 In this video, I want to explain to you why you should be chasing revenue and not per se profit in the e-commerce model. I'm saying this specifically for if you are running e-commerce companies, physical product for example. You are able to sell this asset for example. I'm going to show you why. I'm going to go over to the whiteboard to explain to you as well why you should chase revenue at first. So let me go over to the whiteboard. In the e-commerce model, you are running a business where you can operate without you. Any business can be acquired in the future. If you want to be worth $3-5 million in the next 3-5 years for example. You really want to build a company that can impact a lot of people. Sorry about this. My terrible drawing. But a lot of people and they are extremely happy. They are like, wow, this guy is really good. We really like your products. So if that's the type of company that you want, you should definitely change revenue, not profit. Purely because top-line growth is super, super important. Once you get the money and once you get the basically cash flow coming in, you will be able to hire more people. You will be able to pour that money back into product development and ensuring that your customers are happy, customer service support, blah, blah, blah. But people don't understand that. The product business is a very capital intensive business. So you do need to actually focus on these things to grow top-line revenue. So let me show you why revenue and not profit is important. So imagine you're running tons of ads here and you're driving tons of traffic to your front-end offer. In your front-end offer, you're probably going to be break-even. Or you're going to be very marginally above your break-even rows. So it's either you are losing money on this product or you are basically making very, very little money here. The reason why is because you're spending on ads. So the margin is going to be very, very tight here. However, if you're able to just break-even here on the front-end, for example, in the physical product business on e-com side, you're going to be able to collect email addresses over time. And so if you're driving a lot of traffic from ads and stuff, so I'm just going for the ads anywhere from YouTube to Facebook to Google, stuff like that, then you should be able to drive tons of traffic to collect tons of email addresses. And if you ask any smart business person in the world, the most important thing your business owns is your email list. Or your customer channel basically. And so the email list is super important purely because you do not have to pay for any sort of advertising in order to reach this audience right here. So I'll give you an example. I know a blogger from Singapore, for example, and she does SEO content on her site. And so over time, she has built up an email list of 40,000 people in her audience. She has barely spent anything on paid advertising on Facebook ads. And so this is actually quite a substantial amount considering that this is all organic. Okay. However, all of these people like no like and trust her, okay. They LTR her, right, which means that hey, they're going to be willing to buy from her over time or in the future. Okay. And so, for example, if you spend tons of money to break even here, for example, you make $0, imagine the worst case scenario, right. You don't make any money at all. Okay. What have you gained in the process? Okay. You basically gain $0, right. It's okay. We didn't lose anything. We didn't take else here. But you have gained 40,000 people who potentially are going to buy from you again. Okay. And if 40,000 people, if we sell them a $49 product in the future, right, how many of them are going to take that amount? Right. It's going to be probably a lot of people, for example. Okay. So like a lot of the times people are like new newbies, noobs. Okay. They play at this level. They play on the front end. They want to make money here. Okay. They don't want to make money on the back end. Okay. There could be a few reasons, right. It's probably they don't even have a back end or they don't even know it exists. Okay. So probably don't have, right. Or don't, don't even know. Don't even know. Yes. Okay. So they don't know how to play on this area here. Okay. So the, the, the concept of lifetime value is very important because imagine I spend, you know, I don't make any, any money here, right. But then I start retargeting these people, right. The cost to acquire an additional sale here is significantly lower than the cost to acquire a customer here. Okay. This is a matter of fact. Okay. And so the reason why you should always focus on chasing revenue, right. And not necessarily profit, right. It's because actually the health of your business, right. Is dependent on how much you bring forward here. Okay. Imagine you can spend like something crazy, like 300K on the front end ads. Right. And you gain back like 300K in revenue. Okay. And these 40,000 customers, right. Everything you sell to them on the back is pure profit. It's pure profit. Okay. So this is where the real money is made. And this is where, how do I say this? As the rising acquisition costs on Facebook and Google and stuff increase over time, right. Everybody who is not doing this, right. It's going to get killed. Like it's 1000%. I see it already. Okay. It's more, it's increasingly difficult to be break even on the front end. And it's, it's like, how do I say this? It's very, very essential that you try to be break even and making money on the front end. But if you cannot write, then the worst case scenario is break even. Okay. So like if people who do not do this, this part of the business, it's not going to like boot well for you over time purely because everyone is like playing this game. And you are here stuck on the low level and trying to sell like, for example, like $19, $29 stuff online. Right. You're going to get crushed. You're absolutely going to get crushed. Okay. So how do I say this? There's so many things going on in business already. Okay. So you really need to think about, okay, what is my front end? Why is my back end? How are we going to monetize when people actually come in? What is the customer journey like? Are we going to sell product one, for example? What is product two? You know, how can we increase the amount that they spend here? For example, stuff like that. Okay. So yeah, when you think about profit, right, when do you actually think about profit? Okay. So you should think about profit when, for example, like you're three years into the business. Okay. You have all your operations ready, which means that you probably already have like a media buyer, which means person running ads. Right. You have a team. You have a marketing team. You have a supply chain guy, probably like operations and stuff. You have a manager. So you're not even in the business, which means that the company is making money without you even having to say anything or like do anything. Okay. That is probably when you should start thinking about profit. Okay. And the reason why is because, right, once this happens, right, it means that the business is a real business. Like everybody on the team, imagine I put team here, right? And this is you. Okay. The team still makes money without you, which means that if someone comes in and says that, hey, I want to buy your business, right, they're going to buy anywhere from like, for example, a three to five X valuation. Okay. So imagine you're making a million dollars profit. They can buy it from you at three mil and five mil, for example. Okay. And so this is the game that you want to play. Okay. Not like the game that is all about, oh, we're not making money here, stuff like that. So every time I see, for example, in the Facebook groups where people are complaining about the ads are not being profitable and stuff. I really feel like I don't think they understand this concept of the backend. Okay. The backend, this is, sorry. This is the real shit. Yeah. This is like, if you told me, right, you, I make zero dollars for example on the front end. And I get this, I will take this every, every single day, all day, every day, because the relationship, okay, the relationship that the product and the customer has formed with the business, right? It's more important to me than anything because in the future I can sell them other things that they might be interested in. Does that make sense? Okay. So hopefully this, okay, this is very messy. Sorry. Okay. But I, I hopefully, hopefully you understand what all of this means, but people in the internet marketing space, right? Especially if you are, if you are watching this video at this point in seven minutes and like you are a beginner to the space, right? Everyone is going to tell you this. Everyone is going to tell you, learn the new ad strategy, learn the new ads, ads, ads. Okay. But actually ads, ads is just a medium, a channel to get your customers. Okay. What's important is actually not so much ads. Okay. So hopefully this makes sense to you and hopefully this gives you some perspective of it. But I'm serious when I say, I tell you this, right? The big boys, the big boys are doing this. Okay. If you are still doing the, this stuff here, right? You're going to get crushed. Like seriously, seriously going to get crushed. And with like so many like algorithmic changes or like email spam or like, you know, every, it seems like every single day there's like a file somewhere in your business, right? Then you should definitely try considering doing this. Okay. So yeah. Okay. Yep. If you need help with your advertising and stuff, I'll put some links in the description and hopefully if you want to book a call with us, you can. Okay. That's pretty much it from me and hopefully I'll see you in the next video as well.