Why Private Label Sellers Should Focus on Both Their Products and Their Brand When Looking to Sell
February 25, 2021
Here’s a glimpse of what you’ll learn:
- Andrew Savage’s thoughts on the growing interest in FBA private label businesses
- How increased competition in the private label market benefits sellers, investors, and consumers
- What attracted Andrew to Amazon entrepreneurs and the FBA space?
- Building a brand on Amazon versus optimizing a product on the marketplace
- Are there enough private label brands available for sale on Amazon?
- What FBA businesses should focus on before deciding to go to market
- How Suma Brands evaluates a company for sale
- Andrew talks about Suma Brand’s approach to deal structure and what drives the company’s long-term success
In this episode…
Over the last couple of years, Amazon has been working to improve its marketplace to be more convenient for both sellers and buyers. This has led to an increase in the number of sellers joining the channel—which, in turn, has made it a more attractive space for investors. So, how can both FBA brands and buyers stand out from the growing competition on the Amazon marketplace?
When preparing to sell, most private label Amazon brands work on their financial records, customer reviews, and business operations to make their businesses more attractive to investors. However, according to Andrew Savage, these brands should actually spend more time focusing on their products in order to stand out. As he says, a brand’s long-term value and growth potential are often rooted in the products it sells—not just its presence on Amazon.
Andrew Savage, the Founder and CEO of Suma Brands, joins James Thomson in this episode of the Buy Box Experts podcast to talk about why FBA private label sellers should focus more on their products when looking to exit. Andrew discusses what he looks for when evaluating a business for sale, the importance of creating a product roadmap, and how Suma Brands approaches deal structure. Stay tuned.
Resources Mentioned in this episode
- Buy Box Experts
- Controlling Your Brand in The Age of Amazon: The Brand Executive’s Playbook For Winning Online by James Thomson and Whitney Gibson
- James Thomson on LinkedIn
- Andrew Savage on LinkedIn
- Suma Brands
- Disruptive Advertising
Sponsor for this episode…
Buy Box Experts applies decades of e-commerce experience to successfully manage their clients’ marketplace accounts. The Buy Box account managers specialize in combining an understanding of their clients’ business fundamentals and their in-depth expertise in the Amazon Marketplace.
The team works with marketplace technicians using a system of processes, proprietary software, and extensive channel experience to ensure your Amazon presence captures the opportunity in the marketplace–not only producing greater revenue and profits but also reducing or eliminating your business’ workload.
Buy Box Experts prides itself on being one of the few agencies with an SMB (small to medium-sized business) division and an Enterprise division. Buy Box does not commingle clients among divisions as each has unique needs and requirements for proper account management.
Learn more about Buy Box Experts at BuyBoxExperts.com.
Podcast Episode Transcripts:
Disclaimer: Transcripts were generated automatically and may contain inaccuracies and errors.
Welcome to the Buy Box Experts Podcast. We bring to light the unique opportunities brands face in today’s e-commerce world.
James Thomson 0:18
Hi, this is James Thomson from the Buy Box Experts Podcast. Today’s episode is part of a special series of interviews that we’ve done to dive deeper into the recent phenomenon of private equity companies and FBA aggregators investing in private label brands that are leveraging the Amazon sales channel. As part of this series, we interview a wide range of investors, brokers, consultants, and entrepreneurs that have recently sold their private label brands. We peel back the layers on what’s happening in this new investment space, and look at how private label brands are finding financial success through the building and eventual sale of their online businesses. For three weeks from mid February through early March, we will release a new episode every weekday on this topic. Sit back and enjoy today’s episode.
Hi, I’m James Thomson, one of the hosts of the Buy Box Experts Podcast. I’m a partner with Buy Box Experts and the former business head of the selling on Amazon team at Amazon, as well as the first account manager of the Fulfillment by Amazon program. I’m the co-author of a couple of books on Amazon including the recent book, Controlling Your Brand in the Age of Amazon. Today’s episode is brought to you by Buy Box Experts. Buy Box Experts takes ambitious brands and makes them unbeatable. When you hire Buy Box Experts, you receive the strategy optimization and marketing performance to succeed on Amazon. We also support investors with due diligence services. Go to buyboxexperts.com to learn more. Before I introduce our guest today, I want to send a big shout out to the team at Disruptive Advertising. For off Amazon advertising, Disruptive Advertising offers the highest level of service in the digital marketing industry, focusing on driving traffic, converting traffic and enterprise analytics. Disruptive helps their clients increase their bottom line month after month. Check out disruptiveadvertising.com to learn more. Our guest today is Andrew Savage, founder and CEO of Suma Brands. Suma was founded on the belief that the next generation of household brands will rise out of the Amazon marketplace, like its namesake, the sumauma tree rising out of the Amazon forest. Suma’s purpose is to find, acquire and help those brands realize their potential, both in the Amazon jungle and beyond. Prior to Suma Brands, Andrew held advisory roles for retail companies, as well as working at management roles at Amazon and target.com. Andrew, welcome, and thank you for joining us today on the Buy Box Experts Podcast.
Andrew Savage 2:49
Thank you very much for having me.
James Thomson 2:52
So Andrew, let me start by asking you, when you think of all the stuff that’s happening right now, in the FBA private label space, these businesses are hot commodities, what has happened to generate the recent interest in these businesses? And given these kinds of companies have been around for 20 years, as long as the Amazon Marketplace?
Andrew Savage 3:14
Yeah, you know, I think it’s a combination of factors. Obviously, there’s this, you know, huge macro trend of consumers shifting business online. And, you know, I think a big part of that has been Amazon investing in services for their marketplace on the technology side and also FBA. And that’s, you know, brought a lot of sellers to market and really significantly scale the size of the marketplace. You know, and as a result, I think they’ve focused more on, you know, making sure that their marketplace delivers the level of customer experience and quality that, you know, they really stand for as a brand. And they’ve, you know, frankly made it harder, I think, to achieve rankings and reviews and categories, which has made the position that some of these existing sellers on the marketplace have more valuable. And I really see this, it’s, you know, part of their flywheel, right, like I think their investments in the marketplace have led to, you know, this rush of entrepreneurs into the marketplace as sellers. And, you know, it’s taken a while for those businesses to mature and sort of as a set get to the point where there’s enough that are large enough to sort of be interesting in this model. And so I think, you know, it’s really those things at a macro level, and then you’ve had some, you know, early entrants creating visible proof points, you know, the strategy working, I think that’s, you know, that’s really the combination. So, you know, yeah, that it’s existed since Amazon began and the start of the marketplace, but I think it’s, it’s just now kind of ripen in the sense that there’s a critical mass of businesses that have gotten, you know, really pretty big and very solid in terms of financial fundamentals and made this a really interesting opportunity for acquirers.
James Thomson 4:51
So what do you think happens over the next couple years as the number of aggregators and private equity companies, getting into the space continues to increase? What’s going on? To the types of sellers that participate in the attitudes of sellers that get onto the platform, tell me what you think is gonna happen here.
Andrew Savage 5:09
Yeah, I mean, you know, it’s always hard to say crystal ball and all that. But you know, I would say like, I’m super excited about the next two years, like there’s a lot of activity in space. I think it’s a good thing like another, you know, not surprisingly, a lot of people ask questions along these lines. And another way to frame it is like, Are you worried about competition and competition for deals and supply deals? And, look, I think competition is a good thing. I think we’re in a state where more aggregators means more buyers means higher value value for, you know, sellers and their businesses. And that’s going to bring more sellers to market on wanting to sell, and that’s going to result in more seller exits. Yeah. And the visibility of those exits is going to bring more entrepreneurs into the marketplace, you know, which is going to create more brands that potential, and you know, Amazon’s famous for their growth flywheel, I really think that, you know, this is kind of like a, you know, a flywheel that sits side by side and amplifies that in terms of just really increasing the number of potential saleable businesses out there and the interest in developing these businesses, and I think that’s going to be really good thing. And like, that’s, you know, I’m looking at that from like a deals perspective. And, but I think if you think of it in terms of customers, like it creates tremendous value for customers, right? So more aggregators operating at scale, that’s going to be more efficient supply chains and product costs, I mean, higher quality, that, you know, potentially lower prices, that’s going to increase the value available to Amazon’s customers on the marketplace, which again, feeds their flywheel brings more customers, more purchases, the marketplace scales. And so you know, it just amplifies that whole effect. And so I really think of like, the next two years, it’s just, it’s gonna be super exciting to see how fast that can spin and how fast it can grow. And I just, I love things that sort of create value throughout the chain. And I think this is one of those flywheels, right, it creates value for sellers, it creates value for businesses, like Suma Brands, for Amazon for, you know, thinking about the world that you’re in, I would say, you know, for service providers to third party sellers into that ecosystem, like, it makes the whole pie bigger. So, you know, again, I don’t have a crystal ball, I’m not, I’m not sure what’s going to happen. But I see this is really like a positive thing for the entire entire ecosystem surrounding the marketplace.
James Thomson 7:25
So while you had a chance to work at Amazon, you didn’t grow up as an FBA private label seller yourself. And yet, you’re very drawn to the space you founded a company in this space. Tell me a little bit about the kinds of issues that surprised you the most about the entrepreneurs that participate in this Amazon Marketplace?
Andrew Savage 7:45
Yeah, again, you know, I think it’s a, it’s just such a cool space. And just, I guess, preface, what’s what has surprised me with a little bit about, like, why I kind of got drawn into this space. I think, from a personal standpoint, I’ve always wanted to be an entrepreneur, I think my professional career has taken me closer and closer, you know, to founding something. But along the way, I’ve just realized, like, I’m not the zero to one guy. And I’m really good at taking things that other people have started making bigger, better faster. And that’s, that’s what Suma Brands is all about. Yep. But I’m not. I’ve never been the first mover and frankly, like, I’m just in awe of entrepreneurs who can conceptualize a totally new product or idea and just like will it into being like, that’s such an amazing, yeah, um, capability. And as much as I want that to be me, like, that’s not me. And so, you know, one thing that really attracted me to the space and what we’re doing with Suma Brands is like, the ability to be involved with entrepreneurship in this way and to reward first movers is like the first step in our value chain. But to be close to you, and and, you know, a participant in this ecosystem of entrepreneurs, um, I think, you know, further, I’m just like, personally, just really driven by making sure that things are fully utilized. And I don’t know, like, it’s probably, because I’m an operator, I always have been focused on scaling things and optimizing things. And so I just don’t like to see things that don’t achieve their full potential are underused, and like one of our, you know, just the C’s in the space is that, you know, that the marketplace makes it so easy for individuals to start a brand, right? That you get, like all these valuable products and brands that have, you know, a kernel of something really huge. But there may be started by people that really only care about the product, or they don’t have time, you know, to fully scale it. And so, I think like at Suma, we’re really driven by just making sure that those brands, you know, reach their potential and stepping in and finding Win Win situations where, you know, we can be the right steward for the next tranche of growth and again, really reward somebody that’s taking zero to one stuff.
James Thomson 9:53
So, a lot of people in Amazon started businesses, basically, me to white labeled products. And they know how to play the Amazon game in terms of building social proof and spending money on advertising. And lo and behold, they have this thing called a brand. Now, it may not be a traditional brand, but it’s a brand. And it’s a cash flow. How do you embrace the enthusiasm of people wanting to start brands, but at the same time, validate what’s really a brand that has potential for growth? versus what is a nice white labeled version of something that anybody could buy and sell?
Andrew Savage 10:31
Yeah, you know, it’s, it’s a good question. You know, I think both flavors of the brand are interesting, right?
James Thomson 10:42
But let’s talk about each, then.
Andrew Savage 10:44
Yeah, I think that, you know, my bias is always is always toward, like, product and product people, like, I really feel like, you know, having a product that solves a customer problem, and, you know, an elegant way, like, and delivers that at a great value, like, that’s the underpinning of long term and sustainable value. And so I tend to, you know, my bias is more toward those businesses, but I think, like, equally impressive, is the sort of, you know, call it quote, unquote, like real estate businesses that, you know, people have built on Amazon, where, you know, they’ve played the game effectively, yeah, they rank really well, they’ve got great reviews, and I kind of see, you know, you can take, you can take this both ways, right? Like, you can take something that has solid product fundamentals, and you can, you know, build that presence on Amazon, you can optimize that you can, you know, do various things to build brand equity kind of off marketplace. And that’s a very interesting business. And then you can also take real estate, and you can, you know, come at it from the standpoint of optimizing the product and making the product better and apply, you know, that lens to it. And so, you know, I wouldn’t say like, we don’t focus exclusively on one or the other, it is very interesting to hear kind of the different paths that people take to their business now generally, sort of segmented into, you know, entrepreneurs that are really focused on building a business on Amazon and very data driven, and they find their niche and play the game, etc. And I think there is this other set of, you know, Moore’s kind of product people that are, because Amazon makes it so easy to start that business, they’ve really focused on a product. And then, because of the tools and services and Amazon have been able to build, you know, a business around that. So yeah, it’s, it’s fascinating, you know, the different flavors that are out there. And I think both are valuable in their own way. And one of the really cool things about doing what we’re doing is just having been able to talk to hundreds of people that have done and done it this way or that way, are slightly different and find the different, you know, foundations of value there.
James Thomson 12:47
We talked about all these new investment organizations coming in and being interested in Amazon private label brands is a little bit of a rhetorical question, but are there enough private label brands available for sale today that all these aggregators will have an equal opportunity to to build portfolios? What do you think about the business of finding businesses to vet and eventually buy some of?
Andrew Savage 13:15
Yeah, it’s a good question, when it comes up a lot to you know, the activity in space again, and, yeah, I think I always just sort of reset on like, just how huge the spaces and and how fast it’s growing. And again, going back to that flywheel idea, like, the more visibility to these types of exit opportunities, the more you know, the law of large numbers is going to work in the marketplace and surface, you know, saleable brands. So, you know, I’m not, I’m not particularly worried at this point about, you know, the supply of brands, I think, in terms of like, how we find them, obviously, there’s a big broker system ecosystem out there. I think everybody’s plugged into that we certainly are, and look at those deals. But, you know, our focus is really on being bit there, being available for brands, you know, and entrepreneurs who are exploring this process. You know, we’re happy to educate, we sort of, we don’t assume that any deal is going to be not competitive, even if they’re not brokered. And so we’re very focused on making, you know, market or in some cases above market offers, and we just, we want to be a value add part of the ecosystem. So a big focus for us and one of the reasons I’m here talking to you is just making sure that the Suma Brands name is out there. And that the seller community knows what we stand for, what we do and who we are, and, and feels really comfortable reaching out to us when they’re starting to even just like exploring that idea. Knowing that like first and foremost, we just want to be here as a resource and build those relationships. And so that’s a big focus for us. And then of course, you know, we source leads and find other ways to connect through sellers through a variety of channels. I don’t want to get too far into the details but Marina, probably not surprisingly, we do some cold outreach through various channels. We You know, really try to make sure that we have good relationships with firms like yours who are in the business of working with third party sellers. You know, you’re gonna see us doing a lot more content and trying to provide information and tools that are useful to sellers. But yeah, you know, I think I’m generally not concerned about the availability of saleable businesses and of deals. You know, I, I’m more concerned with you, how do we be front and center? How are we, you know, top on the list when, yeah, when a seller starts to think about that process.
James Thomson 15:36
So when you look at companies that come to you, you’re gonna see the good, bad, the ugly, you’re gonna see everything that comes through the door. And given what you’ve seen so far, what would you like to see private label sellers doing a better job of before they decide to go to market?
Andrew Savage 15:55
Yeah, it’s a great, it’s a great question. And, you know, I, you’re gonna notice a consistent thread, through my just kind of on the product theme. So fair warning, but, you know, I think a lot of the other guests you have in this series are probably going to talk about, you know, the financial and operational and Amazon hygiene, reviews and rankings, etc. That stuff is obviously really important. We care about that. But I won’t belabor that point. Because I think everybody’s kind of talking about that. And, you know, the way that you frame the question like, what would I like to see, brands do more of, you know, I would like to see a little bit more of a focus on product in general, I think, you know, again, well, both flavors of, of, of Amazon Marketplace, business and of, you know, sort of styles of entrepreneurship are interesting and valuable. You know, from Suma Brands’ perspective, you know, we want to build brands, right, we’re, we’re going to be, you know, a top tier Amazon operator, and the marketplace will always be a big part of what we do. But it’s really important to us to find brands that have potential. And I think that, you know, long term value being rooted in products, it’s important to spend some time thinking about your business as the products you sell, and not only your Amazon presence, and I think in terms of, you know, I see some businesses where it’s really like, the whole focus is just like, the presence on Amazon, you know, and, and that’s great and important. But, you know, we’re trying to think bigger than that. And, and so I think I’d like to see more entrepreneurs, like really having a coherent point of view on like, where does their product stand in the competitive set that’s on that Amazon page with them? Like, what are they competing on? Who are their customers? And what’s important to them? What their product roadmap is, you know, looks like and thinking about the underlying foundation of the business, which, you know, if you’re a marketplace seller, is selling a physical product. And so having some thoughtfulness around that. And then, of course, all of the hygiene topics that you’re getting
James Thomson 18:00
from other guests, when we talk about the product roadmap, having done due diligence on a number of brands that are at this point looking to sell, what I’m often surprised by is, yeah, it looks like there’s a whole bunch of things that they say, Oh, you should go international, you should add 20 more products, you should spend more money here, here and here. The company is undercapitalized to be able to do these things itself, that they’re putting down a bunch of things that look good on paper, but how do you delineate between what looks good on paper and actually demonstrating that you’ve started down the path of some of these potential growth channels?
Andrew Savage 18:39
Yeah, and I think like, and maybe this is something that I feel like sellers could could do better I hate to use the word better, maybe could do differently, when they’re preparing for sale is like really be focused, you know, it’s like, I totally agree with what you just said, it’s like you read, especially in the brokerage world, you know, you read the prospectuses, and it’s all the same stuff. You know, it’s just a list of like, here’s things you could do. And it’s like, yeah, we all know, we could do this stuff. Yeah. What’s much more valuable and important is, you know, having an insight specific to your brand of like, which of these levers would really work and why? And then you to your point, you know, ideally, you have some early traction or data point, you know, a minimum viable product experiment that shows some evidence of that traction, right. And so, from a buyer’s perspective, you know, to me having one growth lever that, you know, is really thoughtful in the context of the brand and has a data point supporting it. And, you know, I’ll take that all day long over a list of, you know, all the possible growth levers in my career, you know, to make sure it’s like, it’s Yeah, it’s like a job description. Basically. If you just list you know, everything that you might do. So yeah, I think that’s a really good, really good call out and I think that’s another thing that maybe sellers could do differently. It’s like, don’t be afraid To be really focused, there’s a strength that comes from focus. And great results come from focus. And so, you know, do that in the context of your brand.
James Thomson 20:08
So you’ve, you’ve got this idea of better focus, and you’re looking at companies. And you’re saying, not only is a setup well, but is it set up forward looking to build a scale? Could I take this and do my magic and make it grow that much better? So how do you evaluate a company today and say, I see all sorts of future growth that similar brands could activate? versus I see a company that’s got decent cash flow, but I don’t know how we’re gonna scale this thing to two two to 10x? Yeah.
Andrew Savage 20:45
You know, good question. I think I might not dive too far to the specifics. Because I think, you know, this is I hate to use a cliche, but you know, sort of one of the I think that the elements of secret sauce for the different aggregators, that’s how you grow things. But look, I would say, you know, we look at a couple things when we’re evaluating a brand. You know, we look at product fundamentals, we look at Amazon fundamentals, and we look at financial fundamentals, I think, you know, we start to get interested when, you know, two of the three are there, and then we start to think about, you know, which, which of the ones that are there? Can we amplify? And are we equipped to address and improve the one that maybe isn’t there? Right? And, you know, for us, it’s really about, again, looking at it in the context of what this brand needs to be great, and to continue to grow? And then being self reflective about, like, what are we really good at? And what can we contribute? And so, you know, looking at our capabilities, and comfort in supply chain, in marketing, in kind of the brand management product roadmaps side of things. And then also, like, we looked a lot at, you know, possible deal structures, and we can maybe touch on that a little bit later. But, you know, I think we really tried to look for deal structures that deployed the best resources against a brand. And yet, to be honest, like, sometimes there’s something an entrepreneur is doing that we feel like, we’re not going to do this as well as you are out of the gate, like, it’s going to take this time to ramp on this, and trying to find, like, the right deal structure that honors the brand, like, you know, we feel like that’s first and foremost, we want to like build on what entrepreneurs created. And so if there’s an area where we feel like, hey, you’re doing something better than us, and we need to learn a little bit from you, like, We’re not afraid to say that I think it’s, you know, that it’s important to know what you can hit it out of the park on and where you might need help. And for some of these brands that do exist, like the entrepreneur is bringing something very unique to the table. And we need to learn from that over a period of time. And so yeah, I think we look at all those things. And before we make an offer on any brand we do, we have a very specific growth plan. And it’s usually relatively focused, you know, as alluded to, in my prior answer. And our our goal is that we don’t want to acquire anything, that we’re not gonna be able to scale significantly, because we want to deliver all the value we can to the sellers that we’re buying from, and we really want to pay homage homage to and continue to build the brand that they’ve started.
James Thomson 23:11
So let’s talk about Suma Brands, its approach to deal structure. When I look at the conversations I’ve had with other types of investors, it’s all over the map, you’ve got some organizations that are happy to buy, buy a company, and say goodbye to the owners 30 days after acquisition, there are other models where, you know, the the owners may stick around for a second bite of the apple, year from now, two years from now, how do you think about this equation of capitalizing on all that very specific knowledge the owners have, but also being in a position that you can actually start to apply your expertise to make this thing grow faster than what the the current owners might be able to do?
Andrew Savage 23:51
Yeah, you know, I think it’s, um, I definitely agree. Like, it’s all it’s all over the map. And, you know, I think our approach to negotiating a deal and just negotiation, negotiation in general, is like, you look for ways to make the pie bigger, right, like, haggling is not negotiation. So if you and I are only arguing over, like, what’s the cash value of this business? That’s haggling, right. And obviously, that is a huge and important component of the deal. But you know, we really make a concerted effort to understand what’s important to sellers, both financially and, and from on non financial elements and, and look for ways that we can structure a deal that creates a win win and actually makes the value, you know, the size of the pie bigger. And so for that reason, you know, we don’t really have, I would say we have like kind of standard flavors of deals. But we’re willing to be somewhat bespoke, especially at this stage. You know, we’re ramping up, and we’re just, we’re looking to get the right brands in and have the right resources. is deployed against US brands and is open to, you know, exploring, again, what’s important to a seller and what they can do and what you know, is important to us and what we can do and looking for that intersection. And so you know, that that’s generally our approach, and it comes down to, yeah, what does the seller need? And what do they want? What is Suma Brands need? What do we want? What is the brand need, and do we have an overlap that we feel like, you know, increases the total value in that transaction. So not to be non committal. But I think, you know, in terms of maybe one of the ways that we’re different, you know, from other players in spaces, like we’re, we’re willing to look at these things creatively and, and really try to find the right fit for the entrepreneur and the brand. So that that brand can join the Suma family, and we can, you know, help it achieve its potential.
James Thomson 25:50
As an agency that works with brands, it’s often not sure what the right word is, it’s often extremely rewarding to be able to go to a client and say, actually, there’s five things that are broken here that we can fix. And it’s only going to take a few months to fix a bunch of them. And you’re going to be in a position where you might be twice the size, by this time next year, you might be three times the size by next year. And in some ways, it’s rewarding to say I know my role as an agency, and what I can do to fix things. But likewise, as an investor, you see a growth opportunity. But how do you balance that with the brand owner saying, oh, my goodness, I left so much money on the table? Because I didn’t know how to fix these easy things that would have seriously driven up revenue.
Andrew Savage 26:39
Yeah. And like that, I think that’s part of the deal process, right? It is figuring out like, you know, what’s the right risk, reward, balance for a seller, right? Not everybody has the same, same balance. And some people are like, really fixated on, you know, cash up front, and they want burden a hand and, and other people, you know, maybe recognize they’re like, Hey, I know, this brand has runway, I know, I’m not the right person to do this on my own. And, you know, I’m almost looking for more of a partner. You know, to be clear, we don’t, we’re not investors, we’re operators, and we buy brands outright. But you know, I often think of, you know, one flavor of a deal is like a partnership where we want sellers to get fair value. You know, and we know that if we, if we’re picking the right brands, if we’re applying what we do really well. And if we’re if we’re realizing where there’s a unique value that the seller can bring to the table for some period of time, you know, we know that the brand is going to be much more valuable with that set of circumstances, then if we try to take a one size fits all approach, and sort of, you know, get as much value as possible off the table on the buy side, you know, to the detriment of the brand. So yeah, obviously, it’s a balance, you know, we’re focused on delivering great returns, you know, for our investors. But we also, you know, are, again, fans of sellers, supporters of sellers, believers and entrepreneurs. And I think part of this whole ecosystem, and part of what is going to keep it interesting and keep the supply there is that, you know, sellers have good outcomes. And we want to be part of that as well. Unless, you know, the tangible side, like, I always feel kind of silly saying this, but like one thing, we really believe as soon as we want to be part of happy, calm, happy stories. But, you know, we’re going to take these businesses, and we’re going to massively scale them. And we want to feel really good about like, what we’re putting out into the world. And I think One really cool thing about this business model in this chain is like, if you do the deal, right, it starts with making somebody really happy, right, some of its poured years into building the starting point, and blood, sweat and tears and are invested in the brand they’ve created. Like you start by making them happy with a good exit. You continue on making you know, customers happy by improving the product quality and experience etc. And you’re making Amazon happy along the way and making certain service providers in the ecosystem happy. And then at the end of the day, we’re making our investments, investors happy because we’ve done all those things, we’ve built a ton of value. And that’s just, you know, kind of a corny way to think about it, maybe but it’s like it’s something that’s really important to us. And we just want to help increase the level of utility and happiness in the world.
James Thomson 29:25
So Andrew, what do you do to make Suma Brands successful in the long run? What do you think about this process of putting different pieces together into a portfolio? What can you share with our listeners in terms of what makes you successful long term?
Andrew Savage 29:42
Yeah, I think, you know, it starts with picking the right brand partners and, and making good acquisition decisions and getting the right people on board. But you know, at the end of the day, it sort of shakes out to, you know, we’re world class Amazon operators. Amazon’s out is going to be a core part of the business. And so improving that side of it and being top tier, there is a key element of delivering, you know, success for the business and return for our investors. And then I think, second, you know, the second layer that is, as we talked about, many of these brands will have potential beyond the marketplace, not not all of them, maybe, and we don’t expect to do that, you know, with every single brand that we acquire, but we’re finding opportunities where, you know, we can, we can build a household name, we can push into other channels, we can create equity directly with customers, or we can even enhance the brand new within the context of the marketplace. So, you know, I think those are the two things that we need to do really well, and that we will do really well. And, you know, again, maybe a more qualitative way to think about it, you know, people ask me a lot like, what’s your definition of success and three to five years? And there’s some financial answers to that, and operational answers, and, you know, etc. But the thing that really resonates with me is like, three to five years, I want it as a walk around in my daily life, you know, maybe once a week, once every other week or whatever, I want to hear somebody like raving about a product that they found, like we all do, right, you find like a great product terms you like better and like sort of major or trivial way. And you just talk about it, you know, you talk about it all the time. And you tell everybody who will listen about it. And, you know, I want to regularly hear people raving about a product and be able to say like, Hey, did you know that’s one of our brands. And I know, like if we accomplish that, you know, all the financials, and everything will fall out of that. But it’s basically, you know, scaling these products and brands to a place where there’s something that people love, are aware of, seek out, tell other people’s people about and that’s really, I think, sort of the qualitative foundation of success. And then, you know, there’s all these more sort of tactical building blocks.
James Thomson 31:50
I want to ask you a question in closing our discussion today around the types of software and companies and consultants that you’ve looked at that have helped you get to the point that you’re able to be a professional investor in the Amazon companies. Are there people along the way that have been particularly beneficial that you want to call out?
Andrew Savage 32:14
So I guess I just want to clarify one, one thing, it’s nuanced. But you know, we’re not thinking of Suma, as an investor or investment group. You know, I think of us we’re an operating group. As I just want to be clear, like,
James Thomson 32:27
as you were asked, so you can operate these companies. Yeah.
Andrew Savage 32:32
Yeah. But yeah, it’s important. Like I think success really, in this space depends on being great operators. And that’s what we’re focused on. You know, and I guess the question, I sort of hate to pick favorites, but I’m not above complimenting the host. So I would just say, you know, you are somebody that has been very helpful to us and proactively so. And I have, you know, really appreciated the connections that you’ve made for me and advice that you give me. So I’ll maybe just take the opportunity to thank you for that. And thank you again for having me on the podcast. It’s been great to be here.
James Thomson 33:11
Andrew, I want to thank you for joining us today on the Buy Box Experts Podcast. For those of you who are interested in learning more about Suma Brands, please visit sumabrands.com
Thanks for listening to the Buy Box Experts Podcast, be sure to click subscribe, check us out on the web, and we’ll see you next time.