James

Brand building 🏗️

[James @Jameseey]

May 2024 I made £2.2k in 4 days with zero experience. No clue what I was doing, just started.

Fast forward to now.. consistently hitting $330k/week… $17.1m a fucking year if I keep this up. Absolutely madness in reality.

It wasn't smooth. Setbacks, doubters, months where nothing worked or made sense.

But I just kept going.

The one thing that actually changed everything was joining EB Builders.

Private suppliers, weekly product drops, live calls, and a community that's genuinely ahead of the game.

Less than $100/month. Still the best investment I've made.

👉 https://t.co/4l6TjrmaS0

[James @Jameseey]

@Roni91192 @tivollem

[James @Jameseey]

@harryecommerce It’s you?

[James @Jameseey]

@finityx Yes sir 🫡

[James @Jameseey]

Juicy 😮‍💨

[James @Jameseey]

@LachezarVoynov 🐐

[James @Jameseey]

@cjfeth If you’re not using vantage ngmi

[Harry @harryecommerce]

$1m in 7 days 😶‍🌫️☑️

[James @Jameseey]

@Idan_Frenkel8 Then they have missed the point

[James @Jameseey]

To all creative agencies, please tell me in what world does an ad spend percentage work for an ecom business?

Are you all fucking mad 😂😂

If you want to take 10% of your ad spend on the ads you make, if you then miss targets are you refunding the 10% of ad spend?

Would love to hear an actual argument to how this would ever work for an ecom business.

[James @Jameseey]

@ecompixsil Completely agree with this

[James @Jameseey]

No internal team currently but yes I’d incentivise my strategists. Would they get 10% of ad spend? No.

Something like a CPA target or a spend target = bonus makes complete sense. I’d want everyone on my team to also make bread but agencies can fuck themselves if they think they deserve 10% flat adspend.

[James @Jameseey]

Alex, your point that the downside should be a minimum KPI that returns $0 in bonuses is literally my point.

The whole thread is about creative agencies wanting a flat % of ad spend regardless of how the ads perform. I have never said the agency should cover payroll, refund every business loss or lend the client money. You have created a completely different contract and argued against that instead.

If the agreed KPI is missed, they should not get the performance upside. If it is hit, pay them well. That is completely different from taking a flat % of every dollar spent whether the business made money or not.

And growing spend by 25% is not automatically creating value. Anyone can increase spend. Growing it profitably while bringing in good net-new customers is the valuable part. If an agency genuinely creates that, the fee can absolutely be worth it. But if spend rises 25% and profit falls, why should the agency earn more simply because more of the brand’s capital was deployed?

So Nicky, what I think is fair is a proper retainer based on the actual work required. At this spend level that can obviously be a large retainer. Then add upside for hitting agreed performance targets or creating profit above a clear baseline. What does not make sense is an automatic flat % of ad spend. Spend is the brand’s cost, not proof of value created.

[James @Jameseey]

Your production cost is fixed and capped. The brand’s loss scales with spend. AI ads can be insanely cheap to make, while the brand is risking the ad spend, stock, COGS, fulfilment, returns and cash flow. Losing the cost of producing an ad is not remotely the same as losing hundreds of thousands deploying it, then still owing the agency a % of the spend.

[James @Jameseey]

I get that no retainer means less fixed cost and you can test more agencies. But it still does not explain why taking a flat % of ad spend makes sense. Also let’s be real your opex will be much higher with this setup.

You’re looking at this purely from inside the ad account, not as someone running the full ecom business. In a perfect world every dollar Meta spends would land at the exact CPA you wanted and every customer would be profitable straight away. That is not reality at any real volume.

Some days, weeks and months performance is worse, but you are still bringing in net-new customers. You do not just kill spend every time margin drops. Unless you’re saying the second performance is poor you cut spend and downscale? Because tbh that says a lot about the level of business you have actually operated. You would constantly be scaling up and down and never build any real volume or momenutum.

And your point that ROAS changes with spend literally supports what I’m saying. As you push spend, efficiency can drop, yet the agency gets paid more because its fee is tied to ad spend. The brand takes all the extra risk and margin pressure while the agency’s bill goes up. How is that aligned?

Then you say spend is the success metric, but if it spends and performs badly that is the media buyer’s fault. So when it spends and wins, the creative agency gets the credit. When it spends and loses, somebody else gets the blame. That is all upside and no downside, which is my whole point.

I am not against performance pay. If an agency brings in net-new customers and creates profit the business would not otherwise have made, pay them very well. But spend is not profit or value created. It is the brand’s cost. Taking a % of that while carrying none of the stock, cash flow, fulfilment, returns or downside is not alignment. It is just a very good deal for the agency.

[James @Jameseey]

@NickyFiorentino In the last 2 weeks we have spent close to $1m. No issues with a retainer. My issue is creative agencies thinking they can take a flat % of ad spend.

Want the upside, don’t want the downside risk.

[James @Jameseey]

@derekhalpern This is exactly their mindset. I don’t know any business that only allows you to have the upside and no downside risk.

It’s crazy to me and I don’t understand how they can’t see how mad of an idea it is.

If they want to act like a partner then the risk should be shared.

[James @Jameseey]

Couple of things I’d love to hear your thoughts on because this doesn’t provide an actual good argument to how it makes sense.

The post is about agencies that are wanting to take a flat % fee on their ads ad spend. Not having CPA targets, ROAS goals etc

But even if that was the case as I’m sure you know as you are the 8 figure meta ads expert, you can set bid caps, cost caps etc and even bake in like you say the commission. Does meta really stick to that target set? Or does it fluctuate massively, some months does it over spend and completely miss the targets set.

So at the end of those months where it’s now overspent, at a worse CPA than you were wanting you are going to likely be struggling with a low net % profit if any. Then the greedy agency which is basically acting like another tax man comes along and expects you to cough up a % of your business to pay to them for the ads that didn’t perform that month.

How does this make sense?

On the flip side, you scale massively in a month. You hit records, you end up spending $4m that month. Hit good CPA targets and the agency is $3m of that spend due to a few winning ads they produced. This brought you in $7m revenue for the month, you are growing aggressively and you are left with a very healthy 15% net. You end up making close to $1m that month. Now the agency comes along and wants their 10% ad spend. You need to cough up $300k and you now lose 30% of your profit for the month.

So basically when you do well you end up losing a good chunk of profit and when it goes poorly you still have to pay up and lose any profit you may have had or go negative for the month.

Feels like a very one sided deal to me.

[James @Jameseey]

@lifeofsid And ecom businesses don’t have this and many other things?

[James @Jameseey]

This is my exact point. Agencies only want to see the upside when everything is going well and get an ad spend percentage.

What happens when the performance for the month is poor, you end up breaking even as a business. Maybe even a small loss. Your ad spend doesn’t go down but you now have to pay a percentage of that spend to an agency with poor results for the month.

It doesn’t work. If an agency wants to act and come in like an investor with a percentage of let’s be honest the business pretty much then they should also be exposed to the downside risk.

It’s very clear agencies that run this way have no clue how business or ecom in general works

[James @Jameseey]

@lifeofsid Exactly how?

[James @Jameseey]

Agencies work well and we have grown to 8+ figures with them. Just noticed recently many more are asking for rev percentages, ad spend percentages etc. I get the reasons for them but it doesn’t make sense for the brand owner. Not sure who’s teaching them this shit but it won’t last long for them