Issue 109: The "to the moon" 🚀 scaling creative formula

Look folks, too much to get into this issue to dilly-dally with a clever intro. Cue the Sweet Brown gif:

| UPCOMING EVENTS

• MAY 7: Learn how to scale ad spend & profit w/ Matt Putra

• MAY 8: What’s happening in DTC? w/ Jordan West

| TWEET OF THE WEEK

First-order profitability. Contribution margin. Sustainable growth.

If you’re in DTC these days, you’ve probably heard that “net” is more important than “gross”. Cost of acquisition? Up. Cost to borrow? Up. Cost of shipping, freight, warehousing? Up. Frothy VC dollars and valuations for consumer brands? Gone.

Understanding your unit economics and managing cash flow has never been more important. Of course, that’s much easier to say than to do.

In this edition of DTC Times, we're going to look at the unsexiest trending key unlock for your business. Finance.

This week:

1. Know your numbers

2. How to fund your business

3. Valuing your business

Let’s dive in →

Know your numbers

If you’re fighting for product market fit, having a comprehensive chart of accounts seems a bit “cart before the horse”.

It is extremely important to have your accounting ducks in a row as you grow beyond the PMF stage, however. As you add layers of complexity to your business in the form of new regions, additional sales channels, and an expanding supply chain, you won’t be able to simply log in to your Shopify dashboard and eyeball your profit.

First, let’s talk contribution margin…

| YOUTUBE UNIVERSITY

The Formula for Creative that Scales to the Moon for Brands - Google LA - Jacques Spitzer

| TOGETHER WITH EIGHTX

Does your contribution margin decline when you increase your ad spend? Join an exclusive AMA with a 9-figure eCom CFO.

🚀 Unveiling the Expert Roadmap to Smart Ad Spend - The AMA Edition

Ever wonder how the pros ramp up their ad spend without compromising profitability? Here’s your chance  to ask Matt Puttra, a seasoned eCom CFO, during our live AMA!

Here's what's on the agenda:

📈 Scale Your Ad Spend: Tactics to boost your marketing dollars effectively.
💡 Insightful Investment Tracking: Ensure your budget is fueling growth.
🗣️ Direct Line to Expertise: Engage with Matt and get your answers live.
🔍 Profit Impact Deep-Dive: Understand how to make each ad dollar work harder.

Prepare to catapult your e-commerce venture to new heights with Matt’s insider knowledge and experience.

🎯 Secure Your Seat! Dive into a session that could redefine your financial strategy.

Click and confirm your spot. 🗓️ Don’t miss this chance to get actionable insights!

| QUICK SHOTS

• @SeanEcom: Everyone. There is only one bad guy. It isn’t me, it isn’t saas, it isn’t your agency…

• @codyplof: 6 months ago, our growth felt like it slowed to a halt, customer acquisition was down and we came close to our first down month. I was ready to quit. Fast forward to today, we're adding thousands of new customers a day, and growing almost too fast. Here are 5 ways we're doing it:

• @sourfraser: Let me repeat this for those who don’t listen. Creative is the new targeting.

• @BillDA: Today I am $353,000 richer and Jeff Bezos is $353,000 poorer 🤑

• @TaylorHoliday: So this whole landing pages becoming alternative storefronts thing... I am just so skeptical that the experience will be better than what Shopify or native shops on meta/tik tok can provide. Or if it is what prevents them form duping features?

• @C_Shelefontiuk: Dropoff in checkout has more to do with what happened before the checkout than what's going on in the checkout

| HERE FOR THE MEMES

| AND IN OTHER NEWS…

| GET LINKED

Let's go to ad school — here's a class on Contribution Margin 101 (and why it matters for profitability):

First, gross profit margin and contribution margin are NOT the same thing.

➝ Gross profit margin = Revenue - COGS
➝ Contribution margin = Revenue - Variable Costs (VC)

But this still isn't the final stop in true profitability, especially in your ad account. That's first-order contribution margin:

➝ First order contribution margin = Revenue AOV (first order) - [VC]

Let's break down what goes into your variable costs:

• VC = Cost of Delivery + CAC

• Cost of Delivery = Shipping, Fulfillment, Fees, COGS, Tax, etc.

• CAC = Ad spend

So, you subtract all this from your first order revenue AOV to get the true profitability metric, first order contribution margin. This helps you determine the breakeven point for your paid ads to set informed targets and sustainably grow your ad account.

With our client Saltyface, for example, we:

1. Created a detailed 12-month financial forecast

2. Set cost cap parameters to maintain steady CAC

3. Scaled ad spend 512.24% with cost controls

We helped Saltyface boost new customer revenue by over 244%. While reducing CAC wasn't their goal, we helped them achieve responsible account growth during a peak season — they found a sweet spot between new revenue and costs, which all started with contribution margin awareness.

No matter your goal, knowing your numbers is the all-important first step in achieving it.

Questions on this? Lmk.

| YOU’RE HIRED

Brand

• 🆕 Senior Digital Marketing Manager (Glade Optics)

• Front-End Engineer (Neurohacker Collective)

• Direct-to-Consumer Demand Planner (Beekman 1802)

• Brand Manager (ResBiotic)

SaaS

• 🆕 Content Marketing Manager (Talkable)

• Sr. Director of Engineering (Postscript)

Agency

• Strategic Director (Surefoot)

Got a job you want us to list? Let us know.

| THE OUTRO

Remember the weird and wonderful string of news interviews that occurred a decade ago or so? You know, your Sweets Brown, your Antoines Dodson, your Crazy Hatchet Killer Dudes (“Smash, smash, SA-MAYASH!")… I reckon those were golden opportunities for go-getter DTC types like us to get our products into their hands during their 15 mins of fame.

Oh Lord Jesus, it coulda been straight 🔥,

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