Underdog Ecom Podcast

Alright. Welcome to the Underdog Ecom podcast, where two ecom brand founders are figuring out in real time. Yeah. We're not here to preach. We're here in the thick of it, making mistakes, testing all sorts of ideas, and really sharing the journey of how we've been growing these brands from day zero.

Hopefully, you learn a little bit, perhaps come away with some ideas that save you time and money. And so if you're tired of the same glittery d two c advice from those 9 figure gurus, you're here in the right place. Let's get into it. Hello. We're back.

Hey there, underdogs. It's been a couple weeks. We've been running through all the things. Jack's mister worldwide over there. He's been traveling around the globe, globetrotting.

And so we're gonna talk today a little bit about Profit First, a little bit of catch up on what things have been like over the last couple weeks. But Profit First is a sort of a accounting business philosophy strategy to how to run the numbers and the books and how not to hemorrhage cash, which seems like it's all too common in this ecom, d to c world. I'm guilty. So we're gonna dig into that a little bit. But curious, Jack, how's your travels been?

I know you visited some suppliers. How you doing? Yeah. I'm I'm doing well. I hope everyone's tuning in to this on YouTube this time around because, David's shaved and, he's got a fresh look.

I'm hoping hoping everyone's there to enjoy it. But, yeah, it's been a while. It's been yeah. It's been it's been a while, I think, because both of us have been pretty pretty busy. David especially, both of us fighting fires and things.

So, no, it's good to be back in recording. I think yeah. It's been, I think not to get too much into tariffs, but things are changing again on the tariffs front, meaning that I think stuff is stuff is moving again. Oh, new minute. New new percentage.

Oh, new minute. New percentage. Yeah. Exactly. We're just putting up the hat at this point.

Yeah. Kind of annoying because I literally just sent stuff over to The UK to avoid tariffs, and then now I could have sent it to The US, and it's really annoying. But, now I'm in Unbelievably annoying. Yeah. Unbelievably annoying.

Yeah. But finding finding a way through it Sorry. I was gonna say, I don't know about you, Jack, but I feel like a lot of my friends and family have talked to me like, oh, how are tariffs affecting you? And that sort of thing because I'm, like, the business person or whatever. And it's hard to not get into it and hard to be objective and not just rant and rave about it, but mostly rant, not rave.

Yeah. Also, people just Sorry. Planning. Like, people don't know that you have to plan an order and put in orders, like, six to two years ahead of time, and that usually blows people away. And it's like, I you can't plan in a business environment that's changing every second.

It's the hardest part. Yeah. I was gonna add also people tend to, like, talk to you and say, Tariffs say, like, you're gonna come up with some, like, amazing revelation about it. And it's just like, yeah. It sucks.

I don't know what else to tell you. Like, it's bad. Yo. It's like a knockout blow. How do how do you like getting punched in the face every day?

Yeah. Yeah. Anyways, enough about that. So how how are your shorts going? That's what I want in there.

Oh, man. It's been so fun. Actually, what's funny is, the latest latest prototypes have dropped, but they're coming along. I've been testing, trying to figure out the hard hard part about running a business, especially like this, making custom products, is it takes forever to go from idea to market. And, like, I've been working on these since January, basically, in designing and prototyping and that sort of thing.

And that's actually probably too fast of a turnaround to try and launch them by this summer, but I'm crazy person. And so I struggle with, like, decision fatigue in some ways. Do I make a five inch in seam? Do I make a seven inch in seam? Can I do both?

Do I start off with, like, a big quantity? Because it's the price is cut in half. Like, I was looking at some of the numbers this morning actually from the supplier, and it's like, if I do 500 pieces units, that's half the cost of doing one to two hundred. And I wanna do one to two hundred because cost or, like, because the initial capital. And I don't know if they're gonna do well.

Like, I think they'll do well, but it seems like whenever I really like a product, it doesn't do as well as I'd like. And it's an untested product category in in a lot of ways for me. So I don't I don't know how that's gonna work. But I think they're definitely a popular item. I think that they are in right now.

I think you can run I see other brands at least running ads to them that seem to be working pretty well. And so I'm really intrigued to see what happens with them, and I'm probably gonna pull the trigger soon on placing the PO and get them get them running. But, like, I got another sample in yesterday literally yesterday. Speaking of tariffs, I paid $40 for this sample of shorts, which was not fun. Yeah.

Because they're prototypes, and it's like, really? Now all of my prototypes are gonna cost me extra money on top of it, but they're pretty epic. And these are, like, kind of more of a athletic type material. Oh, yeah. See Yeah.

Yeah. Yeah. And then they've got, like, really cool, extra breathable area down where you want extra breathability or at least Yeah. In, like, the thighs and stuff. Contrast, like and then embroidery.

Yeah. That looks so nice. Sorry. I could talk about these all day. This is not a pod about my shorts, but they're pretty epic.

And so we'll see what happens. Speaking about, like, trying to understand the volume, I mean, we've talked about this a lot, so I don't wanna get into it, like, pre order side of things. But have you thought about doing that to kind of at least gauge, like, maybe if you can give away a good enough good enough, like, discount or something just so you can get an idea of, like, okay. If 20% of these are gone already, then I can I know that I need at least 500 or something? Or or they're showing something to kind of just, like, gauge them on or even if it's just, like, start to build a bit of a wait list on it or something.

I know. Yeah. I've definitely considered it. I feel like preorder is one of those things that sounds really nice when you start thinking about it. But by the time like, I've done preorders in the past.

And by the time I start thinking about a preorder for a new thing, I forget how painful the last one was. Yes. And they were like, yes. It was like a sweatshirt preorder that I did earlier this spring, and it was overdue even though it was just like a print job and getting emails daily with people wondering where they were because they can't read, didn't read. And so even though it's blasted all over, you know, we've talked about this a lot.

But I've definitely thought about it. Been very, very tempted because my cash I'm in a cash cash flow crisis again. My AmEx is frozen again. And I need cash, but, also, like, I'm just kinda scared to do that, because of the issues that I've had in the past. So we'll see what happens.

I might and I usually actually only do preorders when I've already set sent in the PO to get the product made. Yes. And so it's more of, like, a funding, upfront sort of strategy for me rather than, like, a let's gauge interest and quantities and change the quantities. So I haven't really done, like, a long term preorder where it's like, hey. Place this order now.

We'll get this in three months, and, we'll go from there. So we'll see. Probably not gonna do it, but it depends on how upset I wanna make Amex. Yeah. Yeah.

How much you can get away with. Yeah. It's always tough. No. Yeah.

There's a million things to talk about what's happening lately, I guess, catch up wise. But like you said, putting out fires, like, I hinted at cash flow issues, been spending a lot of time in ads, trying to trying to make those work. And I feel like I've made a lot of progress to make those more profitable over the last couple weeks. And that's been pretty exciting. Had some products actually do well in ads, which is pretty exciting and also been getting closer to launching my fleece pullover jet like, new products and stuff.

Just always stuff happening. It yeah. It's just been crazy, but we don't have to I don't I don't wanna get into, like, all the nitty gritty, I guess, there, because we got some other stuff to talk about. Yeah. I think, like, we wanted to get in today a bit about Profit First.

And, I think this it's really interesting because I I think Profit First is is, like, been around for a while. And then I think recently given how I think just given how tough e commerce, I think given the fact that, like, lending is getting harder and harder, like, borrowing money is getting harder and harder, all that sort of stuff, I think we're you know, it we're all dealing with that a little bit, and so it's as the harder it gets, the more, like, the important is just, like, to be profitable and have contribution margin for for buying future stock. I mean, that's the end of the day what we all want. I think we don't always get there, but I I think it's a it's like a really, it's a cool concept, and I think it's like it's something that we all wanna do. I guess it's just talking about, like, how feasible is it, our size, how do you like, do you do you implement in that in your business in any way?

I think you've you were telling me before we we started recording about, like, you had, like, a fractional CFO, help you, which is something I've been thinking about for a while, because I'm really not a finance person. But, I'm keen I can't see what you told me a little bit about it, but, like, what were you saying about that in terms of, like, their thoughts on it? Yeah. Basically and I guess we should probably back up and intro the whole topic in case anyone's not really an old or or, like, aware in the space, because I wasn't. So that's the thing is, like, a couple years ago, I didn't know anything about Profit First, was also very weak in the financial aspects of running the business, weaker than I am now, and I still feel like it's one of my weaker sides in just struggling with the financials and trying to make it all work.

Because it's ecom man, ecom and d two c is so hard, and you have to be, like, basically a pseudo expert in so many different arenas. And one of them is financing because you are trying to turn, essentially, like you said, inventory into cash and that that cash conversion cycle or whatever the fancy term is for it, you wanna have that efficient and not hemorrhaging money, and inventory takes a lot of cash. And so this philosophy, I got introduced, through some people on Twitter, I believe. There's a book called Profit First. I read it.

There's also a follow-up book that someone else wrote that was, like, Profit First for ecom. Now that I'm remembering, and I haven't read that one yet. But it's essentially been it's a philosophy where it's kind of like envelope budgeting that you might hear about for personal finance where you set aside certain percentages into different buckets or different envelopes. And then, ideally, everything's automated. And so instead of looking at the money that's in your bank account and spending it all, which can get you into trouble.

And I think a lot of the situations and a lot of the, like, downsides to running a business and and, like, struggling financially with it that the that Mike, the author mentions in the book, resonated a ton with me. I was like, oh, I've done that. I made that mistake. Made that mistake. Made that mistake.

Check. Check. Check. And so this philosophy was born out of that to try and mitigate and improve the financial operations behind a business. And so, like, you're taking it's like, alright.

You've got your money coming in. You're setting aside certain percentages into different buckets. There's, like, OPEX, profit. There's totally should have these up in front of me if I'm gonna try and read through them. But But yeah.

I mean, even if you take it oh, yeah. Yeah. But I was gonna say The tax. Sorry. No.

Sorry. I have a bit of a delay. I was gonna say, like, if you even take it a step backwards, like, I suppose, like, even more fundamentally so you have like, generally, it's like sales minus expenses is profit is, like, generally how we all think. And I suppose it literally is just swapping profit and expenses. So sales minus profit equals how many how much you can ex you can, how much you can spend on expenses, essentially.

Like, you just set you set your profit goal, and that is how much you can spend on getting there, essentially, I guess, is what, like, it narrows down to. Yeah. Yeah. It's definitely the profit first. Like, the name makes sense in terms of, like, that's that's your focus and that's what you instead of yeah.

Exactly. That's a % it. And what's been interesting is so I have tried to implement this on my ecom brand, and I haven't. I have the bank account set up in Mercury. It's really easy to set up these bank accounts in Mercury.

It's easy to set up automations that moves the funds between the different accounts. But I'm essentially been caught in, like, a bad debt quicksand in some ways over the last, like, couple years. And so I've been funneling everything into OPEX and expenses, and it's it's not the most ideal situation. But I will say I have implemented it on my other business, my freelancing business, because the OPEX for, freelancing is a tiny, tiny percentage compared to running an ecom brand. And so it's way easier because my income's way higher and my OPEX is way lower.

And so I do have it set up where it's and it's actually pretty cool to watch because then, like, I was a I was able to set aside a bunch of funds in the profit account and buy a new laptop, for example, and, like, other sorts of, like, oh, treat yourself kind of things. Like, oh, we need to go buy a bunch of diapers. I got a bunch of funds in my profit account. Let's do it double. So that's been really cool to see it, like, work.

And so I do have the idea of eventually getting to that point with the brand. And I think I remember some folks telling me originally like, one guy wrote up a huge essay, which was really helpful. I printed it out. It's actually sitting on my desk over there where it's like, you need to run through every single expense that you're paying on your brand and consider like, it should be cut out. And unless you make a really, really good argument that it's revenue generating and should stay there, that's really, really hard to do.

And I did a lot of that, and we've talked about cutting apps and cutting costs in other episodes. So check those out. But that was that was, like, part of the whole equation was, like, you know, it's there's so many different little costs. You really have to focus on the profit. You can't spend you can't, justify a cost if you don't have it in your profit account.

Yeah. I think I I I think that the premise of that is very right in the sense that just in business in general, you can't you can't, like, spend your way to success. Like, it it rarely ever works out. Yet we're all so tied to revenue and increasing revenue and all that stuff. Yet and yet the problem is is that revenue automatically makes you think about spending.

Like, it's almost like they're tied together because because you the the quickest way to increase your revenue is to spend more. I mean, it gets to the point where it's a bit like, it's like that saying about, like, buying revenue. And essentially, you end up getting into the cycle where you are literally buying buying dollars because you are you're spending money to get money. And and every business has to do that to an extent. So it's almost like a a toss of a coin sort of thing, the other side of a coin where it is you have to be profit minded to some extent, whatever type of business you have.

And that's some that's a mistake I've made as well. Like, I think that and that's the problem with debt. I think debt makes it really, really hard to be profit minded. I think that's where it makes it really hard, especially with econ, with very straight like, very different cash conversion cycles. You're getting debt into the business.

Your bank account is high, low, going up and down in massive waves from one one week to the next. It is very hard to understand, like, whether you're being profitable. I think Profit First as a idea of, like, will I just set this money aside? Once it's in a separate bank account, you know, like, you what's left over is what you can spend. So in some ways, you know that, like, you know what your what your expenses are and you know what you can spend.

But it is really hard when debt comes into play because it starts to, especially things like, we've talked about this, but, like, revenue like, a revenue or like seller financing, revenue financing, that sort of stuff through Shopify Capital and Wayflyer and stuff, because, actually, it completely depends on your revenue, the length of which that that that debt accrues, and and how much you end up spending. So, really, a forecasting flat is really difficult. And so that's something I've really struggled with. Yeah. That makes sense.

Have you implemented, like, how have you implemented Profit First in in your business at all? I so it's interesting because in when I so I in Kansha, when I started in The UK, in The UK, we have a thing called open banking, which is actually a brilliant thing, which I wish they had in The US. I think it's going to come to The US at some point. It's in Europe. It's in The UK.

Essentially, banks can talk to each other and, like, funds move instantly like it's within seconds. So someone actually sends you money. It's not like an ACH transfer that takes, you know, sometimes days. It's it's literally immediate. Like, the second you send it, the second it shows in the bank.

It's because it's because the banks are allowed to talk to each other in in in Europe and The UK. And for that reason, basically, in, like, some of The UK banks, you can set away what they call spaces or or, pots in your own bank account. And so you can set aside money. It's almost like a separate, like, savings versus checking account. But, like, you and when some when something spends, it won't take it from those from those, like, mini accounts within your own account.

So you can sort of, like and you can do it instantly as well. So you, like, you know what's in there is actually what's in there, not it's not, like, delayed. Since since setting Cancho up in The US, even with Mercury, right, which is what we use, it's not it's not act that accurate, like, what's in the bank account in terms of, like, on a minute by minute or, like, day by day even day by day to an extent. But, so I think it is it is possible. It's not quite as easy as it was with with, like, our UK bank account, like, setting setting funds aside knowing that they're there.

But I was doing that for a little while. The problem is is, like, when you've gotta pay a supplier, you gotta pay a supplier that like, you get into the situation where you're like, well, what am I gonna do? Like, you either don't pay them and then, like, you're you've got no stock and then you can't sell, and then it just goes like that, or you just say, I've got to break the rule. The problem is you break the rule, and then that is the reason why like, the reason why you're breaking the rule is because you're not following the rules. So it's like it just Yeah.

Yeah. Yeah. You can get into a I feel like that's where I got into, like, a cycle of, like, oh, well, I'll just, you know, allocate all the percentage into the OPEX to, like, because I need to pay those things. I need to pay the suppliers. Like and then I've got too much inventory on my books, and so, like, I get caught with that.

And there's just so many moving pieces, and it's like you sort of, like, fudge it a little bit. Like, oh, I'm gonna break my profit first mentality a little bit here. And it's also you actually mentioned you asked earlier about I had hired a fractional CFO, like, a while ago to help dig into all the numbers. That's an area I'm weak on. So I was hope, like, the idea was to have him come in and help out and give a lot of insight, which he did.

And I was talking through Profit First with him, and you asked about that. And, basically, he had kinda said, like, you need to be careful because there's not one rigid structure that will work for every size of business. And, like, he was like, I see this a lot with entrepreneurs and start ups and stuff. Like, they're trying to stick to a certain philosophy, which is good, but also doesn't make sense or doesn't work a % for their side of the that size of the brand or, like, what they're trying to do in that moment. And I think we've kinda talked about that in some ways many times, and I feel like that's one big learning I've had over the last five years or whatever running the little tiny brand that I have is, like, everything online does not apply to every brand.

And actually, another perfect example of that recently was ads. I started designing these, like, basically, vintage Patagonia magazine ads inspiration wise, and they're the opposite of what d two c Twitter says for building ads. And it's like the opposite of what you typically see in ads, but it's overly designed. There's, like, so many words and that sort of thing, and they're doing well for me. So it's kind of just, like, you gotta do what works for your brand, and you should pay attention to ideas and principles and that sort of thing.

But know that at the end of the day, like, it can't stick a %. I think this is particularly hard when you don't have experience in ecom. Like, I didn't have go going into this and didn't know how to run a business, and so they make sense. You turn to these ideas. You turn to this book.

Like, you turn to profit first. You turn to these things that have been battle tested and have been from peer people that have experienced a lot more than you have. And so you try and adhere to that. I tried to adhere to that. And so it makes sense to try and apply that to your situation.

But, I mean, everything's with a grain of salt. So it is it is kinda tricky, but that it doesn't really I feel like that doesn't help people that have been like, I've been there years ago in those shoes where it's like, things work, but they don't work completely. So you just have to know what works for your brand. It's like, well, how do I know what works for my brand and me if I don't know you know, you don't know till you know kind of thing? Yeah.

I think also, the thing about ecom is which is, I think, different or just or just inventory based businesses, we just I go with that, is that Mhmm. You you do also get big payoffs for taking risk. Like, for example, over ordering on stock, but then in Black Friday being able to sell out of all that stock. If you'd under ordered, you would you could have potentially made half the amount of revenue during that time. But if in the summer when sales were slow, if you didn't take that risk, you'd be struggling when it came around to big sale peak.

And that's that's, like, the crux of the problem with ecommerce that you have to think for backwards and forwards always. Like, you have to look historically, but you also look ahead. And if you think too much on historically, then then you it's hard to move forward. But you think if you if you almost guess the future too much, you can also make some bad moves. So it's like it's like I just feel like I'm constantly moving back back and forth between, okay, what do we do last year?

But wait a minute. What do but we're doing something different this year, so we can't completely look at last year and then that sort of thing. So I and I think with software or something, you've got this slightly more regular income or even personal finances. I think Profit First personal finances is just, like, amazing way to run your finances because you've got regular it's not assuming you're getting you know, you're not like us and we don't, like, half not pay ourself half the time. But then but but, if you've got a proper salary salary.

Yeah. Exactly. If you've got a if you've got, like, a a regular salary coming in, I think this is like an amazing strategy. Just set aside, like, what you want to have like, what you actually wanna have set aside for savings or whatever. And then and then you you you can only spend up to that limit, and that's just the best way to do it.

But with with ecommerce inventory based business, I've just I've really struggled with that. Yeah. It's just it's just really, really tough. Yeah. It's definitely a really complicated business model to try and, like, apply that to.

And that's where I mentioned that book earlier where it's, like, profit first adapted for ecom. Now I wanna go grab that off my bookshelf and keep reading it because that was essentially trying to answer that question because it is yeah. That that, like, complicates it so much more. And I think there's so much focus in the ecom, do you see world on, quote, unquote, scaling, which I don't love to use, or just, like, endless growth. Or, you know, I wanna be the brand that a hundred x'd my revenue day over day or whatever.

And that means, like, focusing over focusing on that is dangerous and can get you into trouble. And I've bought into that too many times in the past. And it's it was more just with me. It was, like, chasing that dopamine hit of seeing the order count go up every day. Like, oh, five orders today?

Oh, 10 orders today? But not paying attention to contribution margin, not paying attention to net profit. Like, those types of ideas where it's like, oh, this is the numbers that actually matter on the business. And what's we've actually both talked about this, but we're both sort of looking at bid caps and other ad strategies, to try and pay more attention to profit as sort of a follow-up to this profit first model where it's like, no. We need to focus a lot more on profitability, and that needs to be more of a North Star sort of metric than, like, just order count or revenue or whatever.

I was gonna say, I feel like you've jumped out around a good amount on profit first, but part of the elements of profit first that I really liked was it would set apart set aside percentages into different things, and then it that changes over time as the business changes. And so he's got that whole he's got a section of the book dedicated to that where it's like, you know, this changes as this this percentage changes as the business changes, that sort of thing. Setting aside money for taxes because I've definitely got in trouble in the past where it's like, oh, shoot. Taxes are due quarterly taxes, and I don't have any funds for them. Like, what do I do?

And when I first started doing setting aside funds for that, and then when it got to tax day and I saw that money sitting in the bank account, that was a pretty nice feeling. Like, it was really nice to be prepared for the future that way. So there's definitely a lot of little things that I've been sticking to from the profit first model. But on a high level, generally, the structure is, at least from my brand where it's at right now, which is struggling, it's been a struggle. It it's funny because in The UK, we have a thing called VAT, value added tax.

Essentially, on a sale or a service or product, there's tax included in the product price. But unlike in The US where the customer pays that tax on top, in The UK, the tax is is embedded in the product price. You have to you and then and then you then ream it as the as the business that tax to the government. So, essentially, the tax is included. So the price that someone sees is the price included of tax.

But you what happens is whether you're inventory business or a service business, whatever it is, like, what happens is that inevitably, you don't you don't set that aside because it's it looks just like revenue coming in. And I've done this so many times. I've done this so many times where and every quarter, you have to pay back that tax. It might be thousands. Like, you might pay back that tax over all the sales you've made to The UK.

We we do I I I think I mentioned this on the pod before. We share some services with, like, some with some other businesses. But because I I, have contractors who are, like, I they invoice me from Broad, so there's obviously no tax, everything like in like VAT tax. They're not in The UK. But then when I bill those those those a couple other businesses that I got they and they they they pay VAT to me.

So I get this money in, and I think, oh, great. Get the money in. And then and then, like, two months later, I'm like, oh god. I owe $6 to entire and it's like it hits me every single time because I don't set it aside. And this is, like, a perfect example of, like, you app so you have to set it aside.

Otherwise, you get in this this, like, difficulty every time. Profit first. Alright. Let's run it. Set up those percentages.

It sounds kinda like sales tax, but, like, way more invisible where it's like, oh, shoot. Yeah. Yeah. That needs to be needs to be taken out, set aside. Yeah.

I'm speaking about the, the bid caps thing, just with this, is that, like, one thing also is just going back because talking about the revenue side of the business, obviously, wanting to grow and wanting to, like, obviously see the numbers go up and all that. And I definitely agree with you. Like, d like, d to c land is always, like, wanting people we wanna talk about their top line revenue numbers, how many orders they've had, sales. There's, like, an underlying movement completely the other way where it's like, you know, cutting costs, profit first, contribution margin. You shouldn't spend a penny over that.

And I tend to think and I don't even I don't know if this is like a if this is really revelation or anything, but, like, I tend to think that need of those are correct in the sense that if you yeah. If you go for top line revenue all the time, you're gonna overspend. You're gonna if you don't care about, like, a like, what you're actually spending to acquire a customer, obviously, you're not gonna be around very long. I think that's probably the worst thing you can do. I also think it is overly safe to to not spend a penny beyond your means when you're starting a business because businesses are completely built on risk.

Like, they're they're it's all about risk. If it weren't about risk, then then businesses wouldn't like, they wouldn't exist and they wouldn't do well. It's because you have to take a risk to some extent. And if you never take a risk so if you say, like, I don't want my marketing expenses to be more than 10% of my total revenue, the chances are your total revenue is never gonna grow and neither are your profits because because you're just maintaining the same trajectory of your business. So I really struggle sometimes when I get, like where where people go, like, hard to the other side, and they're like, no.

No. You no. You shouldn't be spending any more than this on on your on your on your marketing. Your your cost of goods shouldn't come more to this. You shouldn't buy any more inventory than than you've like like or sometimes you have to take a, like, a you have you have to go for it because that's how businesses grow.

And so it's a tough one. It's it's hard when there's so much extremes, and I feel like a lot of times in the world in general, people gravitate towards extremes Yeah. These days. And it's like they're everything they're you know, you don't wanna go a % probably. Like, there's a middle ground oftentimes to be had.

And you're right. Like, business is built on risk. You kinda do have to be a little bit risky. Inventory takes a ton of capital upfront to make that gamble, and so it's hard. Oh, nice to meet you.

I was trying to think if there's anything else that we missed on profit first or, you know, it's it's an interesting topic. I definitely suggest people checking out the book. There's endless articles on the website. You could probably even ask ChachiVT to, like, help you implement it, that sort of thing. I'm hoping I can get there where it's, like, fully I feel like my implementation percentage at this point is very low.

And so I'd like to get, like, to a point where it's I can say, you know, I've got 50% of it implemented. Like, I'm I'm focusing a lot on that, and it's it's a thing that's happening. So maybe we'll we'll check-in on that in the future or something and see see how it's going. But it it is a good idea in general, I think, to focus on the profits. And like you're saying, contribution margins, that sexy word that everyone talks about and throws around.

And that is something that a lot of people focus on, but probably could use more focus. I know I've made that mistake before where I haven't focused on it. So I'm just, future David talking to past David, basically. Yeah. But I think, I think one thing also, like, that is definitely a big, been a big takeaway for me is that, like, maybe on the the marketing side of things specifically, which is where a lot of our money goes apart from, like, maybe off just after cost of goods sold, it's then marketing.

I think one thing I've tried to think about is that maybe the best way to look at it is that, actually, what a lot of people try and do is they try and, like, they they say, for example, ads, meta ads. They they're trying to, like, put a lot of energy into into basically trying to, get, like, a basically, hit a margin that makes sense for their business. They spend a lot of energy and a lot of resources doing it. And I think that's part of the game, definitely. I think you gotta get better at, you know, better ads, better creative, better landing pages trying to bring that cost of acquisition down.

But I think brands that I've that do really, really well, it's not because they've aced that. It's because they've gotten other sources. They've they've put effort into things that are harder to do from an effort perspective, from a time perspective, but they reap the benefits because they're not paying a premium because they have taken the time to do it. You see, like, something like, I was speaking to Eric Bandholz from, Beard, Beardbrand the other day and, like, his YouTube following. Right?

I mean, it's it it's insane, like, how good their YouTube following is, but that has taken a ridiculous amount of effort and time to build up of which most people aren't willing to do. And that's why they're able to reap the benefits of of of growing their business through a channel that isn't isn't costing them an absolute fortune on every sale. Doesn't mean that they they don't they can't run ads or they aren't spending money on ads, but I think that's the key is, like, understanding that that if you if you just try and, like, beat the game, like, just from a case of, like, trying to, like, make the numbers work every time just about and do what everyone else is doing, it's really hard. But if you can find other sources and I say this having not done it myself, so I'm not, like, like, trying to preach, you know, you know, here. But I do I do think, like, that's got that's what my focus is trying to be on now, is trying to find interesting ways to kind of, to to grow a business without, like, with without just trying to do what everyone else has done because I think that's kind of maybe how you can do it without without really overextending the business.

Yeah. That makes sense. It's, like, basically, focus on figure out what works for your brand, your business, and focus on that. I do think caveat is, like, 90% of brands should be focused on Facebook ads because that's, like, the acquisition engine that works the best for pretty much for most people. And that should be an important part of every brand's acquisition strategy unless it doesn't work or doesn't make sense.

Like, most brands basically should be focused on that. But you're right. Like, focus on what works. Find what works. Focus on that and, like, double down, double down, double down kind of thing.

Ignore the noise. Just keep digging in, and hopefully, that will pay off. Yeah. You wanna wrap this up? I think we're kind of at the end of time here, trying to keep these on the shorter side, thirty minutes or so, more snack bite information, for y'all out there.

But you wanna wrap wrap us here? Yeah. Thanks for thanks for listening in, and, thanks for waiting. It's been a little while. We simply recorded the last one, so appreciate you guys tuning into this one.

And, let us know what else you wanna hear about, and, we'll definitely definitely talk about it in one of the next episodes.