The last time you heard from me I was boarding a 14 hour flight towards Germany to head to one of the world's largest tradeshows. I so bravely requested that you guys hit me up with as many questions as possible to keep me entertained...As I go to open my laptop before I board my flight I look down to my horror and this is what I see.
I sprinted to the Apple Store in Germany to buy a new laptop but apparently I can't do that because their keyboard has an entirely different language on it hahah Anyways we're back in action after using friends laptops, iPads, and cellphones for the past fourteen days.
Before I dive in I want to give a massive shoutout to minisocial for sponsoring CROSSED Commerce this week. They are an incredible UGC platform that pairs brands with microinfluencers that actually can create dope content. How much time have we all wasted negotiating with influencers who never end up posting, have nonstop excuses or come back to us with Jake Gyllenhaal rates for only 10k followers.
So lets get into it!
Black Friday + Cyber Monday Recap:
In 2022 we optimized for true profit, not flashy dashboards. This meant that each day we were optimizing for profit, but also means we neglected building a large funnel because we did not allow ourselves to have negative days. In hindsight, I wish we would have accepted a few losing days if it meant growing a much larger funnel of emails, sms contacts, and potential purchasers.
Below is a quick dive into our Australian metrics prepared by our head of marketing Grig Boudenkov. He's an incredible follow on LinkedIn btw so follow him here.
Australia has been my passion project that I've been displaying to the world. It's been so fun finally being able to reverse our seasonality and have money coming in the door in the Fall & Winter months when CROSSNET shoppers are usually in hibernation.
Ask Yourself Are You Doing the Following:
1) We began looking at order-level profitability and holding weekly meetings reviewing contribution margins for each country and channel. Ensuring that we’re hitting targets and setting thresholds for increasing marketing spend vs. pulling back.
2) Audited and fixed analytics reporting for better attribution and marketing metric visibility - Thanks TripleWhale
3) Established clear targets for the marketing team (MER targets, marketing spend by day) and quickly communicating any changes enabled us to scale quickly and efficiently. Does your media buyer know exactly when your profitable, how much he/she can spend, and your daily goals?
Wins & Losses:
- Our email newsletter partnerships returned OVER a 15x ROI - incredible, but damn should we have bought WAY more
- You can’t control what happens when everyone is SLEEPING! Our credit card maxed out in AU over night and our backup card number was changed. Our ad spend cut from nearly $10k to zero and we got sent back to the learning phase on Black Friday weekend
- We did NOT do enough with influencers. I wish minisocial came into my life sooner
- Dont be quick to judge on Cyber Monday. People shop at night, after work. Don’t overreact on morning results and shift your marketing to the evening
- Last call emails are cheap and salesy, but damn do they worked. A simple plain texter worked better than 90% of our other graphic emails
- Leverage your ambassador program. Give them cash for making you cash. Use your graphic team to make them assets, send them dedicated emails, make them apart of your team
Listen every business is 100% different. Many of my friends are focused on building the largest brand they can in just one country. My good friends at HUSH only focus on the Canada market. They could get tempted and dip their toes in the USA and start competing with the big dogs OR they could continue to grow and become the monster they are in Canada and dominate there. For us at CROSSNET we are truly trying to grow a global sport and that's our mission. So with that comes new countries & new conquests.
We started working with Brookline our EU distributor in early 2022 and they've been exceptional partners. They are the sole distributors of Spikeball & KanJam (our two largest competitors) and had direct access to all of the major retailers we'd ever want to be in Europe. We've built an incredible relationship with them where they are required to purchase several containers a year and now service all 27 European countries. So what's the deal look like & how can you start?
1) Don't waste your time with a "new" distributor. Everyone has to start somewhere, but don't let your business be somebody's guinea pig. Find somebody who is actively distributing your competitors or like-minded products. We have found almost 99% of the time the guy selling matcha lattes to retailers is not going to be better than the guy slinging sporting goods, even if he does have the connections.
2) How to find them? Put yourself out there! Put up several posts on LinkedIn, build your personal social, and of course create content for your brand saying "Hey we're looking to expand into XYZ" - you'll be surprised at how quickly you get a response.
3) Be proactive? If I were trying to find out who sells Spikeball in Australia I'd pick up the phone and call Rebel Sports (massive AU store) and inquire to speak to a buyer or merchandiser, I'd then ask them who they are buying Spikeball from and what their POC is.... OR even better and easier, I'd just make a fake email and put in an inquiry on the Spikeball website asking that I want to sell Spikeball in AU and they'd just connect me to their current distributor
Everyone needs to eat. You won't get RICH off distribution partners but you will expand your brand, move a ton of units, and see a nice lift in your top line revenue.
Reminder: Distribution partners need to sell to retailers who then need to sell to the end consumers. The distribution partner is the one taking the risk of bringing in inventory, building out a sales team, shipping units, and essentially running the brand. If there's not enough skin in the game for them, they will walk.
Suggested pricing example:
Your COGS (cost of goods) = $30
Distribution Pricing (20-30% Increase) - $39
Wholesale Price - $90
Retail Price - $150
Setting minimums and expectations is a must in any relationship. One of the biggest mistakes we ever made with CROSSNET was giving exclusive distribution access for a year to a country just because somebody was willing to make a small order. We now have a clearly defined strategy:
- Minimum orders start with 20' containers - we can mix & match SKUs but roughly 1000 units
- You have a six month grace period where we will not sell to anyone else in that area and we will redirect new buyers your way
- Contractually obligated to buy anywhere from 2-4+ containers a year to keep exclusivity
2023 OpEx Forecast
With less than four weeks until the new year if you haven't finalized your 2023 budgets you should start doing so now. It doesn't matter if you're a one person team or two hundred, your financial controller should be working with each head of their department to get a line item crunch of every expense that will be happening in 2023, broken down by annual & monthly costs.
For the past month our Marketing, Sales, Ops, Events, Product, Legal, and General Expense teams have been throwing numbers into a spreadsheet and then we challenge them weekly on does this expense REALLY need to happen. The goal? Get the number to be as small as possible.
I can't share the master spreadsheet as that's obviously super confidential, but I took some line items out for each department to show you exactly how we're doing it. The goal is to understand what monthly revenue & cash is required to meet employee costs + operating expenses, while maintaining profitability.
I hosted a Miami's founder's dinner last night and I met somebody fairly new in ecommerce running a crazy brand called Cheeky Chargers. His entire Black Friday strategy revolved around buying microinfluencers for a couple hundred dollars a post and having them all spike at the same time.
His best return?
$200 for $5500 in sales from an account with only 8,000 super loyal followers.
The coolest part? He also got a handful of incredible photo & video content that he can now leverage for the rest of the year.
CROSSNET and brands like Harry's, Super Coffee, and Hydrant use minisocial a SUPER EASY to use platform that allows us to match our brands with microinfluencers who can create quick and incredible UGC content. We've found in 2022, that UGC content performs almost 350% better than content that we staged and had professionals come out for... plus a million times cheaper!
minisocial has their biggest discount of the year all of December for 25% off. It's super affordable and easy to use.
Wherever you are in the world I hope you are enjoyed this and are excited for an incredible rest of 2022. I'm setting up my Christmas tree tonight and have some overpriced DTC hot chocolate on the way. To the dozens of you that emailed back last week with questions, I got you this week I promise. To everyone else, I'd love to hear from you.
How can I help with 2023 planning? Sales & marketing questions? Hit me back or book a session on Mentorpass. Would love to chat.
All the love in the world,