Stock Issues Cost Me Millions ??
Chris Meade
Co-Founder of The Founders Club & CROSSNET | Now Building the World's Best Entrepreneurship Community | Forbes 30 Under 30
Happy Sunday friends!
It’s been a busy week in the start-up world…?
If you know the CROSSNET story, you'll remember how we took the leap of faith with our 401k's and life savings to start our crazy little volleyball game. Yeah, it was a wild ride. We had some heart-stopping moments when our bank accounts were on the edge of oblivion. Luckily, we never hit rock bottom (well, maybe $400).?
Today, I'm happy to report that things are on the up & up and we’ve got our mojo back. But here's the thing – there's still a ton of room for improvement and growth as we invest in CROSSNET & Good Sport’s future.?
Without those fuck ups you never learn and you never get better.
Before we get into this week’s edition, I want to give a massive shoutout to Treat for sponsoring Crossed Commerce. If you haven’t heard of them they are a brand new AI tool that creates super personalized lifestyle photos for your brand for a fraction of a cost of a real photoshoot. More about them later!
Good Sport is Profitable Already!
Good Sport is profitable less than six months after launch because we ate shit for five years building CROSSNET.
We kept things lean. Focused more on what actually drives sales (good content, retail distribution & spending on Facebook) and the reward is getting to take home a paycheck at the end of the month.
Those first few years we threw so much money into the fire, but they are investments we had to make to get smarter and to get better.
My advice to you. Build a network of people who have been through it before. Learn from them. Be a fly on the wall. Don’t be annoying. Provide value in some way. Building a startup is like riding a roller coaster – it's thrilling & unpredictable – and sometimes the best advice comes from those who've just hopped off or are still strapped in for the wild ride.
Team Work Makes the Dream Work
Whether you're searching for the right supplier, warehouse, or retail store, partnerships are crucial. The way you treat people is the way you’ll get treated. Believe me, I’ve said some stupid shit and regretted it. But when you find the right partner it’s been a game-changer and they tend to stick around for a long time. The wrong ones? Kinda like an STD and they suck until they’re gone.
Moral of the story: Not all partnerships are created equal!
You might receive proposals from big companies with impressive plans, but it's important to take a step back and evaluate their true value. Look for partnerships that bring tangible benefits to the table and most importantly align with your long-term goals and working style.
For example, a partnership with a company that shares your values, provides access to new markets & resources, and has excellent customer service will have a far greater impact on your bottom line compared to working with the cheapest company that you believe is saving your company money upfront.
The second option will come back to bite you. Trust me.
Pro Tips:
Stock Issues Cost Us Millions
If you’ve been following along this newsletter then you know this year’s been a rebuilding year for us. Slow things down. Cut our spend and sadly our headcount. Shift back to immediate profitability month over month.
However, you can’t make money if you don’t have stock and these newsletter sponsorships don’t come close to covering CROSSNET’s overhead.
My new goal: Starting this August, don’t be out of stock for the rest of the year. For all channels. For all countries. For all retailers.
So here’s how I plan on getting ahead of it:
1) Monthly revenue forecasts where each department head will be responsible for sharing projected sell-thru by SKU for DTC, Amazon and retail
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2) Calculate the inventory I need for the next 90 days and place purchase orders with China. Our manufacturing time is 30 days, shipping is 20-25, and I add in a month buffer to simply get ahead of things for holidays, delays, etc.
3) By placing large buys for a three-month period I can get my cost per unit down. On our latest buy we just cut our cost of goods by 6%. This is huge savings on our bottom line and annualized out is hundreds of thousands of savings.
4) Setting clear communication with your supplier that you are doing everything in your power to maintain 100% stuck rate. There may be a week or two that they will need to hold the inventory at their warehouse if we over-ordered but that’s the trade-off if you’re going to take our large orders. It’s much better to have China hold the goods than pay any storage facility.
5) Mid-month forecasting to see if our projections are accurate or how bad things are up or down. Lower than expected sell thru sucks but atleast well have inventory. Higher than expected sell thru is amazing but that means we run out of inventory much quicker, which leads to missed opportunities of making more money for the business and requires me to place an order asap to recover. This is where ordering for 90 days works in our favor because if sales are up way past what we expected we can snag some of those units from the third month and place a new order because our true lead time is more like 60 days.
6) During these monthly forecasts you should also be preparing your bank accounts for the expected spend that you believe will be needed to generate these sales numbers.
For easy math's sake, I’ll break down a scenario:
From there you can build out models that include:
The one nice thing about math is it doesn’t lie.
Creative That Converts
Tired of paying for expensive photoshoots? Waiting weeks to get content back? On a tight budget? Welcome to my life.
Treat’s AI uncovers design concepts that resonate with your best customers and then effortlessly generates on-brand ad creative and lifestyle photography to help you acquire more of them.
Treat is offering my readers FREE AI-Generated product images & giving y’all early access to their groundbreaking technology.
New Traditions
I’ve never been one to be preachy and be an oversharer on mental health, but one thing that has really helped me lately is putting my phone away. Endless scrolling, my thumb constantly crooked, my neck hunched down, ignoring my wife and friends. So I started a new tradition this weekend. From Friday 5PM onward I locked my phone away for the entire weekend and scheduled this email out.
Here are some things I’ve been enjoying instead: Being present, pilates, reading, playing padel, working out, long walks, going to the beach, spending way too much time in the bath, working on the outline for the Founder’s Club, and this new childish habit of spending my money on very expensive LEGOS. On #3 in the past month, Harry Potter nostalgia baby.
Enjoy Your Time Off
I’m now going on nearly a year and a half of writing CROSSED Commerce. Building this community and following has been of the best things I’ve ever done for myself. I put a lot of time into this week's send and hope it was super beneficial.
Massive shout-out to the team over at Treat for sponsoring this week’s article. I am so damn excited to start testing more AI-generated content because it’s a pain in the ass to get somebody to go set up a CROSSNET, get four friends and a photographer to go anywhere these days.
Talk soon,
Chris
PS. Struggling with anything or need feedback? I’d love to help. Just shoot me an email back at [email protected]
General Manager @ Slotted - 3PL marketplace and self-guided RFP tool
1 年The truest of true statements about finding an external partner for fulfillment and logistics. "For example, a partnership with a company that shares your values, provides access to new markets & resources, and has excellent customer service will have a far greater impact on your bottom line compared to working with the cheapest company that you believe is saving your company money upfront. The second option will come back to bite you. Trust me."
Top Commerce Voice ??? | RETHINK Retail Top Retail Expert | Mama x2 ????| Omnichannel Queen ?? | Omnichannel Marketer Podcast Host ??? | CEO & Co-Founder @ Brij ??
1 年Dig the new tradition. I might have to steal that one!
Founder, Chief Nasologist at BoomBoom
1 年STAY IN STOCK... This has become priority # 1 on our end too : ) I think having great relationships with suppliers is key here... we've been super transparent with ours as we scale into retail and it's made all the difference.