The Stockout Profit Play

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In this newsletter, you’ll find:

📉 The Inventory Slingshot: Turning Stockouts Into Margin Velocity

🎄 Meta’s AI Ad Upgrades Aim to Maximize Holiday Sales

🏆 Ad of the Day

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Together with Shipfusion

The Missed Post-Purchase Moves That Could Double Retention

Winning new customers is expensive. Losing them after the first order is a cost most brands can’t survive.

Shipfusion tested 110 beauty brands and tracked their post-purchase journeys. The results show how even well-known brands are letting growth slip through their fingers:

❌ 75% missed out on higher AOV with no post-purchase offers.
💔 33% of shipments arrived scuffed, and over 10% had damaged items.
🤯 Nearly half used custom boxes, but only 36% branded interiors.
😔 Most failed to create any memorable unboxing or retention triggers.

It’s not about just the Cosmetics, the same mistakes run through supplements, wellness, pet care, and every category.

These breakdowns are where customers decide not to returnand no ad budget can buy them back. Inside the report you’ll see benchmarks, leader examples, and the exact playbooks to fix it, it’s a teardown you can action immediately.

Download the free report now and turn post-purchase into your most profitable channel!

📉 The Inventory Slingshot: Turning Stockouts Into Margin Velocity

Stockouts are treated like failure in most orgs. But in operator-mode DTC brands, a stockout is an accelerator. When executed correctly, it compresses demand, redirects urgency, and sets up the most profitable moment in your product’s life cycle:

The comeback. You don’t build slingshot energy with CPMs or offers. You build it by pulling the product out of reach, on purpose.

Mental Model: The Inventory Slingshot System

This isn’t scarcity theater. It’s structured margin engineering.

Slingshot Logic:

When that triangle completes, you’ve extracted more cash from less inventory and reset the pricing ceiling in the customer’s mind.

Slingshot Failure Index: When NOT to Use It

This system will backfire if:

🟥 You have <15K email/SMS list (no demand capture infrastructure)
🟥 Your hero SKU lacks adjacent bundle or sibling SKUs
🟥 You run OOS across Amazon or wholesale channels simultaneously
🟥 You can’t restock within 10–14 days to capitalize on waitlist heat

You don’t earn scarcity unless you can redirect desire and recover it on time.

Slingshot Simulator: Turn Inventory into a Margin Play

Operators can use this exact logic tree to simulate whether to trigger a stockout:

INPUTS: Email list size, SKU-level margin, Adjacent SKU velocity, Waitlist CTR, Reorder window availability

Decision Points:

• Can we redirect 20%+ demand to bundles in 48h?
• Can we recover stock within 10–14 days?
• Can the comeback SKU launch at +15% price with <5% CVR loss?

OUTPUT: If yes, trigger the slingshot. If no, you’re just creating chaos.

Use Case: $12M Skincare Brand.

One client ran out of its $38 cleanser mid-influencer spike. Instead of panicking, they rerouted traffic to a $56 duo pack (38% margin). Waitlist conversions hit 29%.

When the cleanser relaunched 13 days later, it came back at $45, bundled only. CVR held. AOV jumped. Profit-per-unit went up 41% on the same product. They sold fewer units. Made more money. And reset the price forever.

Second-Order Impact

• Cash efficiency: Fewer SKUs generating more margin = faster turns
• Forecast clarity: Waitlist velocity gives Q4 reorder data before BFCM
• Pricing elasticity: Return price becomes a reset, not a reversion
• Ad performance uplift: Scarcity-driven bundles drive 3–5x higher ROAS on retargeting

And here’s the kicker: Most brands leave this entire system blind, because they don’t segment stockout behavior by traffic source.

That’s where tools like Levanta can close the gap,  modeling post-OOS demand flow by affiliate or cohort to forecast recovery curves accurately. Run the numbers with the Affiliate Shift Calculator and see how your next stockout could boost profit instead of killing it.

💥 Final Reframe: You don’t stock out because you’re unprepared. You stock out because you’re building velocity where CPMs can’t. Your CAC can’t get cheaper. Your ads won’t convert better. But your inventory? 

That’s your last untouched profit lever. And when you use it strategically, it does more than sell product. It builds momentum that the algorithm can’t.

🎄 Meta’s AI Ad Upgrades Aim to Maximize Holiday Sales

Meta is rolling out a suite of new AI-powered ad features ahead of the holiday rush. The updates focus on smarter creator partnerships, shoppable video formats, and global expansion of ad products. For DTC brands, this means more reach, stronger conversions, and less manual tweaking.

The Breakdown:

1. Creator + Catalog Power Combo – Instagram’s Creator Marketplace now includes region and language filters to partner with the right influencers. Partnership ads can also plug directly into Advantage+ catalog campaigns, with Meta reporting a 4% CTR lift and 3% conversion boost from the new “Show Products” option. 

2. Reels Turn Into Stores – Single-media Reels ads can automatically convert into shoppable formats populated with catalog items. Advertisers also get swipe-up detail cards and video-friendly catalog carousels, which Meta says improved conversions by 7% compared to image-only ads. 

3. AI-Driven Placements & Creative Boosts – Meta’s Flexible Media system can extend ads into additional placements when its algorithm predicts higher returns, producing a 23% lift in conversions during tests. Ads Manager now surfaces creative performance insights and recommends existing media for new campaigns.

4. Worldwide Rollout of Ad Products – Omnichannel Ads are now available globally, connecting online and offline sales touchpoints. Shops Ads is entering seven new markets,  including Canada, France, and Japan. Meta is also expanding email sign-up offers, with brands seeing 4.6x more emails submitted in 14 days.

Meta is sharpening its AI ad engine just in time for the holiday surge. For DTC brands, this translates into more efficient targeting, better-performing creative, and new ways to capture customer data at scale. The timing gives marketers a competitive edge in the most critical quarter of the year.

🎥 Ad of the Day

What Works and Insights:

1. Event framing with exclusivity - Calling it “The Annual Layering Event” elevates it from a regular promo to something that feels rare and worth waiting for. It positions the brand as not just selling perfumes but creating an experience that comes around once a year. A strong move here is reinforcing scarcity with a countdown or highlighting past demand to push urgency.

2. Visual storytelling through product grouping - The bottles are shown together, reinforcing the idea of pairing and mixing, which ties directly into the layering theme, making the concept of owning multiple fragrances feel natural rather than excessive. Extending this move with visual guides (e.g., “pair Menace with Flora Carnivorous for day-to-night wear”) could deepen education while increasing cart size.

3. Added value with gift incentive - The offer of a free City Tote with purchase turns a premium fragrance buy into a lifestyle package. A next-level move would be rotating aspirational but practical freebies (like travel cases or mini discovery kits) to encourage repeat seasonal purchases.

Broader Insight – Luxury categories thrive when purchases feel like entry into a ritual or community rather than a transaction. By combining exclusivity, guidance, and rewards, this ad makes fragrance shopping feel experiential, creating stronger emotional attachment to the brand.

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