You’re Selling Millions in Revenue Online… So Why Are You Still Broke?

In this episode of the Ecomm Breakthrough Podcast, host Josh Hadley explains why distributable cash is the most critical metric for e-commerce business health. He clarifies the difference between net income and distributable cash, warning against reinvesting all profits and leaving yourself financially vulnerable. Josh recommends distributing roughly one-third of net income while retaining working capital for growth. He also shares his personal wealth-building framework, allocating distributable cash across life insurance, S&P 500 index funds, turnkey real estate, and speculative assets, helping entrepreneurs build lasting personal wealth independent of their business's uncertain future.

Links and Mentions:

E-commerce Platforms 
"Shopify": "00:00:00" 
"Amazon": "00:00:00" 
"TikTok Shop": "00:00:00" 

Financial Concepts 
"Distributable Cash": "00:01:02" 
"Net Income": "00:01:02" 
"Cash Conversion Cycle": "00:02:09" 

Investment Recommendations 
"Life Insurance": "00:13:29" 
"S&P 500 VOO Index Fund": "00:15:24" 
"Roth IRA": "00:16:18" 
"REITs (Real Estate Investment Trusts)": "00:18:14" 

Books and Videos 
"Podcast Episode with Mike Olson": "00:14:31" 
"Podcast Interview with Dew Wealth": "00:17:18" 

Additional Notes 
"Speculative Investments": "00:19:55" 
"Oil Investment Opportunities": "00:20:39"

Timestamps:

00:00:00 Introduction & Host Background
Josh introduces himself, his e-commerce experience, and the purpose of the E-com Breakthrough Podcast.

00:01:02 The #1 Business Metric: Distributable Cash
Explains distributable cash, how it differs from net income, and why it's crucial for business health.

00:02:09 Importance of Working Capital vs. Owner Distributions
Discusses the need to balance reinvesting in the business with distributing profits to owners.

00:03:17 When to Reinvest vs. Distribute Cash
Describes scenarios for high reinvestment and sets a 33% distributable cash target for most businesses.

00:04:31 Why Distributable Cash Matters for Entrepreneurs
Explains the risks of relying on a future exit and the benefits of building wealth through regular distributions.

00:05:30 Risks of Operating in Others’ Sandboxes
Highlights the vulnerability of e-commerce businesses to platform changes and the importance of diversifying wealth.

00:07:23 Psychological Benefits of Distributable Cash
Describes how having cash outside the business reduces stress and enables better decision-making.

00:08:51 Common Mistake: Confusing Net Income with Distributable Cash
Shares a cautionary story about an entrepreneur who misused net income, leading to debt and financial trouble.

00:10:36 Key Lessons: Annual Distributions & Retaining Working Capital
Emphasizes the importance of annual cash distributions and not treating all net income as distributable.

00:11:29 What To Do With Distributable Cash: Josh’s Framework
Introduces Josh’s personal strategy for allocating distributable cash to build long-term wealth.

00:13:29 Bucket 1: Life Insurance
Explains using life insurance for creditor protection, steady growth, and as a financial safety net.

00:15:24 Bucket 2: S&P 500 Index Funds & Retirement Accounts
Advocates for steady, long-term growth via index funds and maximizing tax-advantaged retirement accounts.

00:17:18 Bucket 3: Real Estate
Recommends turnkey single-family homes over short-term rentals to avoid creating another business.

00:19:55 Bucket 4: Speculative Investments
Allocates a small portion to speculative assets like crypto or individual stocks for potential upside.

00:20:39 Bonus: Oil Investment Opportunities
Mentions investing as a limited partner in oil drilling for tax benefits and passive income.

00:21:32 Conclusion & Call to Action
Encourages listeners to share the episode, leave reviews, and spread the word.

Transcript:

Josh Hadley 00:00:00  Do you want to know whether your business is healthy or not? Whether you're going to be succeeding over the next five years or whether you're going to be struggling? Today? I'm going to be sharing with you the number one business metric that tells you the exact health of your business and whether you're about to continue to grow or decline. Welcome to the Ecomm Breakthrough Podcast, I'm Josh Hadley. I've scaled my own ecommerce brand from 0 to 8 figures, and I'm actively building towards nine figures in sales. This podcast is where I document that journey and share the systems, the strategies, and the lessons learned in real time so that you can learn what actually matters and scale your own business first and foremost. Who am I? My name is Josh Hadley. I'm a man of faith. I am a father of four and a husband to a beautiful wife. I've been in the e-commerce space for over ten years, and I'm doing over $20 million and doing multi millions on Shopify, TikTok shop and Amazon as well. And also the host of the Ecom Breakthrough podcast, which is the number one business strategy podcast for ecommerce.

Josh Hadley 00:01:02  Let's talk about what the number one business metric is that allows you to know whether your business is healthy and that is distributable cash. Let's talk about what distributable cash is because it's actually different from net income. Net income is what is left over after you have, you know, basi