Today’s newsletter is about how to make more, spend less, and stay ahead. Spoiler alert … the secrets aren’t sexy.

🤯 Andrew Youderian shares 7 lessons from 300 brands with $3.5B in revenue

🤑 Connor MacDonald shows you how to get 1.5x higher LTV from customers

🤫 Connor Rolain reveals Bryan Cano’s (True Classic) top secret ad platform

Plus, the top five headlines in DTC.

Connor MacDonald CMO, Ridge

How to Get 1.5x More LTV From Your Customers

We just had Mike Manheimer from Postscript on MOps. It’s being released tomorrow!

During the show, he shared this data point:

But how do you have conversations with your customers en masse? At Ridge, we use Shopper, Postscript’s always-on AI shopping assistant for SMS. It can …

• Answer questions
• Give recommendations
• Provide discount codes

For example, here’s an actual conversation a customer had with our Shopper bot recently. They were looking for a ring but worried the gold might scratch off.

Shopper answered the customer’s questions, and they ended up purchasing our 6mm 24K gold ring.

Marketers have always dreamed of one-on-one conversations like this. It’s just never been possible at scale.

Now, it is. Thanks to Postscript.

Andrew Youderian Founder, eComFuel

2026 Ecommerce Trends Report: My 7 Biggest Takeaways

We just completed our sixth annual trends report.

Conventional wisdom says sell on Amazon, diversify paid traffic, adopt AI, and if gross margins are rising, business must be good!

On all these fronts, the status quo is either outdated or flat wrong.

Here are my seven biggest takeaways:

1. AI Adoption, No Alpha (Yet)
2. Financial Fluency, Alpha
3. Amazon is Fading
4. Paid is Non-Optional
5. Fatter Margins, Thinner Profits
6. Warehouse Slows Growth
7. First Paycheck at 7-Figures

Editor’s Note: This is only a small sample of eComFuel’s 60-page report. Get the whole thing here.

 1. AI Adoption, No Alpha (Yet) 

72% of stores have adopted AI, making it one of the fastest-adopted technologies in ecommerce history. Yet there’s no measurable difference in financial outcomes between adopters and non-adopters.

If anything, the time required to learn these tools seems to be negating financial gains.

We expect this to change as workflows become better integrated. As of now, net ROI remains elusive.

The Takeaway

Your edge will likely come from tying AI into operations, not just content creation. Audit your AI time honestly and be ruthless with where you invest.

 2. Financial Fluency, Alpha 

Finances and accounting are the least sexy aspects of running a business.

We asked owners to self-rate their financial expertise on a 1-to-5 scale. Those reporting mastery (5/5) have:

• Higher net margins
• More cash in the bank
• Faster income growth

… and they extract capital at higher rates.

Even the difference between a self-rated 4/5 and 5/5 translated to a 37% increase in net margins and nearly double the financial runway.

This pattern held when we controlled for business size.

It’s not just that larger businesses accumulate more expertise and cash; financial knowledge independently predicts better outcomes at every level.

The Takeaway

80% of owners rated themselves below 5/5. Which means 80% stand to see a dramatic payoff from investing more deeply in their financial education.

To start, I recommend the book, Financial Intelligence for Entrepreneurs by Karen Berman and Joe Knight.

 3. Amazon is Fading 

The Amazon era is sputtering.

Amazon’s share of revenue has fallen to 20.1%, the same level as when we started tracking in 2017.

What makes that number remarkable is that more brands sell on Amazon today than ever before (63%).

Meanwhile, DTC is winning on nearly all metrics.

DTC-primary operators grow revenue 65% faster than Amazon-primary peers and carry higher gross margins (52.7% vs. 41.9%).

The sentiment gap is just as stark: 91% of operators who sell DTC love it. Only 17% feel the same about Amazon.

The Takeaway

Amazon earns its place when brand search already exists on the platform. But for operators without that tailwind, it’s a crowded, margin-compressing environment that’s only gotten tougher.

Build your own platform first.

 4. Paid is Non-Optional 

97% of stores use paid traffic.

Thankfully, the long-standing fear that heavy ad spend will destroy your margins is false.

In fact, stores leaning hardest into paid are growing 3-4x faster with comparable net margins.

The Takeaway

Being great at paid is less about top-notch ROAS and more about building a business model that supports ads as a major line item.

• Lower COGS
• Less overhead
• Higher margins

Do you need to be decent at buying traffic? Of course. However, the real edge doesn’t live in the ad account.

It comes to life in the P&L.

 5. Fatter Margins, Thinner Profits 

The stampede toward manufacturing has resulted in the highest gross margins we’ve ever seen (49.5%). And yet, net profit margins have never been lower (10.6%).

Ad spend isn’t to blame. Profitability stays surprisingly consistent when we control for how much brands spend on paid.

The real thieves are product economics and high overhead. The most profitable stores spent 38% and 30% less on COGS and overhead, respectively.

Specifically, the $25-50M tier stands out as a profitability sweet spot — netting 13.6% vs ~10% for most other tiers — driven by a concentration of well-run manufacturers who’ve achieved scale without the complexity tax that hits at +$50M.

The Takeaway

Benchmark your net margins against your peers. The full report includes an appendix to help you do that. If you’re behind the curve, take a long, hard look at your overhead and gross margins.

 6. Warehouse Slows Growth 

For years, conventional wisdom for scaling was buy a warehouse, build a team, stock the shelves, control the operation.

Stores with owned warehouses grew revenue at just 3.8%, compared to 33% for leasers and 22% for those outsourcing fulfillment.

Even controlled for revenue, the gap holds.

Warehouse owners carry twice the inventory burden and run the least remote teams. Yet remote teams grow profits 80% faster at the same revenue size.

One edge we can’t measure is business durability. Having your own warehouse with deep SKU selection, especially if you’re a niche leader, is a meaningful moat.

But based on what we can measure, operators who own the least … are winning the most.

The Takeaway

Be ruthless about catalog size. Every SKU demands more working capital, space, and analysis.

Run the math on your warehouse. 3PL + FBA posts the highest margins and the fastest net-income (NI) growth in our study.

Treat the 20% fixed costs level as a hard ceiling. Above 20%, growth doesn’t improve; net margins fall off a cliff.

 7. First Paycheck at 7-Figures 

Most owners don’t see meaningful financial rewards until mid-seven figures.

It’s especially hard to extract capital if you’re fast-growing or sub-$1M. Of companies growing 50%, only 13% take meaningful dividends — among sub-$1M fast growers, it’s zero.

Dividends become realistic with scale and when growth moderates. At 10-20% revenue growth, 55% take distributions and 29% take “meaningful” ones.

The Takeaway

Aggressive extraction and growth are mutually exclusive. You can’t fund scale while pulling big dividends.

Small, consistent distributions are a sweet spot. That group is top-tier on NI growth (+45.3%), has above-average margins (12.0%) and the highest hopefulness of any cohort.

Take small dividends as soon as possible. It diversifies your wealth, encourages operational efficiency, and counterintuitively doesn’t hurt earnings growth.

 One Last Data Point 

Despite getting pistol-whipped by tariffs, navigating a brand new AI landscape, and facing a margin squeeze from every direction, 80% of you are still optimistic about the future.

You’re a hearty bunch, and I’m honored to know you.

Andrew Youderian has built and sold multiple ecommerce businesses. Now he’s the Founder & Chief Instigator at eComFuel, which is the only online community we’ve partnered with here at Operators.

Connect with him on LinkedIn + X (Twitter).

Connor Rolain Head of Growth, HexClad

Bryan Cano Doesn’t Want You To Know This

A couple weeks ago, we released our MOps episode with Bryan Cano, formerly Nood’s VP of Marketing and Head of Marketing at True Classic, now running his own AI-launching pad for brands.

During the conversation, we asked him if Axon by AppLovin had cracked prospecting. He said they have:

And he’d know.

True Classic was one of the earliest DTC brands to advertise through Axon’s mobile-gaming platform. Within 60 days they went from $0 to $100K per day in spend.

Bryan was “printing.” In his own words:

Sorry Bryan. We’re doing it again. This time, you’re at least partly to blame. Check out the full episode here.

At HexClad, we’ve validated AppLovin’s incrementality with multiple hold-out tests and Northbeam.

Want to try it out for yourself?

If you create an Axon by AppLovin account and launch your first campaign within 24 hours, the Operators-only code attached to that link will give you $1k in ad credits.

Then, when you spend $5k, you’ll get another $5k in credits … stackable, up to $6k in total.

Or if you want the shortcut to diversification, click below to get access to the Operators channel expansion playbook, online masterclass, and up to $5k in ad credits.

THE FEED

​News Anchor to Chief Brand Officer: Kim Chappell’s Untraditional Path​

​How Ecommerce Brands Can Fund Growth​

​You’re Using AI Wrong & This Study Proves It​

The Trends

Curated by the editor of CPG Wire, the five top stories in commerce and DTC.

1. Frozen One Raises $2M: Food Business News​

Austin-based protein ice cream brand Frozen One closed a $2M seed round. The round was co-led by Supernatural Ventures and The Angel Group, with participation from Tonic Ventures and Lucinda Capital.

Since launching in 2025, Frozen One has secured distribution at Wegmans, Bristol Farms, Central Market, and several other regional chains. Frozen One will make its big box debut at Target in May, bringing its total door count to over 2,300.

2. Collab Fund Backs Nomio: Fitt Insider​

Nomio, a Swedish purveyor of performance-enhancing wellness shots for endurance athletes, closed a $4M funding round led by Collaborative Fund.

Nomio’s flagship product is powered by isothiocyanates (ITCs), a natural compound derived from broccoli sprouts, which has been shown to reduce lactate, lower oxidative stress, and improve recovery time. Founded in 2025, Nomio has already established a cult following among endurance athletes worldwide.

3. BTS Launches F&B Brand: Inc. Magazine​

K-Pop supergroup BTS just launched ARIH, a Western-Korean fusion food & beverage brand. ARIH was developed alongside Paldo and Hy, two Korean food giants, and debuted at Walmart on April 24th with nearly 30 SKUs.

The brand currently offers noodles, postbiotic energy drinks, and dual biotic sodas. ARIH plans to launch in additional major global markets in the near future.

4. Leisure Closes Series A Round: LinkedIn​

Fast-growing functional beverage brand Leisure Hydration closed an oversubscribed funding round led by Midnight Venture Partners. Several strategic angel investors, including Doss Cunningham, Greg LaVecchia, and Brian Goldberg, also participated in the round.

In addition to growing nearly 1300% over the past two years, Leisure has achieved the highest dollar velocity in the enhanced water set within the natural channel.

5. Pure Genius Lands at Target: PR Newswire​

Protein shot brand Pure Genius just launched online and in-store at Target. Pure Genius was developed by Giacomo Zacchia, a former Operating Partner at Night Media, and bestselling author Mel Robbins joined the company as a co-founder in late 2024.

When Pure Genius launched in January 2026, it surpassed $1M in sales, sold out immediately, and has since sold out four more times over the last three months. Each 3 oz shot delivers 23g of protein, 100 calories, and zero sugar.

 Unsexy Alpha 

If there’s one lesson from today, it’s that staying on the bleeding edge doesn’t mean hyperactively trying every new tactic.

More often, it means using new tactics to double down on the fundamentals.

• Talking to customers
• Financial literacy
• Lean operations
• Proven ad platforms

To quote Sean Frank …

With thanks and anticipation,
Aaron Orendorff
🤓 Chief Executive Officer

P.S. (Disclaimer): Special thanks to Postscript and Axon by AppLovin for sponsoring today’s newsletter.

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