Welcome to the November 2022 edition of the Brand Report! Each month, we’ll break down our monthly revenue so you can see what’s working and what’s not.
Last 12 months: $8,734,283
Our November revenue was $607,157 which was, once again, significantly below October's revenue of $641,927, even with Black Friday and Cyber Monday. Almost all of our brands are, for better or worse, relatively insulated from the BFCM rush except for Wild Baby due to the fact that the products are summer seasonal.
Overall, here's my assessment of how Black Friday and Cyber Monday were this year relative to other years (including EcomCrew's Black Friday sale): sales were slightly down as opposed to other years, although it wasn't the gigantic drop I predicted. I've heard some businesses report mammoth sales for Black Friday, which I suspect could mean either they deeply discounted (thanks to surplus inventory) or they were exceptions to the norm. We'll get to find out how the holidays actually fared this year when the major public retailers start releasing their Q4 results in a few weeks.
What We Worked on This Month
- Continuing to work on creating more UGC Videos and Photos. We continued to double down on acquiring a strong library of UGC for 2023 with JoinBrands. We'll be hosting a free webinar on Wednesday, December 14, 2022, where we'll show you how we're using this UGC in our listings, how much we're paying, and what kinds of products it works well for. (JoinBrands also has a special surprise for our attendees.)
- Las Vegas Meet-Up. I flew down to Vegas for a couple of nights to meet with Mike and do a bit of planning for 2023 for the stuff we run together. Minus the terrible flu I caught on the way down, the two days were productive and allowed us to address a few of the major concerns and priorities for 2023.
Wins for This Month
- New brand Style Guide completed. As I've talked about in the last couple of months, I've been working with an agency (and also a good friend) on a brand refresh for one of my brands. The new style guide is now complete and, as expected, the agency hit it out of the park on the branding. Our two graphic designers have now been spending most of the month getting this new branding implemented into our next production runs.
- Improvement of payment terms with a major supplier. I worked with a supplier to improve our 2023 payment terms, going from 50% upon shipment and 50% 30 days later to 50% upon shipment and 50% 60 days later. It's a win-win for everyone because without it, we would have throttled our growth a bit in 2023 due to the increasing cost of capital (see below). A lot of Chinese suppliers are likely to be hungry for orders in 2023, and I suspect many suppliers will be open to creative financing.
Losses for This Month
- Too much inventory. Many of our brands are facing the same perils a lot of retailers are suffering from right now: we are overstocked. I compared the total inventory on hand this year to last year and we're at 3x this time last year. Some of this is justified by the fact that we've grown a bit in that time, but at a minimum, we probably have twice as much inventory on hand as we need.
- Rising interest rates. Directly related to the above, the rise in interest rates is having a material impact on the bottom line. Consider that interest rates are more or less double this time last year. Also, consider that we're essentially twice as leveraged as last year. Basically, it means that financing costs are nearly 4x what they were last year. The positive side is that interest is always an add-back on any potential sale, but it can still create a cash flow crisis if not kept in check.