We haven’t clocked out for Christmas.

💰 Connor Rolain shows you how to monetize your checkout

📈 Abir Syed shares “six layers” to build a marketing budget

🔥 Mehtab Bhogal reveals the best online community in DTC

Plus, the five biggest headlines in consumer news.

 Oh, and tomorrow … 

Connor Rolain Head of Growth, HexClad

You Don’t Need a New Channel

The best operators don’t win by bolting on new channels. They win by optimizing their funnel.

• Checkout
• Upsells
• Thank-you pages

The spots where customers are already in “yes mode.”

Why? Because it’s easier to get someone to say “yes” again than it is to get them to say “yes” the first time.

HexClad, Ridge, Jones Road, and over 40k operators rely on Aftersell for post-purchase funnels and monetization tools like Rokt Pay+ and Rokt Thanks.

It’s the lowest-lift, highest-margin revenue we generate all year.

Here’s an early present to help your Q1 planning.

An extended 60-day trial of Aftersell. Or, activate Rokt monetization and get the entire suite free for a full year!

Abir Syed Cofounder, UpCounting

Why Your Marketing Budget is Bad (And How to Fix It)

Your marketing budget is the biggest line item on your P&L. It’s also your most powerful lever for growth.

The difference between your brand right now and the version that’s 10x bigger isn’t your creative or your product. It’s the quality of your decisions about where to deploy capital.

Here are 6 layers to build a marketing budget for 2026.

 Layer 1: MER-Only Budgeting 

This is where most brands start. Set a target of, say, 2.5x MER — total revenue ÷ total spend.

• When ads are good, spend more
• When ads are bad, pull back

Simple. And suboptimal.

Because you’re optimizing for ratio, not for absolute profit.

It’s like saying: “I only invest in things that return 50%” without asking how much you can actually put to work.

Would you rather:

• 50% return on $1k = $500
• 10% return on $100k = $10k

The percentage is better in the first case. The profit is 20x better in the second. Ad budgets work the same way.

Returns aren’t linear. If you only ever spend at a fixed MER target, you’re leaving money on the table.

 Layer 2: Profit-First Budgeting 

Compare these two scenarios:

Scenario A

• MER: 2.5x
• Spend: $80,000
• Revenue: $200,000
• Contribution margin: $44,000

Scenario B

• MER: 2.2x
• Spend: $140,000
• Revenue: $308,000
• Contribution margin: $50,960

MER dropped from 2.5x to 2.2x. But absolute dollars went up from $44k to $50k. Of course, month over month, it’s never that static. Instead, you need to be willing to flex according to your brand’s seasonality.

The point? Don’t worship fixed MER targets.

A lower MER at higher spend can produce more total profit, even if the efficiency looks worse on paper. Instead of one sacred MER number, use these guardrails:

1️⃣ Define a profit target.

Decide how much contribution margin you need this month to cover fixed costs and hit your profit goals. That number becomes the anchor for all budget decisions.

2️⃣ Let MER serve that profit target.

If dropping MER from 3.5x to 3.0x lets you add $20k–30k of contribution margin, that’s a good trade.

3️⃣ Review MER by spend band.

A 3.5x MER at $30k of spend is a different business than a 3x MER at $300k of spend. This is often the first real unlock for a brand that has cash left over at the end of the month.

 Layer 3: LTV:CAC 

Once your brand has modest retention, the whole game changes.

You’re no longer evaluating the profitability of a purchase. You’re evaluating the profitability of a customer over time.

A customer acquired today doesn’t just produce contribution margin on Day 1. They produce it again at Day 30, Day 60, Day 120, and so on. Those repeated purchases compound.

Problem is, as soon as your unit economics begin looking attractive, ad costs rise.

Competitors enter. Audiences fatigue. The “house” (Meta, Google, TikTok) takes back margin. Acquisition gets more expensive, sometimes to the point where you can’t acquire profitably on first order at all.

That’s where LTV:CAC becomes the next budgeting layer.

Many brands with great retention acquire customers at a loss, but still get ahead.

Here’s the best part about LTV.

You control more LTV than CAC levers.

CAC is driven by:

• The auction
• Platform volatility
• Competitor pressure
• Seasonality
• Algorithm swings

You can improve creative, landing pages, and conversion rates. But you’re still fighting the same auction everyone else is in.

LTV sits inside your walls:

• Stronger onboarding flows
• More compelling bundles
• Smart subscription mechanics
• Better post-purchase journeys
• Loyalty and referral programs
• CX that reduces churn
• Faster product delivery
• More educational content
• Product innovation

Each of these levers improve contribution margin without depending on the algorithm. Most brands spend energy trying to save $3 on CAC when they could be adding $30–$50 in LTV.

A 10% bump in CAC kills profitability; a 10% rise in LTV reshapes the entire brand.

 Layer 4: Incrementality 

Incrementality is the real revenue lift caused by a channel. Not the revenue the platform claims.

If you turned the channel off, how much would revenue actually drop? That gap is the incremental impact.

In a perfect scenario, to determine the incremental impact of a single channel, you’d spin up two identical universes.

• Universe A: No Pinterest ads
• Universe B: Spend $50k on Pinterest

Then look at the results.

Since we can’t bend spacetime, we can approximate it with:

• Geo-split tests
• Holdout groups
• On/off time-based tests
• Attribution modeling

This is how you uncover the gap between:

• Reported ROAS and
• Incremental ROAS (iROAS)

A big part of the gap between ROAS and iROAS comes from the “halo effect” — when one channel creates demand that shows up somewhere else.

YouTube ads might report 3x, but actually be 4.5x due to the organic halo.

Google branded might report 8x, but 2x iROAS since it cannibalizes organic.

Meta might report 2x, but be 6x iROAS because it increases branded search.

Once you know the incremental impact of each channel, budget allocation becomes mechanical.

Spend where the incremental ROAS is highest until you hit diminishing returns.

This is where I apply the 70/20/10 Incrementality Framework:

• 70% – Proven Performers
• 20% – Scaling Experiment
• 10% – Future Bets

This allocation anchors in incremental performance while still opening space for experimentation and long-term growth.

 Layer 5: Cash Flow 

You can’t pay your bills with ROAS or unrealized LTV. You pay them with cash in the bank.

Three numbers ultimately constrain every brand:

1️⃣ Days to cash

Gap between spend and cash collected?

2️⃣ Days of inventory on hand

How much capital is sitting on shelves?

3️⃣ Net blended payment terms

When do vendors want their money?

The same principles apply to marketing spend. Some dollars come back quickly. Some take time. Your budget allocation should optimize for cash velocity, not just total return.

Here’s a quick comparison between two options.

Even though the 6x looks better on paper, the money comes back too slowly to fund the next cycle.

The first step to optimizing your cash flow is understanding it.

Build (or have your accounting partner build) a real-time P&L dashboard with:

• Cash reconciliation
• Days to cash
• Top expenses, AR/AP
• Cohort contribution margin

Your finance view should match your marketing view.

Fast, visual, actionable.

 Layer 6: Fragility 

Last thing. A channel can be …

• High lifetime value
• High incrementality
• High speed to cash

But still fragile.

If 70% of your revenue comes from Meta and your product dances near policy lines, you have a single point of failure.

Fragility is the measure of how easily a channel’s performance can collapse due to factors outside your control.

• Policy changes
• Algorithm shifts
• Competitor pressure
• Inventory outages
• Rising CPMs
• Creative fatigue
• Platform bans

The safest plan, and the one that scales longest, layers your contribution margin like a diversified portfolio.

• Low fragility: Email, return customers
• Medium fragility: Google Shopping
• High fragility: Meta prospecting

Fragile channels can fuel growth. Stable channels keep you alive when fragile channels break.

 The Scale Equation 

Once all the layers are in place, budgeting stops being emotional and becomes mathematical.

You can evaluate each channel using:

These channels get the most budget:

• High incremental
• Fast payback
• Low fragility

These get capped:

• Low incremental
• Slow payback
• High fragility

That’s how you scale into momentum without burning cash, and protect the downside without capping upside.

 What To Do Right Now 

Don’t try to move through all six layers at once.

In a Week:

☐ Set profit targets.

How much contribution margin do you need to cover fixed costs and hit your goals?

☐ Calculate channel contribution margins.
​
​Revenue - COGS - Ad Spend = Contribution Margin

☐ Identify your most fragile channel.
​
​The one with the most inherent volatility you can’t control.

In a Month:

☐ Build a basic LTV model.

Track the value of monthly cohorts after their first purchase.

☐ Run a profit comparison.
​
​Compare your current MER vs. a MER that’s 0.3x lower with 20% more spend (adjust different scenarios).

☐ Run one geo or holdout test.

Pick your biggest channel and measure (through approximation) what happens when you turn it off.

In a Quarter:

☐ Map your cash conversion cycle.

Days from ad spend to cash collected.

☐ Implement the 70/20/10 framework.

Proven performers / Scaling experiments / Future bets

This is how you turn your P&L’s biggest expense into its most efficient engine.

Abir Syed is “DTC’s favorite CFO” for brands wanting to grow from 8–9 figures. He’s the cofounder of UpCounting. Connect with him on LinkedIn or Twitter (X).

Mehtab Bhogal Karta Ventures

The Best DTC Mastermind & Community

Business is about making the right bets.

And people who are two to three steps ahead of you already know what the “right bets” are.

If you want to surround yourself with more of the “right people,” eComFuel is an online community of 1,000 eCom owners.

It’s the most active, useful community I’ve ever joined.

It has personally saved me millions of dollars through the conversations I’ve had. The majority of my texts are to people I met through ECF. All the Operators are in there.

Because we’ve partnered with eComFuel, you can …

THE FEED

​Do Smaller Teams Equal Bigger Wins?​

​What Grüns, Marty Supreme, and TikTok Shop Teach Us About Modern Marketing​

THE TRENDS

Curated by the editor of CPG Wire, this week’s five biggest consumer-news headlines in DTC.

1. Sahil Bloom Launches Wild Roman: LinkedIn​

Creator and bestselling author Sahil Bloom officially launched Wild Roman, a natural skincare line for men. The products are formulated with clean, on-trend ingredients like grass-fed tallow, arrowroot powder, activated charcoal, and more.

Wild Roman debuted with six products, and the company will launch a natural deodorant range in the near future.

2. NextFoods Raises $10M to Support Growth: Business Wire​

NextFoods Inc., the parent company of functional beverage brands GoodBelly and Cheribundi, secured $10M in growth funding led by ECP Growth. GoodBelly, which launched in 2006, was one of the first movers in the prebiotic beverage space.

NextFoods then expanded its portfolio in 2023 by acquiring Cheribundi, a purveyor of tart cherry-based performance beverages. ECP is also an investor in Aloha, Base Culture, and Murphy’s Naturals.

3. Unilever Budgets $1.7B for Annual M&A: Reuters​

During a JP Morgan Fireside Chat, Unilever CEO Fernando Fernandez said the company will allocate $1.7B per year for M&A. The consumer goods giant will remain focused on beauty and personal care acquisitions in the US and India.

Given Unilever’s success with Liquid I.V. — acquired in 2020 and now a billion dollars in annual revenue — more deals in the vitamins, minerals, and supplements (VMS) space could be likely.

4. Aix Earle Backs Gorgie: PR Newswire​

Influencer and podcaster Alix Earle just invested in Gorgie, a clean energy drink brand that retails at Target, Sprouts, H-E-B, and select Kroger banners. Michelle Cordeiro Grant founded Gorgie in 2022 and officially launched in Jan 2023.

Alix Earle is a shrewd beverage investor who previously backed Poppi and SipMARGS, a fast-growing canned cocktail brand.

5. Foodbeast Makes First-Ever Investment: Foodbeast​

Foodbeast, the food-focused media company with millions of followers across Instagram and TikTok, just announced an investment in Habiza Hummus.

The investment was made via its newly formed venture arm, Foodbeast Ventures. Habiza is a seed oil-free hummus brand founded by college dropout Jonathan Srour. It’s the best-selling hummus at Erewhon and also retails at Target, Gelson’s, Central Market, and other chains.

 Merry Frickin’ Christmas! 

It finally happened.

My in-laws asked what I do.

What should I tell them?

Let me know. There may be prizes.

Here’s wishing you a fabulous holiday week — no matter where in the world you might be, what you may or may not be celebrating, and regardless of who you’re spending it with.

With thanks and anticipation,
Aaron Orendorff 🤓 Executive Editor

PS (Disclaimer): Special thanks to Aftersell for sponsoring today’s newsletter.

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