Amidst the macro resurgence of Shopify, Meta, and Amazon stock, there’s only one motif reverberating among all eCommerce operators:

The CAC is too damn high. 

Outside of these geniuses who have managed to take a $9 Alibaba Dyson dupe, sell it for $100 on TikTok Shop, and arb a $100M+ run rate TikTok shop business in less than one year, the arbitrage era is over in online commerce and we don’t really know what will come next. 

Despite the short-term pain, I believe this is a healthy development for commerce. As I wrote in my newsletter, United States of Amazon:

There’s a near-consensus view in the commerce ecosystem that with iOS 14.5, Apple cynically obliterated billions of dollars in market cap in the name of nebulous privacy. Make no mistake: Apple is a ruthless despot acting partially in its own self-interest and partially just because Tim Cook thinks Zuck has weird energy.

But in a decade, we’ll look back and realize Cook did the whole commerce ecosystem a favor. At the moment when commerce was getting dangerously stale, templatized, and hyper-dependent on optimizing pixels, Apple dared us to be weird again. 

The pre-iOS 14.5 playbook took too much panache and pageantry out of brand building; exiling creative raconteurs in favor of growth hackers. It also made building a brand largely a single-player exercise, a solo video game an entrepreneur played with and sometimes against the Facebook and Amazon algorithms.

At its best, commerce is a collaborative endeavor, an MMORPG, if you will, that merchants play and win together.

If there's a platinum lining in CACs becoming unsustainable, it's that the next decade of commerce will be made multiplayer out of necessity, where brands come together to split the cost of new customer acquisition.

We’re seeing the infancy of this trend in post-purchase recommendations and shared Facebook audiences via platforms like Disco and the quiet rise of Shopify Collectives. Soon, brands will be more actively sharing customer lists, running affiliate placements on each other’s blogs, and buying and selling highly performant inventory in each other’s newsletters as the convergence of content to commerce barrels ahead. In time, a truly decentralized retail media network for Shopify feels like a sure bet and could prove to finally pose a threat to Amazon’s hegemony. I know it ain’t the glamorous stuff you want to build but the rebels need cheaper performant ad inventory, Tobi and Harley. The days of outsourcing that job to Zuck will end gradually, then suddenly. 

The First Step

Four entities in and around commerce have true scale: Google, Facebook, Amazon, and TikTok. Yes, yes, set aside the thread of Temu and Shein for a moment. Until you are north of $10M at a minimum, the only growth hacks and partnerships that move the needle are those that directly reduce CAC in driving traffic from these platforms. Everything else is mostly a distraction.   

Thus, the first tangible examples of multiplayer commerce will be in the form of partnerships where brands work together to increase the scale of profitable traffic they can drive from one of these platforms. A couple of months back, I went on the DON’T V LOOKUP podcast to propose a model for collective media buying. The rest of this column serves to explain this in more detail and to recruit partners for the effort.

How it works: 

The basic idea here is very simple. I aim to build a consortium of brands that approach content-based affiliates with offers to underwrite the creation of new articles. With brands willing to pay commission rates of ~30%, affiliates can drive significant paid volume, increasing their profits and driving scale for brands at a 3-5X topline ROAS (more on how this math shakes out below).  

These partners will create high-quality content that features all of the products in a format that doesn’t directly rank the items or make any SKU out to be better than others in the list. The publishers here will be selective, only featuring items that they organically think are best in class or fit their broader content strategy. The end result will be articles with editorial framings like: 

  • Best gifts for new moms   
  • The 12 can’t-miss items with more than 10,000 5-star reviews 
  • Six can’t-miss products that hit shelves last month 
  • 25 best things you can buy on Amazon under $35

Done correctly, this is one of the last corners of digital marketing arbitrage left in our ecosystem, where brands can pay at a guaranteed (albeit aggressive) affiliate rate, and partners can drive a ton of scale by buying cheap, broad traffic. 

On the brand side, this is largely a variation of some common themes that have been prevalent in the industry for years. It’s essentially a mashup of advertorial-style landing page campaigns, social whitelisting, and conventional affiliate deals with content partners. At the end of the day, the core innovation here is simply being in it together with like-minded brands.

Buying traffic has been a part of the commerce media playbook for years. Several large publishing houses have quietly built high eight- and nine-figure businesses off of Google and Meta buying funded by affiliate commissions. But it has never been done collaboratively with a consortium of like-minded partners, ALL helping to foot the bill in one shot.

While the unit economics of paid traffic are getting tougher, savvy publishers are also driving historically high conversion rates, and with several brands kicking in a significant percentage of sales, there’s a tipping point that will allow publishers to buy orders of magnitude more paid traffic than they could just working with 1-2 partners on an article.  

The Media Partner Equation 

OK, so how the hell is this profitable for affiliate publishers?  Without going too much into the nitty-gritty, there are two variables here that make the unit economics particularly interesting for sophisticated publishers:

1. When publishers send paid traffic subsidized by brands to high-performing commerce articles, they earn not only increased affiliate commissions but also additional ad exposure and possibly even a pathway to more paid subscribers.

2. When brands are willing to send the traffic to Amazon specifically, publishers can receive full cart value on Amazon Associates commission + brand side incentives. If several brands are all adding generous incremental rates, you can see how the overall yield economics are VERY favorable. 

The real threat is the rate limit at which commerce media buyers can do direct deals. This is a volume and velocity game.  Rates that can be sourced through networks are way too low and doing one-off deals with brands is not scalable. 

But it has never been done collaboratively with a guild of like-minded brands presenting a unified offer, radically shortening the deal flow. So let’s build one. 

Putting it to the Test

This is not strictly an academic post; I have media partners standing by waiting for me to bring them brands in addition to those owned by Forum. For this first run, here are the criteria of like-minded brands I’m looking to partner with: 

  • Willing to send traffic to an Amazon PDP at 30%+ commission (ideally leveraging Amazon Attribution), where you will receive 10% back in brand referral bonus. Effectively, it’s net 20%...or a guaranteed 5X ROAS test. 
  • <$50 AOV for most products you sell. I’m particularly excited to get a few $20-30  products into this test to challenge the prevailing wisdom going around eCommerce Twitter that it’s no longer possible to be profitable at this price point. 
  • Reasonably short purchase funnel/lowish consideration impulse buy.  
  • Strong Amazon conversion rate and fully optimized listings with strong copy, A+ content  
  • ANY category will be considered, but I’d be most excited about parenting and wellness brands as there likely will be additional collaboration opportunities on other co-op growth dreams and schemes of mine :)

If I’ve piqued (for the love of god, not peaked) your interest, please fill out this Google Form and I’ll be in touch. 

If this initial run is successful for all parties involved, I’d love to run many more like it off Amazon, both to Shopify listings and potentially other marketplaces. In general, higher AOV items will perform better in this model, so if we can drive scale at the $30 price point, imagine what we can do together with upmarket brands. 

What starts as simple collaborations on affiliate partnerships will be the spark that ignites a much broader fire in how we think about partnerships living at the center of customer acquisition. Overall, my endgame here is to create something of a modern-day guild among like-minded brands that could comprise broader shared media buying, audience & data swaps, multiplayer loyalty programs, joint newsletter ad deals, and possibly even publishing houses built together by eCommerce operators.

Let’s go build the future of multiplayer commerce.