Amazon FBA Seller Round Table - Selling On Amazon - Amazon Seller Podcast - Learn To Sell On Amazon - E-commerce Tips - Shopify & Woocommerce - Inventions And Start Ups - Marketing School For Amazon Sellers
Connecting Brand's Purpose with Customers - Amazon Seller Tips with Ben Leonard - Part 2
March 11, 2022
Connecting Brand's Purpose with Customers - Amazon Seller Tips with Ben Leonard - Part 2
Things we discussed in this session:

A. Part

B. Part 2

Things we mention in this session of Seller Round Table:


Join us every Tuesday at 1:00 PM PST for Live Q&A and Bonus Content at

Try the greatest Amazon seller tools on the planet free for 30 days at

Transcription in this episode:
[00:00:01] spk_0: Welcome to the seller. Roundtable e commerce coaching and business strategies with Andy Arnott and Amy Wees. [00:00:11] spk_1: Absolutely, I love that. So um you know when when you uh when somebody's thinking about uh selling their business um you know how do the how would they be able to figure out kind of what they might be able to get in terms of offers from uh from people wanting to buy them out. [00:00:28] spk_0: Sure. Um So I guess this comes down to a couple of things, It comes down to how we value a business, but also what makes a business valuable. So we should start with what makes what makes your business valuable. Um So as I alluded to in the first part of the conversation, you really need to have a defensible brand. You can't just be selling stuff a defensible brand with some sort of I. P. Um so you need to have trademarks ideally, um not only in the territories that you're selling him, but also where you're manufacturing and if you can get some additional intellectual property, like a patent or design registration, perhaps on a part of that, you've designed them even better. Um I mentioned before that you wanted to be growing but not maxed out. So there still needs to be some some fruit on the tree for the potential buyer to pick. So that could be growth where you're selling now, but it could be the opportunity for them to take the brand internationally, for example, the business used to be stable, so what I mean by that is not risky, so not selling in a great area and not using any black hat strategies. Um, I need to be transferrable. You need to be able to hand over the keys. So a great test of that is the hospital test if you fall down the stairs tomorrow and break both your legs and end up in hospital for a long time. Will your business run without you? If the answer is yes, then you have a pretty transferable business. That's great. If it's not, that's okay. You just need to do some work to build out some systems and processes and probably some automation and documentation. Have you got everything neat and tidy? All the teas dotted and I's crossed, no eyes dotted and T. S crossed with regards to accounts, iP systems and processes, tax filing, you know, all the stuff that you would expect from, you know commercially financially illegally for your business needs to be in order and then you know on the face of it than more with product and market wise you want to have diversification. You can't have all your eggs in one basket because a buyer is just going to look at that basket and say, well that's a bit risky. So you can't just rely on one or 2 products. You can't just rely on one sales channel and you can't rely on one source of traffic. So for instance if you're selling on your own website and all your traffic is coming from a facebook ads account. What if your facebook ads account get suspended, then you're in a pickle so no one's gonna want to buy it. And then the next part of what you mentioned was about really comes down to think how we value a business. So we value a business based usually not always, but I'll try and keep this as broad as I can for a broad audience who will have many different businesses usually Based on the trailing 12 month performance. And we take that performance which is usually measured either is something called sailors, discretionary earnings ste or so something called Ebitda. Let's just talk about STD for a minute ste is basically your net income plus add backs and adjustments and add backs and adjustments are wonderful. Things that a good broker will do for you too maximize the value of your business. So we take your trailing 12 months performance and multiply it by and multiple. And the multiple the moment in e commerce is ranging from anywhere from between about two to about seven. And there's outliers can be higher than that and that's how we land on the value of your business. So for somebody at home wanting to do a quick dirty calculation, take your net profit, add back any of your discretion re earnings that wouldn't apply to a new owner. You're what you're paying yourself, your internet, your phone, travel, health insurance, Then think about any other costs you've had in the last 12 months, which a new owner wouldn't need to pay for. So maybe you paid for some trademarks. Well it's done. It won't need to be done again. Photography, videography, it's done. He won't need to be done again. Maybe some consulting fees then think about some recurring costs, which you might have, which a new owner probably wouldn't need to take on because they probably already have them. So software, that type of thing. Okay. Maybe legal fees, accounting fees and then where the broker part of where the brook will really earn their money is they'll go in and do a deeper analysis to identify opportunities to maximize the business by adjusting things like your colleagues based on situations that wouldn't apply for a new owner. Like for instance, suppose you've recently negotiated a lower price on your product, but you only did it two months ago. Well we could adjust. So that that applies across the whole 12 months trailing period rather than just the last two months to maximize that sale of discretionary armies. So if you're sitting at home, take your net your net income, do those adjustments that I just just just said and apply a conservative multiple. So let's say 3.5 right? Typically multiples at the moment are a bit higher than that. But let's just be conservative and you've got a rough idea of what your business is worth. But really you need to have that seller's discretionary earnings calculated by a professional who's an accountant and an M and a expert and understand the e commerce and understands the opportunities to find and squeeze out extra value by for instance adding back the right costs that can be added back and adjusting colleagues where they can and that's just scratching the service, you know, when accounting gets in there and does the work, they can really add six or seven figures to the value of the business. [00:06:14] spk_1: Yeah, I love that. That's great advice. Um going back to kind of my example about building house when you were first starting out um on this e commerce journey. Did you have any big like aha moments where you thought of, wow, if I knew this when I started out, it would have really changed the journey for me in terms of growing your business uh you know just upping the, just, just getting to another level with your business in terms of you know, profit or vision or in anything that that really stood out. [00:06:46] spk_0: Yeah, yeah, I did. Um it was this when I first wanted to sell my products in mainland europe, this is pre the UK leaving the european union, which was a pretty dumbass thing that we did recently. Um I needed to register for vat in France, Germany, Italy spain Poland and the Czech Republic and it was a real pain in the asked to do and I nearly didn't do it, but I had to jump through a whole bunch of hoops to do it. I, I even had to, this is hilarious to register for vat in Spain. Not only did I have to have a whole bunch of documents translated, but only by a particular translators on their specialist of translators. I had to have the document notarized, whatever that means by somebody called a notary. And when they do it, this is great. They take account, they take a piece of wax and they melted and then they stamp it like, you know, like a medieval wax seal. They used to use to, to, to seal envelopes, They actually do that. It was like something out of the dark ages. So I had to jump through all these, these bureaucratic hoops to register for vat in all these countries so that I could sell across europe and most of my competitors couldn't be bothered to do it because it was too much effort. So when I jumped through all the hoops and did it, I practically doubled my sales overnight. I felt like I was like a hunter gatherer who just like bothered to climb this ridge into the neighboring valley and I emerged into this lush valley of resources and I was leading my tribe then. And so the aha moment for me was jump through the hoops like when you see an obstacle coming up in the road, the easy thing to do is either find another path or just give up and go home. And I'm not saying that you want to make your life difficult, you want to have a look through the hoop and check what's on the other side. The hoop needs to be see through, right? Imagine you're sonic the hedgehog. Mhm. But if the reward on the other side looks good enough, go to the effort of doing it. And so I kind of applied that across the board then for the rest of the business. So like for instance, I got into Australia when they opened that up. I got into the Middle East when they opened that up, I went to the effort of designing my own products and having them patented jump through a lot of hoops and added value to the business because the potential buyer when they were doing their due diligence to see that this was building the moat around the business. [00:09:25] spk_1: Absolutely. And I think some of the, one of the biggest things that I've learned forever being in many different businesses for many different years is the people who take the effort to to do the ship work right? Like I always call it eating the ship sandwich, right? It's the it's the people who know it is though, it's like the like one of that show, what is that dirty jobs? I don't know if you've ever ever seen that show, but like you know some of the most well paid jobs in the world are you know, people who like clean like sewers out and stuff, you know, or do underwater welding or you know, it's a lot of jobs and things that other people just don't want to do, right. They're not either not glorious or their tedious or you know, some of the worst things working with an amazon business is dealing with like stuff like that, right? Like I remember one Q four, we're pretty much our entire catalog was hijacked and this was back in like, you know, 13 2013 2014 where um, you know, they really didn't have seller support in place. They don't really have any anybody to help you. So, you know, in in the first few weeks I was just losing my mind, right? I mean it was one of those things where it's just you feel so powerless and so you know able to just not do anything. And then finally I realized, okay, well I can either just do this or I can send an email every single day morning and night to sell our support to different, you know, to email addresses. I could find to, you know, just in other words, instead of giving up and throwing your hands up, like you said, the people who succeed are the ones who go through the work and go through the hassle of trudging through and really figuring out a way around the problem or if you can't figure out a way around the problem to take that energy and redirect it to something that, you know, instead of, you know, sitting there just frustrated and not doing anything, I could have been like, okay, well next year, what am I gonna do differently to try to, you know, make sure that this doesn't happen, you know, can I take that interview to maybe find new products? Can I write systems like what, what else can I do with my time and energy that will have a better outcome than me just hitting against this brick wall over and over again? So um yeah, I absolutely love that um the other thing that I would love to hear and uh I don't know if you've had this before because I know that you kept your brand fairly small skew wise and things like that, you're not one of those, you know, sellers who is like trying to find opportunistic products, but um you know, did you have any failed products along the way? And what did that journey look like in other words, you know, how long did you keep that product alive? [00:11:52] spk_0: Uh you know, what do you think [00:11:54] spk_1: were the mistakes that you made in launching that product? We always talk about all the successes and all the tips and tricks and stuff like you said, but I think that there's also a lot to learn in losing, right, when you lose you really learn a lot. So [00:12:06] spk_0: any, any, you [00:12:07] spk_1: know, failed product launches or failed business, you know, efforts that you, you uh, you know, you gleam, uh any value from in terms of, okay, I'm not gonna do it this way next time. [00:12:19] spk_0: Yeah. Um so I'm for, I was fortunate in that I didn't have any products that just kind of like flopped and I think the reason for that is I was always very careful to make sure that I was creating another product that made sense in terms of my brand and in terms of what would work with regards to what my customers wanted. So I hadn't, like, I hadn't like seen an opportunity or there's a, there's an opportunity there on ambulance to sell something that we do that, let's go and try that. And then it doesn't work, it wasn't quite like that, but I did have a product that didn't work out for a lot of different reason and it was this um, it was a liquid chalk product. So this is uh, it is basically chalk suspended in an alcohol solution which you rub on your hands, much like what we're all rubbing on our hands these days, alcohol, you know, jail because of the pandemic. And so the alcohol evaporates and left with chalk on your hands. So you get less mess in the gym. Great. Uh, sourced a really great product tested a whole bunch and, and find a solution that was fantastic. And then amazon wanted me to enroll in the Hazmat program, but none of my competitors were in the Hazmat program and then Amazon wouldn't let me join the Hazmat program and I couldn't figure out why. So I had this product that I had the merchant fulfill because they wanted an enhancement program but they wouldn't let me in. But none of my competitors were required to be in it and it didn't matter how many cases I opened saying, hey, these competitors need to be kicked off. You need to let me know as my program, Nothing happened. And I was incredibly frustrating. And so that product never fulfilled his potential until by the time I sold the business and in fact, I don't think the new owners are even selling it anymore. So that was really frustrating. And so I think the moral of the story there is that you've got to remember that amazon is just a sales channel and you are beholden to what happens with them if you're putting all your eggs in one basket. So fortunately I was also selling on my own website. And so sales of the liquid chocolate, my own website were great. They weren't as great as what they would have been through amazon of course because the vast majority of myself were coming through amazon, but I had gone to the effort to diversify my business and recognize that amazon was just a sales channel and you can't just assume that everything's going to, you know, be tickety boo and I'll work out selling through amazon. You know, you have to recognize that there will be bumps in the road and some of those bumps, you're not actually going to find a new road and I didn't for for that particular product. [00:15:10] spk_1: Yeah, that's a that's a great example. There's so many men that has met, I would say that's the last few years, like one of the biggest issues that you even had that issue and we're like all the, all the, you know, all the ingredients in this product were completely natural based. You know, like, I mean you get sick if you like chugged the whole bottle but it wouldn't kill you. You know what I mean? It was like all natural stuff and yeah. And and we just kept getting wrapped under the stupid Hazmat thing and we'd submit the documentation, like even their own documentation would say, hey, you know, if it's X, Y or Z. You don't need to be hazmat, but you have to file an exemption, which we did. And then they're stupid, ai bots would pick up all the product again and flag it and we'd have to like go through it again and again and then finally they're like, oh no, you need to be FDA approved. And so yeah, we, we pretty much gave up on it at that point because just like, you know, there's some, I guess the moral of the story here is sometimes you do need to know when to pick your battles, right? I mean, sometimes if it's just completely out of your control, you might be better off to just, you know, pick up and walk away and and put that energy towards something else. So, uh, some great lessons there. Yeah, [00:16:20] spk_0: yeah, definitely. This has just been so awesome so far. Like everything that you've brought to the table, then, I think it's great to hear. It's one thing to have somebody from an aggregator come on the show and talk about, you know what it's what you need to do to sell your business. But it's another thing to have a seller who's been through what you've been through and has built what you've built and who has now helped others do the same. Um, it's a whole different perspective because we can actually get in the weeds on some of these things and talk about what real pain points that we small business owners have to deal with when we're, it's a little bit intimidating, you know, thinking that giving ourselves permission to build a brand and become successful. You know, it's it's hard sometimes. So it's great to have these kinds of conversations. Um, now when it comes to selling your business and really getting the best offer that you can possibly get what are some things that some things people should be thinking about, you got to take your business through the right process. So we're in kind of a new, crazy situation with amazon. Well, E commerce at the moment, I remember when we talk about e commerce and particularly amazon being the Wild West, you know, I think like you said before, when you could kind of sell anything and it would work on amazon right back in the day, but we're in kind of a new Wild West now because mergers and acquisitions in the e commerce space is so young, so what's happening is a lot of people are getting very exciting emails land in their inbox from an aggregator saying, hey, we want to buy your business and this is incredibly exciting because you put your blood, sweat and tears into your business and you spent last night banging your head off a brick wall in tears trying to talk to someone to sell support because you've got a problem and now somebody wants to give you a decent amount of money for your brand. It's really exciting. And what's happening is the aggregators will dangle a carrot in front of you and it's pretty big carrot and it's possibly more money than you ever imagined happening having. But in reality, your business isn't worth it carrot, it's where the whole sack of carrots. If only you would do what we do in every other industry, which is, take it through a process, there's no rush, there's no need to to rush this. Have your business strategy mapped out and get help with it from experts. We use experts for our PBC. We use experts for our translations. We use experts for S. C. O. We use experts for trademarks. We use experts for photographs. And yet when it comes to our most valuable asset, our business itself, people want to try and sell it themselves which is just bonkers. So find out what your business is worth because even if you have no intention to sell it, you might as well find out what it's worth. So you have a reference point. Otherwise you're trekking through the jungle without a map or a compass. So find out what it's worth and then ask yourself whether you would sell it for that or whether you have a bit more work to do to get to where you want to be and take it through a process to maximize its value through some of the things we discussed earlier with experts who have kind of lived experience on all sides. They're business owners, their mergers and acquisitions experts. They're accountants who will work with you until you're ready to sell your business and not the other way around and they need to be adding value to your business, like whatever fee they're charging you needs to more than be paid for by the work that they've done to add value to your business and then they need to be actively marketing your business to a pool of the right buyers so that you end up with a competitive environment of several buyers wanting to buy your business. Yeah, that's really, you know the way to do it. Um be wary of if you get direct offers, that's fantastic. That's great. But then what you say to them is you say that's great, thanks so much for your offer. Um If you're the best option for me that I'm sure you'll be the preferred option that my broker finds okay, basically, um that's kind of the way to do it. Um and that's kind of why we ended up existing because we we saw that the services that were available for sellers to plan and then execute their exit strategy, we're not good enough. Yeah. Cool. Um And then I guess the hard question is, how do I know when it's time to sell, yep, you've there's a few red flags, right? Yeah. Have you lost your get up and go for the business? Right. As austin powers would say, have you lost your mojo, like, because if you have that's fine, but you might no longer be the right person to take it forward and there is a risk that the business will go into decline because you've lost your mojo and you're not up for it anymore and that's okay. Maybe the business has reached a point where it actually just needs others with more resources and we take it forward, you might just you might you might you might want to retire. We just sold a business for a guy who bought a yacht and has gone to sail around the world. That is a perfectly fine reason to want to sell your business. Maybe you know the most exciting part for me of building a business is kind of like the From idea Phase two just getting into orbit right? And maybe even have been in orbit now for a few years and you're just kind of done and you have a new idea. You want to sell the business, get some capital for a new idea. Perfectly valid reason to sell your business. There's lots of good reasons to sell your business. But the key is to plan what you can't do is wake up tomorrow and say I want to sell my business because you're gonna have a whole bunch of work to do. What you can do is wake up now and say I want to have everything in place so that when I am ready to sell my business my life is a lot less painful. And that means some of the things I spoke about earlier having all your documentation in order your accounts in order your intellectual property, your S. O. Ps. Getting your business valued by an expert now so that because they might value your business for you and say well we believe you know currently this would sell for I don't know half a million and you might say well I don't want to sell it for less than a million and what they can do this for example is something that we do is actually mentor you on route to an exit, help you stack up the dominoes. These are the things you need to do to get to where you want to be, keep a constant track and what your business is worth and then when you're ready and only when you're ready and not the other way around pull the trigger and go to market. So if you plan ahead your life becomes a lot easier later on and faster. Yeah, I would agree. It's good stuff. Um awesome. So we always asked this question before we wrap up, what are you listening to and reading to stay motivated? Okay, a couple things right now, I am listening to an audiobook called your next five moves moves your next five moves by. Um Patrick, uh David, I think his name was pretty cool book. It's very, very motivational. Um That's the factual book, fiction. I I listened to pretty much on repeat most nights, Stephen fry reading harry potter and I am not ashamed. [00:23:50] spk_1: I love it. [00:23:52] spk_0: I love it. And then um caramel had a question, she said what is a reasonable horizon to plan for in terms of beginning to end um for selling. So maybe she's asking about a timeline. Yeah. Um Yeah, it depends on where in the process we're talking about because the timeline from say going to market to the deal being done can be very fast. It doesn't need to be amy there's definitely, always, always, we, you know, we take an approach of more haste, less speed, let's get this right rather than rushing in. But in particular circumstances it can be necessary to move fast. So if we're talking about going to market to the deal being done, uh you can be a matter of a few weeks if you're really pushing it, but more like a few months. Okay, 23 months. And the reason for that. So you'll see a lot of claims from certain brokers and some of the aggregators sell your business in 14 days or something. Absolutely, you know, insane like that. And I'm just saying to people, you've spent a long time building a fantastic business, why on earth would you rush the most important part of it? If you take your time to actually properly analyzed the business, a significant amount of value can be added. You can cast a wider net to find a pool of the right buyers and then you can take the time to actually thrash out the right deal rather than just rushing to get a few bucks in your bank account. You can take a little bit longer and get a lot of bucks in your bank account definitely. Alright. And the last question before we wrap up is how do people get in contact with you? Sure you can email me Ben at aecom brokers dot co dot UK. You can go to our website which is a con brokers dot co dot UK were in the UK, the UK domain, but we're working all over the world. Yeah, I'm on linkedin. Just look me up, Ben Leonard uh and my social handle is at Ben Leonard pro for instagram and twitter, [00:26:02] spk_1: awesome. Thanks Ben really appreciate you being on today. [00:26:05] spk_0: Thanks for having me. That was fun. [00:26:06] spk_1: Hey guys, and as usual if you haven't done so yet, please rate review, subscribe, join us live Tuesdays one p.m. pacific time. We really love to have you guys. We had a we had a decent crowd here today, thank you guys who came in loud to ask questions that always brings a ton of value to us to our guests, to everybody else listening. So thank you guys who joined us live. If you haven't done so yet, please do join us live And with all of that we were going to stop the live stream, we're gonna stop the recording and we are going to interact with just the people in the in the meeting. So that's a bonus if you guys join us live. So thank you so much and we'll see you next time on the cell a round table [00:26:44] spk_0: mm thanks for tuning in, join us every Tuesday at one PM pacific standard time for live Q and A. And bonus content after the recording at cellar Roundtable dot com, sponsored by the ultimate software tool for amazon sales and growth seller S EO dot com and amazing at home dot com.