G’day

The other day I saw some very alarming net profit figures from international brand Gymshark. Today we’ll be discussing this + how you can combat low margins as an ecom brand.

Here’s what we’ll be diving into today

• How to increase your profitability using Email/SMS

• Video on using blog posts to create email content

• Why 90% of your list don’t care about your emails

Let’s get into it!

Insight Of The Week

The Ecommerce Net Profit Dilemma

Big Brands Making Only 2% Profit?

If you live in the western world and are semi active on social media, you’ve probably heard of Gymshark.

They’re huge in the fitness industry.

Last year, they posted nearly £600million in sales.

But, only £13million in net profit.

You might be saying, 13 million, that’s a ton!

But that is only 2%…

2% profit after all expenses!

This is extremely low. But the reality is, that most ecom stores are struggling with margins (especially when trying to scale).

This is primarily due to a few reasons

• High cost of acquisition

• Talent & quality product is more expensive than ever

• Consumer selection (competition) at an all time high

Sure, there are some external factors that probably affected Gymshark, like some particular marketing campaigns/political stances they took.

But even if they did 10% margins, it’s still quite low.

So, how can you increase profitability as an ecom brand?

There are a few factors that contribute to your sales, including

• Traffic

• Frequency of purchase

• AOV

• Conversion rate

Assuming all else is equal, making more sales by increasing traffic won’t improve your profitability.

So, we can focus on Frequency of purchase and AOV through email/sms plus some other site optimisation.

Since acquisition is a sunk cost at this level, any additional sales we make here is going to improve our profit margins.

Do things like:

• Cart/checkout upsells

• Immediate thank you email offering a discount if they add more items

• Complete pre-purchase flows to improve life-time value through purchase frequency

• A strong value building campaign strategy that encourages continued engagement with your brand.

You could also just spend less money. But if that’s not an option, start here!

Top Links

• Why Ecom Brands Are Struggling With Profitability (Video Link)

• The Email Strategy This Aussie Influencer Used To Make $100K+ (Video Link)

• Using Blog Posts To Make Email Content (Video Link)

Actionable Tip Of The Day

We need to be writing content that appeals to our entire list.

Most brands only ever appeal to those on their list who are ready to buy.

They then rely on;

• copy

• cool designs

• product features

• social proof

To convince people that they should purchase.

But someone who is not inherently interested or even problem aware is going to care about your product focused emails.

So by design, if we shift the focus of our campaigns to;

• Educational content

• Social trends

• Industry Science

• Myth busting

• Blog style/info focused

We will then begin to make people more problem aware, and create more potential buyers on our list.

Make your next 2-3 campaigns something from that list!

— Angus Cowan

How I Can Help You

Looking for additional help? Here’s where to look:

• Free videos on YouTube

  • I’ll be making a TON of content on YouTube this year. If you’re someone who enjoys videos, be sure to check it out and stay tuned for practical Email Marketing help.

• Follow me on Instagram for regular short form content.

• Book a scope call - We’ll dive into your current situation and see if there is an opportunity for us to help you. At the very least, we’ll give you an action plan.

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Next time you’re running a sale, product launch, or other event look no further than Mailtimers.