How this store owner increased his bottom line profits by 50% using email…

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? And was bringing in $80,000 into his bank instead of $55,000, month after month…

I’ve had the good fortune of sharing a flat with an ecom store owner for a couple of months here at the #hustlehouse in Barcelona. And he taught me about the age-old question: Profit vs Revenue.?

If you’re a serious e-commerce store owner, you’ve heard this a million times. Don’t let the fancy screenshots of revenue fool you. If you don’t know the profit, those 7-figures are not relevant, because the person might just be breaking even, or worse, going into the red. ?

Why did you open your store? To get filthy rich of course. ?

Hopefully, along the way, you managed to find/create products that would make the consumer’s life better too, but the primary goal is financial security. And that’s totally cool. So okay, money is the goal, but only money you can actually spend, right? ?

Now let’s have a look at how this business owner managed to bring home $80,000 in profits instead of $55,000, every single month over half a year, simply by implementing the right email strategy. ?

? The raw numbers, Jun 1st, 2018 – Jan 1st, 2019:

?Total rev $3.61M
?Email Flows $244.38K
?Email Campaigns $117.13K
?Total Email Rev = $361.51K or 10%. Funny how this number is so exact LOL 🙂
?Total store revenue – email revenue = $3,248,490.

So let’s calculate the profits of the store if there were no email. And by the way, before April 2018, there wasn’t.

Let’s take round numbers, so it’s a little easier to follow:

?ad costs are 40%
?product costs + shipping are 30%
?CS + Expenses 10%
?returns 10%

We are left with 10% profit. ?

Which is pretty good, considering this is a free+shipping store model, and there are not a lot of ways to cross-promote. The product is such, that you usually just buy one. You usually don’t need or want more. And truth be told, the product quality together with the long drop-shipping times doesn’t exactly encourage repeat purchases.

10% profit on $3,248,490 is $324,849. Or divided by 6 months, is about $54,141 profit/mo.

Now at this point let’s congratulate the store owner. Pretty smashing epic job. That’s A LOT of ad spend and budget control. Seriously brilliant action, and well deserved $55,000/mo taken into the piggy bank.?

? Now let’s have a look at what happened with his $55,000/mo when he brought in the right email service.

?Total Email Rev = $361.51K

?ad costs are 40%
?product costs + shipping are 30%
?CS + Expenses 10%
?returns 10%
?email service 10%

We are left with a 40% profit. ??

40% profit of $361,510 = $144,604, divided by 6 is $24,100.

So just by implementing an email strategy that works, he managed to bring in extra $24,100/mo.

Basically a roughly 50% increase in profit. Instead of taking home 55k, you take home 80k. ?‍♂️

Just by implementing the right type of emailing strategy.?

Seems to me, that a lot of ecom store owners are leaving plenty of $$$ on the table. ?

What would you do with extra $25,000 every month? ??

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