The Results Are Painful

Ecommerce brands are struggling. Look at this revenue chart from a D to C index created by partnership with Common Thread Collective. Varos and Knommerce.  

Last year, revenue growth was 10.81%. The lowest increase since before COVID.  

Over the weekend I watched a great presentation by Taylor Holiday, CEO of Common Thread Collective. Thanks to Taylor and A2X for putting together this great webinar for accountants.

Taylor is a leader in the advertising space for ecommerce brands, and he shares how important it is to focus on cash.

We've been seeing this in our client data as well. Taylor also shared that brand owners before and early COVID focused on top line revenue. 

In the late COVID years and immediately after the focus shifted to bottom line profit. Now, in the high inflation, high cost of capital year the focus is on cash.

This has happened because debt is so costly and sources of capital are basically nonexistent.  

Now you are left with the position to fund your own growth; you must be your own bank. To fund your bank, you must reverse engineer the cash funnel to ensure there are dollars left.

For example, you might cut out noncritical operating. expenses, or raise prices, or negotiate a better shipping rate.

Another strategy is implementing Profit First to help you put your cash into buckets with a purpose. This is helpful because Parkinson's Law is always working in the back of your mind.

If you have dollars growing in your bank account, Parkinson’s Law says you're likely to increase your spending because our demand rises to meet the level of the resource.  

With our ecommerce clients, we have seen the shift from focus on revenue to profit and now to cash. We have been preaching this gospel sinch 2014 with our focus on Profit First.

With Profit First, we recognize that real profit occurs where there is more cash in the bank, not at the bottom of your P&L. 

More recently, we have seen the pain with clients where they are already in debt and margins are suffering and slowed growth has created a perfect storm. 

This is why we created our Cash Flow Accelerator Program. In phase one we take a shortcut to understanding where your cash is going.

We look at everything and get clear about each transaction as we put you in the driver's seat. Looking forward, to where you want to go.

Deciding what is the best way to get there. You make a hypothesis and look at your performance week by week to ensure you are getting results.

If not, adjust and keep going. You aren’t waiting for month-end results from your accountant, you simply need to look at your cash transactions from the previous week.

Our Cash Flow Accelerator lets you reset and refocus so you can grow your cash. If you are tired of watching your bank balances drop, let's get on a call.

Schedule a Free Consultation Now

Cyndi