E012: Twitter vs Threads, Prime Day Deal/No Deal, Definitive COGS, Margins, Profit Per Day & More

OPERATORS · July 12, 2023 · 59 min

Summary

This episode offers a candid look into the operational realities faced by 9-figure eCommerce brands, covering critical financial metrics like COGS, margins, and profit per day, as well as strategic considerations around major sales events, social media shifts, and the often-overlooked complexities of accounting and ERP systems. Operators will gain practical insights into optimizing profitability, navigating marketing challenges, and making informed decisions to drive sustainable growth.

Key takeaways

• Implement a robust ERP system sooner rather than later to avoid costly accounting errors, especially when scaling with wholesale or complex fulfillment. Integrate chargeback management from the start.
• Rethink your Prime Day strategy: deep discounts can erode margins and attract unprofitable customers. Focus on sustained profitability over short-term sales spikes by optimizing COGS and understanding true profit per day.
• Diversify your marketing channels beyond commodity services like email and SMS. While essential, focus on building proprietary brand value and community on platforms you control, or be prepared to compete fiercely on price and service.
• Actively monitor and optimize your Customer Acquisition Cost (CAC) against sales growth. Achieving a 100% sales increase with a 20% lower CAC, as discussed, demonstrates efficient scaling and the importance of attribution tools like North Beam.

Themes

Topics covered

Episode description

00:02:53 Bet against Zuckerberg? No. Killed Snapchat and Twitter. Sean is bummed about rebuilding social graph on threads. 00:06:58 Twitter's alienation may lead to new communities. 00:13:19 June highlights: suffering and key metrics discussed. CAC target achieved, sales up 100% with 20% lower CAC. North Beam saved the business. 00:16:21 Approach to Prime Day has changed, no major discounts. 00:20:31 Prime Day: margins, discounts, customer behavior. 00:26:09 Million-dollar accounting costs lead to a failed audit. 00:32:47 Wholesale shipments, chargebacks, accounting nightmare, ERP, profit per day, optimize for dollars. 00:36:59 "Have a plan, avoid reckless spending." 00:44:12 Email and SMS are commodity services. SendGrid is commonly used for sending emails. Shopify is not a commodity service. Winning in commodity services requires price and service. 00:47:37 Minimize COGS, focus on key financial P&L. 00:52:58 Different pricing approaches in DTC and retail. 00:57:23 Brand creates monopoly and determines value. In the world of eCommerce, a legendary WhatsApp group is rumored to hold the secrets to unimaginable success. The catch? You must have nine figures in revenue to gain entry. The world's biggest brands have denied its existence for years, until now. Three titans known as "Operators" are leaking the secret contents in an effort to share their wealth of knowledge with people like you. Powered By: Northbeam. https://www.northbeam.io/ Sendlane. https://learn.sendlane.com/operators Fulfil.io. https://bit.ly/3pAp2vu Visit Our Website: https://www.9operators.com/ Follow us on Twitter: Sean (Host) https://twitter.com/SeanEcom Jason (Host) https://twitter.com/JasonPanzer Matt (Host) https://twitter.com/mbertulli Mike (Host) https://twitter.com/mikebeckhamsm Finn (Producer) https://twitter.com/finn_radford Northbeam (Partner) https://twitter.com/northbeam Fulfil.io (Partner) https://twit

Frequently asked about this episode

What does this episode say about ecommerce strategy?

Implement a robust ERP system sooner rather than later to avoid costly accounting errors, especially when scaling with wholesale or complex fulfillment. Integrate chargeback management from the start.

What does this episode say about financial management?

Rethink your Prime Day strategy: deep discounts can erode margins and attract unprofitable customers. Focus on sustained profitability over short-term sales spikes by optimizing COGS and understanding true profit per day.

What does this episode say about marketing optimization?

Diversify your marketing channels beyond commodity services like email and SMS. While essential, focus on building proprietary brand value and community on platforms you control, or be prepared to compete fiercely on price and service.

What does this episode say about operations?

Actively monitor and optimize your Customer Acquisition Cost (CAC) against sales growth. Achieving a 100% sales increase with a 20% lower CAC, as discussed, demonstrates efficient scaling and the importance of attribution tools like North Beam.

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