Day One Advisory

Day One Advisory Specialist accountants for ecommerce brands. We help Shopify & Xero users clean up their books, track margins, and grow profit.

26/05/2026

Loss leaders can work — but only if the numbers actually back it up.

There's a big difference between a calculated risk and blind optimism. And as an accountant, this is something Matt sees all the time with ecommerce businesses.

Acquiring customers at a loss isn't automatically a bad strategy. If you know your lifetime value, you understand your margins, and you've got the data to support it — then sure, take the risk. That's an informed business decision.

But here's where it goes wrong. Too many businesses are running loss leaders without actually knowing:

❌ Whether the product is profitable or not
❌ What their customer lifetime value actually is
❌ Whether the math will ever work in their favour

That's not strategy. That's hope. And hope is not a business plan.

If you're going to take a risk, take it with your eyes open and the numbers in front of you. Know exactly what you're betting on and why — otherwise you're just burning margin and crossing your fingers.

This is just a snippet from Matt's full conversation on the Add To Cart Podcast 🎙️ — Episode #627: Why Revenue Is the Most Dangerous Number in Ecommerce. If you haven't listened yet, it's worth your time!

25/05/2026

If you're celebrating revenue, you might be celebrating the wrong thing!

Revenue in isolation is almost a useless metric. It tells you how much came in — but nothing about whether your business is actually working. Gross profit is where the real story is, and it's always the first place to start.

It tells you whether your products have enough margin to cover your ad spend, pay your overheads, and still leave something behind. Without it, every other number is just noise.

So what does good look like?

🖥️ Digital products — 90%+ (no product or delivery costs to worry about)
📦 Standard ecommerce — 50% is the minimum you want to be hitting
🏆 The ones really thriving — sitting comfortably at 60–65%

If you're below those benchmarks, it's not a marketing problem or a sales problem. It's a margin problem — and no amount of ad spend is going to fix it.

Matt dived deep into this and a whole lot more in his recent appearance on the Add To Cart Podcast 🎙️ — one of Australia's leading ecommerce podcasts. Episode #627: Why Revenue Is the Most Dangerous Number in Ecommerce is live now. Highly recommend giving it a listen!

25/05/2026

Here's something nobody tells you when you start an e-commerce business: revenue is vanity, break-even is sanity.

You can be generating sales every single day and still be going backwards. And the scary part? Most business owners don't realise it until it's too late.
That's why knowing your break-even point isn't optional. It's survival.

Here's how to calculate it:

Take your revenue, say $100.
Subtract your cost of goods, $55.
You're left with $45 gross profit.
Subtract your ad spend, $20.
That's your contribution margin, $25, or 25%.
Now take all your fixed costs for the month. The rent, the software, the accounting fees — everything that doesn't move with your sales.
Divide that number by 25%.
That's your break-even. The exact amount you need to sell before you make a single cent of profit.

Once you know it, everything changes. Your targets make sense. Your ad spend makes sense. Your decisions make sense!

Don't know yours? Drop a comment below and we'll help you figure it out.

19/05/2026

Landed cost is the single most important number in a product business. And most people are getting it wrong!

Here's why it matters: Your landed cost isn't just what you paid your supplier. It includes freight, duties, insurance, and every other cost it took to get that product to your door. Get it wrong and your entire gross profit calculation is off. Which means your ad spend decisions are off. Your discount decisions are off. Your break-even is off. Everything downstream is broken.

The problem? Calculating it accurately used to mean messy manual spreadsheets, hours of cross-referencing supplier invoices and duty invoices, and still not being 100% sure the numbers were right.

So we built an AI prompt that does it for you. Drop in your supplier invoice and your duty invoice, run the prompt, and it spits out your landed cost per SKU. Accurate. Fast. No spreadsheet required.

Comment 'PROMPT' below and we'll send it straight to you!

15/05/2026

You're not bad at business. You're just calculating margin on the wrong number.

Most ecom owners do the math like this: sell for $100, product costs $50, therefore I make $50. Sounds right. Feels right. But it's wrong!

That $100 sale isn't really $100:

Minus GST → $91
Minus discounts → $87
Minus refunds → $85

Take your $50 cost off $85 instead of $100, and your margin just dropped from 50% to 37%. Just like that!

That difference changes everything! Your ad budget. Your break even. Your ability to grow without running out of cash.

Start from the right number or keep wondering where the money went!

14/05/2026

Most ecom businesses pay GST at the wharf and never see that money again. Not because they can't claim it, but because they're entering it wrong in Xero.

Here's the fix:

When you enter your wharf bill, set the account to GST and the tax rate to GST on Imports.

That one change means you're claiming the full amount back in your next BAS. Not 10%. Not zero. All of it!

Small detail. Big difference!

12/05/2026

If you're calculating profit using just your supplier cost, you're already losing money!

The real number you need is your landed cost.

That's your product cost plus everything it takes to get it to your warehouse and ready to sell.

Shipping. Insurance. Duties. It all adds up.

That $20 product? It's actually costing you $28. And if you're pricing, running ads, or offering discounts based on the wrong number, your margins are a lie!

Use landed cost. ALWAYS.

11/05/2026

This is more common than you think. Big business. Big numbers. Empty pockets.

Here's what's actually supposed to happen:

Pay yourself a proper wage. Not scraps. A real living wage.

Extract wealth through dividends. Then invest it! Property, stocks, bonds, paying down your mortgage, whatever works for you.

Reinvest strategically. Not emotionally. If you're throwing good money after bad just because you feel like you have to keep going, stop!

Because here's the hard truth, if it all falls apart tomorrow, you should still have something to show for it.

Don't spend 20 years building someone else's wealth while forgetting your own!

Address

Southbank, VIC

Opening Hours

Monday 9am - 5pm
Tuesday 9am - 5pm
Wednesday 9am - 5pm
Thursday 9am - 5pm
Friday 9am - 5pm

Telephone

+61396077140

Website

Alerts

Be the first to know and let us send you an email when Day One Advisory posts news and promotions. Your email address will not be used for any other purpose, and you can unsubscribe at any time.

Shortcuts

Share

Category