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Howdy Readers 🥰 

In this newsletter, you’ll find

🚨 Harsh Truth: Why Most DTC Brands Struggle with Poor Unit Economics

🇺🇸 TikTok’s Future in the U.S.: New Algorithm Under Consideration

📝 Improving Review Transparency: Initiatives by Trustpilot and Google

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🚨 Harsh Truth: Why Most DTC Brands Struggle with Poor Unit Economics

If your Average Order Value (AOV) is less than $20 with a 30% margin, scaling your business is an uphill battle.

But don’t lose hope. Here are steps you can take to turn things around:

1. Create Product Bundles

Increase your AOV by offering product bundles, encouraging customers to spend more in a single purchase.

2. Focus on High-Margin Products

Select products with higher margins and better AOV to ensure you’re making a worthwhile profit on each sale.

3. Negotiate Better Rates with Logistics Providers

Engage in discussions with your third-party logistics (3PL) provider and warehouse to negotiate lower rates. Many brand owners find they are overpaying and can save significantly with better terms.

4. Enhance Customer Retention

Implement strategies to retain customers and increase their Lifetime Value (LTV). Repeat customers contribute more revenue over time.

Why This Matters:

Large brands dominate because they have better unit economics. They can invest more in customer acquisition, which gives them a competitive advantage. In the long run, this economic leverage allows them to outpace smaller competitors.


🇺🇸 TikTok’s Future in the U.S.: New Algorithm Under Consideration
Insights from Social Media Today

As TikTok faces potential U.S. bans over security concerns, ByteDance is exploring a U.S.-specific algorithm to stay operational.

The Breakdown

  • Developing a U.S.-Specific Algorithm: ByteDance is creating a unique algorithm for its 170 million U.S. users. This move aims to separate the U.S. operations from its Chinese parent company, addressing national security issues.

  • Background: The U.S. Senate requires TikTok to be sold to a U.S. company or face a ban. Chinese regulations prevent the sale of the algorithm itself, complicating the issue.

  • Previous Issues: Reports have shown TikTok’s content moderation included filtering out videos featuring certain physical traits or low-quality settings. TikTok claims these practices were not used outside of China.

  • Technical and Ethical Concerns: TikTok’s content recommendation system, which relies on advanced visual identification, poses regulatory challenges. This system’s complexity and potential bias could be problematic for U.S. standards.

  • Potential Consequences: Implementing a U.S.-specific algorithm may reduce TikTok’s effectiveness. If no solution is found, TikTok might be banned in the U.S. by January, highlighting the growing tech tension between the U.S. and China.

The development or potential ban of TikTok in the U.S. underscores significant geopolitical and security issues, potentially altering global tech company operations and international regulations.


📝 Improving Review Transparency: Initiatives by Trustpilot and Google
Insights from Search Engine Journal

Trustpilot and Google are enhancing the transparency and reliability of online reviews. Trustpilot is intensifying efforts to combat fake reviews during a record year of review activity, while Google is introducing a new feature to manage and share user reviews more effectively.

The breakdown:

  • Trustpilot’s Record Year: In 2023, Trustpilot recorded 54 million reviews, a 17% increase from the previous year, with over a million businesses reviewed, 20% of which were new.

  • Managing Fake Reviews: Trustpilot removed 3.3 million fake reviews, maintaining a consistent 6% removal rate. Automated systems identified 82% of these fake reviews.

  • Community and Legal Efforts: Trustpilot issued nearly 7,000 public warnings and 46,000 business warnings and took legal action against 10 businesses. Community members were instrumental in flagging suspicious reviews.

  • Google’s New Review Profiles: Google is launching a feature that lets users manage and share their reviews through a centralized profile at Initially private, these profiles will be public from June 24th, enhancing transparency.

  • Privacy and Impact: Google ensures that personal details like birthdays will not be displayed. Users can delete their profiles if desired. This feature aims to improve review credibility and influence purchasing decisions.

Trustpilot and Google are committed to maintaining the integrity of online reviews. By tackling fake reviews and boosting transparency, they aim to build consumer trust and provide reliable information, essential for informed decision-making in the digital marketplace.


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🔗 LinkedIn updates its link preview images in organic posts, reducing their size for users to stay on the platform and engage with unique content.

👀 Google offers advertisers to opt-in to "video enhancements" for their ad campaigns by automatically creating additional video formats from original assets using AI.


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