thing and then remember how incredible of a feeling it is to hit send every week and hear from you guys and see that the lessons and writing is actually useful.
I’m finally back home in Miami and plan on staying put for the next two months. Crazy that there are only 75 days left until 2024. This year’s been one of rebuilding but damn am I proud of the squad.
Laid off 15+ employees and leaned out the entire organization
Dozens of sleepless nights not knowing how we were going to pay next week’s bills
Underperformed in a mass retailer
Constantly out of stock on our hero products
Amazon revenue is up 48%
DTC revenue is up 30%
WE’RE MOTHER FUCKING PROFITABLE AGAIN
Paid off 1.5M in debt
More control over the business than ever before
The coolest part is while we were doing this I’ve been able to build up this incredible community of founders we call The Founders Club. After 20+ events in a dozen cities, we’ve cultivated an amazing paid community that has just crossed 50 incredible founders in this exclusive community. We have weekly guest speaking sessions, events across the country, bi-weekly masterminds, and non-stop value bombs.
I’m so damn excited for this Thursday because we are having a Senior Buyer from Target come talk to the group for an hour. We’ll be able to rip him with questions, advice, and learn the do’s & don’ts from a buyer’s perspective. If you’re like me when you have your first few retail meetings you don’t know what to say or not say, so it will be cool to pull back the covers and get an honest take with no chance of being penalized or losing a purchase order.
We’re only taking a few new members each month but if interested in joining The Founders Club you can apply here.
2024 Refresh 🌊
I know this may be hard with Black Friday around the corner but now is the time you should start thinking about what worked, what didn’t and how you’re going to capitalize on 2024. If you’re like us, most plans take around 90 days to come to fruition and guess what…in 90 days is 2024.
Here are some big questions we are asking ourselves:
1) We shifted our price on CROSSNET from $149.99 to $99.99 this year. Was this change best for the business? Here are three reasons why we lowered prices when everyone else lowered them.
$99 digit price point should increase sell through at retail & online
We reworked our product costs to net nearly the same percentage amount of gross dollars
Knock offs were coming into the market at $99 and forcing people to want to save $50. I can’t blame them. Now that we are at the same price as the knock offs and the leaders in the space, why would they ever buy a knock off?
My photography background coming in clutch with this photo
How we will review this answer (I’ll follow up in a future email with our company’s official stance):
Did the take rate of the $99 CROSSNET significantly increase on both our ecommerce stores & at retail?
Are retail purchase orders up or down?
For easy math I wish it was as simple as saying “We know we net $20 per unit on every $99 unit sold and we used to net $30 on $150 versions. With that math we would have needed to see a 1.5x increase in CROSSNET units sold in order to atleast break even on our price decrease.” That’s absolutely the starting point but it doesn’t take into consideration the fact that having more nets out in circulation is better for growing the sport, more eyeballs, and more content. However you’re also taking up double the warehouse space and doing nearly double the work for the same effect.
What’s more important - More adoption & users playing or optimizing every single sale for as much profit as possible?
2) Was moving to a 3PL the right decision for our seasonal business?
In the beginning of the year I was raving about our decision of finally moving to a 3PL after five years and us being on track to save $200,000+ with our decision. We have found an INCREDIBLE partner and the best 3PL partner I have ever worked with in a company called Rack’d.
However, no fault to any 3PL due to the nature of our seasonal business, the storage fees crush us when we are not in peak season and have tons of inventory lying around until BFCM & next Spring.
Sadly our items are bulky and we need to keep inventory on hand for the natural flow of our business and this can cost us anywhere from $4000-$7000 per month just in pallet storage fees alone.
Greg pretending hes tired from lifting one box at our warehouse
Part of me thinks what happens if we just rented a big ass warehouse in bumblefuck Kentucky and hired a few super cheap workers to try to save the dollars but then you wouldn’t get the experience of having warehouse workers who know how to ship & prepare retail orders, increased savings from their shipping accounts, the peace of mind of not dealing with it, scheduling and hiring workers, training employees on policies. When you’re doing your own remote warehouse you’re essentially running an entirely separate business.
Is this headache worth the potential savings as we scale up?
How We’ll Evaluate:
Tally up annual estimated storage fees at 3PL
Calculate annual pick and pack fees based on estimated order volume
Add in a buffer for 3PL labor (repacking, side projects, random shit)
Estimate savings of shipping with Rackd’s shipping account compared to ours
Estimate savings of Rackd being so good & compliant on our B2B business and potential chargebacks saved
Average cost of rent for a 10,000 square foot warehouse
Average salary cost of warehouse manager & temp workers
Cost of warehouse furniture, office supplies, etc.
Headache of doing all this shit all over again
Get Ready for Black Friday with TxtCart
If you’re like me you’re doing everything in your power to bring in as much money as possible this holiday season. Every year we say “this is going to be the best year ever” and I swear this year is going to be the year!
One big mistake we realized post BFCM last year was that we were completely ignoring our SMS contacts while we were bogged down with the craziness. We had customers abandoning checkout, waiting for responses, and sitting there with questions and we were too busy to text them back and close the deal. Unexcusable and probably resulted in $50,000+ of lost revenue.
This year we’re working with TxtCart to solve this problem.
TxtCart is powered with real humans and powerful AI to recover carts and make revenue in real time. There’s nothing worse than having a question, wanting to buy, and waiting 72 hours to get an answer. This is what happened at CROSSNET last year and I’ll never let that happen again.
In 1-click sync your Shopfy store to get set up and have text marketing start firing to win back abandoned carts, increase conversion, and of course increase your ROI on all that money you're paying Facebook for ads.
This week only - Get a 30 Day Free Trial here just in time for BFCM
See You This Thursday!
Interested in joining The Founder’s Club and want to join our talk with the Senior Buyer at Target? I’m allowing two newsletter readers to shadow me and join our private call. Just drop me a message back. The first two people win.
I’m home in Miami for the next few weeks and I know alot of you guys are coming into town to escape the cold or for Art Basel. Drop me a note back or email at [email protected] as I’d love to link up!
PS. If you’re looking for a new gig or have a friend that’s in the market my boy Brad from Trampolines.com is hiring three positions. Let me know if you want the intro! Also my friends over at Airwallex are hiring a Sr. Growth Manager here.
All the love in the world and thanks for reading,
Chris Meade the First