Ecommerce Playbook: Numbers, Struggles & Growth

Margins Are Shrinking, Debt Is Rising – What’s Next for Ecom?

Feb 6, 2025

Drew Fallon, co-founder and CEO of Iris Finance, shares his expertise in financial modeling for ecommerce brands. He discusses the troubling trends of rising debt and shrinking margins, emphasizing that while revenue is increasing, profitability is waning. Drew breaks down the financial health of 8-figure brands and offers practical strategies for navigating cash flow challenges. He highlights the importance of adapting to new economic realities, urging brands to rethink their financial metrics for sustainable growth amidst a shifting landscape.

56:07

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Episode guests

Drew Fallon

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Episode notes

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Quick takeaways

E-commerce brands are experiencing squeezed margins despite increased sales, indicating rising operational costs that negatively affect profitability.

Rising debt levels among brands, combined with poorer-quality loans, present risks to future financial stability and sustainable growth.

Effective cash flow management is essential for e-commerce success, as many brands struggle with cash availability despite healthy EBITDA figures.

Deep dives

The Stability of Email Marketing

Email marketing is a highly effective and reliable strategy for online merchants, often providing significant returns on investment. Brands that utilize email and SMS marketing platforms, such as Omnisend, typically generate an average of $73 for every dollar spent. This consistency and ability to deliver steady results make email marketing a powerful tool, especially in unpredictable economic times. The simplicity of setting up automated campaigns allows brands to focus on other aspects of their business while ensuring that their marketing efforts continue to convert.

Intro

2min

E-Commerce Financial Insights 2024

7min

Exploring Financial Leverage and Cash Flow in E-commerce

5min

Navigating the Cash Conversion Cycle in E-Commerce

10min

Navigating E-Commerce Cash Flow

29min

Navigating E-commerce Challenges: Survival and Optimism

3min

Margins are shrinking, debt is rising, and ecommerce brands are feeling the squeeze. In this episode of the Podcast, we dive deep into the financial realities facing DTC brands in 2025. Is the ecommerce game still worth playing? Or has the landscape shifted in ways that make profitability harder than ever?

Joining Taylor are Lio from Finaloop and Drew from Iris Finance, two of the sharpest financial minds in the space, to break down the data, trends, and what it means for your business. We’ll cover:

The latest financial benchmarks for 8-figure brands
Why revenue is up, but profitability is down
How rising debt levels are impacting growth
The path forward for brands trying to survive and thrive
Practical strategies to protect your margins and improve cash flow

If you’re running an ecommerce business, this is a must-watch. Don’t let the market catch you off guard—stay ahead of the curve.

Show Notes:

Go to https://your.omnisend.com/CTC to get 20% off your first 3 months with code CTC20.
Explore the PROPHIT System: profitsystem.com
The Ecommerce Playbook mailbag is open — email us at podcast@commonthreadco.com to ask us any questions you might have about the world of ecomm

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