Every eCommerce founder I know wants two things. More revenue and more profit. It's incredibly simple to say, yet incredibly hard to achieve. We all spend our entire working lives trying to optimize these two numbers. Because in ecommerce, revenue and profit are constantly fighting each other. You push acquisition and CAC rises. You scale spend and margins compress. You discount to move inventory and then your margin and lifetime value drops.
And the thing is, having one without the other is typically not a good thing. Growth without profitability is a recipe for disaster. If you spend more than you earn and your business isn't profitable, no matter how much you're growing, your company will eventually self-destruct regardless of how much money you've raised. And if you focus solely on increasing your margins but in turn your revenue materially declines, you now have a larger slice of a very small pie.
So in reality, you need both revenue and profit to continue trending up over time so that you can run a healthy, sustainable, and valuable eCommerce business that keeps up with inflation, pays your bills, provides profits to you as the owner and allows you to invest in new ads, products, experiments, etc while continuing to incentivize and retain your team.
This is hard to do but it's obviously possible since millions of businesses around the world have achieved this very thing. And the biggest difference between brands that can scale isn’t one “growth hack” channel or tactic. It’s about having total control over your numbers, margins, your customer acquisition economics and your growth playbooks and systems. Without that clarity, every decision is ultimately just guesswork and you won’t achieve your goals.
And when it comes to growing a business, there are typically three core philosophies. The first is to do everything yourself in house which means that you only hire full time employees and you don't use any contractors, agencies or third party vendors. The second option is to outsource as much as you can, keeping your full time team as lean as possible and outsourcing the rest. And the third option is to do a blend of the first two, which is what I always recommend.
I've said it before and I'll say it again, every great company I know does a mix of both. They hire internal team members to manage various core functions, their people and the long term strategy and stewardship of the brand and then they rely on external experts and agencies for other aspects of execution as needed. Agencies should not be the ones owning your core strategy but they should help with execution. In general, you should never be afraid of outsourcing and using agencies or partners, but you should be afraid of picking the wrong people to work with your brand! Here’s why.
Why it all comes down to the people: (Agencies, Operators & Executors)
I strongly believe that the team you build is the company you build. If you have great people around you, whether they are contractors, agencies, full time or part time employees, you will win. If you don't, you won't. That's because the people who work with your company are the people responsible for the work itself. They define the strategy, they manage the execution, they do the analysis, they iterate and try to improve.
If they are incompetent, lazy, or not able to make the right decisions because of a lack of experience, lack of understanding, lack of resourcefulness, or whatever else, your business will struggle. If they are intelligent, smart decision makers and operators, your business will flourish. It’s a tale as old as time!
I just think there’s a very clear distinction between what I’ll call “service providers” and people who are true operators and experts. Nowadays, anyone can spin up a landing page and start selling paid media or creative services. This does not mean the provider is a true expert or operator who has done this before. When you look at agencies or partners, you want people with real experience. Typically folks who have been in house on the brand side, done something phenomenal for at least 1-2 brands, and then decided they wanted to go off on their own to provide those services through an agency. This was my path as well. I helped Hint scale from mid 8 figures to 9 figures in revenue as the in-house Head of DTC. This is where I learned and executed on all of my playbooks for growth. Once I knew they actually worked and could drive results, only then did I decide it was time to start an agency. Only then did I feel comfortable helping other brands do the same.
So there is a lot of noise in the service provider space right now and it’s why it’s so crucial to pick the right partner. There are folks out there like Ecommerce Equation who are operator led and have done this work before. They are strategic operators that ensure that no matter which person or provider you are working with, you get the absolute maximum performance out of them. They function like high-level advisors, teaching and coaching you, the founder and executive team, about clarity over your business numbers and the right systems and processes for success. What they are best at is helping ecommerce founders understand their bottlenecks so they can scale profitably, help gain clarity on where to invest, what creative to run, and what offers will convert. They’ve worked with thousands of companies to help them on this exact journey. And the thing I like best about them is that the founder’s always in control. You still own the strategy and goals, they just help you see clearly how to achieve them. It’s folks like that where you know it’s not just a random freelancer who spun up a template website and now they want to sell you paid ads, creative or SEO. This is a very different league.
In general, this is why I believe choosing the right partners is so high leverage. Think about it like this… Having the right ideas and frameworks, followed by the right execution from the right person or agency leads to very different outcomes and results for your brand. It's almost funny to say this, but if you run a digital business, the results of your entire professional life come down to having the right people press the right buttons on their computers in the right order to make your company more revenue and profit each year. That is why it’s so important to get right.
The structural problem with agencies that nobody talks about
Another thing I've realized after working with a ton of brands over the years is that even when you find good people to work with, there's often a deeper structural issue that prevents sustainable growth, and it’s something a lot of founders never think about.
The issue is that most agencies, even really good ones, are built to optimize channels rather than full businesses. You have agency partners that are just good at one thing. They are experts at TikTok or email or SMS but they aren’t full funnel marketers and business consultants who understand contribution margin, how to make your company more profitable, and how to optimize the entire business end to end.
Also, think about how most agencies are structured and what they're actually designed to do. They're generally built around managing ad spend, producing outputs, and hitting specific KPIs within their domain of responsibility.
So a paid media agency is optimizing for ROAS and efficient spend across Meta or Google or whatever channels they manage. A creative agency is focused on producing more ads and improving creative performance metrics. A CRO team is running tests and improving conversion rates on your site. All of these things are super valuable to do, but when they are done in a silo and not controlled by one team who has a more holistic view, it’s hard to make real progress.
Instead, you need a partner to optimize for your full growth system and your overall profitability, not just one channel. And they should be incentivised around this too. Not just helping you spend more on ads, but making sure you are achieving the 2 things all founders want most. More revenue and more profit like I said at the top. The problem isn’t that agencies are bad. It’s that founders don’t have enough visibility to manage them effectively.
A quick story about when more growth wasn’t a good thing
Remember, more ad spend is not the same thing as better business outcomes. But if you're an agency that gets paid a percentage of spend or that gets evaluated based on how much volume you're driving through the channels you manage, your incentive is naturally to grow the total spend and scale the things that you can control, even if that's not necessarily what's best for the business as a whole.
Let me give you an example of what this looks like in practice. I was talking to a founder a few months ago who runs a fashion brand, and they were telling me about this problem they couldn't quite articulate but they knew something was off. They were doing about $700K per month in revenue and they were working with an agency that had helped them scale from around $500K per month to 700K/month. If you looked at the revenue growth dashboards everything looked good but it wasn’t. Ad spend had grown from $125K to $250K month. Revenue was up but ROAS was way down and their profits were decreasing even faster.
During that same period, their net margins had decreased by over 20% and because the agency was dead-set on pushing certain products they knew would perform on ads, they neglected other SKUs and left the brand sitting on $180K worth of inventory that wasn't moving. So If you don’t understand your contribution margins, you can’t detect this problem early.
I then recommended that they talk to my friends at Ecommerce Equation and they realized this agency partner was steering them in the wrong direction. The team at EE dug into the numbers, figuring out which products were actually profitable after accounting for all costs, and it turned out that about 40% of their new customers were being acquired at a CAC that was higher than what those customers would ever be worth to the business! It was a total disaster.
The revenue growth from $500K/month to $700K/month actually hurt the brand more than it helped and they were now in a worse place!
The agency this brand used wanted to grow the company’s paid ad spend (since they got paid a percentage of spend) and then crushed the brand’s margins in return. And to be fair, the agency had done exactly what they were hired to do, which was scale paid acquisition on the channels they managed. But the business itself was becoming far less healthy, and nobody had visibility into that until it became a real problem because the agency wasn't paying close enough attention to margins or inventory or lifetime value across the full customer journey.
That’s when Ecommerce Equation stepped in and helped them change course. Because they’ve helped over 4000 brands on this same journey to grow revenue and profit, they could immediately tell what was broken. They did a super detailed audit and went SKU by SKU, channel by channel, ad by ad, and looked at the performance metrics, COGS, and net profitability after expenses from each campaign.
They showed the brand which products and offers were actually generating profits, and managed to help them get 10% of their margins back while reducing spend and maintaining the $700K/month revenue number.
The change in the people (i.e the partner helping the brand) created the change in outcomes that the founders wanted and Ecommerce Equation helped them change course adding back hundreds of thousands in profit that would have just disappeared.
The agency churn loop
I think once you understand the structural issue above, you start to see this pattern everywhere, and it's what I call the agency churn loop that most founders fall into without even realizing it.
It goes like this. You want to grow so you hire a new agency because you're stuck or frustrated with your current results. You get to work with new people and you get some fresh energy, some new perspectives, and they come in and audit your account and spot some low-hanging fruit that your previous team missed or didn't prioritize. They make some changes, launch new creative, adjust the targeting, and performance increases a bit in the first few months. Everyone's excited because it feels like you finally found the right partner who gets it.
Then somewhere around month three or four, things start to flatten out. The initial lift basically plateaus or it even declines a bit. The agency explains to you that it's because of seasonality or iOS updates or increased competition in the auction, all of which are real factors that affect your performance. Then they recommend you test new angles, or explore new audiences, and they want you to increase ad budgets so that they can test more.
But by month six or seven, things have completely stalled out again. You're spending more but revenue and profit isn't scaling proportionally so you start to get pissed. Eventually you start looking at other options, you hop on calls with other agencies, and everyone promises they can do better because they have a different approach or special expertise or whatever else. The relationship with your current team deteriorates because nobody wants to admit it's not working and eventually you fire the initial agency and make a change.
Then a new agency comes in, does a fresh audit, identifies some quick wins, you see a performance bump, and then the same plateau happens three or four months later. And the cycle repeats.
A different kind of partner:
This is why you need to be so focused on picking the right people to help you. I’ve found that the brands who break out of this never-ending churn loop do something fundamentally different.
They build internal control with operator guidance. They take ownership of the strategic decisions about how their business actually works: the economics, customer acquisition model, margins, inventory dynamics, and growth constraints and they develop clear processes and playbooks across acquisition, conversion, operations, and profitability. They can still work with agencies and specialists to execute different pieces, but they’re not outsourcing strategy and hoping someone else will figure out how it all fits together.
And when that clarity exists, every partner they hire after performs better.
Great agencies, including mine, can drive meaningful performance improvements through strong execution and operator experience. We launch campaigns, build creative, optimize performance, and manage channels. That work can make a huge business impact. But what ultimately determines whether those efforts translate into real profit is the clarity behind the decisions driving them.
That’s why I like the coaching-led approach to eCommerce growth and why I think folks like Ecommerce Equation have built something meaningfully different from the traditional agency model.
Instead of just managing channels in isolation, Ecommerce Equation works directly with founders and their teams to diagnose what’s actually constraining growth. Whether that’s contribution margins, CAC efficiency, creative strategy, funnel conversion, inventory planning, or data visibility and then helps design the scalable systems needed to fix it.
Just as importantly, they help founders understand what “good” looks like. That includes clarity across paid media strategy, creative testing frameworks, conversion optimization, tracking and reporting, and operations and margins alongside demand planning. It’s not about doing more work yourself. It’s about owning the right decisions and having the right systems so that when you do work with partners, they’re operating within a clear strategic framework rather than guessing.
This approach doesn’t replace agencies, it makes them more effective. Like I said above, the team at EE has helped over 4,000 ecommerce founders through this process and influenced more than $1B in ad spend across growth-stage brands. They’re a Meta Business Partner and Google Premier Partner, which means they’re close to the platforms and latest strategies, but the real value is that they’re building internal capability and decision-making confidence inside the companies they work with rather than creating dependency as a vendor.
Those are the kinds of partners that create durable growth because they change how a business operates, not just the campaigns running inside ad accounts.
If you’re interested in getting clarity on how to improve both revenue and profit, you can schedule a conversation with them here. At the end of the day, the right partners give you leverage. They make you stronger, smarter, and more capable as an operator and that compounds over time.
If you’re heading into Q2 and evaluating growth partners, it’s worth having that conversation.
Alight, that’s all for now. I’ll be back with another banger this Sunday night. I’ve been writing something all week and I’m looking forward to sharing it.
Thanks again for reading.
See you soon.
Nik