00:00.531 –> 00:06.993
[SPEAKER_00]: Generally, all brands have a different range of constraints, but it all comes back to kind of the source of data.

00:07.193 –> 00:11.654
[SPEAKER_00]: When your Shopify dashboard says one thing, your triple wild is another thing, or store heres, it’s another thing.

00:11.874 –> 00:14.695
[SPEAKER_00]: The first source is to, can I get right this out?

00:14.755 –> 00:15.975
[SPEAKER_00]: Can we just start it this out?

00:16.055 –> 00:25.478
[SPEAKER_00]: Can I work my way down that piano and can we see through margins that actually match in say zero or quickbooks as much as they do on the dashboards that most founders look at?

00:28.143 –> 00:30.526
[SPEAKER_02]: It’s the e-commerce master plan podcast.

00:31.087 –> 00:35.173
[SPEAKER_02]: Here to help you solve your marketing problems and grow your e-commerce business.

00:35.694 –> 00:43.485
[SPEAKER_02]: Cutting through the hive to bring you inspiration and advice from the e-commerce sector and beyond, here’s your host, Chloe Thomas.

00:46.798 –> 00:48.299
[SPEAKER_01]: Hello and welcome!

00:48.339 –> 00:49.279
[SPEAKER_01]: It’s great to have you here.

00:49.379 –> 00:53.860
[SPEAKER_01]: Thank you for hitting play and choosing to listen to one of our inspiring guests.

00:54.361 –> 00:58.442
[SPEAKER_01]: In this episode we’re doing one of our WWYD episodes.

00:58.482 –> 01:00.163
[SPEAKER_01]: Yes, it’s what would you do time?

01:00.563 –> 01:09.466
[SPEAKER_01]: These are the episodes where we get an expert in the industry to come on and take us through a scenario on what they would do if they were faced with that scenario.

01:09.946 –> 01:13.987
[SPEAKER_01]: This time, we’re going finance, yes, for the first ever time.

01:14.347 –> 01:18.408
[SPEAKER_01]: We are donating an entire episode to the subject of Ecommerce Finance.

01:18.968 –> 01:19.769
[SPEAKER_01]: Not something.

01:19.989 –> 01:23.430
[SPEAKER_01]: When we’ve done selling your business, we’ve done buying a business.

01:23.550 –> 01:26.230
[SPEAKER_01]: We’ve never done the finance as of running your business.

01:26.710 –> 01:30.151
[SPEAKER_01]: So our guest today is going to be answering the what would you do?

01:30.611 –> 01:35.893
[SPEAKER_01]: That is, what would you do if you were bought in a CFO of a fast growth D to C brand?

01:36.493 –> 01:55.216
[SPEAKER_01]: and I’m really looking forward to this and I know you’re really going to like listening to it because we get into some really good nitty gritty stuff that even if you’re even if you’re trying to void finance like the plague you’re going to get a lot out of this you’re going to like it you’re going to find finance less scary and you’re going to get some great ideas for improving the performance of your business.

01:55.756 –> 02:03.178
[SPEAKER_01]: So make sure you listen to the end of the episodes you don’t miss out on my guest top tips because they’re particularly good as well and you’ll also get my

02:09.657 –> 02:11.697
[SPEAKER_01]: and now to introduce our special guest.

02:12.137 –> 02:24.340
[SPEAKER_01]: Dan Major is a fractional CFO for D to C fashion, footwear and beauty brands focused on scaling profitability by unlocking margin and freeing up cash for ads and stock.

02:24.400 –> 02:25.320
[SPEAKER_01]: Hello, Dan.

02:25.700 –> 02:27.781
[SPEAKER_01]: Hello, nice to see you.

02:27.921 –> 02:30.201
[SPEAKER_01]: Very cool to have you here on the show.

02:30.361 –> 02:34.782
[SPEAKER_01]: And how did you get into the world of e-commerce before we go completely fine, Antscrazy?

02:35.638 –> 02:36.699
[SPEAKER_00]: I’ve always worked in brands.

02:36.859 –> 02:44.522
[SPEAKER_00]: I had one quite painful year in insurance, which very, very quickly confirmed to me that that is not where my future lie.

02:44.942 –> 02:47.204
[SPEAKER_00]: The most of my career has been in various in brands.

02:47.724 –> 02:52.206
[SPEAKER_00]: It is bigger than Gucci and smaller than 7 bigger brands.

02:52.306 –> 02:53.887
[SPEAKER_00]: And always in finance.

02:54.487 –> 03:00.272
[SPEAKER_00]: And bit by bit, I focused more and more on e-commerce, eventually had an e-commerce function borting and under me.

03:00.432 –> 03:07.798
[SPEAKER_00]: And I kind of found that link between finance, marketing and operations, which is fairly unique in deed sea brands.

03:08.059 –> 03:17.407
[SPEAKER_00]: Thought quite a few brands make some pretty terrible decisions with the whip, but because they weren’t really taking note of their financials, their unique economics.

03:17.967 –> 03:18.487
[SPEAKER_00]: And I thought,

03:19.408 –> 03:21.011
[SPEAKER_00]: I could make an impact there.

03:21.151 –> 03:27.882
[SPEAKER_00]: I could provide that financially lens and specifically help do to see first brand families.

03:28.824 –> 03:30.567
[SPEAKER_01]: I have to say, having worked with

03:32.118 –> 03:41.187
[SPEAKER_01]: many different e-commerce and supplier side businesses over the years of having the agency doing the consulting, doing all the various bits and pieces of done working in house, etc, etc.

03:42.368 –> 03:49.214
[SPEAKER_01]: If your if a brand has a quality good finance director, finance team,

03:50.375 –> 04:00.510
[SPEAKER_01]: it makes such a difference, you know, the good ones are like the marketing heroes, you know, the marketing team love the good finance people because they actually, everybody’s speaking the same numbers.

04:00.891 –> 04:05.838
[SPEAKER_01]: And like, whenever I approach a brand and they’re like, oh, we try not to talk to finance, oh shit.

04:06.358 –> 04:16.365
[SPEAKER_01]: You know, it’s like, oh no, this one, we’ve got big problems here because if finance marketing and finance need commerce aren’t getting on, then someone’s been hired badly.

04:16.825 –> 04:25.931
[SPEAKER_00]: Yeah, and it’s natural ground founders normally come from, or more often they’re not come from a product background, and they want to be involved in the product that’s more driven into it.

04:25.971 –> 04:31.315
[SPEAKER_00]: First place, sometimes a marketing background as well, very rarely do they come from a finance operations background.

04:31.395 –> 04:33.616
[SPEAKER_00]: So a lot of the time they come

04:35.592 –> 04:37.675
[SPEAKER_00]: when there’s a need, but they actually don’t love finance.

04:37.695 –> 04:38.236
[SPEAKER_00]: And that’s fine.

04:38.256 –> 04:39.397
[SPEAKER_00]: I’m well aware of that.

04:39.437 –> 04:47.167
[SPEAKER_00]: But if you can have a finance person that can can talk, in-cack, and a low effect across channels is easily as they can financial.

04:47.207 –> 04:52.815
[SPEAKER_00]: Then you’re probably in the right place, and you can actually, you know, you’re able to actually link those parts together.

04:54.121 –> 05:04.324
[SPEAKER_01]: So, let’s imagine you’re starting as the CFO, at a fast grinded C brand who is not doing all the right things.

05:04.404 –> 05:08.025
[SPEAKER_01]: You know, you’re kind of there for a serious finance person coming on board.

05:08.105 –> 05:09.065
[SPEAKER_01]: Cause that’s your what would you do?

05:09.145 –> 05:13.046
[SPEAKER_01]: What would you do if you were bought in as a CFO of a fast grinded C brand?

05:14.646 –> 05:16.167
[SPEAKER_01]: Where do you start?

05:17.787 –> 05:20.588
[SPEAKER_00]: So, generally, all brands,

05:21.610 –> 05:23.891
[SPEAKER_00]: have a different range of constraints.

05:24.252 –> 05:29.014
[SPEAKER_00]: So there’s different areas that can be impacting individual brands.

05:29.535 –> 05:32.136
[SPEAKER_00]: But it all comes back to the sort of data.

05:32.256 –> 05:35.919
[SPEAKER_00]: And I realize probably you hear that a lot of the time, very natural thing to refine it, it’s better to say.

05:35.939 –> 05:41.342
[SPEAKER_00]: But when your Shopify dashboard says one thing, your triple wireless is another thing, or store heres, it’s another thing.

05:41.382 –> 05:42.763
[SPEAKER_00]: And Amazon, how else?

05:43.887 –> 05:48.349
[SPEAKER_00]: are so vastly different from the Amazon British South of that you think you’re getting.

05:48.749 –> 05:53.790
[SPEAKER_00]: The so many obscured fees and payouts, the first source is to get right.

05:54.090 –> 05:55.031
[SPEAKER_00]: Can I get right this out?

05:55.071 –> 05:56.311
[SPEAKER_00]: Can we just staff at the South?

05:56.391 –> 05:58.472
[SPEAKER_00]: Can I work my way down that piano and get that?

05:58.932 –> 06:10.956
[SPEAKER_00]: Can we see through margins that actually match in say zero, quickbooks as much as they do on the dashboards that most founders look at, and pressing refresh 150 times a day on Shopify.

06:11.536 –> 06:20.225
[SPEAKER_00]: A lot of the time they don’t, they’re emitting core things, but it could be a simple as sales tax on the map or something, or it could be pouts or fees or missing.

06:20.645 –> 06:22.787
[SPEAKER_00]: So, you’re a written example.

06:24.453 –> 06:29.157
[SPEAKER_00]: Hi, Greg, some figure a month did C-branders work with, and their third part in ours is tall.

06:29.657 –> 06:43.307
[SPEAKER_00]: It was telling them they were making 15% contribution margin, but actually, when I immediately pulled up, there’s zero financials, and they were completely break-even at that level, and so there’s complete gap, and it turned out they just had not set up this tall.

06:44.092 –> 06:47.336
[SPEAKER_00]: But then that was mastering other things because it completely changed in it.

06:47.356 –> 06:57.087
[SPEAKER_00]: I’ve got a value, completely changed the margin they’re making and it’s a case of just making sure that are the tools you’re using coming up at the same figure to push the board.

06:57.367 –> 07:03.234
[SPEAKER_00]: That’s probably the initial starting point, but for you even start making decisions on the rest of it.

07:04.062 –> 07:12.488
[SPEAKER_01]: Is it feasible to have a third-party reporting tool and, I guess, the ad space, something like a triple whale?

07:12.508 –> 07:25.198
[SPEAKER_01]: It’s exactly matching your QuickBooks or zero accounting piece because in my experience, as the marketer, you’re better at the numbers than I am, because you’re fine, but as a marketer, it’s like,

07:26.018 –> 07:29.061
[SPEAKER_01]: So long as we know they’re all trying, I’ve always taken the approach.

07:29.121 –> 07:33.645
[SPEAKER_01]: So long as we know they’re all trying to report in the same way, we have included that.

07:34.425 –> 07:37.828
[SPEAKER_01]: We have included costs, the right costs where we need to include the right costs.

07:38.368 –> 07:43.433
[SPEAKER_01]: Then I’m okay with differences because of cookie lengths and reporting time when it’s all this kind of stuff.

07:44.296 –> 07:55.596
[SPEAKER_01]: But are you striving for a, May 2026 exactly the same on every single platform or are you striving for numbers you can trust in every platform that are telling the same story?

07:56.400 –> 07:58.321
[SPEAKER_00]: No, I’m not striving for perfection.

07:58.622 –> 08:08.328
[SPEAKER_00]: A lot of the time you could end up creating a cottage industry and finance well before you know, you’d end up by that point, you’ve hired six different roles just to try and keep track of all the tunnels.

08:08.468 –> 08:13.792
[SPEAKER_00]: And it’s, it you become, as I said, it’s a cottage industry and far too much cost and involved.

08:14.132 –> 08:16.854
[SPEAKER_00]: You’re looking for something reliable that you contrast.

08:17.374 –> 08:19.936
[SPEAKER_00]: And if it turns out that by the time you either didn’t

08:20.576 –> 08:24.659
[SPEAKER_00]: every single fee or but into a third party like a triple hour store hero.

08:25.199 –> 08:26.060
[SPEAKER_00]: And it’s slightly off.

08:26.640 –> 08:30.262
[SPEAKER_00]: It’s still as long as you can spot that difference and it’s regularly the same amount.

08:30.503 –> 08:34.305
[SPEAKER_00]: And you can still use that as a kind of a run rate for the month.

08:34.325 –> 08:39.589
[SPEAKER_00]: If you can still see right have a good feeling that you know it might come in and say total sales and I know that next sales.

08:40.289 –> 08:40.749
[SPEAKER_00]: lower than that.

08:40.789 –> 08:52.154
[SPEAKER_00]: But actually, as long as the, I can trust that what it’s showing us in the R or ROS or that I can trust that the net sales coming through, I’m going to have a reasonable idea of what their unit economics are going to look like.

08:52.534 –> 08:55.116
[SPEAKER_00]: So I can get good enough.

08:55.876 –> 08:57.457
[SPEAKER_00]: And that’s what you need for a bit of something.

08:57.497 –> 09:00.598
[SPEAKER_00]: Maybe maybe when you’re a figure, you’re funded, you’ve got a kind of maybe.

09:01.397 –> 09:07.659
[SPEAKER_00]: private equity owners that you need to have everything exact, then find you need to then have the then your payment for a team.

09:08.019 –> 09:11.941
[SPEAKER_00]: But at this point here it’s about having good enough and been on to move forward on it quickly.

09:12.881 –> 09:24.926
[SPEAKER_01]: So we’re trying to get to that point where the founder can refresh in their pretty tall as many times as they like during the month to be pretty confident that when they have their catch-up with down their CFO at the end of the month, there’s not going

09:29.007 –> 09:33.873
[SPEAKER_00]: and that moment happens in 100 million companies as much as it happens in five million companies.

09:34.233 –> 09:44.565
[SPEAKER_00]: There is countless times that you’re going to get called out because of something changed or there’s a one-off or a certain connection to an ad partner dropped or something happened where.

09:45.005 –> 09:46.227
[SPEAKER_00]: that was the case.

09:46.667 –> 09:55.317
[SPEAKER_00]: But the majority of the time, you can get it close enough that you can start to learn to have 11 crust and that gives both sides that almost gives that live dashboard approach.

09:55.678 –> 09:58.461
[SPEAKER_00]: But also, it also means you can cross correct, click on it.

09:58.481 –> 09:59.001
[SPEAKER_00]: There’s no point.

09:59.859 –> 10:07.483
[SPEAKER_00]: waiting to the dead first the month, then going and letting the book keep us work on the 15 days and then having a meeting booked in with me on Saturday 24th of a month.

10:08.204 –> 10:16.909
[SPEAKER_00]: And then finding out that actually something to have a last month, you need to build to react to something much quicker than that, especially indeed see it’s not a flow moving industry.

10:17.109 –> 10:20.691
[SPEAKER_00]: You need to light your six or eight weeks late by the time you’re actually reckoning changes then.

10:21.171 –> 10:22.212
[SPEAKER_00]: So you need to build to get live

10:28.340 –> 10:34.943
[SPEAKER_01]: So you once you’ve got those kind of, um, I guess the numbers, the brand are looking at working for you all.

10:35.244 –> 10:36.224
[SPEAKER_01]: Where do you go next?

10:37.125 –> 10:50.932
[SPEAKER_00]: So then I want to, um, I want to make sure from a unit economics perspective and by that, I mean, if you sell one product, this one scheme, maybe hero skews, so I mean, oftentimes I find that most brands will have

10:51.803 –> 10:55.525
[SPEAKER_00]: two, three, four skews that may come up after 50 different methods.

10:55.545 –> 11:16.054
[SPEAKER_00]: So start their first, but if you sell one of this, does it come, where do they come on a product margin, a gross margin, and a contribution margin, and I know you make money at that point, because a lot of the time, that is where these various tools we’re speaking out are hiding, and it, you know, as I said, there’s different constraints and different businesses, but ultimately speaking,

11:17.054 –> 11:22.178
[SPEAKER_00]: Before we fix anything else, are we actually making money on the sales we think we’re making money on?

11:22.498 –> 11:28.162
[SPEAKER_00]: So there’s industry benchmarks, you can find out pretty quickly where you sit on that.

11:29.077 –> 11:32.959
[SPEAKER_01]: I’m not going to ask you to share benchmarks because we’ll have to get out of every vertical that’ll take us hours.

11:33.299 –> 11:36.421
[SPEAKER_01]: But you mentioned three different types of margin there.

11:36.521 –> 11:38.922
[SPEAKER_01]: Gross margin contribution margin and another margin.

11:38.962 –> 11:42.064
[SPEAKER_01]: Can you give us a very quick explanation of what those three are?

11:42.084 –> 11:45.466
[SPEAKER_01]: Because I know at least some of the listeners are going, what there’s more than one margin?

11:46.106 –> 11:47.046
[SPEAKER_00]: Yeah, very, very quick.

11:47.247 –> 11:48.727
[SPEAKER_00]: And I’m looking at them for different purposes.

11:49.248 –> 11:49.448
[SPEAKER_00]: So,

11:50.599 –> 11:52.180
[SPEAKER_00]: off your revenue, have your product margin.

11:52.280 –> 11:55.921
[SPEAKER_00]: That’s the cost it takes to get your product into you to your warehouse.

11:56.141 –> 12:00.062
[SPEAKER_00]: So that’s the cost of the product that may be any inbound fees, inbound duties and so on.

12:00.462 –> 12:04.964
[SPEAKER_00]: That’s useful because that’s also the margin that might be used to wholesale logic in post going on that one.

12:05.684 –> 12:08.325
[SPEAKER_00]: Okay, that’s that’s one strong word to be what that’d be.

12:09.459 –> 12:15.088
[SPEAKER_00]: Your gross margin is the next one is what it costs to get it out to the customer.

12:15.288 –> 12:22.319
[SPEAKER_00]: So it includes any Shopify selling fees, any economies, maybe any shipping distribution costs.

12:22.640 –> 12:24.262
[SPEAKER_00]: And that you’ve got it out to the customer.

12:25.095 –> 12:28.458
[SPEAKER_00]: And then your contribution margin is your final variable margin.

12:28.958 –> 12:32.301
[SPEAKER_00]: Overall, probably your most important margin as we see first brands.

12:32.661 –> 12:34.983
[SPEAKER_00]: And that is after to include customer acquisition.

12:35.564 –> 12:38.686
[SPEAKER_00]: Now, in the financials, it’s a blended customer acquisition.

12:38.906 –> 12:44.851
[SPEAKER_00]: So it’s the blend between, you know, you might actually find that on a brand new customer, you might look bright even.

12:45.532 –> 12:50.836
[SPEAKER_00]: But then, obviously, with the retention of customers, as long as your blended is a good, you’re probably your student-making money that.

12:51.900 –> 12:58.763
[SPEAKER_01]: Got you, and it’s that it’s that customer acquisition part is once you get to the contribution margin, the last thing you had before.

12:59.003 –> 13:03.245
[SPEAKER_01]: I think we should probably explain contribution as well because that’s still not your profit, is it at this point?

13:03.585 –> 13:11.269
[SPEAKER_00]: No, that’s, that says your final variable margin is everything it costs to deliver and sell one unit to one customer.

13:11.869 –> 13:14.651
[SPEAKER_00]: that is the the contribution you’ve made of that one.

13:14.671 –> 13:25.619
[SPEAKER_00]: So it might be this 20% and you put, you know, sole tonic repound and you’ve collected 20% you’re still going to have all your fixed costs and operating costs off the bottom of that and a lot of companies are very bloated there.

13:25.639 –> 13:30.183
[SPEAKER_00]: So it’s not quite your net profit before tax number, but it’s the final number that

13:30.863 –> 13:37.769
[SPEAKER_00]: you can impact with scale, though, if I felt 10 of them, give a 10x, this, if I sell 20, then it’s going to 20x.

13:37.889 –> 13:44.776
[SPEAKER_00]: Whereas your bottom number is all fixed numbers, they shouldn’t increase the scale in the same way, and that’s actually quite a good tactic.

13:44.816 –> 13:53.263
[SPEAKER_00]: If you’re overweight on the bottom, as long as you’ve got profitable computer margin, you could often go out for that because your bottom numbers start getting smaller,

13:56.247 –> 13:58.989
[SPEAKER_01]: It’s kind of one of those things when people hit a difficult point.

13:59.049 –> 14:01.550
[SPEAKER_01]: It’s really easy to go, oh, we’ll cut overheads.

14:01.990 –> 14:15.058
[SPEAKER_01]: You know, we’ll see what money we can cut, but actually, for the amount of effort it takes to cut a thousand pounds of overhead, it probably takes less effort to increase sales by the amount that we’re bringing in a thousand pounds with a contribution.

14:15.198 –> 14:17.339
[SPEAKER_01]: And of course, then you’re on an upward trajectory.

14:17.359 –> 14:19.380
[SPEAKER_01]: And I think it’s often what people forget is that

14:20.902 –> 14:26.376
[SPEAKER_01]: Yes, we’ve got a cash paper for more profit problem, but actually if we can sell more

14:27.670 –> 14:29.671
[SPEAKER_01]: level of overhead isn’t a problem anymore.

14:29.731 –> 14:31.952
[SPEAKER_00]: Yeah, and that’s totally true.

14:32.432 –> 14:45.657
[SPEAKER_00]: You still, like later on, no, still the elements of dealing with a cash line of things, cash doesn’t always follow the sale or the profit, but with an element of when you’re trying to scale, you can’t scale if your contribute for modernism is not decent.

14:46.098 –> 14:48.058
[SPEAKER_00]: So they just isn’t enough profit left over.

14:48.118 –> 14:52.040
[SPEAKER_00]: So you have to fix those first and then you could pull on the top.

14:52.780 –> 15:00.582
[SPEAKER_00]: And a big part of what I do is actually not trying to, if someone comes in and they break even 0% at the final profit margin, net profit.

15:01.362 –> 15:02.643
[SPEAKER_00]: I don’t want to try and get them’s 20%.

15:03.083 –> 15:10.685
[SPEAKER_00]: I might want to make enough changes to get them’s 10% but then grow their absmends because they might only have been spending 20% on absmends.

15:10.705 –> 15:11.665
[SPEAKER_00]: I might want to get them up to their 5%.

15:12.769 –> 15:23.534
[SPEAKER_00]: because they can then outspend the rest of the competition when the auctions and so essentially that scaling piece is a lot easier if you’re willing to outspend if we’re gonna have a higher count of minutes.

15:23.934 –> 15:26.936
[SPEAKER_00]: So for my perspective, I’m not looking to make someone the highest profit margin.

15:27.336 –> 15:32.579
[SPEAKER_00]: I’m looking to say, well, we’re coming to you to send a bigger than them up at this contribution margin.

15:33.419 –> 15:39.242
[SPEAKER_00]: And then keep the more into the outspend and see if we can then outspend the next layer and the next layer and the next one there.

15:40.053 –> 15:46.802
[SPEAKER_01]: Yes, you’re at that point where you’re going, we’ve got x percentage points, where are we going to deploy these?

15:47.002 –> 15:49.225
[SPEAKER_01]: Is it going to be more marketing or is it going to be my pocket?

15:49.425 –> 15:53.290
[SPEAKER_01]: Obviously, the growth answer is marketing’s been, but clever marketing’s been.

15:53.310 –> 15:55.513
[SPEAKER_00]: Yeah, this pages of life, I guess.

15:55.573 –> 15:58.476
[SPEAKER_00]: There are, there are points that if you’re in the year before you’re going to sell.

15:59.537 –> 16:11.460
[SPEAKER_00]: and you’ve already done three or four years of growth, it might then be useful to focus on ramping up that bottom margin a little bit, because obviously, any valuation will be based on that, that final number.

16:11.700 –> 16:13.180
[SPEAKER_00]: So, different stages of life.

16:13.500 –> 16:25.943
[SPEAKER_00]: If you’re already at a size where you’re happy with and you’re not in a growth phase, then take a bit more of margin off the table, take money off the table, people keep expecting a big exit, solve things, but actually taking money off the table

16:29.884 –> 16:34.625
[SPEAKER_01]: Okay, so you’ve got your accurate numbers feeding into all the different platforms.

16:34.685 –> 16:39.466
[SPEAKER_01]: You’ve got a handle on those unit economics and all those different levels of margin.

16:40.987 –> 16:44.827
[SPEAKER_01]: Now I figure you’re going to need to start finding some impact to make.

16:44.887 –> 16:48.628
[SPEAKER_01]: So how do you work out where to look?

16:48.708 –> 16:52.129
[SPEAKER_01]: Is it always the same place for every brand or the different things you dive into?

16:52.169 –> 16:56.790
[SPEAKER_01]: How do you find the place to make an impact after you’ve got all that accuracy in place?

16:57.638 –> 16:58.399
[SPEAKER_00]: you mentioned earlier.

16:58.699 –> 17:10.451
[SPEAKER_00]: So, every vertical is slightly different, but broadly speaking, if you find in your vertical, you know your metrics of what you should be aiming for as a benchmark, you should put a very quickly see way or over what it’s.

17:10.471 –> 17:21.762
[SPEAKER_00]: So, for example, if the whole industry in your vertical, if the whole industry is getting a 75 to 80 percent product margin, cost, and you’re only getting 60 percent, you’re probably spending too much in your products, so you need to really go shape with the factory.

17:22.262 –> 17:39.404
[SPEAKER_00]: you need to find the cheaper method of making it or equally raise the average order value raised there RRP quite often you’ll find that actually a company is spending far too much on distribution, far too much on in and down in the gross margin and actually it’s not an issue

17:40.245 –> 17:41.987
[SPEAKER_00]: specifically that they’re overspending.

17:42.007 –> 17:50.173
[SPEAKER_00]: They might, you know, it might be besides the weight of the product that they’re spending, that might be the right distribution cost, but if it’s making up 20% of your margin, you can’t go anywhere with that.

17:50.193 –> 17:53.016
[SPEAKER_00]: So then what it might be is, well, why are you sending it for free?

17:53.336 –> 17:57.079
[SPEAKER_00]: So maybe the point is you need a shipping income that can neutralise part of that.

17:57.119 –> 18:02.083
[SPEAKER_00]: So the the recent brand, I said, I worked with earlier that seven, seven figures a month, right?

18:02.263 –> 18:07.648
[SPEAKER_00]: They didn’t have any shipping income and actually just by adding a shipping income, we added four percentage points to their margin.

18:08.268 –> 18:16.352
[SPEAKER_00]: and we adjusted discounting down, because we’re given away bottom matching discounts and I’ve got that from 12% to 8% and there’s another 4% which is there.

18:16.472 –> 18:21.995
[SPEAKER_00]: And so we were able to find eight or nine pounds of average order value on every single sale with no additional costs in the business.

18:22.375 –> 18:23.175
[SPEAKER_00]: It won’t always be that.

18:23.375 –> 18:27.617
[SPEAKER_00]: You might already be covering those things, but there will be somewhere in your panel which is overweight.

18:28.138 –> 18:32.400
[SPEAKER_00]: And if you look down at it and your product margin is good, be your gross margin is terrible.

18:32.860 –> 18:34.241
[SPEAKER_00]: It’s in there, though it’s,

18:35.041 –> 18:36.622
[SPEAKER_00]: you’re selling fees or your distribution.

18:36.922 –> 18:56.473
[SPEAKER_00]: If you’re at gross margin, you’re still hitting 60% 55% maybe 50% in the streets, and you’re down there, you’re pretty solid, and you’re against your verticals benchmarks, you’re doing solid there, but actually you’re in a 10% confusion margin, then something’s gone, hey, why are you in your marketing and you need to kind of pull back them, maybe it’s because you’re in a growth phase, and therefore,

18:57.273 –> 19:08.391
[SPEAKER_00]: almost all of your markets and spend is on newcack, not retention and maybe there’s something there to fix, but you can normally quite quickly spot where in the pinout you’re overweight.

19:09.200 –> 19:13.143
[SPEAKER_00]: equally same thing you could be making 25% contribution margin.

19:13.184 –> 19:17.527
[SPEAKER_00]: But if you’re spending 30% on your operating costs and fixed costs, you’re still going to be underwater.

19:17.848 –> 19:25.014
[SPEAKER_00]: So then you may need to get some changes to your fixed costs or headcounts or subscriptions that the pieces below there.

19:25.274 –> 19:31.119
[SPEAKER_00]: So it’s about kind of spotting where you’re heavy and then targeting the easiest

19:33.120 –> 19:39.884
[SPEAKER_01]: And you’ve mentioned already about redeploying some of that saved margin into more marketing spend.

19:41.125 –> 19:58.015
[SPEAKER_01]: That’s very easy to do flippantly, I suppose, but to do it well, how do you make sure that that’s just not becoming a cost somewhere else in the P&L and is actually bringing in the right things without becoming the marketing person yourself?

19:58.624 –> 20:01.605
[SPEAKER_00]: So it’s about having a really close relationship with the marketing person.

20:01.945 –> 20:08.948
[SPEAKER_00]: So from that perspective, this is where brands don’t need to use finance as kind of a cost cutting-edge side, but can use it.

20:09.008 –> 20:10.048
[SPEAKER_00]: So it’s not defensive.

20:10.068 –> 20:12.949
[SPEAKER_00]: You can always use it as an offensive utility.

20:13.489 –> 20:22.413
[SPEAKER_00]: If we’re happy with the net margin and they’re not in a period of their life where their needs take particularly heavy dividends or they’re not in a period of life where they need to show heavy net profit margin.

20:23.113 –> 20:32.987
[SPEAKER_00]: then all of the savings we can make across the PNL and you’ll need them every year, metric, matters 60% higher in the last two years or at everyone has a different statistic, something like that.

20:33.027 –> 20:37.533
[SPEAKER_00]: But it’s if you’re going to get more expensive next year and the year after and your job is to keep finding.

20:38.469 –> 20:51.822
[SPEAKER_00]: enough spare margin and enough meat on the bottom that you can afford that next cost of cac, that next cac, that next every year because if your competitors can’t or if people in your space can’t then you’re going to win those bits, you’re going to win those stats.

20:52.182 –> 21:02.212
[SPEAKER_00]: So every year you’re going to have to find more and more and it might be part of the RLP, it might be that you find savings, you might find that there’s some easy wins going and then it comes, you know, it’s RLP focus.

21:02.612 –> 21:02.752
[SPEAKER_00]: But

21:03.413 –> 21:26.288
[SPEAKER_00]: the aim then is if the idea is scale is a growth and then it’s about someone will how much you spend if you’re already spending 40% on marketing spend then we have an efficiency problem because if you can’t find scale on 40% of net revenue on marketing then then you’ve got a deep dad that first but a lot of brands were able to you know scale quite quickly on say 15th then ad spend during covid years

21:26.948 –> 21:32.511
[SPEAKER_00]: And that world has gone now and they kind of, you’ve talked to them and they say, well, why do I used to get that growth then?

21:32.651 –> 21:39.654
[SPEAKER_00]: And it’s just a different, different scenario, maybe metering good, that ads got more widespread and charging more and it’s more separated platform.

21:40.114 –> 21:44.576
[SPEAKER_00]: If growth is the ambition, which is what is really important to work out what the goals are, first of all.

21:44.856 –> 21:47.597
[SPEAKER_00]: Because if the goals are to milk profit, then that’s the totally different game.

21:48.058 –> 21:48.538
[SPEAKER_00]: But if,

21:49.218 –> 21:53.964
[SPEAKER_00]: Scal is the goal, then it’s about feeding that into marketing and then tracking each other.

21:54.004 –> 22:07.300
[SPEAKER_00]: It’s never linear, so you can’t put, it’s never quite linear to say I’m going to put money into here and I’m going to get it out here because obviously NewCack is more expensive than it’s a few like returning customers, you almost have to break through new levels.

22:08.341 –> 22:09.182
[SPEAKER_00]: But you have to monitor it.

22:10.168 –> 22:11.008
[SPEAKER_01]: love that answer.

22:11.228 –> 22:35.417
[SPEAKER_01]: And the other thing which the other thing which which people get tripped up by as they grow is inventory and stock and cash flow and overstocks and all that stuff that goes on in the actual physical product which seems to be, I mean I don’t get into the P&L of many commerce stores these days but it does seem to be one of the big

22:36.277 –> 22:41.400
[SPEAKER_01]: problems and the big challenges that people come up against is is actually managed to have enough stock to sell.

22:42.080 –> 22:45.321
[SPEAKER_01]: How can a brand, how do you help brands solve that problem?

22:46.322 –> 22:52.105
[SPEAKER_00]: So quite often there is a problem of having enough stock to sell but also according to much stock.

22:52.705 –> 23:02.550
[SPEAKER_00]: A lot of the time brands are overweight on stock and they are, they often don’t have enough of their course cues but they also don’t have enough cash to buy enough of their course cues.

23:03.703 –> 23:08.289
[SPEAKER_00]: and the reason is they’ve across the last couple of years and it doesn’t hit you in the face straight away.

23:08.450 –> 23:09.831
[SPEAKER_00]: It’s left on that where I was shot.

23:10.452 –> 23:19.064
[SPEAKER_00]: And that by that you made a mistake on, that by that you may be overbought on across two or three years, still sitting in there and bit by bit.

23:19.845 –> 23:27.292
[SPEAKER_00]: you know, if you use up a million in stock a year and you’re sitting on a million stock technically your stock takes a year to pass through.

23:27.552 –> 23:43.508
[SPEAKER_00]: So you’re not going to have to go back for a whole year, though now in reality you probably have a handful of excuse that you’re sharing through every 60 to 90 days, however you also have other stock that probably take until three years worth of and actually that’s that that in most brands overweight.

23:44.048 –> 23:46.631
[SPEAKER_00]: and actually could do with, you know, play for the bet.

23:46.891 –> 23:47.952
[SPEAKER_00]: Yeah, that’s all hasn’t worked.

23:48.452 –> 23:53.518
[SPEAKER_00]: Now, that’s the stop you use, say, sell times for Fridays, and you just clear it back.

23:53.598 –> 23:57.642
[SPEAKER_00]: And all you’re worried about doing, you’re not in a so worried about making a margin, I think you’re just worried about getting the cost of sale back.

23:58.142 –> 24:03.608
[SPEAKER_00]: So the product back to you, to place another bet to go again, and with another star or another skew.

24:04.148 –> 24:12.035
[SPEAKER_00]: So the inventory perspective, most people are sitting on too much, and often there is a unlock there, two, three multi-six figure, our amount of cash.

24:12.495 –> 24:15.577
[SPEAKER_00]: Look, and it’s not instant, from it’s not instant to change.

24:15.758 –> 24:24.925
[SPEAKER_00]: You need to work on it, and you might need a sale period or a Black Friday or a January sale, but most of the time there is six figures in multi-six figures in there that could be unlocked.

24:28.334 –> 24:33.118
[SPEAKER_02]: E-commerce master plan is supporting by some of the greatest companies in the E-commerce sector.

24:33.239 –> 24:41.366
[SPEAKER_02]: Here’s a reminder of who they are.

24:41.526 –> 24:43.408
[SPEAKER_02]: It’s time for the top tips round.

24:45.990 –> 24:47.231
[SPEAKER_01]: Okay, I love this section.

24:47.271 –> 24:51.475
[SPEAKER_01]: Gives me and our listeners some really quick ideas for taking our businesses to the next level.

24:51.535 –> 24:53.357
[SPEAKER_01]: Dan, are you ready for the top tips?

24:54.078 –> 24:54.278
[SPEAKER_02]: Yes.

24:55.839 –> 24:56.299
[SPEAKER_01]: Excellent.

24:56.380 –> 24:58.201
[SPEAKER_01]: Okay, the book top tip.

24:58.401 –> 25:05.487
[SPEAKER_01]: If everyone listening to this podcast agreed to take Friday off and read a book to make their business better, which book would you recommend?

25:06.218 –> 25:11.221
[SPEAKER_00]: So, the book I’ve chosen is called 12 months to 1 million by Ryan Daniel Moran.

25:11.861 –> 25:14.083
[SPEAKER_00]: The title is a little bit clickbaity.

25:14.623 –> 25:23.489
[SPEAKER_00]: So there are some things in there which are along those lines, but the bit I really like is that they go very, very deep on your IPP, your ideal

25:29.252 –> 25:34.035
[SPEAKER_00]: tough fabric, though, I am going to make tough fabric for seven different verticals.

25:34.475 –> 25:39.819
[SPEAKER_00]: You go, my ICP is someone who’s just started jujitsu or something.

25:40.299 –> 25:50.866
[SPEAKER_00]: I’m going to say, right, product one is the kit, product two might be the belt, product three might be the athletic tape, they need product, but I’m creating that three to five product ecosystem that our person is going

25:56.769 –> 26:11.838
[SPEAKER_00]: create that 3 to 5 product ecosystem around a journey of an ITP, then Sam will actually my faculty can produce one thing so I’m going to do it for this buyer and this buyer and this buyer because buying those new customers having 2, 3, 4 email, it’s very expensive.

26:13.105 –> 26:21.909
[SPEAKER_01]: I’m so glad you qualified that decision because the title 12 months to $1 million is it sounds like the least CFO book ever.

26:22.309 –> 26:23.530
[SPEAKER_00]: No, absolutely.

26:23.790 –> 26:35.236
[SPEAKER_00]: And I’m done all over this one because there’s plenty of other options and the site options you kind of hear me come up over as a profit first or an e-mith revisited, but I’ve thought you’d probably heard that a hundred times and I’m thinking I’ve slightly different option.

26:35.256 –> 26:39.798
[SPEAKER_00]: I’m definitely qualifying it because there is a lot in there which is…

26:40.813 –> 26:46.158
[SPEAKER_00]: It’s probably slightly on the old fashioned Gallup product and Amazon dial journey.

26:46.478 –> 26:55.506
[SPEAKER_00]: But I just, if someone was the 3D one part, I was just focused on that building an ecosystem around the journey of your ICP and then they will keep coming back to you.

26:55.566 –> 26:56.327
[SPEAKER_00]: It’s not new, CAC.

26:56.487 –> 26:59.470
[SPEAKER_00]: They will recommend you to their friends and that’s what I really love about them.

27:00.290 –> 27:00.811
[SPEAKER_01]: Love that.

27:00.871 –> 27:01.191
[SPEAKER_01]: Okay.

27:01.672 –> 27:07.277
[SPEAKER_01]: Traffic top tip, which marketing method do you either prize above all others or think doesn’t get the press it deserves?

27:08.262 –> 27:12.183
[SPEAKER_00]: Again, as a CFO, my natural inclination is to stay simple first.

27:12.243 –> 27:19.805
[SPEAKER_00]: So if you’re a Shopify business, say, focused on one channel, however, inevitably, brand-fandered do-spicy channels, they want to be in multiple places.

27:20.305 –> 27:25.406
[SPEAKER_00]: So remember, from a market perspective, to judge the hell effect on the blended marketing.

27:25.746 –> 27:30.087
[SPEAKER_00]: So if you might find that you’re ticked up on your mixer are creating a low ROI.

27:30.548 –> 27:31.808
[SPEAKER_00]: But if that spend

27:32.628 –> 27:55.247
[SPEAKER_00]: on Metta and TikTok awareness suddenly generates a bumping sales on Amazon, you can’t shut the tap on this one because you have to, you have to, you have to, you have to access it as an overall, to see whether there is a halo impact across all of the channels, so marketing don’t just shut up the channel based on single channel ROI, you almost have to look at how it’s impact on your total blended result.

27:56.400 –> 27:59.401
[SPEAKER_01]: and everyone, that was a fine ant person saying that.

27:59.762 –> 28:03.083
[SPEAKER_01]: As I said earlier, you get the right finance people in your business.

28:03.383 –> 28:05.144
[SPEAKER_01]: It all makes sense.

28:05.164 –> 28:06.525
[SPEAKER_01]: Sorry, dad.

28:06.925 –> 28:08.646
[SPEAKER_01]: Okay, the tool-top tip.

28:08.746 –> 28:13.048
[SPEAKER_01]: Maybe a collaboration tool, a social media plug-in, a phone app, or just a way of working.

28:13.448 –> 28:17.430
[SPEAKER_01]: Is there a call at all to all you use that makes you and your team more efficient from day to day?

28:17.870 –> 28:24.753
[SPEAKER_00]: There is a tool that I like to bring into all of my DC brand clients and anyone else that managed to speak to.

28:26.276 –> 28:26.817
[SPEAKER_00]: There’s two of them.

28:26.837 –> 28:28.219
[SPEAKER_00]: There’s an American one and an English one.

28:28.239 –> 28:31.403
[SPEAKER_00]: The American one is called A2x and the English one is called Link My Books.

28:31.503 –> 28:33.045
[SPEAKER_00]: And they do broadly the same thing.

28:33.065 –> 28:33.485
[SPEAKER_00]: I’m full though.

28:33.766 –> 28:34.306
[SPEAKER_00]: Say they did.

28:34.326 –> 28:35.408
[SPEAKER_00]: But they do broadly the same thing.

28:35.748 –> 28:38.271
[SPEAKER_00]: And they’re definitely the Link My Books and A2x.

28:38.312 –> 28:42.176
[SPEAKER_00]: They essentially automate the Shopify Amazon TikTok.

28:43.263 –> 28:45.065
[SPEAKER_00]: supporting directly into your financials.

28:45.446 –> 28:59.604
[SPEAKER_00]: So quite often, if your bookkeeper is not a did-see-first bookkeeper, trying their posting net panels as your sales, and they weren’t post-any feeds, or you know, where is this completely told that?

28:59.624 –> 29:01.286
[SPEAKER_00]: You almost have live numbers in

29:02.347 –> 29:03.228
[SPEAKER_00]: Bookbook saw zero.

29:03.808 –> 29:04.489
[SPEAKER_00]: It just works.

29:04.889 –> 29:05.850
[SPEAKER_00]: It’s it’s simple.

29:06.010 –> 29:07.871
[SPEAKER_00]: It’s cheaper than bookkeeping hours.

29:08.652 –> 29:13.475
[SPEAKER_00]: And your bookkeeper will thank you if you bring it up to them because they have a lot of plants.

29:14.416 –> 29:22.122
[SPEAKER_00]: But it just works and it saves time and it accurate and you get all of the fees, all of the cogs, all of the revenue, all of the clarity counts.

29:22.222 –> 29:23.923
[SPEAKER_00]: Everything’s just done automated.

29:24.063 –> 29:24.824
[SPEAKER_00]: You have to set it up.

29:24.984 –> 29:26.485
[SPEAKER_00]: But once it’s plummeted, it’s pairing.

29:26.685 –> 29:27.906
[SPEAKER_00]: It’s working really well.

29:28.867 –> 29:29.287
[SPEAKER_00]: All branching.

29:30.311 –> 29:31.612
[SPEAKER_01]: love that recommendation.

29:31.652 –> 29:32.193
[SPEAKER_01]: Thank you.

29:32.733 –> 29:37.777
[SPEAKER_01]: The carbon top tip, what’s your favorite way to reduce the carbon footprint of an e-commerce store?

29:38.658 –> 29:53.230
[SPEAKER_00]: So, dear, I want to buy less and buy right over production dead stock is one of the biggest, you know, it’s a landfill issue, it’s a carbon way to this shoot, heighten your buy, you sell through data, you can go out stock occasionally.

29:53.890 –> 29:54.511
[SPEAKER_00]: You’re allowed to.

29:54.631 –> 29:57.813
[SPEAKER_00]: You’re allowed to, on especially on that’s not your core.

29:57.853 –> 30:03.698
[SPEAKER_00]: Don’t go to stock on your course skis, but on some of those bits, it’s fine to buy slightly less than you think you can sell and then reorder.

30:04.439 –> 30:06.201
[SPEAKER_00]: Don’t end up putting it into landfill later.

30:06.541 –> 30:08.863
[SPEAKER_00]: It’ll improve your margins and it’ll improve your carbon.

30:09.243 –> 30:09.824
[SPEAKER_00]: Come on, wait.

30:10.544 –> 30:19.472
[SPEAKER_01]: Probably the biggest and best advice you can ever give on reducing the carbon footprint of anything in the world of retail by the right stock and by less of it.

30:20.112 –> 30:20.533
[SPEAKER_00]: It’s like

30:21.299 –> 30:37.262
[SPEAKER_00]: If you can set it up so you can get hold of it quicker as well, not by plane, but you know, you can have a, if you are, maybe you can get to point me on the assuring then then that can again save, but but ultimately be the overall aim here is that you can get away with buying rest and being able to and selling all of it.

30:39.063 –> 30:40.283
[SPEAKER_01]: Yes, that is the goal.

30:49.702 –> 30:54.506
[SPEAKER_00]: So I took quite regularly on LinkedIn, Dan Major, on LinkedIn.

30:54.906 –> 30:57.188
[SPEAKER_00]: And I also, I write a weekly newsletter.

30:57.688 –> 31:02.432
[SPEAKER_00]: There is a free resource for deedseed margin calculated people are interested in that.

31:02.752 –> 31:10.197
[SPEAKER_00]: But I also, I write about the kind of things that deedseed brand founders wish they knew if they had a CFO in the room.

31:10.658 –> 31:12.079
[SPEAKER_00]: It doesn’t go deep on the finance.

31:12.239 –> 31:13.800
[SPEAKER_00]: It goes deep like I was spoken about today.

31:13.820 –> 31:18.324
[SPEAKER_00]: It goes deep on actionable insights and texts that they can use to help them.

31:19.084 –> 31:20.605
[SPEAKER_00]: improve their business straight away.

31:21.887 –> 31:23.048
[SPEAKER_01]: Nice, love that everyone.

31:23.068 –> 31:26.010
[SPEAKER_01]: We’ll make sure you put links to all of that in the show notes for you all.

31:26.130 –> 31:28.993
[SPEAKER_01]: And Dan, thanks again for coming on the Commerce Master Plan podcast.

31:29.393 –> 31:31.115
[SPEAKER_01]: It has been brilliant chatting with you.

31:31.135 –> 31:33.216
[SPEAKER_01]: So thank you for sharing so much of advice for everybody.

31:33.617 –> 31:34.818
[SPEAKER_00]: Thank you very much for having me.

31:40.648 –> 31:46.591
[SPEAKER_01]: Doesn’t that get you excited about the possibilities of taking a good look at your finances and what it could do for your business?

31:47.151 –> 31:49.532
[SPEAKER_01]: Love what Dan ran through there.

31:49.712 –> 31:59.496
[SPEAKER_01]: Getting that accuracy right at the start of it all, he then needs to get to grips the economics and then it’s all about finding the opportunities wherever the problem is, how can we solve them?

31:59.876 –> 32:03.018
[SPEAKER_01]: How can we fix that with different approaches and different strategies?

32:04.358 –> 32:05.700
[SPEAKER_01]: really love that chat with Dan.

32:05.780 –> 32:07.101
[SPEAKER_01]: I hope you found it useful too.

32:07.162 –> 32:10.906
[SPEAKER_01]: If you like our dive into finance, do think this is the first step of time we’ve done it.

32:10.946 –> 32:14.490
[SPEAKER_01]: Then do let me know and maybe we’ll bring some more of it to you.

32:14.510 –> 32:22.079
[SPEAKER_01]: You can get your hands on our notes from this episode including the top tips and links and all that good stuff by heading over to ecommercemasterplanned.com.

32:22.439 –> 32:33.153
[SPEAKER_01]: You can also use our direct episode short link just put ECMP.info forward slash the number of the episode into the URL bar and you’ll be redirected straight to the right episode page.

32:33.634 –> 32:40.482
[SPEAKER_01]: When you get to the website, you can also add yourself to our email list so you don’t miss out on any of the stuff I share to help you improve your business.

32:41.183 –> 33:00.851
[SPEAKER_01]: If you liked this episode, then one that comes with a surprisingly large number of similar recommendations is Episode 586, with Richard Chappell who’s the ex-CMO of Jim Shark, and he was doing a what would you do all about if he was starting a new job as CEO at an eight figure fashion brand.

33:01.551 –> 33:13.304
[SPEAKER_01]: and it’s kind of more taking a marketing and sales perspective to what we’ve just gone through really fascinating stuff definitely worth a listen after this one because it really does build on what we’ve just been talking about.

33:13.905 –> 33:17.830
[SPEAKER_01]: You can find all of what would you do’s at ECMP.info

33:21.053 –> 33:25.676
[SPEAKER_01]: Thank you for tuning in to this and every episode that you do of the e-commerce master plan podcast.

33:26.077 –> 33:38.845
[SPEAKER_01]: We bring you a new interview every single week because we want to inspire and help you to succeed and thrive with your e-commerce business, including encouraging businesses and consumers to make more sustainable buying decisions.

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[SPEAKER_01]: So, if you know someone they show can help, please tell them to listen to the e-commerce master plan podcast.

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[SPEAKER_01]: I hope you have a great week and don’t forget to keep

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[SPEAKER_02]: Thank you for listening to the e-commerce Master Plan podcast.

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[SPEAKER_02]: Find out more at e-commercemasterplanned.com slash podcast.