Thread by @jkelemen

In 2021, my e-commerce business, DoodleDazzles, did $3.5M in revenue and I paid a whopping $0 in taxes.

Not because I'm evading the IRS, but because we failed to make a profit (yikes!)

In 2022, we hit $4M with healthy profit margins

Here are 6 lessons from the bounce back:

Lesson 1 - Bad unit economics at scale will kill you

Know your unit economics cold and know when they’re shifting

Rising freight and facebook ad costs turned my nicely profitable business unprofitable fast and I didn't realize how bad it was until almost too late.

In 2022, I made some changes:

✅ fired my previous bookkeeper
✅ hired a team specializing in e-commerce financial reporting
✅ started using @beprofit_co for intra and day-to-day profitability tracking

Get obsessed with finance and accounting.

Lesson 2 - Increasing your AOV is the cheat code that makes everything else easier

In 2021: AOV was $29.73 (yikes!)

In 2022: AOV rose 33% to $40

Bundles + high-margin add ons can boost AOV with limited extra costs

Those ~10 extra dollars translated into six figure profit.

Lesson 3 - Know when to ignore other people’s advice

Your business isn’t the same as their business

Let me give you an example:

A lot of experienced, successful people advised me that I should push customers hard to buy my hero SKU in much larger quantities than the average order of 2 units

And even though I *knew* my customers liked to buy variety...

I wasted so much time and money trying to get customers to buy larger quantity bundles before coming to terms with reality

My customers wanted multiple unique items, not costco-style buying in bulk

I knew this, but hadn't trusted my own experience. Be careful with advice.

Lesson 4 - Landing page + sales funnel testing is 10/10 mission critical

I used to think I could solve all my problems by hitting upon that one "magical" Facebook ad that brought CPA all the way down and made customer acquisition super profitable again

I was wrong.

In 2022, I finally got serious about testing different types of landing pages

I discovered that "five reasons why" listicles performed WAY better than the standard PDP

AOV ⬆️ and conversion rate ⬆️ nearly overnight.

if you like instant ROI gratification, this is your move.

Lesson 5 - Have a healthy skepticism about big marketing and bigger revenue numbers

Revenue does NOT imply profit. Beautiful design + marketing do NOT mean a business is economically sound.

My own business did $3.5M in 2021 with a net income of $0.

Have a critical eye.

Lesson 6 - Businesses go through challenging cycles but you can survive the low points with self-belief and total focus on the metrics that matter

In early 2022, I genuinely thought I might go to zero.

To survive, I knew I had to increase AOV while holding CPA steady, and I had to do it fast enough to climb out of the cash flow hole before I hit bottom.

Stressful is an understatement.

But I kept hammering at the unit economics, knowing I’d be fine if I just kept going

TLDR:

1) Get obsessed with your numbers
2) AOV is the magic metric
3) Ignore advice when necessary
4) Bet big on landing page testing
5) All that glitters isn't gold (or even silver or bronze)
6) Businesses go through tough times, stay level-headed

And of course...

If you enjoyed this thread, I'd appreciate you sharing with other business operators who would find this is helpful

And I'll be posting threads on my experience running 7-figure brands 2-3 times per week, so follow me if that sounds interesting to you ✅