Ian Sells 4:07
So we had to go and do it. And we had more people that wanted to go every last minute so I was pretty awesome and and went off without a hitch.
James Thomson 4:17
So on your website, you mentioned that 17% of our members have already sold the business. And among those that have sold the private label brand business. I’m sure they will concur that the FBA private label business market today is a hot commodity for investors. I’m interested in your perspective on what has happened to generate this recent interest in these private label brands. When these brands have been around since the beginning of the Amazon Marketplace nearly two decades ago.
Ian Sells 4:43
Yeah, I mean, it’s pretty funny to see how fast it’s picked up steam and how the valuations have grown dramatically in just a year or so. When these businesses have been great and growing rapidly for a long time then from what I understand is that there’s a lot of money that goes into ventures in all different segments of the market, right? You have biotech you have, you know, franchises, you know, things like that. And yeah, COVID hit and e-commerce really advanced with adoption rates so fast, you know, when they say like 10 years of growth happened in a matter of months. And then also at the same time, all these big money businesses and VCs and bat and all these private equity companies, they had nowhere to put their money because they’re like, we’re not going to buy chain restaurants now, we’re gonna grow these others. So they’re like, okay, where do we put our money? And so then, e-commerce was the next best thing, which was already becoming the best thing. And so I think that’s really where we saw the influx of like, okay, hey, let’s figure out this new segment. Let’s roll this up. It’s ripe for consolidation. I mean, there’s how many people selling garlic presses and dog collars, right. And so, you know, these big brands and these big aggregators come in and buy a bunch of brands and get a lot of economies of scale efficiencies in the market, you know, launch new products, and they’re not trying to conserve their capital, like, you know, the mom and pops are.
James Thomson 6:07
So what do you think’s gonna happen in the next two years as both the number of aggregators increases, but also the general awareness among brands that they potentially could exit? But what else do you think’s gonna happen?
Ian Sells 6:20
Well, I think that most people have the inclination, they’re gonna exit You know, when they join the Amazon work workforce and do this, you know, FBA model, right and launch a product from from China, I think the idea was like, I’m going to buy a product in China, sell it on Amazon, it’s going to turn into a multimillion dollar business, and then I’m going to sell it, I’m going to do it all over again. And now people are starting to go, Okay, why would I do that when it’s easier to go from $5 million to 50 million than it is to go from another zero to 5 million. So I think that’s where the barriers are kind of coming in. The problem for most people is that they don’t have enough capital or resources, or knowledge of how to build a team in order to get to that level. And so I think that’s where that gap is being filled right now is, is this like, you know, money team strategy, you know, and scalability of an operation, because most sellers, even if you’re doing 10 million, you may only have five or six people on your team, and half of them are in the Philippines.
James Thomson 7:11
Right, right. So let’s talk for a minute about what are some of the types of new questions that you’re fielding within your mastermind that the fellow members are starting to ask of each other? Tell me a little bit about what you’re seeing now versus 14-15 months ago?
Ian Sells 7:27
Yeah, well, the conversation is like, you know, now’s a good time to exit, right? Or find a way to sell at these higher multiples, especially if you experience you know, rapid growth from COVID type of situations. People are looking about, you know, is this going to continue? Can Amazon keep expanding? Do I go to other markets, right, you know, maybe it’s not the right time to sell, it’s actually time to expand, to build a team, invest more capital into human resources, and create new product opportunities. They’re also talking about ways to get together and roll up a, you know, I do a micro on air heater a room, though, that’s kind of happening as well.
James Thomson 8:05
So tell me a little bit more about that, because I have heard bits and pieces, but I haven’t actually seen somebody successfully take four or five companies and put them together, are these companies that would all be in the similar area? Or have similar types of margin economics?
Ian Sells 8:20
Yeah, generally, it’s, it seems to be like they’ll find, you know, a group of niche products, like, let’s say supplements, and then the supplement guys will, you know, kind of join forces together. And try to either go to an area or bring to keep operating the companies, but be the, basically the operational platform for that, and then start acquiring new ones. So I’ve seen a couple of guys kind of go that at scale, they’ve gotten big enough, they sell half their company or so to a private equity firm. And they require other, you know, smaller software brands to try to build up the portfolio because they have the knowledge and expertise in that space. So that’s kind of what I’m seeing there. And, you know, the goal is, obviously, to have a second exit and get even higher multiples. So I see a lot of that happening. And I see a lot of, you know, unique ideas and, you know, spax, and, and, and, you know, going IPO and, you know, companies like Mohawk, right, that are already public are trying to figure out, you know, how do we, you know, take advantage of our situation being public company, and they already in the soft market. So, it’s pretty interesting to see what’s happening and what ideas are getting thrown out. People are just really like, Where is it? How do I get there? You know, when I talk to all these different aggregators, do I go with a broker? Do I wait and hold on to raise capital? I mean, the ideas are just, you know, so out there, and there’s not one right answer, right. It depends on what time it is.
James Thomson 9:40
What are some of the biggest concerns that you’re seeing of your members that you talked about questions they’re asking, but are there concerns that are now surfacing to public discussion where? Oh my goodness, yeah, those are hard problems to solve.
Ian Sells 9:54
Yeah, I think a lot of the issues have to do with aggregators, not having the proper teams People in skills to actually perform. And so I think some of them are more ahead than others. You know, this is a skill that you can’t just go and pick somebody else for Procter and Gamble or from Harvard and be able to solve, you know, a flat file issue or a listing, there’s just no wrong way to have. And that’s where the Million Dollar Sellers group has been so impactful to all the members is because we’re actually helping each other you know, when you’re down there, they’re helping each other out. So, you know, having a network and a skill set like that, where people have done this and dealt with and really you have to problem solve. And so if you’ve never dealt with these issues, there is no answer. It’s really you literally telling seller support, or Jeff at Amazon, like exactly what the problem is and how they need to fix it and why they should fix it. And so I think that’s one of the issues that all the aggregators are going to have as they grow and scale is that this knowledge doesn’t really exist out there. And just because you worked on a Shopify store, or you had a job at, you know, rent running a warehouse for Amazon doesn’t mean that you have any expertise in Amazon.
James Thomson 11:01
So with so many private label sellers that I’ve talked to, that they’re thinking about selling, in your view, how much longer does this investor interest continue? And you know, at what point should sellers be saying, Do I sell now? Do I have to wait six months? So I wait a year? What are your thoughts on this?
Ian Sells 11:20
Well, I can tell you from experience, and and you know, what people talk about, it’s like, if you don’t want to try to time the market, you need to sell when you’re on the way up, not when you’re on the way down, because then you have no power and leverage. I happen to sell my brand, actually just personal experience, like right before COVID I had home exercise equipment, which was booming, but it was getting too big for me with all the other businesses I’m running. And so you know, I sold it for COVID. Well, turns out COVID, you know, exploded my sales, you know, 3x, and they were able to raise the price by two XL, you know, by the time they, you know, made six months of owning a business, they had probably pretty much already made all the money back, they paid for the business. And so, you know, is there a right time looking back? Yeah, hindsight is always 2020. But for me, it was a good time. And it was an opportunity cost that I couldn’t pass up to move away from the Amazon made Amazon business I had and focus on RebateKey and Million Dollar Sellers in the lead seller. As I grow the businesses.
James Thomson 12:17
You mentioned the term opportunity cost, one of the things that I’ve learned since leaving Amazon is most entrepreneurs definitely don’t have their finger, one pie, they got their fingers in four or five different pies. And so the opportunity cost of, well, I’ve running all these businesses, and this one looks good to sell now, but I’m certainly busy doing other things, I imagine with the size of the sellers that you’re dealing with within your group, it’s very common for them to have multiple other businesses going on. versus somebody who you know, has a little three 400,000,003 or $400,000 business that they’re running.
Ian Sells 12:53
Yeah, I would say you know that the million dollar mark was kind of where you kind of jump from your full time job and go, Okay, I’m gonna do Amazon full time, right? You know, if you make up my profit margin, you got a $200,000 salary. Okay, cool. I have money to spend now. So, you know, it does take a certain level to have that ability to, you know, build a business. But yeah, they’re definitely looking at the different risks with Amazon. And, you know, is it the right time to sell and to scale up, you know, requires a lot of risk capital. And so with Amazon sellers being, you know, traditional entrepreneurs with their hands in so many different buckets, when it gets to be too big, a lot of them that don’t have the focus are like, okay, where do I put my time? I know plenty of guys who have an Amazon business, a warehouse, a software of Chrome, and a home gym service and a nanny, and then they help people, you know, babysit at their house. Like, it’s like, why do we do this stuff to ourselves, right, as entrepreneurs, and I’m guilty of it too. And, there are some entrepreneurs in the group that literally have laser focus, and you see them building 100 million dollar businesses. And so you kind of go well, I’m really not doing a service myself, I don’t put 100% of my effort into this. But I don’t want to let one thing go. So, you know, I’ve gotten to a level where I’m able to put good people in place to help with each of those businesses. I’m kind of, you know, helping to guide in set vision, but not actually, you know, doing the hard heavy lifting. So that’s really helped me, but it took a long time where I wasn’t, you know, in the business so much, though, if you’re not there as a seller or entrepreneur, and you have your hands on so many things, you maybe you need to think about what you can cut off because I’ve been coached this many times, you know, cut things off and not and I did that. And, you know, to my detriment, I missed out on a few million dollars, probably where the profits but at the same time I believe what I have in the bank, and what I have going on right now is better. So I think, you know, focus is important, especially if you want to build a big business and if you don’t have focus, that’s where you kind of, okay, maybe my focus is elsewhere. I’m passionate about something else. And so I really do need to sell and that’s like, Okay, well how do I sell to a broker, right? Yeah, like, aggregator do I talk to 10 aggregators. Hey, by the time you’re done, And all of a sudden your business is now declining because you haven’t put any attention into it. So, you know, there’s all these different ways to go right?
James Thomson 15:07
So let’s talk for a minute. With the world now having investors that are interested in private label brands. It changes the way that new private label brand owners come into this market, they have potentially a slightly different set of expectations than what your members joining three, four years ago might have been thinking about in terms of a potential exit, or what the long term strategy is, I want to run through a number of different issues and get your thoughts on how you’re seeing people thinking differently now about these issues. So number one, documenting and creating and documenting operating procedures. What are you seeing people doing there around getting their house in order and putting things in a place where they potentially could hand this to someone else who isn’t familiar? You talked about the guy who ran the warehouse, the guy who went to Harvard, but not necessarily the guy that built the brand, is now going to be the one actually running this business? What do you think about operating procedures? What do you think about brand owners getting their act together and getting that all documented and ready to hand off to someone else, they get super important, and a lot of people don’t actually do it ahead of time. And they think that their business is good, and it’s running, but they don’t have a lot of the processes documented that they do.
Ian Sells 16:29
They have people coming in and out of their business, right. And so, you know, even to this day, we see people with, you know, 5-10 million dollar plus businesses that are still like, hey, do you have an SRP for, like, how to remove reviews, or, you know, how to how to do a flat file, and you’re like, you don’t have this by now. And so I think it’s just the nature of like, you know, us being entrepreneurs, and not, you know, starting from a position of like, I’m organizing on efficient, and I, this is how I do things and how every other Corporation, yeah, you can’t, you can’t like get a review of your business until you’ve submitted all the documents and how they’re all together, or, you know, you can’t, you know, hire people unless you have this type of documentation and onboarding process and all this stuff, for bigger companies, but, you know, entrepreneurs, we fail to, like, do the little stuff, we always focus on the big picture. So I still see that as an issue, I still see people, you know, that are trying to get ready to sell and they have, they feel like they don’t have their books in order, you know, it’s just insane. And it’s because we move so fast, and really just kind of take advantage of opportunities, and we’re always looking for the next thing. So it’s very important for these guys to work on that process. And if they don’t, you know, at this level, like, you know, it’s advised to hire a company that does document processes, and does put all that stuff together, because you’ll get a higher valuation and maybe not to have aggregate, they don’t care as much. But if you’re going to sell to an individual investor, or whatever it used to be required, actually, I think maybe it’s less required. Now, the aggregators, if that’s where you’re aiming to sell, because they actually don’t care about your people or your processes.
James Thomson 17:54
You mentioned your financials, talk to me about some of the maturing that you’ve seen among your members around getting their pnls in better shape, getting their metrics better organized, now that they realize that someone’s going to be evaluating and sifting through all that stuff very carefully.
Ian Sells 18:10
Yeah, I think it’d be you know, we have constant discussions on what you can include in your in your p&l and why you can’t obviously to raise your valuations, you know, taking out things that are costing you money, you know, not launching products in the middle of a sale, you know, that might hurt your EBITDA, you know, a lot of things like that, you know, it’s constant discussion and how to maximize EBITDA on your way out so that, you know, you can say, okay, you know, what types of things can you do to add value, add sales, that doesn’t cost you any more money, right, creating bundles, or, you know, right, like, you know, not spending more on PVC, that’s not going to help you, right, but cutting out wasted spend, and then adding in like additional, you know, packaging bundles, things like that can actually add some value at the end of the market when you’re going out to exit.
James Thomson 18:57
Talk to me about newer members to your group? How are they changing the way that they build their businesses from the ground up so that they are now essentially looking at the end goal of exiting, versus folks that have been in your group for several years may not have necessarily built the business initially with that expectation?
Ian Sells 19:17
Yeah, I would say I mean, everybody feels like they’re gonna exit at some point. I mean, this, this used to be, you know, you could make it a lifestyle business goal, you see so much potential to grow and scale, like, you’re like, Okay, this is more than just living on the beach and selling a few units a day, right. I can actually build a multi million dollar, if not, you know, nine figure business out of this. Yeah. So yeah, the new members, I mean, we’re seeing some amazing new members come in with businesses they built in a few years. I would say that, like, when I started, there was no training, like ASM was just barely getting around. You know, there was, you know, very little people talking about I think it was like scott walker and Phil, those guys, right, you know, bring the content. And now there’s a lot more out there. There’s a lot more people helping and educating and there’s a lot more tactics that are flushed out that actually work, and a lot of stray away from like the black hat tactics that are gonna get your account shut down, right and things that, you know, buying reviews as long gone and things like that where it used to be very easy to get to 100 reviews, you know, from friends and family, you can’t do that. So I think people have chains or ideas of how to run a business and they look at it more of a business versus like, Oh, hey, I can get rich off of this really quickly. All right. And so they’re maturing, and they’re thinking and, and obviously, I think they’re returning and seeing how e-commerce is so important to Amazon, so important to our business, and they’re able to build a really good business, a long term business off this platform. So I think that really, people are putting a lot more effort into, you know, this being a legitimate way to, you know, operate and grow your business and your family and improve everything.
James Thomson 20:44
So now you have a legitimate business, you’re thinking about selling? I’d love to get thoughts around what your members are asking and sharing with each other in terms of Do I go look at a broker? Do I go look at aggregators of aggregators? Do I go find an m&a specialist who can help me find strategic acquirers? What’s going on there, in terms of the types of knowledge sharing that you’re seeing?
Ian Sells 21:09
It’s kind of all over the gamut. Basically, you know, there are certain people that you know, like, I’m just gonna use it, I’m gonna get the value I want to earn out, I’m going to go right to it will be better. And I want a quick deal. I was, I’ve heard plenty of people in the group have gone through 12 plus months of, you know, trying to sell through a broker or whatnot. And then buyers backing out buyers not having cash, you know, you can imagine some people were in escrow, right, with great buyers that couldn’t secure financing, or get money after COVID hit, right, and they just kind of backed out. So there’s a lot of that, for me, I was not willing to go through six or nine months of effort with multiple buyers and falling out last minute, so I wanted to sell it quickly. And I took the lower, I would say a lower valuation, but I was able to work on a lot more, you know, on the earn out things like that, that would be impactful for me. And plus, I didn’t have to train or transfer any of that knowledge over right, almost pretty seamless. So, you know, I think people are looking at it like, Okay, if I want to make more money, I’m gonna have to get more than one offer on my business, obviously, and have more people’s eyes on it. So there’s people that are looking at multiple aggregators, there’s people that are looking at, you know, using some of the major website closers as a as a sponsor of MDS, that they, they do very well for people, their traditional broker, right, they, they’re going to show your plot your business to, you know, 1000s and 1000s of buyers, they’re gonna probably expose it to the aggregators first to get you know, a lot of interest and, and gives you some offers really quickly. And then the other people are gonna be coming in with SBA with a million dollars in cash and partnerships and other stuff like that. So, you know, I think there’s just different ways to look at it depending on your situation, there’s not one right or wrong way. But but not actually looking at your valuation and and looking at your numbers first, and really planning for that exit, you’re going to cut yourself short on some multiple and some some EBITDA improvements that you can use to like offset some of the expenses or hard sell.
James Thomson 23:03
So in Million Dollar Sellers, you have a number of rather large seller skies that are well beyond a million, well beyond 10 million a year in sales, when you start to approach $40, $60 $80 million a year, if you’re looking to sell your business, if you’ve got a solid margin, and you get a decent, decent multiple on that business, you’re starting to get in some very serious dollars, such that most aggregators actually can’t afford to buy you, your your way outside the working capital, they have to buy portfolio companies. How do you see those types of companies getting themselves ready to exit and the extra dances that they need to do in order to be able to sell a business for 50, 70, 100 million dollars, you think?
Ian Sells 23:48
Well, you kind of get into these different tipping points where you know, all of a sudden, now you’re at 50 million, maybe I can get to 100 million in sales. And I can go and sell to a much bigger company like Procter and Gamble or something, bring you on, you know, so it’s like, every every segment hits a new challenge, right? Like you’re saying, like, if you’re in 10 million, you’re like, Okay, I can partner up with three or four others and go get a 15 million Viva, right, or you can sell it to an aggregator and get some upside on it or an envelope, or, you know, go to a website closers or something like that, and then then finally, a buyer out on the market, that are competing and making offers on the deal. And so, you know, some of these aggregators, they have, they can usually get more cash, especially that good businesses and they appear that size, you might be a huge asset to them as well, I think you’re positioning yourself more than just a business. I’d say at that point. You’re positioning like what you mean to the business that’s buying you. It’s a strategic purchase, like, you might have all of that. So you might have a team of 50 people, you know, you might have all these resources that an aggregator might need. So it might behoove them to spend the extra money and get this type of business in their wheelhouse and pay extra for it because you’re bringing in, you know, skews and skills and yes, yes. Right. So Think of all those things that, you know, are valuable. And of course, like yours, or you think your business is much more valuable to somebody else, and they also bring a lot of value to you. And, you know, this business, that side is also putting out a lot of cash flow, right? And so, you know, the selling really makes a difference in your life, or what are you going to do, right, because maybe this, this is something that’s going to continue to grow. Amazon, your work, you know, when I started, I felt like I was just riding Amazon’s coattails, essentially, I was just making listings, I was playing Monopoly getting, you know, my, my place and, and the boardwalk, right. And like, as you grow over time, and your real estate becomes more valuable, as you get more reviews and more sales. And so again, it’s very hard for someone to catch up to you. And just like monopoly, you kind of win if you own the real estate. And that’s what you really own on Amazon is the listing and real estate in that UPC, right, and those are all tied together. And so these people have built up a really good real estate business. And unfortunately, Amazon is not done yet growing, right, they’re not even in every country, there’s so much room for growth, I just think that it’s insane. And, you know, for any company to really be able to touch them, like logistics wise, it’s pretty much near impossible, I think, at this point. So I think, you know, there’s a lot of room to grow, and keep going for these guys. And so, you know, his exit the right way, is it exit but stay on, and, you know, owner, like basically partner with PDE and, and buy more brands and kind of build that real estate portfolio.
James Thomson 26:24
So as a manager of a mastermind group, how has your role changed in the last 14 to 18 months?
Ian Sells 26:32
Well, it’s been challenging, because, you know, we not only have this online community that have really strong, you know, relationships and entrepreneurs that are savvy that are willing to help each other. But we also were throwing events all over the country, and we had to put a kibosh on that for a year. And so, you know, when we bring in new people, it really is hard to build a relationship with a lot of people, you know, 450 Plus Now, in the group, and I think we’re now over 5 billion in sales, but like, it’s hard to build, like rapport and integrity and trust that the people who started in the beginning, we have a really good fortune teller, we’re willing to help each other go a mile and share, you know, deep secrets and details, you know, with the group. And so the events actually were the, the bridge of that, right, where we would have an event and you would now meet these people you’ve been communicating with online for the last six months, and now you meet them in person, all of a sudden, now you’re friends, now you travel to each other’s houses, now, you know, the house, and you build these, you know, side, you know, connections and, and you’re helping each other on the side, and maybe even starting businesses together. So the group is actually, you know, become more valuable to the community, to the group to the community as a whole, right, because we actually saw the problem during COVID, where you couldn’t go to these events, we had the ability to help, you know, build our leadership, and we already had people that understood how to communicate in our group, which is very unique, you know, in an open and active and 24, seven type of, you know, way where people are willing to actually comment on a post we have posted, get hundreds of comments, you know, on the daily, but it’s not like following following. It’s like, you know, adding value by contributing, like supporting each other. So, it’s been very important. And now we’re getting back to having these events and people are, we’re bringing them back together. And those bonds are even stronger now. Because of COVID, and how much we’ve suffered.
James Thomson 28:13
You know, so let me ask you this, among your members who have sold their businesses, or their private label, Amazon businesses, what kind of learnings from their experience have been brought back to your remainder, the remainder of your membership teams that have been helpful, or, you know, unexpected things you’ve learned that you didn’t expect? Was the State of the State of the Union out there?
Ian Sells 28:36
Yeah, I think, you know, a couple of learnings I would say is like, you know, don’t feel the pressure from an offer, you know, from an aggregator, right. Like, they’ll tell you all you have seven days, like, that doesn’t matter, you know, like, you should take that offer, probably in shopping around, you know, they probably expect you to, if you don’t, you’re probably putting yourself out there, they’ll, they’ll tell you, you know, buyers will tell you that they’re the best at buying these types of businesses, they’ll give you this type of burnouts, you know, you get some amount of cash up front, you got to decide where you want to be and, you know, stick to your guns and, and know that you can negotiate, I think a lot of you also think that they This is the offer, and this is how it is and we need to understand this is we’re gonna accept it and you can negotiate on, you know, that you might be willing to give on the cash up front, if you can get a bigger turn out or on counter now, or you might be able to negotiate on closing terms, you know, or non compete. So, you know, even in my business, I’m always saying like, if you don’t ask you don’t get it so you always have to push the envelope and ask for what you want, otherwise, you won’t get it right. So I think that’s really important. And timing is important as well. Like I said, you know, you want to sell on the uptick. There was one member who, you know, was going to sell and they offered him and he was like, kind of over the business and it was, you know, a multimillion dollar offer but it just felt like you know, just too low for all the time and effort and energy you put into it and stuff and so he he didn’t end up selling and just kind of kept on the refiguring all and do some rubber I’m sorry that and then COVID head and his business exploded. And so he ended up making an extra million dollars in profit, and then sold for an extra million dollars. So within six months at a $2 million swing, the same buyer came back and bought his business. So, you know, there are some really cool stories that happened like that. And so you know, just, you gotta do what’s right for you, and then analyze your situation and know what kind of risk you’re willing to take. And, again, you know, if you have focus, you’re going to be more willing to like risk, put more risk on the table, if you have less focus on your business, you’re gonna say, Okay, this is gonna put me in the hole if I’m not paying attention. So I need to, like, you know, get out of the business. And so I think there’s something that I’ve had. And then just like planting, right, like, you know, how can I increase my email, what expenses can move before I go to sell, you know, what, what team people on my team, I don’t need any more, unfortunately, you know, I was, you know, somebody that needs a job or move them to another company, like I said, of all my companies now with a management company, so I can just keep my employees on management, and I can just bill accordingly to what I need for the business. So that way, you know, what I’m selling, I’m saying, This is the cost of running the business. And, you know, making it that way, until, like, when I sell the company, it’s not, you’re not really, you can buy an employee if you want, but they’re not going to be transferred with the business right there. You know, they work for a management company. So I think there’s a way to set it up and strategize. And also, if you’re going for a big exit, there’s ways to maximize, you know, your your your taxes, and or not maximize, minimize your taxes, right, and pay, you know, and have a bigger gain or offset stuff, or unique ways to sell the business in a structured way where you might pay less taxes now. So, you know, there’s all these different things you need to think about. And then, of course, the time it takes to do so is really right.
James Thomson 31:44
So let me ask you again, what do you see your mastermind having to do over the next few years, to continue to help your members remain on track to being successful? How do you have to evolve the mastermind, to to stay front and center with all of these members?
Ian Sells 32:02
Yeah, the one thing we’ve done a lot since the COVID, is we’ve become very transparent with what we’re doing. So we’ve been building our team, to host more events, we have, you know, more the membership fees go to like supporting, you know, in person events around the country, right, you can attend, we’re really turning into more of a community of entrepreneurs that, you know, we want people to sell their business, but stick around, and, you know, give back starting a business, you know, b bnmc, Group B and our other groups, right, you know, we have an investment group, so we help people on multiple levels. So more of like a EEO type of approach where this is kind of a, you know, a lifestyle, when you hang out with people that are just like you, it’s really easy to have a conversation to talk about ideas, you know, the get the gets you to get the commerce, if you go to another function where you’re meeting up with entrepreneurs, but they, you know, they own 17, pizza stores, it’s like, we don’t have a lot in common. So, yeah, I think it’s more of like, we were kind of turning more to a lifestyle, and we want to be the place where you go. And we have family trips for entrepreneurs, you know, we have all these different things that, you know, bring them value in their lives and connections. And that’s what we’ve seen, the biggest value is like the people that you’re connecting with. And so we’re very careful who we bring in, we’ve put in place core values. So the group, you know, we really operate like a real business with, you know, vision, core values, what we want to do, how we want to bring value, and bring in like speakers that you may have to spend, you know, if you’re an individual company might spend 25, or $30,000, on a speaker come in, we can do that, because we have the group, you know, and we’re able to allow everybody to get asked that type of, you know, speaker for basically no cost, essentially, you know, and so that’s what we’re just doing, bring value from our like a corporate level, and then share like what we’re doing.
James Thomson 33:45
That’s great stuff. And I want to finish our conversation today by asking you, in your mind, how are these FBA investors going to get their value? Through the growth of these portfolio companies they’re now acquiring? You mean through like, once they’ve sold or so they come along, they buy your members businesses? How do you see them actually getting the value out of this, and I’ll tell you a little bit of my quandary here. If you’re an FBA investor, you buy a company, you pay 567, multiple, what you’re basically betting is that you can continue to generate revenues for at least the next 567 years and be able to grow the business and do that all in an environment where the half life for a lot of private little brands on Amazon is what 18 months. So how do you see these aggregators, these investors buying these firms and actually being able to grow fast enough and large enough that it’s worth them having made these investments in the first place?
Ian Sells 34:48
Well, yeah, I think there’s gonna be a number of failures. We’ve seen that in the early days of like, 101 Commerce and, and so many other aggregators, right? So these aren’t going to make it there’s gonna be consolidation again or the aggregators. But for value wise, I think that Amazon in itself is creating so much value for the growth of business. So they’re multiple also applies to you so if Amazon is growing at a 30% growth rate, or 50%, or adding new marketplaces, inherently, you’re going to grow anyway. So if you do nothing else, but keep the same thing going, your business is going to grow. Right? Because Amazon’s brand new customers, and more people are using it. And so you’ll have more people looking for dog collars and toilet paper, and all that stuff on Amazon, just every single day without you doing anything. You know, the brands also will need to launch new products and keep up with the changing of times, and certain products will become bad if there are any improvements in technology of products, right. So you know, what, I started off selling a Bluetooth speaker, that was amazing. It was this little seeker, it’s useless now, I mean, it’s literally useless, but we had 1000s of reviews, or in the early days like 2012. And, you know, it was like a little pop up speaker. And so, you know, you have to evolve as any business. And so, you know, as MDS is evolving, really key, you know, as evolving, Elite Sellers, evolving as an analyst tool for, you know, multiple Amazon accounts, you have to continue to do this stuff, in order to grow. So I think they can’t be stagnant. But inherently, I think they’re gonna be able to grow. I’m not seeing people getting, you know, 5, 6, 7 multiples quite yet, like just off the cuff, you know, with a standardized business, but I think they’re, they are moving in that direction, and maybe you know, more, but I think, you know, those are starting to be very attractive multiples for people to exit. And it’s gonna be, you know, the more that the more the buyer pays, the harder it is gonna be for them to recoup that money, right? Yes, as taken. So it’s gonna take ingenuity, it’s going to take new products, gonna take growth and marketplace, you know, you might only be a US, if you’ve just launched Canada, Mexico and UK, you might be able to add another 40 or 50% of the revenue. So, you know, with an aggregator they have teams that just specialize in the UK and Canada, they’re able to do those things where, for me, I’d take away my focus from the USA and I did it in I spent all the time and energy. And in the UK, I didn’t know what I was doing. I was literally trying to figure it out. And so I lost a ton of money doing that type of stuff. So, you know, when you’re focused on and doing what works, and just doing more of what works, that’s where you win, but the aggregators have the money, they can go buy multi millions of dollars worth of inventory, they’re not trying to run lean, like most of the people that in my group, right? everybody’s like, cat, I only have a million bucks for $10 million worth of this product, because it’s so good. And I could sell it, but like, we also go, Well, what happens if we can’t sell it? Right? What happens if Amazon shuts our listing down so that we have these, like, risks that admins aren’t really thinking about? Because they have so many different products that are doing well that it can offset some losses? You know, I would say that, like the, the meters, you know, COVID I bet you they bought a bunch of businesses that just went to the dump, right, they really tanked you know, if they bought travel pillows or, you know, things for you know, you know, traveling right or whatever, right, or automotive or office accessories, you know, just went to nothing. And then they had businesses that also quadrupled, right? So they were able to offset that. But if it was just that one FBA guy that sold travel pillows, or inflatable neck pillows, let’s say they would have been crushed. And they would have had, let’s say a $500 – $500,000 a million dollars of inventory, no sales, what do you do? You know, and so the aggregators are gonna win in that regard as far as be able to, you know, absorb these, you know, issues or if your hero skew goes down, it’s gonna take, it really takes out most of the sellers, but for aggregator, they have 100 hero skews. So one or two going down isn’t gonna matter. And so I think that’s where, you know, people are starting to think okay, this is now it’s not a you know, individual game. It’s a sum game and that’s where you know, the efficiencies come into play.
James Thomson 38:52
And I want to thank you for joining us today on the Buy Box Experts Podcast. For those of you interested in learning more about Ian’s Million Dollar Sellers mastermind group, please visit milliondollarsellers.com. You can also learn more about RebateKey and Elite Seller to other businesses. Please go to rebatekey.com and eliteseller.com. Join us again. Pardon me? It’s super easy, super easy. Good SEO there. Thank you for joining us today on the Buy Box Experts Podcast. Join us again next time. Take care.
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