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Hi there! 👋

Your e-commerce business is lacking profitability because costs spiral out of control.

And it's a result of years and years of wind in the sails.

You probably have lots of suppliers, tools, subscriptions and systems that you pay for but doesn't benefit your business.

Slowing sales isn’t killing your profits.

Rising costs are.

And your OPEX is the place you’ll find them.

Review your OPEX and keep the Grim Reaper out of the door.

Now, most important thing is to realize that you don’t have control over the complete OPEX.

• You’re not going to impact Depreciation

• You’re not going to impact Housing costs

• You’re not going to impact Management Fees

So don’t bother about tehem.

However, you can impact many things on the cost side.

We’re not going to fully deep dive into OPEX optimization (that could be a 4 year degree on it’s own), but I’m going to share with you what I did to improve OPEX the past 6 months.

• Cut down Google Ad spend.

• Cut off most of 3rd party agencies.

• Review all retainer deals you have running.

• Cut all paid channels that didn’t bring in proven profit.

• Review all of your marketing tooling, do you really need it? If not, cancel contract.

• Review your team structure and create a team that’s as lean as possible.

In the previous issue we’ve talked about the fact that it is OK to let people go (especially underperformers.

A wise men once said: “OPEX walks on two feet”.

And the fastest way to cut down your costs is to let underperformers go. It won’t be pretty, but sometimes you have to be the hangman to regain profits.

Bonus tip: never ever sign a multiyear deal to be $5 a month cheaper.

Bonus tip2: never ever sign a contract with auto-renewal. It should always be an auto-stop contract. The other side will contact you when end of contract is in sight.

Stay tuned. Have a great Sunday.

Erik

Whenever you’re ready, there are three ways I can help you.

1. Interim E-Commerce Management: I run, scale & optimize your e-commerce business.

2. Resource Library. Useful resources for every marketer. Includes an E-Commerce Audit Report, ChatGPT Prompt Guide & Midjourney Masterclass.

3. Book a 1:1 Call. A No Bullshit 20 min Ask Me Anything call. If you’re facing challenges in online business, I’m happy to talk.

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