Cost Reduction Techniques

Powerful strategy for solopreneurs: - Start an LLC - Grow and Become an S Corporation: This can provide significant tax advantages by allowing you to split your income between salary and distributions, potentially reducing your overall tax liability. But make sure to optimize the qualified business income deduction - Pay Yourself a Reasonable Salary: As an S Corp owner, pay yourself a reasonable salary that reflects the market rate for your role. This salary is subject to payroll taxes, but any additional profits can be taken as distributions, which are not subject to self-employment tax. - Add a Solo 401(k) and Max It Out: Establish a Solo 401(k) plan to take advantage of tax-deferred retirement savings. As both the employer and employee, you can contribute up to the maximum allowable limit, significantly boosting your retirement savings while reducing your taxable income. But make sure your salary is not too low, it will impact what can go in here - Employ Your Spouse: If your spouse can perform meaningful work for your business, employ them and pay a fair salary. - Max Out Solo 401(k) for Spouse: By employing your spouse, you can also contribute to their Solo 401(k) plan, further increasing your family's retirement savings and reducing your taxable income - Backdoor Roth IRA for Each: Utilize the backdoor Roth IRA strategy for both you and your spouse. This involves making non-deductible contributions to a traditional IRA and then converting those funds to a Roth IRA, allowing for tax-free growth and withdrawals in retirement - Maximize Qualified Business Income Deduction (QBID): Take full advantage of the Qualified Business Income Deduction (QBID), which allows eligible S Corp owners to deduct up to 20% of their qualified business income (or lesser of that and 50% of w2 wages). This can significantly reduce your taxable income and increase your overall tax savings. - If salary is too low to max solo 401(k), then do mega backdoor Roth 401(K) to the $69,000 limit Implementing these strategies can help solopreneurs optimize their financial planning, reduce tax liabilities, and build substantial retirement savings

3 7-figure Amazon sellers said the exact same thing to me last week: “My TACoS is way too high, and I don’t know what to do.” The issue is: -Campaigns are bloated with too many targets. -Ad spend is scattered across underperforming match types. -SD and SB campaigns are eating the budget. -Top-performing targets are competing with irrelevant ones in the same ad groups. We recently helped another 7-figure seller facing similar issues cut wasted spend by 35% in just 60 days. So I wanted to share what’s been working… Here’s what we’re doing: You have to audit ad spend data to get more profit and better TACoS. When you try to fix TACoS, you’ll get stopped by: -Targets that look profitable but aren’t (check CVR and ACoS). -High bids in auto campaigns eating up your budget. -Poorly optimized SD and S B ads draining spend. -Too many targets in one ad group causing wasted ad spend. Instead, to lower TACoS and increase profitability: Reorganize your campaigns and reallocate ad spend strategically. Some examples: -Remove targets with 20+ clicks (~ 5% CVR) and no sales (this freed up $44k in a recent account audit). -Use phrase and exact match types to focus on high-converting keywords. -Pause poor-performing targets to stop unnecessary spending. -Split large ad groups into smaller, more targeted ones for better control. Reduce bids for low-performing ROS placements. Shift budgets toward your best-performing products. Test this. Simplify your campaigns. Decrease your wasted spend. #7FigureSellers #ScalingAmazonBusiness #AmazonBusinessGrowth #AmazonPPC #MillionDollarBrands #Profitability #PrivateLabelSuccess #EcommerceScaling

For business owners with significant income, creating a family management company can be a powerful tax planning tool that benefits both your business and your family. You can do a Schedule C or C Corp, and both have benefits. The C Corp helps if the individual tax rate is in the highest bracket and you save the difference in the C Corp flat rate on net income. Schedule C, meanwhile, works if you have a different business entity type for something else but want to consolidate hiring children, being exempt from fica if Under age 18. —--> The Concept:  Create a separate entity (most typically an LLC) that provides management services to your main business. This structure allows for strategic income allocation and tax planning while providing legitimate services to your business. —--> The Benefits: -Tax Optimization: Potential tax savings through strategic income allocation -Asset Protection: Build assets in a separate entity -Business Continuity: Create a structure for potential succession planning -Business Education: Involve your children in real business operations -Payroll Tax Savings: Potential exemption from Social Security and Medicare taxes for children under 18 in certain entity structures —--> Optimal Structure:  Unlike what many assume, the family management company is typically owned by a parent as a sole proprietorship or LLC, not directly by the children or trusts. This structure provides greater control while still offering tax advantages when employing family members. —---> Example:  A doctor client created a management company that handled the medical practice's billing, scheduling, and administrative functions. The practice paid $120,000 annually to the management company, which employed the doctor's teenage children part-time in age-appropriate roles. After expenses, this strategy saved the family approximately $22,800 in taxes annually through a combination of income shifting and payroll tax savings. —---> Caution: This strategy requires careful implementation and ongoing maintenance. The IRS scrutinizes family arrangements closely, so proper execution with professional guidance is essential. The services and payments must be legitimate, reasonable, and well-documented. Like content like this? ♻️ Follow Dr. Jackie Meyer, CPA for more!

Most people wait for their CPA to tell them what they could’ve done. We built a guide of 297 proactive ways to play offense. The tax code is the ultimate playbook for investors. Here are 5 of my favorite plays: 1.  Restructure Holdco to an S-Corp or LLC for Pass-Through Savings Why it works: The 23% pass-through deduction favors well-structured entities. Example: A $2M income stream flowing through a passthrough could mean $400K+ in shielded income. 2. Refinance Debt to Take Advantage of Deductible Interest Why it works: Full interest deductibility is back to make your capital structure more tax efficient. Example: Swap mezzanine equity for debt, lower your WACC, and expense the interest. 3.  Use Cost Seg on Short-Term Rentals Why it works: STRs qualify as non-residential under certain rules meaning you can accelerate depreciation fast. Example: A $1.2M luxury STR can generate $200K+ in bonus depreciation in year one. 4. Run a Cost Seg Study on Heavy Equipment Businesses Why it works: With 100% bonus depreciation back, asset-heavy businesses (think paving, HVAC, waste, car washes) can now be turned into tax shields. Example: Acquire a $3M EBITDA paving company with $1.2M in equipment. Write off 100% in year one to offset income across the portfolio 5. Reclassify GP Comp from W2 to K1 (Passthrough at 23%) Why it works: The passthrough deduction increased to 23%. Reallocating active comp lets you shield more income and keep more profit. Example: A fund manager earning $600K as W2 can move to K1 and save ~$30K+ annually with the same gross payout. Want the full list of 297? Comment "forwardfirm" below and we will send it your way.

I discovered why my competitor was dominating with half our ad budget. He was spending $12K monthly on ads with incredible results. I was spending $25K and barely keeping up. I convinced my client to “diversify across all Amazon ad types.” Sponsored Products, Sponsored Brands, Sponsored Display, the works. Sounded smart. Felt strategic. Within 30 days, our ROAS couldn’t compete. That’s when I learned the uncomfortable truth about Amazon advertising allocation. Most sellers spread their budget too thin trying to be everywhere. Smart sellers concentrate where conversions actually happen. Here’s what I discovered during the competitor analysis: He was putting 90% of his budget into Sponsored Products. We were splitting ours across every available ad type. His ads looked native. Customers clicked without hesitation. Our fancy Sponsored Display campaigns had terrible conversion rates. The breakthrough insight: Amazon customers don’t want to be advertised to. They want to find products that solve their problems. Sponsored Products feels like organic search results. Everything else feels like interruption advertising. The reallocation strategy that changed everything: - Moved 85% of budget to Sponsored Products immediately - Kept 15% in Sponsored Brands only for products with strong video assets - Eliminated Sponsored Display campaigns that couldn’t prove profitability - Ignored Sponsored TV completely unless running massive branding campaigns The performance difference was immediate: - Overall ROAS improved significantly within weeks - Cost per acquisition dropped across all campaigns - Total sales volume increased despite same total spend - Ad efficiency reached competitor levels The mindset shift that matters: Stop thinking about ad type diversification. Start thinking about conversion optimization. Put your money where customers actually buy, not where Amazon suggests you spend. I am the founder of GigaBrands.ai, helping Amazon brands allocate advertising spend for maximum profitability rather than platform recommendations. What’s your current experience with Amazon ad type performance? Are you seeing better results from concentrated or diversified spend? Found this helpful? Subscribe to my newsletter through the link in my bio for more profitable advertising strategies.

How we increased the profit margin for a beauty Amazon account from 16.92% to 23.83% in one month with Amazon PPC. First off, let’s start with the important metrics which I pulled from Sellerboard for this case study. October 2023 Sales: $167,569.22 October 2023 Profit: $28,356.62 October 2023 Profit Margin: 16.92% October 2023 Spend: $32,742.11 November 2023 Sales: $151, 219.80 November 2023 Profit: $36,035.13 November 2023 Profit Margin: 23.83% November 2023 Spend: $17,722.84 Sales actually DECREASED from October to November by $16,349.42 BUT profit increased by $7,678.61. Here's what we did to increase profit and profit margin. I noticed that one of our recent launches saw a massive increase in competition. This caused advertising conversion rate to drop and ACoS to go up. Ads just were not as effective as before. Also, organic sales dropped as a result of the competition taking sales. We can’t control competition. We just have to adjust our strategy accordingly. Also, we were running ads for low volume SKUs that just weren’t performing. We wanted to test them to see if we could gain traction so we targeted highly relevant keywords but the CPC was too high and so was competition. Back to what we did to increase profit. I built a Microsoft Excel automation that allows me to see conversion rates and average daily spend of individual campaigns. After doing an analysis I decreased budgets on low conversion rate campaigns and campaigns with no sales. I used 14 days as my timeframe for the budget adjustments. I also tested pausing campaigns completely for lower volume SKUs and this worked like magic. Profit margin improved dramatically for this product. It went from break even to 20% margin. Another optimization we made was pausing all Sponsored Brands, Sponsored Brands Video, and Sponsored Display campaigns. Now, this might have been a controversial decision but it needed to be tested. Finally, we capped the account to prevent it from overspending. This had the largest impact on profitability. The goal here with the cap was to increase profit while I optimize campaign budgets so we don't need the cap in the future. After testing different account caps we went from spending $1,032 per day to $571 per day and sales only decreased by 9.76%. This told me that our products were strong enough organically that we didn’t need to be as aggressive with ads. So that’s it. That’s how we increased the profit margin for an Amazon beauty brand from 16.92% to 23.83% in one month with Amazon PPC. If you’ve made it this far in the post and are interested in learning the latest Amazon PPC strategies I’m testing on a weekly basis then send me a message and I’ll give you information about my weekly advanced Amazon PPC mastermind. This mastermind also includes free Amazon PPC software and my Amazon PPC automations that will optimize bids and launch new campaigns.

A new CMO walked into a 1P brand and asked just the right question… "If we’re not profitable until the second or third purchase, then why are we judging success on the first?" For this consumables brand, about a third of revenue flowed through Subscribe & Save, effectively inflating topline sales and making ad efficiency look great. But while ACOS looked healthy, finance was seeing ongoing margin erosion. Working together, we connected Amazon Marketing Cloud data including Flexible Shopping Insights into a fresh dashboard in Velocity. Now every retail order (ad-attributed or not) feeds a cohort view of lifetime value. Here’s where this post is different from most AMC “case studies” that just celebrate dashboards... This one is about partnership, operations, and profitable growth. Here's how we worked together to transform the business: 1️⃣ Bring finance to the table Finance calculated customer acquisition costs across the product catalog and leadership agreed to an initial three-month payback rule. With those KPIs in place, we set out to make the Amazon channel profitable, a goal we accomplished in just 90 days. 2️⃣ Test new customer acquisition one product at a time The pilot focused on a single hero product, and used the AMC audience modifiers to push bids into a very competitive range, but only for true new-to-brand shoppers. Within four weeks, we beat the CAC target by 25% for the product while maintaining strong repeat purchase rates. 3️⃣ Trust in putting profits over volume  Once AMC’s Flexible Shopping Insights exposed that 25-35% coupons were wiping out margin (especially on SnS orders), leadership agreed to roll back the discounts that had fueled share growth. In our early tests, we proved that slimmer discounts in the 15-20% range still converted a healthy, and profitable customer base. 4️⃣ Rolling it out  With proof in hand, the CAC to LTV playbook expanded across every category over the next six weeks. A Velocity dashboard now tracks CAC, LTV, and payback period, with media budgets only increasing when the CAC:LTV ratios support it. 5️⃣ The Results By the end of Q1 2025 (just 90 days after replacing ACOS/TACOS with a CAC:LTV scorecard) the brand’s Amazon business had already matched its operating profit from all of 2024 without adding a dollar of incremental media spend. With a new north star for success on Amazon, the team is now raising the bar. They’re carving out category specific CAC targets and experimenting with longer, flexible pay-back windows. This will let them ramp ad spend for the highest value cohorts while still safeguarding profits. Imagine walking into your next leadership meeting with a slide that ties CAC:LTV to both profitability and category share gain. How would the conversation change for the better?

Swipe the framework that saved one brand over $1M in marketing spend 👇 **After 12 years on Amazon, I'm sharing insights to help brands boost margins. Join me for 100 Days of Amazon Profit Hacks 💰 - Day 3/100** The other night, I helped my 4th grader add fractions. We talked about finding a common denominator and why it's important to have comparable factors. The concept applies beyond 4th grade math. For Amazon marketing, find common factors for comparison. Many brands use PPC ads and promotions to improve organic rankings, so we can find a common ground for comparison. For PPC, there's ROAS (Return on Advertising Spend). It's calculated by dividing ad sales by ad spend. Next, we create a promo spend comparable. I call it ROPS or Return on Promotional Spend. To find it, take promo-attributed sales divided by promotional spend. Example: If I sell a $20 product with a 20% coupon used 100 times, I can find my ROPS. First, calculate the sales: $20 x 100 = $2,000. Then, the spend is $20 x 0.2 = $4, plus $0.60 coupon fee for 100 uses, totaling $460. This results in a ROPS of 4.35 (2,000 / 460) HERE'S WHAT TO DO: Pick a product Monitor its organic ranking on top relevant search terms as you do the following... → Invest an incremental X dollars in PPC and note your ROAS and average organic ranking change over a month. → Invest the same amount in promos and note your ROPS and average organic ranking change over a moth. Run these tests independently to avoid mixed results. In other words, separate incremental PPC tests from promo tests. You can also run multiple tests to split ROPS by promo type (e.g. coupons vs. lightning deals). After a few months, you'll develop a general framework for each product: ↳ Boosting organic ranking by a set amount costs X in ROAS and Y in ROPS. Then, use the ROAS vs. ROPS comparison to right-size your marketing strategy. Example: To boost a given product with an incremental $10K in marketing with yield an expected 3.2 ROAS or 2.8 ROPS ↳ Spend more on PPC and less on promos Continue to monitor ROAS and ROPS and invest in the opportunity with the best return Make sure you are also tracking ranking and total sales I ran this with a $70M Amazon brand. We used ROAS vs. ROPS to cut annual marketing costs by 15% while keeping the same ranking boost. This saved the brand over a million dollars in profit that year while boosting rank. Now implement this for your brand and let me know how it goes! ____ Follow for more daily Amazon profit hacks.

When I rolled out Zero-Based Budgeting for Unilever’s $1.2B North American marketing spend, I learned a critical lesson: Most companies do ZBB wrong. The "traditional" ZBB process starts from scratch with a mountain of spreadsheets, painstakingly adding every single line item back into the budget. It is incredibly time-consuming and simply doesn't scale. Fortunately, there’s a better way. Instead of a blank slate, start with last period's itemized expenses. Group them, evaluate the groups, and then optimize. This "new approach" turns a month-long ordeal into a manageable, high-impact exercise. It’s how we made ZBB work across a multi-billion dollar budget. Here are 3 tips to make it a success: 1️⃣ Phased Roll-Out Don't boil the ocean. Implement ZBB one department at a time to prove efficacy and manage the workload. 2️⃣ Cross-Functional Buy-In A budget isn't just numbers. Get qualitative insights from budget owners on things like vendor quality and strategic importance. This context is gold. 3️⃣ Ringfence Savings Encourage budget owners to find cuts by allowing them to reinvest the savings into higher-ROI activities. This turns it from a "takeaway" exercise into a strategic reallocation. From experience, some budgets are harder to tackle with ZBB than others. Marketing is usually at the top of that list—large, complex, and tracked in ways that rarely line up with finance. And if you’re trying to manage it all in spreadsheets, the challenge multiplies. This is where a modern tool like Uptempo can make a big difference. It bridges that gap, connecting marketing campaigns to financial results and making the entire ZBB process faster, more flexible, and way less painful. See how Uptempo simplifies the way you manage marketing budgets and performance: https://lnkd.in/daT9udYc