Retail Channel Management

🗣️ “I didn’t want to make Nike, Adidas and Puma richer.” - a masterclass in sports business and fashion. This quote is from Aurelio De Laurentiis, owner of SSC Napoli. His club Napoli went fully inhouse for their jersey and merch and created a startup in the club. A masterclass in sports &business by Europe’s most financially sustainable club ♻️- you would not expect in Napoli ;). I) How it usually works – Club x Supplier 👕 – Club signs with Nike, Adidas, Puma, etc. – Brand pays yearly fixed fee as sponsor – Club gets free gear + ~€5–7 per jersey – Royalties = ~10–15% of wholesale price – Brand handles production, logistics etc – Club only earns more via its own stores In short – Safe, low-margin, low-control – Great for global distribution – Merch is outsourced – so is upside 🤯 II) Napoli’s shift – DIY + EA7 “I called my friend Giorgio Armani. I needed to make my own jerseys, but with a credible brand. That’s how the idea was born.” 🧠 Starting 2021/22: – Ended Kappa deal (€8M/year) – No traditional sponsor replaced it – Partnered with EA7/Armani (€100k/year) – Napoli handles: design, production —>all – EA7 provides: brand, fashion expertise Strategic plays: – No middlemen – Global D2C via Amazon et al – Released 13 kits in first year❗️ – Built demand through drops & storytelling Control gained: – Faster time to market – Higher per-unit net margin (est. ~50%) – Cultural & visual brand alignment III) Did it work? Merch revenue by season “It’s like another company within our company, one that produces a lot of stuff. We’ve transformed everything.” ⬇️ Merch rev., growth, est. % of total rev. year by year: 20/21: €3.4M, –, 2% (last season w/ Kappa) 21/22: €5.8M, +71%, 3.5% 22/23: €14.7M, +332%, 5.5% 23/24: €21.5M, +532%, 8.0% 24/25: Est. €25M+ considering title momentum 🏆 📈 5x merch revenue growth in 4 years → Thanks to entrepreneurial vision and execution. 📌 Lessons for the industry – Vertical integration isn’t just for factories – Brand control > brand dependency – Storytelling, scarcity, speed = sales Could this model scale to other top clubs? Or is this DIY path one-of-a-kind? Want to see more behind-the-scenes from Napoli’s business model? 👇 Let’s talk in the comments. Lucas Sorrentino

On the road to Chubbies >$100M exit, a mistake I made was thinking DTC was our most profitable channel. 5 lessons & 1 Action: Lesson 1: DTC isn't really DTC Early on, we thought DTC was the future. It's DIRECT to consumer, after all I was wrong As Facebook acquisition costs worsened over time, we learned DTC is a misnomer Beholden to an algo we have no control over, a more fitting acronym is DTZBA: Direct to Zuckerberg's Bank Account Lesson 2: DTC Has Benefits, but The Favorable Economics of the Good Ol' Days Are Gone: CAC was a fraction of today You could actually reach most of your social following Shipping, 3PL labor, Shopify and Klaviyo were cheaper Free shipping/returns weren't standard etc If you're spending the vast majority of your ad dollars on DR measured on 1d click, solid chance adding disciplined wholesale can generate accretive incremental contribution $$, assuming you're willing to invest in brand Lesson 3: Under-Appreciated Additional Benefits of Wholesale Predictability in CAC: the margin hit you take from retail partners, while large, does not have the volatility of DR, and certainly hasn't 2, 3 or 4x'd like Meta. Forecasting gets a bit easier Access Massive TAM: Wholesale = 7-10x larger than Shopify Diversification of Cashflow Streams: adds resilience, downside protection. A growth story for investors/acquirers Higher Quality Brand Building: Physical products = wearable billboards. The quality of the impression is 1000x more impactful than an IG ad. Fuels DTC too. You look bigger & more legit when in a great retailer Lesson 4: Avoid Hell on Earth: Get your ops house in order Inventory Mgmt: Make sure that's in a good place. If not, checkout Kyle and Dave's new co. Ensure 3PL can do wholesale: Don't learn on the day 10,000 units are going to 3 retailers, each w diff't EDI rules Negotiate COGS or terms: Rationale for "why now?" is sound since buys are going to start 📈 Lesson 5: Brand Building Drives It All To experience any of these benefits, you've got to reach more people and get them to feel something Classic product/offer/urgency creative has some impact, but it won't maximize the chance someone chooses you when they walk into the store, & it def won't get the retail buyer to bang down your door to carry you You'll see Brand dollars go further here Action: Every brand is different, so here's an action to consider as you make the right call for you Review DTC cost increases since day 1 Incorporate the "risk" costs on your biz like CAC volatility Forecast continued trends. See when economic model breaks Takes multiple years to ramp wholesale, so work back to when you need to start Make a call Takeaways: Right now, few things are more important than finding incremental accretive contribution $ While all channels have pros & cons, adding wholesale could help Experiencing those benefits requires incorporation of broad reach, feeling-driven, net-new demand generation (Brand building)

Most emerging brands think they have scaled distribution once they are selling on their website, a few marketplaces, and have an offline outlet. But are your channels actually working together, or are they just coexisting? There is a difference between being multi-channel and being omnichannel, and it shows up in your operations before it shows up in your revenue. Omnichannel means your inventory, orders, and fulfillment are talking to each other in real time. I'll share a scenario that most brands at 50Cr+ scale will recognize. You launch on three new marketplaces. Sales look good on paper. But six months in, you start seeing complaints: wrong items shipped, delivery promises missed, stock showing available when it is not. Your ops team is firefighting daily. Your customer returns are climbing. The channels were not the problem, but the backend was always disconnected, and low volume hid it. This is what happens with a multi-channel setup: each channel sees its own slice of inventory. So when a customer buys on Myntra, your warehouse does not know that the same unit was just committed on your D2C site. Someone gets a cancellation. Someone else gets a delay. Both leave unhappy. An omnichannel OMS fixes this at the root, one unified inventory pool. Orders are routed intelligently based on where the stock actually is and where the customer actually is. Your store stops being just a sales point and starts being a fulfillment node. This upgrade directly determines whether your unit economics hold as you scale. A few things to pressure-test before you decide which you actually need: - Can a customer buy online and return in-store without your ops team having to manually reconcile it? If no, you are multi-channel, not omnichannel. - Do your store managers have real-time visibility into what is available in the warehouse? If no, you are losing ship-from-store potential every single day. - When you run a sale, does your inventory across every channel update in real time? If no, you are overselling and you may not even know it yet. The irony is that most brands invest heavily in acquiring customers across channels, but underinvest in the backend that determines whether those customers actually get a good experience. Acquisition without operational unity is just buying problems at scale. We built Fynd OMS specifically for this: for brands that have outgrown spreadsheets and disconnected tools and need one system to run it all. But regardless of what you use, the principle holds. Your channels can only be as good as the infrastructure connecting them.

How much revenue are you leaving on the table because you’re afraid to evaluate your dispensary tech stack? Part of the work I do with stores is review their marketing and operations tech. Dispensaries almost always have gaps, overlap, inefficiencies, and poorly matched products, usually because it’s a pain to change it up. Most of the time, the cannabis tech stack is a quilt, stitched together. We do the best we can because none are perfect. Here’s who I most rely on at the moment: For core operations, Dutchie continues to anchor most POS environments, and AIQ.com (Alpine IQ) remains a dependable option for loyalty and CRM. Where I’ve seen the biggest shakeup lately is in e-commerce. With budtender education, SparkPlug has stood out for both performance and efficiency. Their UX is great. Mobile-first and seamless. Bundling brand education, incentives, and promotional programs into one platform streamlines everything. For market intelligence, Hoodie Analytics continues to lead on the most insightful and accurate competitive insight for retailers. You can see what nearby competitors are promoting, what’s moving on their menus, and who their shoppers are. It’s a gold mine. If you’re running lean, Lit Alerts deserves credit for making useful data accessible on a budget. Want to shout out to Happy Cabbage’s Happy Buyer product. It's proven to save retailers money by helping store manage inventory and unlock dollars stuck in inventory. I’m always interested in what the tech platforms are doing in the space. Who is a must-have in your dispensary marketing stack?

Cannabis retailers: messy discount names = lost $$$ We recently worked with a client to optimize their approach to discounts. In retail, clarity is king. This includes how you see the dollars allocated to different initiatives. The first step? standardizing the discount naming conventions. How we did it: 1. Streamlined Operations: - Unified discount names across all platforms - Implemented a clear hierarchy for promotional types 2. Enhanced Customer Experience: - Simplified communication of offers - Reduced confusion at point of sale 3. Improved Data Analysis: - Easier tracking of discount performance - Quicker identification of profitable promotions The results? ➜ 5% increase in profitability in 45 days ➜ Less resources spent amplifying promotions ➜ Clear path of what can be done next to continue to optimize Key Takeaway: cannabis retail is not just about the percentage of your discount—it's about the dollars. Clear naming conventions impact how you identify what is contributing or eroding the bottom line. DM me or subscribe to our newsletter for more insights on boosting your cannabis retail profitability. #CannabisRetail #DiscountStrategy #RetailProfitability

What do you do & where do you go, when your Cannabis taxes go up unsustainably—(besides to the #receivers)? With California’s excise tax now at 19% and New Mexico climbing toward 18%, operators really only have three options: 💸 Absorb it — shrink your margins. 📈 Pass it on — raise prices & risk losing customers. 🛠️ Tighten operations — find efficiencies before the tax bill comes due. One Bay Area retailer chose the third path. With the help of HeadQuarters, they cleared expiring stock, launched smarter discounting, and freed up $170K in just two months—without raising prices. HeadQuarters big behind-the-scenes team is the best kept secret powering efficiency at some of the industry’s biggest names: 710 Labs, Embarc, Eaze, Kiva Brands, Inc. Verano, NABIS, Green Thumb Industries (GTI), and many more. Case Study: https://lnkd.in/gbettwd5 In Cannabis these days, #survival isn’t about shouting louder—it’s about running smarter #Cannabis

How to Compete as a Smaller Dispensary Operator Like in cultivation, I hope for a world where enterprise, middle market, and small dispensary operators can find their niche and a lasting foothold in the industry. For smaller operators it’s important to: 1. Connect with local customers - Excellent customer service, community outreach, and volunteer efforts come to mind as ways to build community and a loyal base. Unpaid media mentions for these efforts can cement your brand identity as genuine and authentic. 2. Have a laser like focus on efficiency - Through judicious use of leading software platforms you can run a streamlined, efficient operation that drives margin improvement. 3. Attract tourism dollars - Cannabis tourism is a big deal. When tourists shop for a “dispensary near me”’your name needs to shown up on the first page. 4. Offer rockstar menu offerings - Going beyond normal product lineups and offering differentiation like limited and exclusive drops can be a big draw. Getting the word out with banner announcements, social reviews, staff picks, and referral marketing can be huge here! 5. Understand market needs and consumption preferences for your target demographic - Talk to customers, conduct surveys, and study industry data from Headset and others. Position offerings accordingly. With many operators experiencing top line pressure, it’s a great time to continue working on your business. Shoot me a DM if you would like to learn more or chat about your operation. Always here for you, Jesse #retail #dispensary #differentiation

Cannabis has never had a shortage of people willing to save the day. This industry was built by founders, fixers, growers, salespeople, and operators who could make something work with incomplete information and not enough cash. They could find product, repair a room, call in a favor, move inventory, cover a shift, calm a vendor, and somehow get through another week. That ability still matters. But it is not the same thing as operating control. A company can survive for a long time on judgment, relationships, hustle, and a few people who know where everything is buried. The problem shows up when prices compress, promotions deepen, labor stays expensive, inventory slows down, and capital becomes less patient. Eventually, improvisation stops looking resourceful and starts showing up as margin loss. The companies built for the next phase will know their cost per pound, gross margin by SKU, inventory age, cash conversion, labor requirements, reorder quality, and where discounts are actually landing. They will know who owns those numbers and how quickly the business responds when they move the wrong way. Not because every cannabis company needs another dashboard or a thicker operating manual. Most do not. They need enough visibility and discipline to catch a problem before the month closes, before the inventory ages out, and before another emergency becomes normal operating procedure. Hustle helped build cannabis. Operating control is what gives a company a chance to keep what it built. #CannabisOperations #OrdoVerde

Zach Santarsiero, the Wizard of Blogz, has put out this gem for you via Green State just in time for... tomorrow (Green Wednesday!!). Full link below, but here's the skinny: Green Wednesday isn’t about a race to the bottom on discounts. It’s about preparation and customer experience. A few smart moves cannabis retailers should be making right now: 🔊 Dial in your Google presence. Most shoppers start with “dispensary near me,” not your promo email. Hours, menu, photos - get them right. 🔊 Be strategic with deals. Bundles, mix-and-match, loyalty perks beat the lazy “40% off everything” approach every time. 🔊 Keep messaging tight. One announcement, one reminder, one day-of nudge. Don’t spam your list. 🔊 Fix the in-store flow. Shorter menus, express pickup, extended hours. Friction kills revenue. 🔊 Capture new customers. Holiday shoppers are often first-timers - follow up, thank them, and give them a reason to return. 🔊 Measure what matters. Basket size, repeat visits, online to in-store conversion. Not just total sales. The retailers who treat Green Wednesday as a strategic moment (not a price) war - will keep winning the long game. https://lnkd.in/eCAvRssk

Your biggest revenue channel might be your biggest profit leak. Most multi-channel founders I talk to can tell me their top-line revenue by channel in seconds. But when I ask which channel is actually making them money after platform fees, fulfillment, returns, and ad spend? Silence. And that's a problem, especially heading into Q4. Scaling decisions get locked in fast. Let me show you what a channel contribution analysis looks like 👇🏼 Take your Shopify DTC channel. Subtract: - Merchant processing fees (~3%) - Paid ad spend to acquire that customer - Shipping + fulfillment costs - Return rate (DTC tends to run higher) - Shopify platform fees Now what's your gross margin per channel? Run the same math on Amazon: - FBA fees (pick, pack, storage) - Amazon ad spend - Referral fees (~15% depending on category) - Return processing - Any co-op or promotional fees And wholesale: - Retailer margin (often 50%+) - Freight to their DC - Compliance/EDI fees - Chargebacks and deductions The channel pulling the highest revenue is often the thinnest on margin. Amazon looks profitable until you properly allocate ad spend. Wholesale looks safe until you factor in deductions and freight. DTC looks premium until CAC creeps up going into Q4. - - - Mid-Q3 is exactly when you should be running this analysis. Before you commit Q4 inventory, set ad budgets, or double down on a channel that's bleeding margin. I've seen brands reallocate 30-40% of their Q4 spend after doing this analysis for the first time. They finally knew which one deserved more fuel. Remember: Channel revenue doesn't equal channel profit. - - - Which of your channels would survive a full contribution margin breakdown? ♻️ Know a founder heading into Q4 without this analysis? Repost this for them. P.S. If you want to build a channel contribution model for your business before Q4 planning kicks in, I can help ➜ https://lnkd.in/eZ9cu5vR #DTCBrands #EcommerceStrategy #CashFlowTips #FinanceTips #FractionalCFO