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James Thomson  15:25  

For brands that basically exist just to sell on Amazon, we often see a half life of many of these private label brands of maybe 18 months. What do you think about companies that sell exclusively on the Amazon channel that are selling basically commodity products that they have branded themselves but they’re basically commodity products? What do you think about a business like that?

Shakil Prasla  15:50  

Yeah, it’s, that’s that’s a good question. You know, James, I, me personally, I need a unique product to buy like some patent patent on it or something that protects it. And I’ll pay a premium for something like that to be protected. Anything, you know, Amazon is a very cutthroat rolled and you could get taken over easily. But if you have a defensible product that makes it easier, but on the other hand, there’s a market for, you know, widgets that you just throw your, you know, private label on, you know, and people will buy that piece, you know, there’s a lot of buyers coming into the marketplace that are leaving their corporate jobs, cashing out their 401 K, and using that as a downpayment to buy Amazon businesses. So there’s a lot of buyers out there and you’re even if you have a purse, you know, private label product with nothing defensible. You’re most likely going to find a buyer out there to buy your business. So yeah, I mean, I personally wouldn’t buy it, but other people may.

James Thomson  16:52  

What do you think about the process of putting multiple businesses together when you have a portfolio of businesses have you found that it’s critical to have businesses that are in similar categories or similar types of customer groups? Or do you thrive on having a range of different businesses and find that that’s rewarding for you.

Shakil Prasla  17:14  

If I were to redo this, again, I would focus on a niche specific category. But I started focusing on buying just cash flowing businesses. And so if you look at my portfolio of products and a lot of different things that, you know, vary from, you know, greeting cards, to socks, to metal promotional items, it’s just a bunch of different things. Um, but what I do is that the sort of the synergy that works within our company, is what I call my back office. And so my back office is a team of people that worked for the whole portfolio. Think of it as an agency for my portfolio. Yes, and that’s what we do. It’s economies of scale. You know, I think it’s cheaper to have, you know, a team working for the whole portfolio. And so that’s my synergy is, you know, I have a paid advertising team, content team, import sourcing team. And so that sort of makes up my back office that works for the whole portfolio.

James Thomson  18:21  

If you could invest in certain talent that you don’t currently have, what would be a luxury hire for you in terms of having additional skills to help drive the businesses?

Shakil Prasla  18:33  

Hmm. That’s a good question.

James Thomson  18:37  

Oh, let me put the question a little bit differently. If you decided to invest more in the businesses you currently have today, where would you be placing bets within the existing portfolio, whether that’s people, whether it’s processes, whether it’s expanding catalogs, what kinds of things would be opportunities for you?

Shakil Prasla  19:00  

Growth hackers, some type of growth hack hackers marketing, where I could pay more for someone who has even more experience running, you know, AMS Amazon ads. I’ve sort of done it the way where, you know, pay an average salary, and then train them internally to recognize how to optimize keywords. But if I had no more money, I would just go high end and hire someone that has this experience that can just start getting me going right away. Yep, yep.

James Thomson  19:36  

Okay. So Shakil, let me change gears here a little bit. I’d like to gauge from you. At what point did you understand in your investment days? At what point did you understand you were good at evaluating brands and finding the winners in the midst of all these companies who were looking at? What triggered that moment of realization that Yeah, I can do this. I’m actually Gonna be able to make a living out of this? Yeah. All right, I’m sorry. I’m assuming you’re at that point already.

Shakil Prasla  20:10  

Well, yeah, you know, 15 acquisitions in now, you know, it’s hard to, honestly, if one were to screw up it would mess the whole portfolio upside. I’ve been very, very specific and methodical in buying the companies. But when I bought my first one, I made my buddy but money back quickly, I knew I was onto something. But along the way, you know, just not never asking those right questions. And you know, after the fourth or fifth acquisition, just kind of seeing the patterns and just kind of building the rapport and the relationships with the sellers. I was able to tell that, you know, this is going to make a good living for me. You know, one of the questions I remember is that, so, you know, one of the biggest mistakes I’ve made is that when you look at financials and you look at cash and accrual basis, one of the businesses I bought was on a cash basis. So you know, everything that you’re making is going to be on the bottom line. What the seller had done was, let’s say, I think it was, you know, he’s selling in 2015 to 2014, he pre bought a bunch of inventory, using that same strategy of just both buying. So he pre bought everything. And so for the last 12 months cash, it looks really high, because he had pre bought all this inventory before that, right and so his inventory purchases were really low. And so your cash was really high. And so I bought it at that, you know, a cash basis instead of an accrual basis. That was one of my bigger mistakes and I overpaid for that business. And it was really hard to sustain something like that. But once I recognized that And just kind of learned from my mistakes, I definitely knew I was onto something now.

James Thomson  22:06  

You Have Recently launched a training program to help people understand how to buy businesses online. Tell me more about how that came to be. Tell me more about what has come of that now that you’ve got that out on available in the market.

Shakil Prasla  22:22  

Yeah, so, you know, prior to all these, you know, family offices coming, there weren’t that many multiple buyers out there like me and so people would always message me, you know, I have questions and stuff and a lot of them or, you know, similar questions over and over again. So I decided to just take a course. And it’s an eight module course and teaches you everything about how to find businesses that are on market, but also off market where you could get really good deals, and how do you go off to those off market deals to formulate your letter of intent? To ask 20 good questions to due diligence and the four things you should look into due diligence. The contracts, contracts are very important. And then finally, the first 30 days, the first 60 days to the first 90 days of ownership, yes, you’ve got a business. But you could easily screw that up. If you’re not running the business. If it comes with employees, and you just step in and start making changes. I know you’re rocking the ship, things would go sideways. So it teaches you what to do. And then the last module is called rinse and repeat. How do you do this? Again?

James Thomson  23:40  

Let me just fixate on one aspect. You talked about these companies that don’t have an online presence. We didn’t talk about that earlier in the discussion. How do you go and find businesses that don’t exist online yet?

Shakil Prasla  23:55  

Yeah, so when I mentioned that it was off market deals that are not selling But if you were to look for brick and mortar stores that have no online presence, you know, let’s just say I’m in Austin. A good thing you could do in Austin is go to meetups, meet with financial advisors, meet with accountants. You know, these two people are gatekeepers to a lot of businesses. Yes, you could have a conversation with these folks saying, Look, I’m in the I want to buy business I want to buy a business that’s not even selling online. Do you know anyone? You know, CPA, me know or colleague, or whatever, and pay him a finder’s fee. Look, I’m looking to buy a $100,000 business. I’ll give you five grand, just an introduction. Yeah. And people make those interests for you. Right. So, you know, that’s a great way to start something locally, or go to, you know, bizbuysell.com and look for manufacturing businesses or Austin based businesses and see if they have a local presence and then take Get online. I mean, I think that’s a great way to really grow your profits is I come across sellers that are maybe old or don’t want to embrace technology. Yes. And you come in and you take it online, and you make your money back quickly. Yes, yes.

James Thomson  25:20  

So talk to me about the escrow company you recently formed. What Why? Why did you go down this path?

Shakil Prasla  25:26  

Yes. So typically, whenever you’re about to buy a business, you want to transfer your funds into you have to give it to the seller, but you want to make sure you get all your assets first. So you put your money in escrow. And the money stays in escrow and then the seller will transfer you all the assets, the websites, the inventory. You know, all the acids that you put in the acid purchase agreement. Once you verify that You received all the assets, escrow gets released. Typically how the escrow company is done is made. Very few brokerage companies do it. But it’s a lot of lawyers that do it. And escrow.com is kind of the biggest company out there. And so it’s very fragmented. So I launched zoomescrow.com, which is specifically for online acquisitions. And I’ve learned the pain points of not knowing how long escrow is going to take, not being transparent, being expensive. And I just paid a flat fee. I have a lawyer on staff. Yeah. And it’s transparent the whole way you get an inside look, dashboard on the whole thing. And so it was just a pain point for me and there’s nothing better out there. So just like any entrepreneur, I am looking to fix the problem.

James Thomson  26:53  

Talk to me about favorite tools or companies that have helped your company to be where it’s at today. Are there outside partners who you’ve worked with, or tools that you’ve used within your company to accelerate your business?

Shakil Prasla  27:09  

You know it I, we started a new program last night and you forget to, it’s already out there. It’s called EOS entrepreneurial operating system where, you know, we hired a consultant to train us on this. And that’s been a game changer for us. You know, and it’s, it’s honestly as simple as just getting your partners and your team members on the same vision. You know, like, we just threw up a vision statement of, you know, what we’re trying to do and stuff, but it wasn’t really what we’re trying to do out there. And so, this consultant made us ask the hard questions. What do you see yourself doing in 10 years? What do you see yourself doing in three years? Do your employees and your CEOs resonate with something like this right, and so is getting everyone on Have a unified vision? And then what we’ve done is work backwards now, in 10 years, we want to be known as doing this. Okay, let’s break that up into three year commitments. Let’s break that up further into annual goals. And so from there, we create quarterly rocks and monthly actionable items. Yes. But this gave us a framework to make sure that we’re doing what we’re set out to do there. You know, they gave us a framework for KPIs to make sure that I’m sitting in the right seat, that I’m enjoying the tasks that I’m doing. You know, there’s this quadrant that to us where, you know, on the bottom, right, it’s, I don’t like to do, but yet I’m doing it. How do we just take those things out and see if we could delegate something like that. So it was just a mindset change, but it created a lot of positivity and when that when you create a lot of positivity, your momentum picks up, people start doing more work and are happier. And so it’s led to a lot of growth.

James Thomson  29:04  

Can you talk to me about any up and coming trends that we should be paying attention to, within this world of buying and selling Amazon businesses?

Shakil Prasla  29:14  

I do see a lot of mergers and acquisitions happening. But I see a lot of people a lot. I see a lot of manufacturing now, buying these Amazon businesses too. Right? I can see China eventually getting into this, you know, the, you know, a lot of people, a lot of people from China already selling on Amazon, but manufacturers that want to bypass all this made by their customers business out, you know, I also see Amazon agencies or Google agencies buying their customers out to you know, they’re making profitable income for them. But they’re only collecting, you know, let’s just say they charge 10% of ad spend. How do they keep that whole The whole piece of the pie. And so I do see, you know, those types of acquisitions happening where more buyers come in manufacturing, direct to consumer agencies buying and I think your multiple of online businesses, it’s going to keep going up. So honestly, like today is the best time to buy a business. James, one thing I didn’t mention is because of this whole COVID thing that’s happening, you know, SBA has launched what’s called an SBA debt relief, where for the first six months of your loan is going to be paid for by the US government division of SBA. So there’s never been something like this where your loan is going to be paid for for the first six months.

James Thomson  30:51  

I want to ask you one last question as we wrap up our discussion today. building a business and having the right people in place Finding the right kind of talent, the right kind of motivations. Everybody seems to be running towards Amazon in some way. Where are you finding success in terms of finding people that are trainable are already competent when it comes to understanding online channels?

Shakil Prasla  31:19  

I do a few different strategies. So you know, yes, we’ll look on indeed you will look on LinkedIn and monster will use other headhunter agencies, which will basically poach people, you know, if they’re already working on LinkedIn, or there may be working on competitor, or maybe through a network, and I’ll tell them look, I’m looking for someone that is a badass at Amazon ads, that optimizes or that’s a really good photographer, whatever it is, and they’ll go look for it and I pay him a finder’s fee. Yeah. But even Yes, you found someone, there’s this whole process of making sure they’re right fit for you. There’s different tests that you can do to make sure their personality matches with you. But, you know, one thing I’ve learned is people do make or break your company. I wouldn’t be here where I am today without the people in my company. We have 80 employees over 80 employees now and I value each and every one of them. And so you want to make sure your, your, your hires are good. Otherwise they could break your company, but trust the process of hiring someone and training them.

James Thomson  32:40  

Shakil, I want to thank you for joining us today on the Buy Box Experts podcast. For those of you interested in learning more about Shakil and his business, please visit SZventures.com

Shakil Prasla  32:51  

Thanks, James.

James Thomson  32:52  

And now to finish today’s podcast. I’d like to share some final thoughts for third party sellers to be successful on Amazon at a critical level. We’ll be soliciting feedback from customers. We at Buy Box Experts are really big fans of the team at eComEngine, and it’s tools that help Amazon sellers to simplify the process of messaging customers of Amazon orders. To learn more, go to ecomengine.com. And with that, I want to thank you for listening today and I look forward to joining you next time on the Buy Box Experts podcast.

Outro  33:24  

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.