My Favorite Questions Ever

Wow, last night was epic. I flew out to Denver to host our first ever Founders Club event out here and to be honest, I was really worried. I don’t have many friends in Denver (only been here twice) and just a few weeks before the event I thought I might have to cancel it due to low attendance. Out of nowhere, the city came alive and we packed the house out with 55 guests and it was one of my favorite events we’ve done in a long time.?

The reaction is the same everywhere we go - people want community. They want to network with people in real life without all the stuffiness that a traditional conference provides. The brands were legit crazy. I finally got to meet my friend Dylan, the CEO of Brumate in real life. Met a guy who just started ecommerce a year ago and is doing $25M a year selling makeup. A husband and wife who run a tea company that has been reading the newsletter for years. Just a super, super rewarding experience.

I got some amazing questions from last week’s newsletter and it sparked some good inspiration for this week’s newsletter. I’m currently in the backseat of a pickup truck heading to Vail to snowboard, so I had some good time to dive through the inbox.

Before we get into it, if you haven’t already signed up I’m speaking on a massive panel next week on March 27th called The Future of D2C in 2024.

Chargeflow is hosting essentially the Super Bowl of ecommerce panels and its legit stacked with people way smarter than myself like Aaron Nosbisch from Brez, Ashvin Melwani from Obvi, and Rob Fraser from Outway, and a ton more.

This newsletter is great and all for weekly knowledge, but with this roundtable format discussing the next wave of eCom strategies you will probably get a couple thousand dollars of free knowledge in just an hour or so. Plus you will have the chance to win an Apple Vision Pro, gift cards, and platform credits simply by joining.

Whether you are an eCommerce founder or executive, you cannot miss it.

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Rapid Fire Questions

Here were my favorite questions from last week. If you’re dealing with something I’d love to try to help. Send me a response back at [email protected]

I’m having a hard time saving money, what should I do??

Back in 2023 when I started working with my business partner Aaron after he sold his company for $50M, he told me he did something that really stuck with me. This guy became essentially rich over night, but for some reason he was still scrappy and hustling to make the next $500.?

I asked him how he was wired like that after all the success and he told me this - He only kept two months of living cash on hand in his bank account and every other single dollar was out of site with an investment manager. Every dollar that comes in after his 60 day nest egg, immediately goes out to an investment account to make more money.

You don’t need a fancy financial advisor to do this for you. There are so many free tools out there and things like Amex high yield that you can set up in legit 2 minutes that will get you 4-5% annually for doing nothing! I remember getting scammed and starting up a Bank of America savings account and it legit was giving me 15 cents on my money every month. What a joke.?

So for now I keep $15,000 on hand for rent, life, travel, and food. Your number might be $5,000 or $40,000. Every other dollar should be set to work and make you more money. I have four accounts and the goal is to get the dividends on these accounts to pay out $100,000 annually as soon as possible.

1. 401K?
2. Low risk mutual funds (my safety account)
3. Selective stocks - Amazon, Google, Facebook, etc (long term)
4. Crypto ?

What’s the biggest mistake you made 2023??

As sales ramped up at the end of last summer we ordered inventory too late to try to chase these orders. The result was an extra $250,000+ of inventory that we did not need, and then a storage bills piling up at both the 3PL & Amazon.

The reason this happened was that we did not make inventory analysis a priority and instead just chased inventory all year long. A few weeks of keeping your eyes off the ball and you wake up and you’re like shit we’re going out of stock soon and then you over order to make up for that mistake.

This year I am doing an inventory on hand vs forecast check EVERY SINGLE WEEK. We will not be out of stock. But we will not be overstocked. If we can accomplish this, our cash flow will improve immensely and allow us to profit more than we ever have in company history.?

I have several ideas of new products I’d like to launch, how do I prioritize??

You can’t do everything. We have a big board for our team of 10+ products that we want to put out for CROSSNET this year and sadly maybe 1 or 2 of them are going to see the light of day. Each product should have a fully baked go to market plan and careful planning. The funny thing is as I look at our product mix now, we’ve released 4-5 duds for every 1 banger of a product. You don’t get to the good unless you put out the bad. The thing is you gotta be careful putting out too much bad or it will kill your cash and your momentum.?

My advice:?

1. Is there any analytical data that you can find on how this new product will perform compared to what you currently are selling or is on the market?
2. Create a BUDGET for how much you want to spend on production creation, testing, sampling, patents, etc. - This budget typically should be planned in the beginning of the year and re-evaluated quarterly.?
3. Can the product be sold at a reasonable cost to hit your margin threshold? We try to not bring anything in without a 70-80% gross margin. You could have the greatest product in the world but if its a one time purchase and the margins are shit, its not worth working for free
4. Understand your full lead time and negotiate MOQs as hard as possible, much better to constantly be restocking than to be overpaying for storage pallets

Should I focus on Tik Tok ads? Youtube ads? Podcast ads??

Focus, focus, focus.?

The more conflicting priorities, the more scattered thoughts, work, and potential headcount is needed.?

My friend Sean Frank from Ridge said it best and I’m paraphrasing but “You can get to $50M in revenue by just doing Facebook ads alone.”

Keep the team small. I love the $1M of revenue for every employee rule. We’re right around there currently and it’s incredible to see revenue & profits rise, with an even smaller and more focused team.?

I’m behind on my bills what do I do?

You’re not alone! My first suggestion would be to build a twelve-week cash flow model. If you’re not doing this, you should start weekly. Here’s a quick Youtube video on it. It’s essentially a list of bills going out and money coming in and how you’e able to plan financially.

Of the bills, we have always prioritized the ones with interest vs the ones with no interest. I’ll let you deal with the morality of it, but if you owe a credit card bill with 20% interest, you should probably be making these payments first before you pay an agency that you owe money, as they can’t really enforce interest. It’s a shitty situation to be in but you need to stop the debt from growing further and that’s where the bills with the interest get prioritized. We have also always prioritized paying off personally guaranteed money over unsecured money, even tho this feels like common sense.

The best thing you can do with people you are behind with is to be honest, give them a realistic forecast of when they can get paid, and even offer up a payment plan.

Onward & Upward

I’m just getting to Vail and about to go snowboarding with my friends for the next couple of hours! I’ll be in NYC & Boston over the next few weeks and would love to grab matcha or go for a run with some of you guys. We’re also hosting a few events so be on the look out for that!

Remember, sign up for the Future of DTC roundtable here!

All the love in the world,

Chris