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Should entrepreneurs always "Follow the numbers"?
Should you be led by the numbers in your business buying and selling decisions? Let's deal with that today.
Having previously bought various properties, I'm now considering selling one A selling or buying decision around any asset, including property, or a business is a lot of the same sort of thing.
So you're buying an asset or selling an asset, which has a capital value, and then it will, if it works well, generate cashflow, sometimes negative if you get it wrong.
So should you be led by the numbers?
I've been on a train with a Google sheet, working out the capital gains of selling a residential property versus keeping it.
What's interesting is how one arrives at decisions in business the nice thing about business is numbers guide you. Should they lead you? Should they guide you? Should you ignore them?
Let's take one extreme at a time and examine how it works.
Thesis: Ignore numbers (go with your gut)
Extreme number one is to ignore the numbers and go with your guts, follow your intuition.
There's a difference, between your guts and immediate instinct.
Instinctive reaction to pain causes short-term decisions
Running a business or owning property.
Can be painful. , there's legal liability people hassling you, spending your own money and time and regulations always increasing. Both in business and residential property. My experience in the uk, Amazon selling is not getting any less full of regulations particularly if you sell in the eu or you know, if you're looking at Amazon's legal changes.
Okay, so gut reaction might be just sell the damn thing because it's painful, but anything worthwhile can be painful. That's probably not a good plan.
Now, what about intuition? If your intuition says, it's hard work, but the pain is not worth the gain. You might be right. Intuition can, misguide us because we overrate immediate pain and underwrite future pain. So if we do something now that makes them the easy but cost you a lot of pain in the future, that's not a very rational way of making decisions.
Pure instinct or intuition has its dangers. So in the pure form, probably unwise, although one should not ignore one's intuition as an entrepreneur,
Antithesis: Being led purely by the numbers
Here's version two, led by the numbers, not guided by the numbers, but just led by them.
The classic example of that mistake is in the the lockdown period or just after that, a lot of aggregators, private equity companies with a lot of money went out shopping for e commerce businesses based on Amazon. They made multiple mistakes, but one of them was based simply on following the numbers.
A lot of very smart people, many of whom I interviewed for the podcast at the time, were involved in that, but they didn't have Amazon common sense or e commerce common sense they were good at, number analysis. So they analyzed the numbers but what they didn't take out was any kind of common sense.
Why did the aggregators get it wrong in 2021-22?
If you look at the root cause of the massive increase in revenue and profits of e commerce businesses around 2019, 2020, was obvious. The pandemic and lockdowns particularly in the UK and US. Were extreme.
I was in the UK at the time, so yeah, that is in retrospect, I guess, very obvious what was, was going on there. Even at the time it wasn't rocket science to think there would be some kind of aversion to shopping in a physical location after the Pandemic, how much was going to be hard to call, but it wouldn't be zero. And there was going to be some reversion to spending discretionary earnings.
So consumer spending, you could spend on whatever that isn't just your rent or mortgage on some services such as entertainment, going out to pubs. Technically they're buying products, but they're kind of consuming them immediately. So it's kind of a service or other services like going to the cinema or going... -
Imagine you're a thriving Amazon seller. You log in to Seller Central, download your settlement report, and receive your net deposit. But here's the catch: the numbers don't quite paint a clear picture of your finances. Amazon reserves make understanding your true profit, profitability, and cash flow a challenge.
Now, add multiple sales channels to the mix. The complexity grows exponentially, leaving you scrambling to reconcile data and make sense of your finances. This is where AI-powered accounting steps in, offering a lifeline for busy eCommerce brand owners.
[00:00] - Importance Of Clean Data For Business Owners[00:44] - Introduction And Context Setting[01:07] - Challenges Of Single-Channel Amazon Selling[02:10] - Webgility's Data Integration Process[03:02] - Multi-Channel Data Consolidation[03:38] - AI Assistant's Role In Data Analysis[04:34] - Automating Data Transfer To Accounting Systems[05:16] - Computers' Efficiency In Numerical Calculations[05:59] - Common Issues In Data Integration[06:20] - Importance Of Consistent SKU Naming Conventions[07:31] - Webgility's Approach To Clean Data Setup[08:16] - Challenges Of Maintaining Consistent Data Practices[09:24] - Development Of AI-Powered Product Mapping Capabilities[10:40] - Difference Between Mechanical Systems And Intelligent Systems[11:58] - Two Approaches To Accounting Systems[13:39] - Impact Of Clean Books On Business Valuation[14:50] - Progression From Top-Line Focus To Profit And Valuation[15:17] - Introduction To Webgility's Services[16:10] - Webgility's Resources And Upcoming Webinars[16:39] - Importance Of Financial Preparation For Holiday Season[17:06] - Final Advice On Understanding Business Profitability[17:31] - Conclusion And Thank You
How AI Simplifies Your Accounting Nightmare
Webgility leverages the power of AI to transform your eCommerce finances. It can handle data from the most granular level (SKU) to your overall settlement reports, all presented in a user-friendly, centralized dashboard. Going beyond Amazon, Webgility integrates with other platforms and payment processors, offering a comprehensive overview of your finances, regardless of your sales channels.
Imagine logging in and having a virtual assistant at your fingertips, ready to answer your financial questions. AI-powered tools allow you to seamlessly connect your data with popular accounting software like QuickBooks. This enables you to record granular-level fees, identify trends over time, and gain valuable insights, all within Webgility or directly in your accounting software.
Clean Data: The Foundation for Accurate Finances
But before diving into AI, let's address the elephant in the room: clean data. Garbage in, garbage out is still a golden rule in the digital age. No matter how powerful AI is, it can't magically transform messy data into financial clarity.
The key to success starts with a well-organized product catalog. Develop a consistent SKU naming convention across all your channels. This seemingly simple step ensures accurate sales and profit tracking over time. Remember, inconsistent data leads to inaccurate reports, hindering your ability to make informed decisions.
While AI excels at processing unstructured data, it's not a miracle solution.
Here's where Webgility shines. It helps you get started the right way by offering features like:
SKU naming guidance: Webgility assists in establishing a consistent naming convention for your catalog.
On-the-fly account creation: Streamline the process by having Webgility automatically create clean accounts as you manage your business.
Professional onboarding: Webgility offers onboarding services to ensure your data is structured correctly from the get-go.
In some instances, AI can even help improve existing data. Webgility is constantly developing tools to analyze potentially flawed data, like identifying similar SKUs that may be duplicates. This can extend to customer and client data as well,... -
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In today's rapidly evolving digital landscape, artificial intelligence (AI) has emerged as a game-changer for businesses of all sizes. For eCommerce sellers, AI offers a powerful tool to streamline operations, enhance customer experiences, and gain a competitive edge. This guide will delve into how SMB eCommerce businesses can leverage AI to optimize their operations, improve decision-making, and achieve sustainable growth.
[00:00] - AI Benefits For Business Owners And Consumers[01:01] - Introduction To The 10K Collective Podcast[01:45] - Parag Mamnani's Background And Founding Of Webgility[02:36] - Challenges Of Multi-Channel E-Commerce And Inventory Management[03:34] - Financial Systems As The Cleanest System Of Record[04:47] - Complexity Of Pricing And Inventory Tracking[06:00] - AI Adoption In E-Commerce Organizations[07:16] - Early Days Of AI Integration In E-Commerce Platforms[08:30] - Difference Between Generative AI And Regression-Based AI[09:45] - Barriers For SMBs In Adopting AI Technologies[11:29] - AI For Small Business Operations[12:42] - Bifurcation Of AI Technology In Business[14:29] - Key Capabilities Of AI Assistants In Business Operations[15:52] - Importance Of Predictive Power In AI For Business Decisions[17:16] - Challenges In Forecasting Due To Unpredictable Events[19:12] - Impact Of Black Swan Events On Predictions[20:31] - Limitations Of Forecasting For Small Businesses[22:03] - Factors For Successful Future Predictions In E-Commerce[23:38] - Importance Of Blending AI With Human Intuition[24:53] - AI Assistant Inclusion And Learning From Customer Expectations
Understanding AI's Potential for eCommerce
AI, with its ability to analyze vast amounts of data and learn from patterns, can significantly benefit eCommerce sellers in various ways. By automating routine tasks, providing valuable insights, and personalizing customer experiences, AI can help businesses increase efficiency, reduce costs, and drive sales.
The Benefits of AI for eCommerce
Enhanced Efficiency: AI can automate repetitive tasks such as order processing, inventory management, and customer service, freeing up valuable time for more strategic activities.
Improved Decision-Making: By analyzing data and identifying trends, AI can provide valuable insights to inform business decisions, such as pricing, marketing, and product development.
Personalized Customer Experiences: AI-powered recommendation engines can offer tailored product suggestions to customers, increasing engagement and loyalty.
Optimized Operations: AI can help streamline supply chain management, improve inventory forecasting, and optimize logistics, leading to cost savings and improved customer satisfaction.
Leveraging AI for Operational Excellence
Inventory Management: AI can help optimize inventory levels by predicting demand, preventing stockouts, and reducing excess inventory costs.
Pricing Optimization: AI algorithms can analyze market data and competitor pricing to determine optimal pricing strategies, maximizing revenue and profitability.
Fulfillment and Logistics: AI can streamline the fulfillment process by optimizing shipping routes, reducing delivery times, and improving customer satisfaction.
Customer Service: AI-powered chatbots can provide instant customer support, answer common queries, and resolve issues efficiently.
Harnessing AI for Marketing and Sales
Personalized Marketing: AI can help create targeted marketing campaigns based on customer preferences, demographics, and purchase history, improving conversion rates.
Customer Segmentation: AI can segment customers into different groups based on their behavior and characteristics, allowing for more effective marketing strategies.
Predictive Analytics: AI can predict customer behavior and identify potential churn, enabling proactive retention efforts.
Implementing AI in Your eCommerce Business
Identify Your Goals: Clearly define the specific areas ... -
The world of e-commerce thrives on innovation, and Amazon remains at the forefront. For brand owners, a successful product launch on this platform can be a game-changer. However, navigating the vast Amazon marketplace can be daunting, especially with limited resources. This guide equips you with the knowledge to strategically utilize PPC (pay-per-click) advertising to launch your product and propel your brand forward.[00:59] - Discussing Broader Expectations For PPC Strategies[01:26] - Subjectivity In Amazon PPC Strategies[01:56] - Example Of Keyword Strategy For Whiskey Products[03:14] - Separating Brands And Search Terms In Campaigns[04:01] - Gradual Introduction Of Different Ad Types[04:41] - Importance Of Consistency In PPC Strategy[05:18] - Balancing Patience And Action In PPC Management[06:39] - Importance Of Data And First Sales In PPC[07:28] - Periodic Review Of PPC Campaigns[08:06] - Adapting To Changes In The E-commerce Ecosystem[09:02] - Importance Of External Traffic For Amazon[09:48] - Balancing Organic And PPC Efforts[10:40] - Learning And Testing In Different Amazon Categories[11:09] - Impact Of Pricing On PPC Performance[12:09] - Importance Of Honesty And Transparency In Agency Work[13:00] - Understanding The Product And Target Market[14:31] - Overview Of Enzo Brands Services[15:37] - Enzo Brands' Experience With Various E-commerce Platforms[16:15] - Enzo Brands' Approach To Client Relationships[17:20] - Importance Of Brand Message On Amazon[18:20] - Keeping Things Simple And Understanding Basics
Understanding Amazon Ads Broad Match and Auto Campaigns
Amazon Ads offers various campaign structures, each with its advantages. Let's delve into broad match and auto campaigns:
Broad Match: This approach casts a wide net by capturing searches containing all or some of your keywords. While broad match can generate a high volume of impressions, it requires careful monitoring to ensure your ads reach the right audience.
Auto Campaigns: These campaigns leverage Amazon's algorithm to automatically identify relevant keywords for your product. While convenient, auto campaigns can be imprecise and necessitate ongoing refinement.
Striking the Balance: Broad Match vs. Targeted Keywords
Michael Kahn's Insight: Michael Kahn, an industry veteran with Enso Brands, emphasizes the value of starting with broad match campaigns. This initial broad approach helps you discover the keywords most likely to resonate with your target audience.
Beyond Long-Tail Keywords: Conventional wisdom dictates a heavy focus on long-tail keywords for Amazon PPC. However, this isn't always the golden rule. Depending on your product category, high-volume keywords like "whisky" or "scotch whisky" might yield excellent results.
Building a Robust PPC Strategy: Beyond Broad Match
While broad match offers valuable insights, a successful PPC strategy requires more than just initial experimentation. Here's how you can craft a results-oriented approach:
Sponsored Product Ads: This core PPC tactic showcases your individual products to targeted audiences based on keywords and product listings.
Harvested Keywords: Leverage data from broad or auto campaigns to identify high-performing keywords for future manual campaigns, allowing for more focused targeting.
Negative Match: Strategically exclude irrelevant keywords that generate clicks but don't lead to conversions. This helps you refine your targeting and save budget.
Branded Search Terms: Track branded search terms separately to assess brand awareness and avoid skewing overall campaign data.
Video and Headline Ads: Exploring Additional Options
While sponsored product ads are a strong foundation, consider incorporating video and headline ads for a more comprehensive approach:
Video Ads: These compelling visuals can effectively communicate your product's unique features and benefits, driving engagement and conversions. -
The world of e-commerce is booming, and Amazon remains a major player. For brand owners, a successful product launch on this platform can be a game-changer. But how do you stand out in a crowded marketplace, especially when resources are limited?
[00:00] - Introduction To The Podcast[01:31] - Introduction Of Michael Kahn From Enso Brands[02:13] - Michael's Background And Location[02:44] - Defining Launching On PPC[03:12] - Essential Preparation Before Launching[04:52] - Importance Of Competitor Analysis[06:28] - Understanding The Competitive Landscape[07:01] - Types Of Amazon PPC Ads[08:31] - Amazon Ads Team Innovation[09:14] - Focus On Video Ads For Product Launch[11:33] - New Partnership Between Amazon And TikTok[11:50] - Financial Expectations For Ad Spending[13:47] - Balancing Ad Spend And Patience[14:51] - Example Of Ad Spend Strategy Over Time[16:42] - Three-Month Timeline For Ad Strategy[17:46] - Gradual Adjustment Of Ad Spend[18:59] - Warning Against Abrupt Changes In Ad Strategy
Introducing Enso Brands and Michael Kahn:
This guide draws expertise from Enso Brands, a full-service agency for Amazon sellers. Led by industry veteran Michael Kahn, Enso offers brand acquisition, management, advertising expertise, and even warehousing solutions.
Launching on Amazon: New Products or Revivals
Your launch strategy will differ depending on whether you're introducing a brand new product or reigniting interest in a dormant listing. This guide tackles both scenarios, offering actionable tips to maximize your Amazon advertising impact.
Pre-Launch Checklist: Prep for Success
Before diving into PPC (pay-per-click) advertising, ensure a solid foundation for your launch. Here's what you need:
Know Your Target Market: Demography and psychographics are crucial.
Competitor Analysis: Identify direct and indirect competitors. Analyze their pricing, reviews, and ad strategies (including video usage).
Keyword Research: Conduct thorough keyword research to ensure your listing appears in relevant searches.
Listing Optimization: Craft compelling product descriptions with high-quality A+ images.
Vine Reviews: Consider leveraging Vine reviews for early, honest feedback.
Launching with PPC: A Powerful Toolset
Amazon offers a variety of advertising options to consider:
Product Ads: Showcase individual products to targeted audiences.
Branded Ads: Increase brand awareness and build recognition.
Video Ads: Effectively communicate your product's unique features and benefits.
Headline Ads: Enhance brand visibility, though conversion rates may vary.
Remember, Amazon provides tools to scale your spending, but consider utilizing third-party ad management solutions for added efficiency.
Optimizing Your Campaigns: What Works for Your Product
The key to successful Amazon advertising is finding what drives conversions for your specific product. Here's what Michael Kahn recommends:
Always A/B Test: Experiment with different approaches to identify the most effective messaging and visuals.
Embrace Video Ads: Consider video ads to showcase your product's unique selling points.
Start with Sponsored Products: These ads offer a good balance between conversion and cost efficiency.
Headline Ads for Brand Awareness: While conversion rates might be lower, they can be valuable for building brand recognition in certain categories.
Client Story: Video Ads Highlight a Unique Feature
Michael shares a client example where video ads were instrumental in showcasing a product's unique feature that wasn't easily conveyed through text descriptions. These compelling visuals helped differentiate the product from competitors and justify a higher price point.
ACoS, High Spend, and "Bleeding Keywords" During Launch
ACoS (Advertising Cost of Sale): Achieving the right balance between ACoS, high ad spend, and "bleeding keywords" (unprofitable keywords) is crucial during launch. -
Michael Veazey Welcome to Amazon Newsday. I'm your host, Michael Veazey. Today, a couple of stories that are not in the last couple of weeks, but they were so important, we didn't want you to miss them.
Amazon Tiktok Integration Announced
Amazon TikTok integration.
On the 9th of August, Amazon and TikTok officially announced their partnership, enabling users to discover and purchase Amazon products directly within the TikTok app.
The integration allows TikTok users to see Amazon product recommendations on their For You feed. Users can link their TikTok and Amazon accounts through a secure one time setup process. Once accounts are linked, Amazon customers can then complete checkout within TikTok without leaving the app, providing a faster and more frictionless experience.
Users in the U S. who linked their accounts will see real time pricing, primary eligibility, delivery experts, and product details on select Amazon product ads in TikTok.
"Project Handshake"
This partnership is part of Amazon's Project Handshake, a broader Amazon strategy which aims to merge social media with e commerce.
Similar integrations have been made with platforms like Meta and Snapchat. For Amazon sellers, this integration could open up new opportunities to reach younger audiences through TikTok, potentially making sponsored display and DSP ads more effective.
This integration is initially launching only in the United States with no specific timeline provided for expansion to other regions. This partnership represents a significant step in integrating e commerce with social media, potentially reshaping online shopping behaviors and offering new avenues for brands to reach consumers.
Amazon required to recall unsafe products
Amazon has been required to recall unsafe products.
In a landmark decision, the U. S. Consumer Product Safety Commission, the CSPC, has ruled that Amazon is legally responsible for hazardous products sold by third party sellers through its Fulfillment by Amazon program. This July 29th ruling classifies Amazon as a distributor under the Consumer Product Safety Act, making it liable for over 400, 000 potentially dangerous items sold on its platform.
The case focused on products like flammable children's sleepwear, faulty carbon monoxide detectors and unsafe hairdryers.
As a result, Amazon must now develop plans to notify purchasers and the public about these hazards and provide refunds or replacements.
Wider implications for e-commerce sellers
This decision could have far reaching implications for other e commerce platforms, potentially subjecting them to similar notice reporting and recall obligations as traditional retailers. It underscores the CPSC's commitment to enforcing compliance across all
parties in the consumer product distribution chain.
Amazon plans to appeal the ruling, arguing that it had already taken swift action to warn consumers and offer refunds when notified of safety issues. However, the CPSC found these measures inadequate, emphasizing the importance of public notice for all potentially affected customers. -
Trainers. Not a market that is obviously a winner for new products. If a client came to me with the idea of launching trainers, the names "Nike" and "Adidas" would come to mind as fierce competitors. And yet here is Skechers, making waves with a new trainer. But not just any trainer. And not just competing for the mass market. No, Skechers has created and expanded a wonderful niche market for itself selling trainers to people with a very specific need. One that Michael can speak to from personal experience!
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Kody Thompson, founder of WrkPod, isn't your average entrepreneur. He bootstrapped a web development company from a shoestring budget into a multi-million dollar powerhouse, generating over $5 million in profit. One of his biggest success factors? Building a high-performing team in the Philippines.
This guide delves into Kody's journey, exploring how he leveraged Filipino talent to achieve explosive growth. We'll uncover his recruitment strategies, team management philosophies, and the key benefits of outsourcing for ecommerce businesses.
Time Stamp
[00:00] - Introduction To The Podcast And Host Michael Veazey[01:09] - Welcome To The 10K Collective Podcast[01:26] - Introduction Of Guest Cody Thompson From WorkPod[02:02] - Early Stages Of Building A Remote Team[03:29] - Mental Leap To Get Started With Outsourcing[03:48] - Using Freelance Platforms And Virtual Staff Finder[05:03] - Setting Up A Physical Office In Dumaguete Philippines[05:50] - Renting Space From Silliman University[07:17] - Creating An Internship Program With University Students[08:57] - Navigating The Challenges Of Internship Programs[10:16] - Building Relationships With University Deans[11:56] - Streamlining The Hiring Process Through Internships[13:03] - Importance Of Local Relationships In Recruitment[14:29] - Introduction To WorkPod And Its Services[15:50] - Providing Support And Frameworks For Managing Remote Teams[17:03] - Common Management Mistakes With Remote Staff[18:58] - Learning From Management Mistakes And Experiences[20:24] - Challenges In Positioning Talented Employees[22:12] - Introduction Of VA Task Outsourcing Checklist[24:01] - Closing Remarks And Invitation To Join 10K Collective Mastermind
From Freelance Hustle to Global Success: The Power of Outsourcing
Kody's story begins like many others – a freelance graphic designer trading time for money. But Kody recognized the limitations of this approach. "I wasn't getting paid when I was doing bookkeeping or social media," he explains. "My value lies in design."
This realization sparked a pivotal shift. Kody started outsourcing administrative tasks, freeing him to focus on his core skills. This newfound efficiency fueled the growth of his web development company, propelling his annual revenue to a staggering $700,000 with a team of just 5-6 Filipino virtual assistants.
Building a Dream Team: Beyond Remote Work
While outsourcing tasks proved beneficial, Kody realized the limitations of a fully remote team. Managing talent spread across different locations posed challenges. The solution? Building a centralized team in the Philippines.
But where to start? Kody identified Dumaguete City, home to top universities brimming with tech talent. He secured office space near the university, forging partnerships with deans and establishing an internship program. This provided direct access to top students, many of whom transitioned into full-time positions after graduation.
Finding the Right Talent: Avoiding Common Mistakes
Outsourcing success hinges on finding and retaining skilled personnel. Kody highlights some of the most common pitfalls:
Assuming everyone learns like you: Different people learn in different ways. Tailor your training methods to ensure effective skills transfer.
Adaptability: Resistance to change is a common obstacle. Foster a culture that embraces evolution and continuous improvement.
Unreliable Payment: Not paying staff on time is a recipe for disaster. Develop a robust payroll system and prioritize on-time salary payments.
Inadequate Training: Throwing new hires into the deep end without proper training sets them up for failure. Invest in comprehensive training processes and establish clear procedures.
WrkPod: Beyond Recruitment, Building a Thriving Ecosystem
Kody's passion extends beyond simply connecting businesses with Filipino talent. WrkPod offers a comprehensive ecosystem to empower entrepreneurs: -
Kody Thompson, founder of Wrkpod, understands the ecommerce journey. He bootstrapped a web development company from a $250 startup into a multi-million dollar powerhouse generating over $5 million in profit. Today, we'll dissect his "build to sell" approach, equipping you to scale your ecommerce brand for a successful exit.
Time Stamp
[00:00] - Introduction To The Podcast[00:20] - Michael Veazey Introduces The 10k Collective Mastermind[01:04] - Welcome To The 10k Collected Podcast[01:34] - Introduction Of Cody Thompson From WorkPod[02:24] - Why Cody Started A Graphic Design Business[03:41] - Transition From Solo Designer To Subscription Business[05:12] - Developing A Subscription Model For Websites[07:07] - Lessons From Niching Down And Customer Response[08:34] - Creating A Win-Win Business Model[09:46] - Path To Exiting The Business[11:26] - Decision To Sell The Web Development Company[13:48] - Finding A Buyer And Preparing For Sale[15:49] - Building A Business Ready To Sell[18:02] - Learning From Mentors And Decision-Making Process[19:44] - Negotiating Flexibility In Business Contracts[21:38] - Lessons On Utilization In E-commerce[23:11] - Things To Do Differently In An Exit[24:51] - Importance Of Business Community And Support[26:24] - Introduction To WorkPod's Business Model[28:58] - Free Checklist For Outsourcing Tasks[30:23] - Closing Remarks And Mastermind Promotion
Building Your Foundation: From Passion Project to Scalable Business
Many ecommerce ventures begin as passion projects. Kody initially offered freelance graphic design services to support his volunteer work. However, his vision evolved. Recognizing the limitations of selling time for money, he pivoted towards a subscription-based web development model.
The "Aha" Moment: Identifying a Lucrative Niche & Building Recurring Revenue
Kody's turning point came when he realized the high cost of custom websites deterred small businesses. He observed a need within the fitness industry and pivoted again, creating website templates specifically tailored for gyms. This niche focus, combined with a subscription model, ensured recurring revenue and a scalable business.
Building a Business That Runs Without You: Systems, Documentation, and Delegation
Building to sell requires a business independent of your personal involvement. Kody achieved this by:
Systematizing processes: Creating clear workflows for all aspects of the business.
Detailed documentation: Documenting procedures for future reference and team training.
Clean financials: Maintaining accurate and up-to-date financial records.
Daily bookkeeping: Ensuring financial transparency for potential buyers.
The Power of Team: Building a Culture of Excellence
A strong team is fundamental to a thriving ecommerce business. Kody prioritized building a team he enjoyed working with, fostering a positive work environment. This translates into higher employee retention and a more attractive business proposition for potential buyers.
The Exit Strategy: Setting the Stage for a Lucrative Sale
Many entrepreneurs underestimate the importance of planning for an exit from the start. Here's why Kody built with the goal of selling:
Reduced reliance on personal time: A successful business generates revenue regardless of your daily involvement.
Reliable, recurring revenue: Predictable income stream attracts higher valuations from potential buyers.
Lower risk: A well-systematized business with a strong team mitigates potential risks associated with ownership changes.
Beyond Financials: The Importance of Preparations Beyond the Numbers
Kody built a business attractive to buyers in ways that go beyond just the bottom line. Here are two crucial considerations:
Data Room Readiness: Kody streamlined the due diligence process by having all necessary financial and operational documents readily available.
Strong Team: The quality and expertise of your team significantly imp... -
Amazon Newsday 3 Sep 2024
Unfulfillable FBA inventory to be removed after 23 days
Unfulfillable FBA inventory is to be removed after 23 days.
Amazon is updating its FBA inventory-required removals policy.
Amazon claims this is to create more room for seller products and to help sellers to save on storage fees.
Starting on September the 16th 2024, if sellers have not enabled automated unfulfillable settings in the UK or the EU, Amazon will dispose of or donate unfulfillable inventory after 23 days' notice instead of the current 30 days.
To avoid disposal, Amazon says sellers can create a manual removal order or configure automated settings to either liquidate the inventory to recover some value straight away or return inventory and have it sent to a seller return to address or a third-party freight forwarder.
Once they create a disposal order after 23 days' notice, Amazon warns it cannot be cancelled.
Change to the digital services tax charges from October.
On October the 1st, 2024, Amazon will introduce a digital services fee for digital services taxes, DST that are implemented by the governments of Canada, the UK, France, Italy, and Spain. The typical DST Rate is 2 percent in the UK and 3 percent in Canada, France, Italy, and Spain.
Since 2021, Amazon has apparently accounted for DST by increasing selling on Amazon fees in the UK, France, Italy, and Spain, and by increasing fulfilment by Amazon fees in the UK and France, but starting from October 1st, Amazon will reduce those fees and account for this cost by introducing a standalone digital services fee.
DST or digital services taxes charges are unpredictable as they vary based on the location of the seller's business, the location of the buyer and other factors. And so Amazon has decided rather than basing the digital services fee on those variables, which will create an unpredictable unpredictable business impact, um, Amazon will introduce a fixed digital services fee only based on the seller's location and the store in which the sellers sell.
Where to see the digital services fee applied to seller's orders
If sellers wish to see where their digital services fees are being applied to the orders from September the 1st, sellers can preview the fee in the revenue calculator and starting on October the 1st, sellers will be able to track digital services fees via the transaction view in the payments reports.
In order to view the fees across different stores and different countries, the SKU economics report will provide historical proceeds from sales. Returns fees and ad spend and net proceeds by SKU for each store in which the sellers sell.
Change to coupon code stacking settings
Changes to coupon code stacking settings.
Amazon has added an extra setting to give sellers control over whether coupons can be stacked by consumers. Stacking coupons means that, for example, a 20 percent offer could be combined with a 5 off offer to give a consumer a larger discount on an item than a seller intended.
Amazon have created a new tool called Stacked Promotions Enablement. This tool enables sellers to choose how they stack coupons, percentage off, or buy one get one promotions. It's thought this will be particularly useful for protecting sellers on high-volume days such as Prime Day. -
Sometimes consumer products aren't just confusing or overly complex. Sometimes they can be downright difficult to use. They can even be dangerous. They might even be deadly. Such is Mike's loft ladder. Difficult, frustrating and downright dangerous, this is an example of consumer product design sins to avoid at all costs.
If you design products - or have them designed for you, you MUST think about this. Even if you're "just" ultimately liable if someone hurts themselves, you've got to be so careful not to produce products that harm your users.
Otherwise, it's just a matter of time before someone hurts themselves using your product. Or you're just hoping for good luck. And luck, as the Marines say, is not a strategy. -
Scaling an Amazon FBA business can be challenging, especially with limited capital. However, by following a strategic approach and leveraging the right tools and techniques, you can achieve significant growth. In this guide, we'll explore a proven checklist approach to scaling your Amazon FBA business using remote staff, without spending your life managing people. We are drawing from the insights of amazing scale expert, Steven Pope of My Amazon Guy, famous for hiring 100 staff in under 30 days.
Time Stamp
[00:00] - Stick To What You Know[00:14] - Introduction To 10k Collective Mastermind[01:00] - Introduction Of Steven Pope From My Amazon Guy[01:34] - Scaling A Sellable Amazon Business[01:53] - Importance Of Business Books On Scaling[02:21] - Avoiding Trend Following In Product Selection[03:09] - Importance Of Product Knowledge[04:46] - Product Expansion And Customer Avatar[05:44] - Importance Of Checklists And SOPs[07:24] - Outsourcing And Labor Cost Management[08:52] - The Checklist Manifesto And Airline Industry Comparison[10:13] - Quality Assurance In Business Operations[11:19] - Hiring And Training Interns At Scale[13:39] - Leveling Up Life And Creating Jobs[14:50] - Emphasis On Results Over Direct Control[16:13] - Employee Performance Evaluation Criteria[18:19] - Balancing Business Success And Personal Adventure[19:42] - Simplifying Business Operations[20:55] - The Importance Of Having The Right People[21:29] - Services Offered By My Amazon Guy
The Road Less Traveled: A Checklist Approach
Unlike many business books that focus on data-driven product selection and trend following, this approach emphasizes the importance of sticking to what you know and understanding your niche.
1. Product Selection: Beyond the Data
Avoid Trend-Chasing: While data tools can be helpful, don't rely solely on them to select products. Trends can be fleeting, and by the time you source and ship your products, you might find yourself with excess inventory.
Leverage Your Expertise: Focus on products that align with your knowledge and passion. This will give you a competitive edge and make it easier to navigate challenges.
2. Product Expansion: Stick to Your Strengths
Know Your Customer: Have a clear understanding of your target customer's needs, preferences, and pain points. This will guide your product expansion decisions.
Plan Ahead: Outline your next 10 products, including sourcing, quotes, and FOB details. This will streamline the scaling process and minimize risks.
Building a Scalable Foundation: Checklists and SOPs
The Power of Checklists: Implement checklists for various tasks to ensure consistency, reduce errors, and improve efficiency.
Overcoming Sophistication: Don't let complexity hinder your progress. The more checklists you have, the better your business will run.
Learning from the Medical Industry: Take inspiration from the medical field, where checklists have dramatically improved patient outcomes.
3. Outsourcing and Offshoring: A Strategic Approach
Leverage Global Talent: Consider outsourcing non-core tasks to skilled professionals in other regions. This can help reduce costs and access specialized expertise.
Embrace Filipino Culture: Many entrepreneurs have found success in working with Filipino teams, who are known for their work ethic, reliability, and adherence to processes.
Creating a System: SOPs and Education
Standardize Processes: Develop clear standard operating procedures (SOPs) for all key tasks to ensure consistency and efficiency.
Train Your Team: Educate your team on the SOPs and empower them to contribute to improvements.
Continuous Improvement: Regularly review and update your SOPs to adapt to changes in the market and your business.
Building a Moat: Your Unique Advantage
Develop Your Niche: Become an expert in your chosen niche. This will make it difficult for competitors to replicate your success. -
Andy Jassy recently gleefully shared increased profits for Amazon shareholders. Sadly, those profits came directly from Amazon Ads - which in turn come directly from your profits as an Amazon Seller.
With the ever-evolving Amazon marketplace, it’s essential to optimize your ad spend to maximize returns. Here Steven Pope, manager of top Amazon agency My Amazon Guy, gives us his straightforward strategies to actually reduce your Amazon ad spend without cratering sales.
Time Stamp
[00:00] - Stick To What You Know For Amazon PPC[00:23] - Introduction To 10k Collective Mastermind[01:07] - Introduction Of Steven Pope From My Amazon Guy[01:42] - Scaling Amazon Advertising Costs[02:27] - Internal And External Advertising Strategies[03:41] - When To Look At Alternative Advertising Options[05:56] - Prioritizing Tasks For Amazon Sellers[07:24] - Focusing On Traffic Generation[08:15] - Sponsored Product Ads And Budget Allocation[09:25] - Rules For Keyword Negation[10:45] - Avoiding Fixation On Outdated Marketing Ideas[12:18] - Segmentation And Keyword Prioritization[13:50] - Dangers Of Excessive PPC Automation[15:57] - Simplifying Amazon PPC Accounts[18:20] - Importance Of Simplicity In Scaling Businesses[21:15] - Framework For Eliminating Keyword Cannibalization[23:00] - Day Parting Strategy For Amazon PPC[27:27] - Impact Of SKU Count On Business Sellability[33:39] - Overview Of My Amazon Guy Services
Understanding Your Amazon Ad Spend
Before diving into optimization techniques, it's crucial to understand your current ad spending patterns. Analyze your Amazon Seller Central account to identify key metrics such as:
Average Cost Per Click (CPC): How much you're paying for each click on your ads.
Click-Through Rate (CTR): The percentage of impressions that result in clicks.
Conversion Rate: The percentage of clicks that lead to purchases.
Advertising Cost of Sales (ACOS): The percentage of your sales revenue spent on advertising.
By analyzing these metrics, you can pinpoint areas where you can make improvements.
Leveraging the Amazon Ecosystem
Organic Search Optimization: Prioritize optimizing your product listings for organic search results. Use relevant keywords, high-quality images, and detailed product descriptions.
Amazon Prime Benefits: Encourage Prime memberships by offering Prime-exclusive deals or faster shipping. This can increase your product visibility and sales.
Amazon Brand Registry: If eligible, enrol in Amazon Brand Registry to access additional tools and benefits, such as custom store pages and enhanced brand protection.
Exploring External Opportunities
Social Media Advertising: Platforms like TikTok, Instagram, and Facebook can be effective for reaching new audiences and driving traffic to your Amazon listings.
Influencer Marketing: Partner with influencers in your niche to promote your products and reach a wider audience.
User-Generated Content (UGC): Encourage customers to share their experiences with your products on social media. This can help build trust and credibility.
Determining the Right Focus
When deciding where to allocate your resources, consider the following factors:
Spend: If you're spending over $50,000 per month on Amazon ads, exploring alternative channels might be beneficial.
Category: The competitiveness of your product category will influence your marketing strategy.
Brand Type: Private label (PL) brands may have different marketing needs compared to arbitrage brands.
Optimizing Your Amazon PPC Campaigns
Keyword Strategy: Focus on broad and auto keywords to reach a wider audience and discover new opportunities.
Negative Keywords: Use negative keywords to exclude irrelevant search terms and reduce wasted spend.
Bid Management: Regularly adjust your bids based on keyword performance and campaign goals.
Campaign Structure: Create separate campaigns for different product categories or target audiences to improv... -
Amazon Newsday 27 August 2024
Amazon Newsday 27 August 2024
If it's Tuesday, it's Amazing FBA Newsday, the show for Amazon seller news.
Here's your host, Michael Veazey!
This is Michael Veazey and welcome to Amazon Newsday.
Amazon Delivery Drone Noise Annoys Texas Residents
Amazon delivery drone noise has been annoying some residents in Texas.
Residents of College Station, Texas are troubled by noise pollution from Amazon's delivery zones, a concern as Amazon seeks to expand its Prime Air program. Amazon has asked the Federal Aviation Administration, the FAA, to increase drone flights from 200 a day to 469 per day, which has raised concerns amongst residents living near the drone facility.
The buzzing noise from drones is a significant issue, potentially leading to stricter regulations or bans that could hinder Amazon's expansion plans. Amazon began drone deliveries in 2022 in College Station and in Lockford, California, and it aims to improve community relations by possibly relocating drones and their ports away from residential areas.
The City of College Station is collaborating with Amazon to find industrial zone locations for drone operations and Amazon is developing a quieter drone model, the MK30, to reduce the noise. Despite the noise concerns, the drone delivery program has been successful with no reported crashes or injuries and is seen as innovative and efficient by local officials.
Drone delivery is still in its early stages and is facing regulatory, technical and public acceptance challenges, but it holds potential for future growth as a supplement to traditional methods.
Amazon to bring back Prime Big Deal Days this October
Amazon announced it's bringing back its Prime Big Deal Days sales event this October. Prime Big Deal Days return this October to kick off the holiday season for Amazon this autumn and fall. Only Prime members will have access to early holiday deals across popular categories, including deep discounts on products from top brands.
The celebration will take place in 19 countries, including Australia, most European countries, including France, Germany, and the United Kingdom, and in North America, Canada, Canada and the United States.
Amazon Launches “FBA Grade and Resell” programmer
Amazon launches FBA grade and resell program. Amazon is launching a program to enable, uh, sellers on its platform to regrade and resell rejected and secondhand inventory. The way it will work is that after ingraining in grade and resell eligible FBA returns will be inspected to see if they can be relisted with one of the four conditions, like new, very good, good, or acceptable.
Amazon will inspect packaging, confirm the item matches the description, test the items condition, check for any signs of use and assess any damage. When the item is relisted through grade and resell, Amazon will provide customers with a detailed description of its condition. This includes information about minor imperfections, packaging details, and functional functionality.
With grade and resell, Amazon says the three. Selling points are that you can recover value, that is turn customer returns into sales, set it and forget it with a streamlined customer returns management and supporting, of course, sustainability and enhancing reputation with customers by offering pre owned products.
Thanks so much for listening to today's show, stay tuned next week for our ongoing Newsday updates. This has been Michael Veazey for AmazingFBA. -
Is your product confusing consumers?
Is your product confusing consumers?
Hey folks today you find me in the glamorous location of our garage and I've got a simple but really important point to make about consumer product design, particularly if you've got a complicated product.
So here is our trusty tumble dryer.
I wish it were a washer dryer, but for various reasons, my wife wants to keep the old washing machine, so we end up schlepping stuff from one place to another.
So by the way, hint number one, if you can create a machine that solves two problems in one go, and they logically belong very, very closely together, like washing clothes, what do you always do?
You dry them.
If such a thing doesn't exist in your market, or it's not very functional, that's a good hint.
But that's not the main thing for today. The main thing for today is this look at this panel.
We've got a bunch of different options, look how many options, 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14 different options.
Guess which one I always use? Eco. Why? Because I want it simple. I've got four options for how dry I want it. The one is hanger dry and the previous one is like, extra dry. And then the other one is iron it.
I would argue that you probably need three settings maximum there. Then you've got everything else.
Timing, how long it lasts for I don't even know what that does.
That's the temperature obviously, that's something special. Guess what I do? I use Eco, I choose the driest one, I press on and then I'm done.
if you overcomplicate the user interface of any product at all, you are probably not adding value for anyone.
And you probably think you are adding value because engineers love complexity and they love solving problems. And so the product designers, as you get very, very deep into a product there, you realize there are more and more nuances. And you think you're adding value by adding complication. I very much doubt you are.
I think that you're very likely to be adding stress to a consumer's life.
What they want is something that works reliably, is very, very, very simple to use and gets them the outcome they want.
Now, okay, there may be a few different outcomes and I'm not saying you shouldn't have a few different options.
But the reality is that your consumer is going to choose one of two of them.
There's a good argument in favor of creating something very simple.
Years ago, Anita Broderick, I think. The creator of the incredibly successful brand, the body shop said and this was back in the nineties or the two thousands, right?
When home computers were relatively new thing.
" I think somebody should can invent the computer, which has four buttons on and off, and that come on with the other three where, and she makes a valid point.
Most computer systems, most domestic appliances. are way more complicated than you need, right?
I could take you indoors and look at the oven. But let's look at this.
This is actually not too bad as interfaces go, but guess what? When my father in law turned up here, He's got an oven, an electric oven like this one. He put this on in order to put the oven on, but guess what that tiny symbol means? Grill. Well, first of all, if you're selling products to the UK, why don't you put English on them?
There's a, there's this large language market for English language products, I understand. Like that might include England Australia Canada United States. Right? It's not rocket science.
So first of all, this tiny symbol is supposed to mean grill. And secondly the, there are, there are just even here too many options.
So here's the half grill. I kind of get it, but it could be simpler and clearer. Couldn't it? So again, there's more about clarity than too many options.
And again, this whole oven timer thing, everyone in the world who's got an electric oven knows there's a timer on it. I don't know anyone who uses it. -
Congratulations, you've found a potential e-commerce brand acquisition opportunity! Before diving in, it's crucial to showcase your own value as a buyer. Whether you connected through a broker, a cold outreach, or a warm introduction, be prepared to demonstrate your capabilities in a concise and impactful way.
Remember, flexibility is key.
Time Stamp
[00:50] - Introduction To Step Five Of Buying E-commerce Business[02:13] - Six Key Questions For Sellers[02:39] - First Question: Tell Me About Your Business[03:36] - Second Question: What Happens If You're Away For Three Months[04:32] - Third Question: How Do You Market Your Products[04:47] - Fourth Question: Who Are Your Competitors[05:43] - Fifth Question: Why Are You Selling The Business[07:10] - Sixth Question: How Would You Grow The Business[08:10] - Setting Up Next Steps After The Meeting[09:47] - Getting NDA Signed And Requesting Financial Data[10:28] - Recap Of Main Points From The Meeting[11:20] - Importance Of Practice And Role-playing[12:11] - Learning From Sales Pitch Evaluations[13:15] - Reflecting On Experience With A Mentor[13:44] - Offer For Assistance In Business Evaluation And Negotiations[14:27] - Encouragement To Practice And Seek Help If Needed[14:50] - Preview Of Next Topic On Deal Making Psychology
Aiming to Project:
Safe pair of hands: Reassure the seller you are a responsible and reliable owner.
Industry experience: Highlight your understanding of the e-commerce landscape.
Business experience: Demonstrate your track record of successful business management.
Experienced dealmaker: Showcase your expertise in navigating acquisitions (if applicable).
Authority: Subtly lead the conversation, demonstrating your seriousness and preparedness.
What to Say in Your Self-Presentation:
Briefly outline your industry background and expertise in e-commerce.
Briefly highlight your experience in managing successful businesses, if applicable.
Mention any relevant dealmaking experience (acquisitions, investments, etc.).
If you have a strong team or mentor, subtly reference their expertise.
Evaluating the Business (6 Key Questions):
Now that you've established your credentials, it's time to delve deeper into the business. This is not a full due diligence process, but a preliminary assessment to determine if the opportunity aligns with your goals.
Here are 6 Key Questions to Ask (within 6 minutes):
Open-ended: "Tell me about your business." This opens the dialogue, provides a business overview, and reveals the seller's personality (explored further in the next episode).
Management: "Who runs the business day-to-day? What happens if you were unable to work for a few months?" This assesses the team structure and potential operational dependencies.
Marketing: "How do you currently market your products and generate sales?" Understand their customer acquisition strategy and marketing channels.
Competition: "Who are your main competitors? How do you differentiate from them? And how do they beat you, if at all?" Gauge market positioning and competitive landscape.
Reason for Sale: "Why are you selling the business?" Identify the seller's motivation, which can impact negotiations and future growth plans.
Growth Potential: "If you weren't selling, how would you envision growing the business?" This reveals the seller's perspective on future potential and aligns with your own acquisition goals.
Pro Tip: "NLP Anchoring" (Revealed Next Episode):
We'll delve into Carl Allen's NLP anchoring technique in the next episode, a powerful tool to subtly guide the conversation during this evaluation phase.
Moving to the Next Step
If the initial evaluation sparks your interest, it's time to set up clear next steps.
Goals:
Future Pacing: Outline the potential acquisition timeline, fostering a smooth transition.
Reinforce Expertise: Further establish yourself as a qualified and serious buyer. -
Congratulations! You've made it through the first four steps of successfully acquiring an e-commerce business to scale your brand. Here's a quick recap:
Decide to Buy: Defined your goals and motivations for acquisition.
Define Your Ideal Target Business: Identified the type of business that aligns with your vision.
Find Your Ideal Businesses (Deal Flow): Utilized various strategies to discover potential acquisition targets.
Filter Your Suspects to Prospects: Narrowed down your options to qualified candidates.
Now comes a crucial step: the buyer meeting. This is your chance to connect with the seller, build rapport, evaluate the business, and set the stage for a successful acquisition. This guide will equip you with the tools and strategies to navigate this pivotal step.
Time Stamp
[00:44] - Introduction To 10 Step Process For Acquiring E-commerce Business[01:03] - Recap Of Previous Steps[01:59] - Four Aims Of Step Five[02:43] - Importance Of Building Rapport[03:42] - Evaluating The Business[04:42] - Preparation Before The Meeting[05:30] - Researching The Business And Owner[06:30] - Basics For The Meeting: Dress Code And Punctuality[07:45] - Managing Meeting Time[08:44] - Main Aim In The Meeting: Building Rapport[09:31] - Active Listening Techniques[10:48] - Balancing Professionalism And Friendliness[11:27] - Presenting Your Own Value[12:26] - Positioning Yourself As An Experienced Dealmaker[13:20] - Offer To Review Potential Deals[13:35] - Importance Of First Impressions And Rapport Building[14:39] - Practice Makes Perfect: Role Playing And Reflection[15:14] - Offer For Assistance In Business Buying Process[16:32] - Preview Of Next Episode: Six Killer Questions
Aims of this Step in the Process:
Building Rapport: Create a connection and establish trust with the seller.
Positioning Yourself as an Expert/Safe Pair of Hands: Demonstrate your knowledge and capability to manage the business.
Evaluating the Business: Gain a deeper understanding of the company's strengths and weaknesses.
Setting Up Next Steps: Determine a clear path forward for moving towards acquisition talks.
Overview of the Process:
This section will delve into the key aspects of your buyer meeting:
Preparation: How to gather information and prepare yourself for the encounter.
Setting the Right Tone: Ensuring professionalism and creating a comfortable environment.
Building Rapport: Techniques to connect with the seller on a personal level.
Evaluating the Business: Strategies for acquiring a basic understanding of the company's performance.
Setting Up Next Steps: Establishing a clear plan for moving forward.
Preparation (3 minutes):
Before the meeting, thorough preparation is key. Here's how to hit the ground running:
A. Researching the Business and Owner:
Owner:
LinkedIn: Explore their experience, network, and any connections you might share.
Google: Look for news articles, interviews, or past ventures that demonstrate their expertise.
Facebook: Gain insights into their interests and personality (optional).
Business:
Amazon: Analyze the listings, pricing strategy, reviews, and customer engagement.
Ecom/Brand Site: Explore the brand messaging, product variety, and overall customer experience.
Social Media (e.g., Instagram): Observe the brand personality, visuals, and customer interaction.
B. Identifying Common Interests or Experiences:
The goal here is to find common ground:
Shared hobbies (sports teams, etc.)
Geographical similarities (grew up in the same area, state, etc.)
Educational background (same university, mastermind groups, etc.)
Industry connections (knowing common industry figures)
Understanding the Business's Aims:
While researching, also demonstrate your knowledge of the business:
Analyze current trends in the industry/sub-industry/category.
Use tools like Helium 10 or Jungle Scout to assess competitor performance. -
Hey folks, Michael from AmazingFBA. I just realized I was missing a golden e commerce opportunity here. It's kind of e commerce, I ordered something online, which is the latest the MacBook Air. So I've had a MacBook Pro And then a second MacBook Pro.
And this time I'm going for a MacBook Air. I've kind of been forced into buying it because the old one slowed down. But nevertheless, buying a Mac is a serious, expensive hobby. guess I'm kind of excited as well. Nervous and excited because it's the nerve centre of all my business operations.
Not that I'm running a million dollar empire, but I could be one day from this computer. And so Here's the unboxing video that I'd like to show you.
So I've actually taken out the stuff already because it only just occurred to me.
First thing to note is that Apple does a beautiful job of packaging.
It's really thick, sturdy, lovely packaging. It's very clean. It's just got a very, very minimalist picture on, which goes with their brand. Apple's minimalist brand.
And then. We've got the computer inside, which is lovingly packaged. I pull that up, look at that, the design detail, I can pull it up. And of course then it's got everything, which, which I've taken out.
So that was put in here. This has got it had its own little, little thing that I've thrown away. So that went neatly. And now I've already messed that up, but I'm about to unlock the actual MacBook itself.
Now, another thing they do,
you can see they've wrapped it carefully and lovingly in a piece of paper. It's a waxed blue paper, I guess it's to protect it against getting any kind of dirt on it at all.
Let's just take a moment to admire The beauty of the thing. Again, it's a design classic. They made it very, very sleek. It's a MacBook Air. So I guess it's not quite the same wedge shape as the classic one, but it has got that classic shape. Now what they've designed it again, this is more of an experiential thing than necessary. When you open it, it turns on so we can take the screen protection on that automatically turns on with its logo.
So they're doing all the right things at Apple. They immediately get you into the experience of using the computer. Now, the first thing I'm going to need to do Is to move it from one computer to another.
So I've done this before. I've moved all my data from one MacBook to another and it went pretty well and I'll try a different way of doing it today with an ethernet cable. The point is that they make it easier to start. And to use from the very beginning and to transition from a similar product to another one.
So keeping you within the family of products, if you will.
So stay tuned, I will give you a few updates on this, but it's just an example of creating a beautiful consumer experience, unboxing and hitting the ground running built into the actual products itself.
So the simple challenge for you is if you create physical products, how can you create that wow factor.
Don't forget the packaging, the unboxing experience itself. Is your packaging of the product, does it indicate that you love and care for the product?
And of course, can you hit the ground running using the product even, and especially with a complex consumer product like a home computer, can you make that easy to hit the ground running ?
That's kind of what part of the USP of Apple as a company, plus beautiful design. What is that equivalent for you and your products and your business?
Right, enough chit chat. I've got a MacBook to transfer from one. computer to another. That wasn't even a sentence but you know what I mean. So I'll speak to you soon. -
Congratulations! You've reached a significant milestone in the sale of your e-commerce business: the signing of the Letter of Intent (LOI). The LOI signifies both parties' initial agreement on the key terms of the acquisition. But before the deal is finalized, there's essential work to be done. This guide will equip you with the knowledge to navigate the crucial post-LOI phase and ensure a successful exit.
Time Stamp
[00:00] - Introduction To The Podcast[01:00] - Setting Up The Discussion Topic[01:56] - Due Diligence Processes In Acquisitions[02:13] - Quality Of Earnings Validation[02:36] - Product Diligence Explained[03:00] - Legal Diligence Aspects[03:40] - Competitive Landscape Analysis[04:03] - Customer Reviews Examination[05:04] - Approach To Integrating New Brands[06:08] - Key Integration Areas For Acquirers[06:54] - Philosophy Of Not Fixing What Isnt Broken[07:25] - Importance Of Founder Knowledge[08:27] - Looking For Gaps To Add Value[09:19] - Preserving The Value Of Acquired Businesses[10:08] - Challenges Of Founder Transition[11:11] - Appreciating Founder Contributions[12:16] - Importance Of Understanding Brand Uniqueness[13:17] - How To Contact Society Brands[14:03] - Key Takeaways For Acquisitions And Sellable Brands[14:18] - Introduction To 10k Collective Mastermind[15:21] - Benefits Of Joining The Mastermind[16:06] - Closing Remarks
Unveiling the Realities: Deep Dive into Due Diligence
The post-LOI period is all about verifying the information presented during negotiations. While the M&A team conducted preliminary checks, a comprehensive due diligence process is now undertaken. Here are the key areas of focus:
Quality of Earnings: The buyer's accounting team will meticulously scrutinize your financial records. This verification ensures the accuracy of the numbers presented, mitigating potential risks for the buyer.
Product Diligence: What better way to understand your product than to experience it firsthand? The buyer's team may purchase and evaluate your products to verify quality and functionality.
Legal Diligence: This involves a thorough examination of your intellectual property (IP). Are trademarks secured? Any potential patent issues? Outstanding legal disputes? Addressing these elements protects both parties' interests.
Competitive Diligence: The buyer will analyze your competitive landscape. This could involve assessing the number of competitors in your product category, their strengths and weaknesses, and the overall market dynamics.
Customer Reviews: Customer sentiment carries significant weight. The buyer will examine the authenticity and positivity of your online reviews, as they directly impact brand reputation.
Standing Out from the Crowd: Tech-Enabled Integration Strategies
In an acquisition landscape saturated with competition, how can tech-enabled consumer product companies like Society Brands differentiate themselves in terms of post-acquisition integration?
Michael Sirpilla, CEO of Society Brands, emphasizes the importance of a focused approach. He warns against the pitfalls of rapid, large-scale acquisitions, highlighting the integration nightmares they create.
Society Brands serves as a model for successful integration. With 12 acquisitions within 2.5 years, their meticulous approach prioritizes seamless integration. Clean financial reporting and a robust technology platform enable brand-level and consolidated measurement, fostering transparency.
However, integration doesn't equate to complete overhaul. Society Brands identifies key areas for integration, including:
Finances and Back Office: Streamlining financial systems and back-office operations creates operational efficiencies.
Demand Planning: Optimizing demand forecasting allows better inventory management and cost control.
While integration is crucial, Society Brands also recognizes the value of preserving existing strengths. Here's what they typically leave unchanged: -
The e-commerce industry has experienced meteoric growth in recent years, creating unprecedented opportunities for entrepreneurs. However, the path to a successful exit is complex and fraught with challenges. This guide, informed by insights from Michael Sirpilla of Society Brands, will demystify the process of selling your e-commerce business in 2024. We'll delve into the intricacies of the acquisition landscape, the factors that influence valuation, and essential tips for maximizing your exit potential.
Time Stamp
[00:00] - Introduction To The Podcast[01:09] - Explanation Of Society Brands[02:09] - Definition Of Acquisition In This Context[03:39] - Benefits Of Acquisition For Brand Owners[05:34] - Evolution Of E-commerce Acquisition Landscape[07:42] - Focus On Category And Profitability[09:56] - The RACO Acronym Explained[11:27] - Importance Of Profit Over Revenue[13:36] - Organic Growth Vs M&A Growth[15:51] - Key Factors In Evaluating Acquisition Targets[17:56] - Desired Profit Margins And Revenue Growth[19:57] - Revenue Per SKU Metrics[22:12] - SDE Vs EBITDA Explained[25:05] - Normalizing Earnings And Margin Compression[27:36] - Buyer's Perspective On Future Performance[29:53] - Using Normalized EBITDA Approach[31:23] - Earn-out Structures For Alignment[32:12] - Reflections On Changes In Acquisition Landscape[34:01] - Calls To Action For Listeners
What is an E-commerce Acquisition?
When we talk about acquiring a business in the e-commerce context, we're essentially referring to one company buying another. This transaction typically involves a buyer paying a multiple of the target company's annual profit (EBITDA) for a controlling stake or even the entire business.
The allure of selling your e-commerce business lies in several benefits. First, it allows you to realize the value of your hard work and diversify your investments. Second, it provides an opportunity to reduce risk by converting your business equity into liquid assets. Lastly, partnering with a larger company can offer access to additional resources for scaling your brand.
Scaling Through Acquisitions: A Double-Edged Sword
Acquisitions have become a popular strategy for scaling e-commerce businesses. Companies like Society Brands have successfully grown their portfolios by acquiring promising brands. However, this approach is not without its challenges.
On the one hand, acquiring established brands can accelerate market penetration and revenue growth. It also allows companies to diversify their product offerings and reduce reliance on individual products. Moreover, by integrating new brands into their existing infrastructure, acquirers can achieve operational efficiencies and cost savings.
On the other hand, integrating multiple brands can be a complex and time-consuming process. Cultural clashes, operational differences, and system compatibility issues can hinder the integration process. Additionally, the success of an acquisition hinges on the ability to retain key talent and maintain brand integrity.
The Evolving E-commerce Acquisition Landscape
The e-commerce acquisition landscape has undergone significant changes in recent years. One of the most notable trends is a shift towards larger, more strategic acquisitions. Companies are focusing on acquiring established brands with proven track records and substantial revenue streams.
Another key trend is the increasing importance of category focus. While some acquirers cast a wide net, others specialize in specific niches. This specialization allows them to develop deep industry expertise and build stronger relationships with suppliers and customers.
Profitability has also emerged as a critical factor in the acquisition landscape. Investors are becoming more cautious about funding unprofitable businesses, and acquirers are prioritizing companies with solid financial performance.
Building a Profitable E-commerce Business
To increase your chances of a successful exit, - Mehr anzeigen
