7 minutes of eComm Wisdom: Arsh from ASYSTEM

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I think one of the things that stood out for the brand was the aesthetic of how things looked. And credit to the founders for having a good eye on that. And also just the nuance of how to use the product in a way that felt luxurious as you took a supplement product.

So to that point, one of the things that stands out from your brands is: 'Strong brand identity builds trust'. And very often we would find partners who'd want to work with us, especially as a newer brand, because of how the aesthetic was. Still being very green in the market, when we'd reach out to some of these larger agencies or marketing partners, or even freelancers that we were looking to work with, they'd actually get really excited just looking at the website and looking at the product packaging. It was a good learning for me in terms of the value to put on the aesthetic of a brand. especially in the early days, if you are going to spend, an extra let's say $2,000 on the brand aesthetic, I think it's worth it to reap those benefits when you're in market and largely looking to work with partners, but also probably looking to attract a certain type of customer as well.

One of the things that we struggled with, and I think a lot of brands struggle with is, consistent content production.

So we were able to write up the briefs, we were able to find somebody to source content as a contractor, get some pretty good content, get a freelance video editor, to create the ad. That did well. and then it fell through. Because, everyone was a bit of a contractor; sourcing talent takes some time;

we got one ad working and then we're like, "oh, okay, we're good" and sat on our hands for a little bit. I think just I think now when I think about early stage brands and helping them think about how to scale: A lot of the time goes into thinking about resourcing and like systems around content development.

And so at a smaller scale, is there an opportunity to build out just a small area in your office to do photo-shoots if you need to go spin out content really quickly and cost effectively? Or could you have someone on your team that isn't a full time videographer or graphic editor, but they might do it as like a side hobby and enjoy it as a passion.

So if we need to create some content quickly, we can plug into them and they'll be able to help. If you're not able to do that or do photo shoots pretty consistently, like once a quarter, then plugging in with an influencer platform is needed. There's a few out there. I think at a higher scale, there's one called Aspire. that I've been using more consistently I know "Insense" is pretty popular as well. And then more cost effectively is "billo" but overall the challenge for us was sourcing creators or sourcing video or graphics for static ads and being able to do that at a consistent pace

Resourcing that and having the right partners to do that at a consistent volume where, you can have creative coming back every single week is something I think about a lot more. I think the industry changed as well. I Now there's, folks that focus just on creative strategy and you have folks that are doing just the content production and then you have the media buyer.

So I think the game has changed the last few years to where creative strategy has just become a role in itself. which I think is important and I think more brands are leading towards having some sort of creative strategist or including that in the role of somebody that's like a Head of eCommerce or Head of Digital.

A lot of brands don't, either think about financial modeling or have it as a core competency. I think at a baseline, they know it's important and know that the business operates around the mechanisms of revenue goes up based probably on media spend going up, inventory goes down: you need to put in a PO.

If you put in a PO, your cash goes down, but you get inventory. Although modeling that all out and then tying that to your financials is something that's complicated and typically not in the skill set of the founder. And most of the time they're really focused on marketing, right? they're a brand new company

and they're not really coming from a background of financial modeling. So what I try to help out with is "let's build out a model based on your financials first".

So the first few tabs should be your profit and loss statement. It should be your balance sheet and then your cashflow. And then the model that we build should tie back into those statements because those are your financials. And ideally at any point in the time of the business, you should be able to report back on those financials.

Just print them out, give them to an investor, give them to an accountant, whoever it might be. So everything should back up into those financial statements. And then the internal tabs outside of that should be around the different expense categories of sales, marketing, support, you can break out into headcounts, marketing, you can break out further into paid media and the paid media will have different channels and your spend and MER and how you want to think about attribution, probably on a last touch in platform basis.

And then you should also have a tab on inventory. I think most people understand what levers there are in the business. I think where it gets difficult when building this out is, most founders want to start to think about inventory bottoms up. So they're like, "Oh, we have all this product. We have packaging, we have these tins. Let's build out our inventory tab based on that". That complicates things and rather you should simplify that with just one light item that says: "We need a certain amount of days of inventory, and that equates to X amount in dollar value". So then what happens is, as you spend more, revenue goes up, and your cost of goods tie to your revenue. The cost of goods go into that inventory line item, and decrease your inventory based on those cost of goods. Because you have a single line item for days of inventory that's required, once it hits that dollar value, it'll do an additional PO in the model, which will be the cash pullout, and that'll go to your accounts payable.

And then you should build a separate model purely on inventory forecasting that's more bottom's up. So overall, I think the financial modeling across the business directionally, people know where it is, but building out that complete model, helps them a lot because it gives you a bit of a, direction.

Let's say it's 85% accurate or 90% accurate. It's not 100% because you're making assumptions but this then helps founders understand how much they should be spending, where revenue targets should be, where cash should be, when they're going to be making other POs directionally, and then separate out the inventory model and probably even separate out a different model just for paid media spend, across those channels. So that's where I think I provide the most value for these earlier stage brands. In addition to then starting to think about growth, I think some of those foundational components helps provide a little bit more clarity and visibility.

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