“If you think about the money as the fuel that drives the car, if the money is getting stopped up before it gets to the vehicle–meaning it’s not being organized properly–then you never get the vehicle to move forward.” – Ezra Firestone
Ezra Firestone is in the house!
That’s right, Ezra Firestone of Smart Marketer is our guest for today’s episode. Labeled as the first and leading ecommerce influencer in the world, Ezra runs multiple seven- and eight-figure businesses and has been working in the industry for over a decade. He is a very busy man and I’m definitely stoked to finally be able to talk to him on the podcast!
Today’s topic goes to the very core of any business–money. When you run a business, it’s only natural to try to lower your expenses as much as possible in order to maximize profits. That means trying to get the lowest cost of goods, lowering advertising spend, and crimping on employee salary. But if you’re trying to grow your business and want it to last for more than a couple of years, is that really the right thing to do?
Ezra shares his exact formula on how much he spends on all areas of his businesses. His goal is to grow his businesses aggressively, and that means he tends to spend a lot more on areas where most entrepreneurs tend to cut corners. For example, other people go ballistic when he mentions he spends 10-20% of his top-line on employees alone.
In a little bit more detail, here’s what we discussed:
- Who Ezra Firestone is (for those who’ve been living under a rock)
- How much to sell items for
- The advantages of selling higher-cost, premium items
- How much to spend on Cost of Goods Sold
- Why he spends 10-20% of his top-line revenue on his employees
- How much to reinvest back into direct growth marketing and how to allocate the money for ads
- Metrics for valuation
- What blended Cost per Acquisition is
- Lifetime customer value, repeat order rate, cross-sells and upsells
- When to take cash for equity and when not to
This episode is longer than what we usually do, but I didn’t even notice it because I enjoyed talking to Ezra so much. I even compared my numbers to his and will apply many of his principles on my business. He’s a very busy guy, but he was kind enough to spend more time on the podcast than most guests usually do!
If you want to learn more about Ezra and check out what he’s up to, just go to smartmarketer.com.
Thanks for listening to this episode! Until the next one, happy selling.