EP 9 - The Three Levers of First-Order Profitability

There are three numbers you need to continuously approve.

Author

Keyan Bazargan
October 17, 2025

This week I attended a Foxwell Founders retreat with some of the top agencies and founders in the DTC space. It’s always refreshing to step away from the laptop, meet new people, and trade notes.

In Today’s Email:

  • The Three Levers of Profitability

  • Bookmarks & Resources

The Three Levers of Profitability

I had a few side conversations with brand owners about tariffs, and how unevenly they hit. Some brands are positioned to absorb the cost and keep growing, while others will struggle to survive. The ones who adapt will take the market share left behind.

There are only three levers to improve first-order profitability.

  1. Increase AOV

  2. Decrease CAC

  3. Decrease COGS

Iron Margin focuses on number three.

We know manufacturing, freight, tariffs, and fulfillment. But we’ve chosen to go deep on last mile shipping for one reason:

It’s the lowest-risk, highest-impact cost category in DTC.

For most brands, shipping is a bigger line item than fulfillment, and sometimes even bigger than manufacturing or tariffs depending on product size and value. But unlike those categories, shipping is something that can be improved in a matter of weeks.

Every dollar saved here is a dollar that can be reinvested back into product, marketing, your team, or your own net income.

That impact is why we do what we do.

BOOKMARKS

Quince’s Website Promotes Transparency Around Their Products

Quince makes high-quality, sustainable clothing and home products at an affordable price. Upon landing on the site, customers receive a pop up to encourage them to sign up for the newsletter. They are also encouraged to join Quince’s referral program with a second pop up as they continue to browse the site.

www.dtcpatterns.com/dtc-patterns-articles/quinces-website-promotes-transparency-around-their-products

How 3PLs are increasing profit margins with postage | Chad Carleton posted on the topic | LinkedIn

3PL's are adding margin to postage for three reasons: 1) Brands insist pick/pack prices are gimmicks 2) They can renegotiate postage and expand margin 3) Postage is obscure and confusing and it is easier to put margin there | 24 comments on LinkedIn

www.linkedin.com/posts/chadcarleton_3pls-are-adding-margin-to-postage-for-three-activity-7383874800177315842-DsSN?utm_source=share&utm_medium=member_desktop&rcm=ACoAACad0aoBO7yY_9kGoH4TICx1M_WMLrHLN4M

See you all next Thursday 👋

Keyan

PS: Whenever you’re ready… we help brands save north of 10% on last mile shipping costs. If you’d like to work together, just reply “Ops” and I’ll shoot you details.