I'm So Bullish On Ecommerce That I'm Starting A Brand transcript

The e-commerce world is crazy. Some might even say it's on fire right now because tariffs are throwing everything off. And yet, I am still bullish. I am still bullish on DTOC as a business. A few months ago, I recorded an episode at the beginning of this year. I was doing my reflections at the end of 2024 and and thinking through a bunch of different predictions about what e-commerce is going to be like going forward.

And I made the case that e-commerce and DTOC is a great business to be in right now. I'm overall bullish on it. I've recorded an episode also about being bearish on it just you know to sort of do the alternative case. But since that time goods from China in the US have been tariffed at a gigantic rate which is a definitely a real problem. And the macroeconomic situation is crazy. Consumer confidence has plummeted. It has been hit the lowest number that it's hit in a very very long time.

Some of those are some of that consumer confidence is divided along political lines but it's it's gone way down for everybody. It's a crazy moment to be running a business and yet I want to make the case right now that there is still a lot of reason to be um optimistic about the future and not just to be optimistic but to be building intelligently in your DTOC business. And some of this is going to be similar to things I've said before, but some of this can be a little bit different.

And there's a couple particular angles that I see right now as I approach this issue that I want to talk through because they continue to form my total approach to what I think is happening in the e-commerce space right now and and really my total approach to uh to how e-commerce brands ought to operate. I want to start with this case by making a distinction. Okay, which is that the there is a distinction here between the long term and the short term of what I believe is happening in e-commerce right now.

I think no matter what else I say, the short term could be real real bumpy. I'm going to come back around to what I think you should do about that in a little bit. But to begin, I just want to acknowledge that I'm not saying that everything is rosy and easy, that everything is perfect and smooth and that anybody who's complaining is lying and is weak and is cheap or whatever it is, right? It's not that at all. I mean, it's a really hard moment for a lot of brands.

For some, it's like an existentially threatening moment. I fully get that. In fact, I think that no matter what I say next, there are going to be brands that are going to be casualties of this whole thing. Uh, so I don't I don't mean to gloss over that at all. Um, I'm just I've just been trying to assess the moment in light of the larger things that I believe about e-commerce and figure out how those things fit together.

And so what I want to do is play back and forth the short and the long term of what I believe in this present moment. Okay. So um so the the the broader thing that I want to point out here is something that I've pointed out before which is this crucial thing about e-commerce in the US at least and I'm thinking really of the US specifically here which is that e-commerce as a percentage of retail is still growing. E-commerce as a percentage of retail is still growing.

And um and that point anchors so much of what I think because as long as that is the case, as long as more people are buying stuff online, especially if that is paired with growing retail in general, like if if total GMV across all retail is growing, if both the pie is getting larger and the e-commerce slice of the pie is getting large larger, and I believe both of those things are true, um then the opportunity for people selling products on the internet is really really strong, especially if that continues in the way that it has happened before, which is rough. ly one percentage point per year uh over the last 10 years.

Right? So we're up to now over 18% of uh all retail in the US being happening online. And I just think almost everybody underrates how big of a factor this is. Yes, it makes the barrier to entry lower to other people. Um for sure, but this point just remains really crucial to me that that is still expanding and as long as that is the case, there's a really good opportunity in e-commerce. And um and so there there is a challenge in the present moment to be sure.

But there is also a real um tailwind behind people who are e-commerce sellers. And this is I believe why uh as I've said before, there are so many big e-commerce brands right now that there have not been in the past. Right? In my 10 years in e-commerce, brands are just m there are many more much larger brands than there used to be. That's a really big deal. And as much as people like to complain and say uh uh talk about how things have been difficult for the last bunch of years or whatever it is, people who are making those complaints are often people with very large businesses.

And so I just don't really uh I just I just think there is a there's a really big opportunity here for lots and lots of brands. Okay. So that's like a baseline sort of grounding economic principle. And if you think about that if you think about that as a macroeconomic principle outside of your control, then you can sort of stack that up against tariffs and the sort of general macroeconomic uncertainty of the present moment and say which one of those do I expect to be more long-term?

Because they're both macroeconomic factors outside of my control. So, which one do I think is more likely to last? And this is a crucial part of everything else I'm going to say. What I basically believe is that this is this present moment is a crazy blip that is going to be difficult and have some casualties, but it's a blip and that at some point, who knows how long, right, that this is going to end. And I I think by the way um there's pretty good evidence so far that this is not something that is going to um carry on for forever because so far all of the other tariffs that President Trump has put into effect and his team has put into effect, right?

Uh have pretty much all of them I think have had uh a short- termism to them. Especially some of the larger claims around tariffs. They have they have gone away very fast and been renegotiated very fast and they often do seem like negotiating tactics. Now, China and the US relationship, I I have no political predictions about this. I actually don't have much to say politically in general, and I just want to say clearly, I really don't have uh I I voted third party in the last year, right?

So, I don't have a very strong um very strong opinion about in either direction, pro or against President Trump and his policies and those things. I just not it's not where this is coming from is all I mean to say. Okay. uh all I mean all I'm trying to do is assess what I can best think of in the present moment in terms of uh in terms of how these things will play out and as best as I can see it I think the most likely thing is that this is not a forever thing most the most recent numbers I saw on poly market were that there was a 50% chance of a renegotiated trade agreement with uh the US and uh or at least the betting market was set at 50% um for a renegotiated uh trade agreement between the US and China in the next couple months.

I'm I'm recording this in the last day of April. Uh I think I think that was like a a July timeline or something like that. I can't remember now. Um but the point is there's reasonable amounts of people putting their money where their mouth is saying that there's a pretty decent chance coin flip chance that this goes away within two months. Now, if that happens and we've seen the way that um public equity markets have responded to any positive tariff news uh and I i.e. any news of tariffs going away.

Um markets have responded extremely quickly. The the the econ the macroeconomic response to tariffs has been fast. So there's possibly a way of looking at this where if this is actually a quicker shorter term thing and and I don't think this is just uh polyianish for me to say this. I think there's plenty of reason to think this is this is you know at least one reasonably likelyhood that you could handicap at say 50% in the next couple months.

That becomes a much shorter term thing. And then in the on the other side, there is a longer term reality of macroeconomic tailwinds for e-commerce businesses in the US. Um, and and the other thing you can add on top of general retail and on top of e-commerce is a percentage of US retail, excuse me, is the international component of all of this. First of all, this is a possible way to solve some of your tariff problems if you can grow your overseas business, your international business.

Okay, so there's that. Um, but secondly, if you can actually just not import at all, right? if you can send your products to other places. Um but uh secondly, if there is uh if if there's also a growing uh revenue base in other countries as countries throughout the world continue to grow in their um GDP basically and I think that's very clearly the case in the last bunch of years uh let's call the last 20 years. So if you look at a 10 20 year timeline for a lot of these businesses um you can start to think that there's a growing customer pool all over the place and those to me seem like the much larger economic trends over the longer time period.

So the question is how do you survive the difficult times in the midst of the larger on the larger tailwinds. Now that's some basic analysis of where I think the world is at right now as best as I can tell. Of course, that could all get destroyed in any one second with for all kinds of reasons. And again, the USChina relationship in particular strikes me as particularly volatile. But uh but there's a basic basic principle.

What I actually want to get to is some other specific things that I see right now happening in our space that are really significant in the way that I think people are using their money. And there's actually um one crucial thing that I think is pushing e-commerce's businesses forward in three different areas of business. Okay? And the first is on the opex side and that is the marginex expanding power of AI. You should join Workspace 6.

Workspace 6 is a private community with over 900 highlevel executives and operators from e-commerce businesses, seven, eight, and nine figure brands. And look, it's really hard if you just um engage in the community a little bit. It's really hard to not get value and access of the cost of being in a great community like Workspace 6. Workspace 6 is $1 for the first month so you can check it out for yourself and then $99 a month after that with no commitment and you'll write it off.

So really it's even cheaper than that. And uh if you do that right uh then you will join a community of really smart thoughtful uh e-commerce executives and operators who are going to do all the things that a community can uniquely do which is like uh tell you what's working in their businesses right now. They can get together on things like supply chain and tariff challenges and brainstorm on how they're going to solve these problems.

They can give you all kinds of insight into software and services. And by the way, no software providers and no service providers are allowed in the community. I know a few of my clients are in Workspace 6. I have no idea what they have said about me because I'm not allowed in there. So, you keep, you know, uh, service providers with our grubby mits off of your money. Instead, you can talk honestly in those kinds of places without hurting anybody's feelings or anything like that.

Get honest feedback about the things that you are seeing, compare prices, all of that kind of stuff. You could probably save the money in excess of the uh, membership fees for Workspace 6 just by doing that. Like just find out how much other people are paying for the same software you're using and then use it as a negotiating tactic with your software service provider. Like just do that. Just do that and you will make more money than the cost of the membership.

On top of the many other good benefits, it's ultimately a really great, really well-run Slack community. They've also built an AI tool recently that allows you to ask it basically any question and it will go and give you the answer from past uh Slack conversations. Uh, so basically the combined knowledge of all of Workspace 6 and all of our operators um from all that time. You can get access to that in real time with the AI tool.

Really, really cool stuff. Great people. I've been reading their newsletter for forever. I'm so happy to recommend them to you. Workspace 6.io. Go check it out today. It's an interesting time for me to be in the agency business because um I I have no idea what AI is going to do to agency margins and what the expectation of what an agency even is and does every day in the world of AI. Uh, I've thought about trying to push more aggressively on building a larger agency business.

I'm considering doing this more, which I've resisted doing for the last couple years of this business, but I'm really starting to think about it a little bit more. And um, and I was thinking about that before AI, but now with AI, it's an interesting thing to think about like should I go and try to be more aggressive with an agency business in a world where AI has a real potential to um, let's say devastate agency margins? um it it could really really hurt agency margins.

I think that's definitely a possible outcome of AI and um and uh and so what do I do and what do I think about that? Well, here's the thing. Among other things, the possibility of AI killing agency margins means that it also creates margins somewhere else. That is the loss of my margin as an agency is potentially the gain of your margin as an operator. Um, if it kills my margins, it's probably because the margin is acrewing to yours because services that once were very expensive get a lot cheaper.

And software that once was very expensive gets a lot cheaper. And the winner in that is not the software business or the service business, though possibly it's them too depending on a few things. Okay? But it's you, it's the operator, it's the e-commerce brand. And if that's the case, then it's a really, really good time to be in e-commerce because you are the one who could do this. There's a similar dynamic at play with offshoring.

Though though I don't want to spend as much time on this, I recently had some friends discussing like, man, it just seems like the opportunity to connect global talent to US-based businesses is really strong right now. And and they were sort of musing on the question, how do I get in on that business, right? How do I do that? Because it seems like it could be a really really good business. Um because uh more and more US businesses are going to uh hire offshore talent like I've done with my business.

Okay. Um and my thought about that was how do you do that? You start an e-commerce business. That's how you take advantage of the moment. You don't go create a talent agency to do that. Uh I mean maybe you could but like but that's not what I would do. What I would say is if what you're saying is there's a margin opportunity for e-commerce businesses via offshoring. Okay. Then start the e-commerce business and offshore and build um a remote team where your opex gets lower.

If you I mean let's put those together. If you combine that with AI and think about the possibility of margin happening in both those places, your opex as a percentage of your revenue can get extremely low in in a US-based e-commerce business. And I'm certainly not the first person to point this out. I've heard people talk about the idea of, you know, nine figure brands being run by five people and stuff like that. And I think that's really possible.

Um, but it is it is a a real opportunity and it's one of the reasons I think being in e-commerce business is a really strong thing. So, um, now that raises another question. Does that lower the barrier to entry so much and maybe push prices down for all e-commerce goods that it you know uh maybe makes it so there's more players and and even with expanding TAM of customers uh just across all of e-commerce like I was saying earlier maybe that creates sort of a super low barrier to entry and makes it so that you know Timu the Timus and Sheen of the world or China however you say that right um you know obviously not direct from China with tariffs stuff but just like that kind of thing there becomes like this extreme low price pressure um for people who and build really big businesses really fast at even with low prices and does that just sort of kill everybody?

Well, here's what I'd say. In general, great technological tools acrew the most value to skilled people first. So, if you are already the kind of person listening to or watching this podcast, it it means you are already engaged in the e-commerce world now and probably a lot of you have been in it for a while because I know some of you who listen to or watch my podcast, right? You've been at this for a long time. That means you are the skilled person with a giant head start in this.

And my guess is you are the person who has the most opportunity to do this and therefore an e-commerce business with AI and you know we'll nod to offshoring as well. Okay. Um could potentially run extremely low opex as a percentage of revenue. And of course when one part of your P&L costs decrease you can either increase your cost on another part of your P&L or you can just take the profit. And that creates a real big profit opportunity for someone.

I I'm starting to think that that is like a really really big thing and a reason to basically be extremely bullish on e-commerce as a business. Okay, number two. Number two, the emphasis on incrementality and ad spend continues to grow. So if number one was about opex, that part of your P&L, let's talk about your CAC. Okay? And um and there's a lot to say about CAC and there's a lot to say about how just like increasing conversation around YouTube and App Leven and I've mentioned that before that additional um ad channels uh are are possibly viable here uh for for all kinds of reasons and that would be a real tailwind for e-commerce people who have been stuck on meta for a really long time, right?

But let's recognize that underneath that in fact part of what's driving uptake of those channels is incrementality. Okay, Common Thread Collective recently put out a podcast where they said YouTube is this place where you can spend a whole bunch of money and you should be considering doing that and it could be really good. And do you know what the core argument was? The core argument was exactly the same as Olivia Cory's core argument from house analytics when she came on my podcast and talked about this.

The inplatform reporting which has previously held you back in fact is drastically under reportporting the value of your YouTube spend. And if you measure with incrementality, you are going to see that it actually performs much better. the the the increasing place of incrementality is forcing brands to um to start thinking more carefully about the best form of measurement possible. And the cost of incrementality is going down all over the place.

Whereas initially I'd seen lots of like 8 figure per month costs for incrementality services and software and those sorts of things. I'm now seeing costs much lower. CTC in fact just announced that they are making it so that they're they're going to do it for free if you join CTC. Like it I mean you know I don't know much about that service. I haven't looked at it very closely, but it's a pretty compelling thing that they could potentially build that you can already run a Facebook conversion list study for free in Facebook, right?

Google's got a brand lift study and probably will have developed that even more. The cost of that of that way of thinking is now uh getting lower every day like it's already happening and it's going to keep getting lower and more and more people are going to get away from flawed measurement tools and get towards incrementality tools. So there's always a risk at some point that with incrementality u it becomes this thing that becomes a sort of narrow pursuit in a way that actually doesn't serve you very well.

It becomes shortsighted and too measurement focused and um people stop thinking about brand etc. Although I'll say at the same time I see increasing conversation I've certainly seen it on my podcast about more effort more effort around brand building and product releases are the true drivers of e-commerce success. So people are also starting to think more about that which is really good. But um but this incrementality focus I think on the mostly it's going to help brands spend their money more effectively and more efficiently and potentially also allow them to grow faster by um testing new channels in appropriate ways.

And in fact I'll tell you I have seen beta versions in a couple of ad accounts I've looked at for meta ads where you can actually change your optimization or your attribution from standard attribution to incremental attribution. and they're trying to build that tool straight into um straight into meta so that you don't even need a third party tool. Like that is crazy to where that would just be like the standard measurement.

You know, they're going to get there at some point. I haven't seen tons of roll out of this. I haven't seen tons of release. But that's a really big deal because if we can measure the performance of our ads better, uh then at the same time we can allocate our ads more efficiently, grow faster, grow more profitably, grow more efficiently, etc. Um that's a really big deal. And again if you just sort of zoom out right and think AI incrementality like uh these two things that I just mentioned okay AI and incrementality are two things that I would say if you look at the longer um the longer uh trend line on these I think that the the up and to the right trend line growth of those both in quality and quantity like the ease of access the cost of it's going to go down on both of those all of those things are pointing to longer term trends of of tailwinds for e-commerce brands even if there is a short-term headwind with something like tariffs.

Now again this assumes the tariff headwind is short term but those are two really big ones where the technology is getting better. The services are getting cheaper all the time and in fact of course the incrementality tools are powered by AI. All right so um so that's just a really big deal. Okay. Um so uh there's that. Okay. Number three. So we've talked about opex, we've talked about CAC. Let's talk about this third thing which is um your supply chain, your cost of delivery, variable costs in your business.

Now, this is another area where I I could see um uh a number of things getting better. And what I want to point out here first is that uh is that uh this is not necessarily something where is as obvious to me that there is a clear AI or incrementality style tailwind and trend line. But I sort of think, well, let me put it like this. At one point, Taylor Holidayiday put on on on X, he he asked the question, what's the sort of like bullcase for how tariffs fit into things?

Okay. And my answer to that question is that tariffs could be, they could be, they might be, they could be, I'm not saying they are necessarily. I'm saying they could be or might be um a forcing function for building smarter supply chains. I am telling you in this episode about shaving costs and using AI to make your business run better and more efficiently. And that's why I'm so excited to tell you about a new sponsor on the show, Rich Panel.

Rich Panel is awesome. And what I realized recently is that multiple of my clients were using Rich Panel um for their uh help desk software. And I started looking into why they were doing that as I was seeing other people talking about it and I was like, "Wa, this is really awesome." At the baseline, let me just tell you what Rich Panel is able to do just guaranteed. Okay, this is this is like the the home run for you if you're an operator watching this and you're uh on one of these other software services.

Okay, uh Rich Panel guarantees you that they can save you at least 30% relative to Zenesk or Gorgeous while onboarding you in 2 weeks and they can reduce your customer service tickets by 30% relative to any other software that you are using. That is a pretty strong guarantee. Um, and they do that by being an AI first platform built from the ground up for the purpose or with the goal of leveraging AI to make customer service experiences better for your customers and more cost effective for your brand.

It is awesome software. It works great. I've taken a um really careful tour of it. It just does things that are really really cool. Like for example, one of the things that has plagued me as a meta ads guy for forever has been moderating comments um and uh on social and now uh with rich panel you can actually use an AI bot that will go and do your comment interaction for you very quickly uh and at mass scale in a way that uh frankly is the best solution to this problem I've ever seen and get people answers to questions they need all those kinds of things.

It's just really really cool. Brands are saving a bunch of money in delivering excellent software, uh, excellent interactions with their customers. The ratings from customers are extremely high. It's just awesome. Go check it out. Get on a call. If you're on Gorgeous or Zenesk, this is a no-brainer. 30% savings in cost. Um, go check out Rich Panel today. Richpanel.com. Tell them that I sent you. Go to richpanel.com. That essentially, I've said for a while, well before Terrace came in, you've heard me say that supply chains are the most underoptimized part of an e-commerce business.

I really believe that. Okay. So, uh, so if that's true, the reason people have done that is because they're focusing on other parts of the business that are easier to optimize faster in their view, right? It's not because they're lazy. It's because there's other things that look like bigger opportunities. But the moment tariffs come in, they force you to say, "Whoa, we better optimize this a whole bunch. We better do a lot of things." Now, there's probably nothing you can do to optimize your way out of 130% tariff or whatever the China number is.

Exactly. Okay. Uh so like you're not going to be able to shave 130 points of margin or you know what like 70% of your margin or 60% of your margin or whatever that is and and and sort of get back to where you were before in most cases. Okay. But you might be able to shave some. Okay. Um the phrase nec um um necessity is the mother of invention is exactly right in this case. Right? That phrase the idea is when things are really hard it forces you to get creative in your thinking.

And I believe that this can and will have this kind of impact in our space. I think it really can and and I'm already seeing it in some conversations that I'm having where people are getting on the phone with my friends at Move Supply Chain to say like, can you help us do this? In fact, um I am starting to work on on my own brand. I'm going to come back to that um more in a little bit. Okay. Um that there will be casualties.

There will be casualties in this. But like like I said, but at the same time, if brands start looking and saying, "Wait a minute, I need to have backup vendors. I need to think better about my financing. I need to think about um looking at for vendors in other parts of the world and make it so that my supply chain is more resilient. I need to think about how I can get cheaper cost of goods or do redesigning or whatever." You know, there's all kinds of different things that brands are going to think about.

It's really hard to generalize about because it varies so much category to category. And again, there are going to be casualties here for some people who just no matter how much they try, can't survive at the moment. But uh but I think it could actually force brands to rethink a lot of things in their supply chain they've just taken for granted. So okay, so my brands, let me give you an example of how this has played out for me.

Um now I um my brand has not launched yet, but we've been working on it for a little while and the most expensive part of my uh brand's supply chain is um is actually the packaging and it's built in in in China. I haven't said too much publicly about what the brand is. Um but um and that's doesn't it's actually irrelevant to this right now. Just just know that the the most expensive part of the product is packaging. The packaging is made in China.

It's sort of complex. It's a custom custom design package and and so because of that uh because of that uh I have immediately had to sort of slow down my potential roll out and rethink the supply chain. And I went and I um and and talked with Laura Gavara from Move Supply Chain, who's helping me build my supply chain, as I've said before, um who went to Vietnam last week for the global sourcing fair, visited a vendor, looked at my packaging sample, and immediately started sampling with a vendor in Vietnam. that vendor uh came back and had um had uh cogs for my packaging that were about let's call it 20% higher um at my at myQ or at theQ which is 1,000 pieces.

Okay, about 20% higher than what I had initially looked at with my Chinese manufacturer. But if I could get it to to ordering 3,000 pieces, so if I can get any level of scale here, basically it actually meets my original ChineseQ. And that's like right away. I don't know that it was the first vendor she talked to. It was a little hard to find that vendor to be sure, but u but she could do it. She found that vendor and now it's not the worst thing in the world for me.

Like there are some challenges with it that aren't quite as easy, but I can go do that. And I suspect if we go and shop this and think about redesigns and some of those things, we could actually get that number down a little bit more. and still end up with things. And it's also possible that I'm going to have in the process um slightly higher MOQs, which is worse, but better financing, better lead times, um and maybe maybe maybe better costs at some point depending on how things go.

Okay? But better financing at better lead times, shorter lead times would be a really big deal. And so, uh and so right now it's forces to pause, right? We have a moment and we have this advantage which is that we haven't launched yet. We haven't ordered yet. We didn't get hit with some massive tariff. I'm like so grateful that we haven't launched the business yet and that there's been some things slow side gig kind of stuff, right?

But it has forced us to rethink that and look for alternative manufacturers and I'm I'm pretty impressed with what we can see elsewhere. We got to get samples still, but like they say they can do it. They've seen what we're trying to do. They've you know other manufacturers have done it and so so it's not like they have to come up with it from scratch and they're saying that yeah, this is probably doable and and so uh I'm I'm really interested to see if we can make it happen.

That's the kind of thing that's going to be happening for lots of brands right now. And that's good. That's a good thing. It's going to force people to think in other parts of the world. It's going to force people to um do all kinds of things. Who knows where else we could look? But uh but as a starting place, it was like a really encouraging bit of news in this last week from talking to Lara. So um so put another way, right, the momentary challenge of tariffs is momentary, but the more structural changes I think are overwhelmingly acrewing value to e-commerce operators.

Okay, including the knowledge change of the supply chain side of things. Um, I do think that's going to help in the long term in some way. Whether it has quite the same impact as incrementality or AI, I don't know. It could actually have a bigger one if people can get cogs cheaper in the long run. As I said, um, you know, Poly Market is is suggesting a 50% possibility that that there's a new trade deal um in the next couple months, at least last I had checked, right?

Uh, and look, pundits like me in this case are famously bad predictors of things because there's no accountability for their decisions. Okay, but if you um but you know, Poly Market does really well because people are actually putting money behind what they say. So, if you want to know what somebody really thinks, watch what happens when they have to put money on the line. Okay? Um, so, but here's what I would say. I am still starting a brand.

None of this in tariff moment or anything like that has stopped me from wanting to do that because I believe everything else I said. I think it's an incredible time for smart brands to keep digging into information to build a great P&L and build um uh thoughtful consideration of what a good e-commerce P&L looks like. If you could still do that stuff, well, it's great. If I had if I was sitting on a bunch of capital, I would be like jumping right now to go buy businesses.

In fact, soon I'm going to talk to um Fan uh be uh my my friend Fan like Fan has looked at a whole bunch of businesses in the last quarter. I think it's over a hundred. um he's still in the M&A world like thinking about buying businesses. I think it's the right move. I'd be if I was him pretty aggressive right now about trying to do that. I can't remember when this is going to come out. It might actually come out uh I think it's going to come out before my conversation with Fan.

So, um my conversation with Fan will come out in a few days after this, but if you want to get more of a sense of how somebody from the M&A side of things is thinking about this right now, really putting their money where their mouth is, subscribe because you're going to want to get that episode. Fans conversations are always great. He's really smart guy. Um, but in any case, all I'm saying is I actually am putting my money where my mouth is here.

I am building a brand. I am trying to do this. It's sort of the ultimate hedge against the agency problem. Again, side gig right now. I don't expect it to be huge, but uh it's something that I'm I'm uh thinking about pretty actively and pushing on. So, what should you do? Okay, so what should you do? You should survive. Um, I know that sounds too simple. I understand that. I obviously can't give you a kind of advice right now that is going to be applicable to every brand in this moment.

I think you should do the things that people are doing, which is that you should more relentlessly shave OPEX. Like maybe you can't save that much money on COGS, but maybe you can if you shop 3PLs. Maybe you can if you cut some software costs. Maybe you can if you get serious about AI and offshoring on your OPEX side of things. Maybe you can if you did your creative testing campaigns. maybe if you go hunt down dollars in your business really seriously um that you can actually run a leaner business and get some of that cost back because a dollar is a dollar is a dollar.

So whether or not you pay it to to a tariff or pay it to um a software company, it's still a dollar going out. So if you can shave it in one place, it's still a dollar that's not going out. Um so maybe that can get you part of the way there. Um but have to have that mentality. Try to survive as best as you can and to try to think broadly about the future. Try to do also all of the things that good brands do. release products as fast as you can, supply chain permitting.

Um, run sales that you need to run, etc. U, be smart about your cash, all of those normal things that that good brands do. Um, deploy your ad dollars efficiently. Um, and at the same time, I do think right now, uh, you should be shopping your supply chain really aggressively as message as much as you possibly can. There's no better time to start doing that. Again, even if that doesn't mean going to a different country.

What happens if there is 20% savings, 30% savings? I mean, this is real. Like, I've talked to brands who have worked with supply chain experts. In fact, it was working with people at Move um who I've mentioned a few times now on this episode. Like I've I um like I I've talked to brands who have saved like 30% on their cogs from doing that work. Like it's possible. There there's real savings to be had. What happens if you can get 20 or 30% uh reduction in cost from your manufacturer in China?

They're going to work with you to keep maintain your business right now in this moment. What if you can get 20 or 30% off there and at the same time you can shave some OPEX and you can shave that? Like that's the survive mentality. And if you can just survive, I think you can be in a really really good spot. If you can do that and at the same time start thinking long term, building for the long term, I think the opportunity in e-commerce right now is as good as it ever has been if you can just get through this moment.

Hopefully the moment doesn't last too long. Who knows? But hopefully the moment doesn't last too long. If it doesn't, you can be really well positioned to have a really good business. All right. Somebody's going to be mad at me at some point for like just not being negative enough right now. I know there's a lot of conversation all the time about things that are going wrong and um and sometimes it just is like therapeutic to hear that.

But uh yeah uh hopefully uh hopefully you hear this is what it is, which is like my most honest assessment of where things are at. Look, I'm I'm an optimistic guy in general and uh and I think there's reason for that right now and hopefully my perspective uh is helpful to you in the midst of the other ones. Hey, don't forget to follow up with me first. podcastfgrowth.com. If you have any thoughts about this economic moment, about anything I said in this episode, reach out to me there. podcast at ajfgrowth.com or tag me um publicly on LinkedIn uh or on xanderjer.

I'd love to hear from you there. And of course, you can find everything I'm doing at ajfgrowth.com. Do also follow up with my great sponsors for this episode. If you're trying to save costs on software, those sorts of things. Workspace 6 is an amazing community. Go check them out. Workspace 6.io rich panel for your um customer service needs. Look, if you're on Gorgeous or Zenes, I can save you 30% guaranteed right now on your customer service costs by going to Rich Panel.

So, um, so go to Richpanel right now and check that out. You can do that at, um, richpanel.com. So, uh, so thanks for so much for watching or listening. Do subscribe wherever you're doing that. Got a bunch of great episodes coming up, bunch of interviews lined up that are going to be really good. Um, yeah. Thanks. I'll see you next time. [Music]