Playbook / Lessons / Partners and paid growth
Cash-flow businessBe profitable on the first sale before you buy more ads
Coddou says his razor brand makes money on the first purchase, which leaves it room to spend on acquiring customers. He contrasts that with rivals that hope lifetime value will eventually repay what they spent to acquire a customer. He expects trouble for direct-to-consumer brands that cannot afford their acquisition costs.
“Our biggest weapon is that we’re profitable on the first purchase.”— Patrick Coddou, Supply.co Founder: Day of Reckoning Is Coming for DTC Brands, Aug 2020
Do this
Check this week whether your first order covers its product cost, shipping and ad cost, and you cap daily ad spend at the level where it still does.