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How to Scale Your Amazon Business with Oz Merchant · Selling on Giants: The eCommerce Marketplace Podcast

0:08
SPEAKER_00: Welcome to another episode of Selling on Giants, the podcast where we dive deep into the world of e-commerce and bring you actionable insights from industry leaders.
0:18
SPEAKER_00: I'm your host, Mr.
0:19
SPEAKER_00: Will, and today we have a very special guest joining us.
0:22
SPEAKER_00: We are thrilled to have Oz Merchant, the CEO of e-comm sellersHQ with us.
0:27
SPEAKER_00: With 25 years of experience spanning retail, wholesale, and high-tech startups, Oz is a seasoned entrepreneur who has successfully launched, scaled, and exited multiple businesses.
0:38
SPEAKER_00: He's also coach and consulted e-commerce and startup founders across five continents, helping them achieve their business goals.
0:45
SPEAKER_00: In this episode, Oz will share his expert tips on how to launch, grow, and ultimately exit your e-commerce brand.
0:52
SPEAKER_00: Whether you're just starting out or looking to take your business to the next level, this episode is packed with valuable advice and strategies to help you navigate the complex e-commerce landscape.
1:04
SPEAKER_00: So let's get started.
1:06
SPEAKER_00: We're excited to have Oz on the show, and we can't wait to learn from his wealth of experience.
1:12
SPEAKER_00: So, Oz, with 25 years of experience in retail, wholesale, and high-tech startups, you've seen the e-commerce landscape evolve dramatically.
1:21
SPEAKER_00: Can you share some of the biggest changes you've witnessed and how they've influenced your approach to launching and scaling e-commerce brands?
1:28
SPEAKER_01: Sure.
1:28
SPEAKER_01: Well, I appreciate it.
1:29
SPEAKER_01: First of all, thanks for having me on.
1:32
SPEAKER_01: You know, it's interesting.
1:33
SPEAKER_01: My background is starting in brick and mortar.
1:36
SPEAKER_01: So when I think back on those days, it's such a radically different shift because you were doing in the retail days, there's so many different things you'd be worried about, from you know uh how you're gonna lay out a store, uh, what type of products you're gonna bring in, what's gonna get and moved, you know, in the front of the store versus the back of the store, what's gonna be above like eye level, what's gonna be below eye level.
1:59
SPEAKER_01: Uh, and this was back in the days we didn't have like computers and stuff either.
2:03
SPEAKER_01: Everything was hand tickets, the pricing and stuff.
2:05
SPEAKER_01: Uh, you know, so you'd go through, you put the price on it, you go through market with their red line and put a sale price on it.
2:13
SPEAKER_01: You also have to keep an eye on somebody not just randomly coming in with their own red pen, marking a price down and trying to say, okay, well, this is this price, I'm gonna go buy it at a discount price.
2:24
SPEAKER_01: So the the different things you'd have to worry about were so radically different, including like lights and stuff.
2:30
SPEAKER_01: I mean, you know, we'd worry, because this was like a lot of apparel stuff, so it would be uh looking at the lights, making sure the products are getting the right amount of lighting, but not too much, so that they're not fading the clothes and stuff.
2:43
SPEAKER_01: So it's so radically different when you think about e-commerce.
2:47
SPEAKER_01: Um, but at the same time, there's different things you have to worry about, meaning that you know, in an e-commerce world, you're getting this visual medium, you're getting photographs.
2:57
SPEAKER_01: Now you've got a lot more video prevalence, so that's great.
3:00
SPEAKER_01: So you're getting potentially video and audio access.
3:03
SPEAKER_01: And then on that, it's just words.
3:05
SPEAKER_01: So that's what's conveying.
3:07
SPEAKER_01: You're not having a salesperson there to talk to somebody, have them try something on, get their a feel for it.
3:13
SPEAKER_01: So you're having to really cut out all those modalities and just have kind of your words tell the story and your photos, images, and videos do that for you.
3:24
SPEAKER_01: So it's very limited, but it's still amazing to see how much people buy through that.
3:31
SPEAKER_01: Now, one of the other things that's probably changed a lot is the fact that you know, in those days, people would just buy and you you really wouldn't return uh because either you got to try it on, test it and stuff, so you weren't returning it as much.
3:43
SPEAKER_01: Um, but now everything's about returns, right?
3:45
SPEAKER_01: You can buy anything, you test it out, and you return it.
3:48
SPEAKER_01: In fact, I've seen that you know behaviors in retail change, meaning that you know, I would typically just try something on one of the store.
3:55
SPEAKER_01: And I'm like, yeah, I don't want to mess with all that.
3:56
SPEAKER_01: I'm just gonna buy it, I'll go home, I'll try it on.
3:59
SPEAKER_01: If I don't like it, if it doesn't fit well, I'm just gonna go take it and I'll just return it later.
4:03
SPEAKER_01: So that return mindset has now transferred from e-commerce into kind of the brick and mortar world.
4:10
SPEAKER_01: So everything is now, you know, I should be able to return it.
4:13
SPEAKER_01: I'm not gonna buy anything if I can't return it.
4:15
SPEAKER_01: So that's really changed how I think consumerism and how the consumer thinks.
4:20
SPEAKER_01: So, you know, when you think about launching, I I think and you know, when I was starting, so I started selling on on Amazon in 2005, and this was pre uh FBA, pre anything.
4:34
SPEAKER_01: Really, it was just uh when I was doing it, it's like I was selling some stuff on eBay.
4:37
SPEAKER_01: So I was like, let me extend that onto Amazon because that had uh not launched, and I think they're opening up for uh three-piece stuff, so go sell some stuff there.
4:47
SPEAKER_01: But now it's you know, with the the last 15, 18 years, it's changed so much that you have to think about is that where you want to start?
4:56
SPEAKER_01: So that's I guess the first thing you need to look at.
4:58
SPEAKER_01: Are you gonna launch on, you know, which channel are you looking at?
5:00
SPEAKER_01: Are you gonna go launch in a marketplace or are you gonna go D to C?
5:03
SPEAKER_01: Because if you're going D to C, it's a very different approach than if you're gonna go into a marketplace.
5:08
SPEAKER_01: And I see when I you know talk to folks, the mindset is very different.
5:12
SPEAKER_01: Um, the D to C mindset is you're not coming up uh as kind of like, well, this is kind of a little side hustle and stuff, and I'm gonna go uh take this to market, just because A, most likely you're not doing resale, you're doing kind of your own brand.
5:27
SPEAKER_01: And for that, you need to really have thought through what am I doing?
5:30
SPEAKER_01: And and the cost of it is just it's a lot higher versus a marketplace.
5:34
SPEAKER_01: Okay, well, I can just buy anything.
5:36
SPEAKER_01: Let me you know do arbitrage, let me start with a little bit of wholesale and work my way up to doing a brand on a marketplace.
5:42
SPEAKER_01: So I think it begins when you look at e-commerce is how much finances do you have?
5:48
SPEAKER_01: What are you really what's your outcome you're going for?
5:51
SPEAKER_01: Is it to just have a little bit of a you know, uh a side hustle money?
5:57
SPEAKER_01: Is it uh I wanted to um build out a particular brand?
6:01
SPEAKER_01: Do I want to have a full-out empire?
6:03
SPEAKER_01: Uh, or do I just want you to have a few extra hundred bucks to you know take a little vacation, extra vacation this month, or pay for this uh kids uh camp or you know, uh Christmas presents.
6:15
SPEAKER_01: So the intention makes a huge difference as to how you want to launch and where do you want to launch and how do you want to go execute that?
6:22
SPEAKER_01: Um, because I see a lot of folks on the arbitrage side, they will take the summer months off.
6:27
SPEAKER_01: It's like you know, if you take time off, well, it's a business.
6:32
SPEAKER_01: Yeah if you're down the road, if you're ever thinking about getting funding and stuff, all that stuff makes a difference.
6:37
SPEAKER_01: If you have fluctuations in your sales volume, uh that's gonna have an impact of how somebody's gonna be looking at your business.
6:44
SPEAKER_01: So all that stuff gets, I think, factored in.
6:47
SPEAKER_01: Uh, and the other part of it's from a supply side.
6:50
SPEAKER_01: Okay, if I'm not buying domestically, not using uh reselling, going for domestic suppliers, okay, where am I going?
6:57
SPEAKER_01: Things like Alibaba have uh you know totally changed the face of where things were at, you know, 20 years ago.
7:04
SPEAKER_01: Now uh the fact that anybody can just say, I'm gonna go on to Alibaba and uh see if I can go buy something and see if I can take it to market here.
7:13
SPEAKER_02: Yeah.
7:14
SPEAKER_01: Uh and so the barrier to entry is just over time just come down considerably.
7:18
SPEAKER_02: Yeah.
7:18
SPEAKER_01: So that's the thing there's good and bad to that, meaning that there's so many more products out there on the market than there were you know 20 years ago.
7:26
SPEAKER_01: Um, but uh this is America, so we're very much consumers uh first kind of uh market.
7:33
SPEAKER_01: So if you're gonna go test something else, exactly come here, see if it will sell, and then uh see if you can do something with it.
7:40
SPEAKER_01: So yeah, I I I think the idea people talked about like this kind of American dream, what you can do with e-commerce, it's made it a lot more possible than I think ever before.
7:51
SPEAKER_00: Yeah.
7:52
SPEAKER_00: A lot of brands start out e-commerce first.
7:54
SPEAKER_00: I know personally, like I watch a lot of Shark Tank, and you know, nine times out of ten, if they're a launch brand, what do you have?
7:59
SPEAKER_00: You have your DDC website and they're always on Amazon.
8:03
SPEAKER_00: Um, and those are some really great points.
8:04
SPEAKER_00: And you've unpacked a lot there from the the self, you know, the transition of retail to kind of a self-service model being online, the return rates and all the difficulties there.
8:14
SPEAKER_00: And we're gonna get a chance to jump into all that when we kind of dive deeper into our main topic.
8:18
SPEAKER_00: But Az a bit about you.
8:21
SPEAKER_00: Can you describe some of your successes and your experience in e-commerce or just generally as an entrepreneur in this space?
8:28
SPEAKER_01: Yeah, I so when I usually share with folks, you know, I've got had kind of three acts.
8:32
SPEAKER_01: Act one was all about retail, uh wholesale manufacturing.
8:36
SPEAKER_01: Uh, I've got kind of background in uh degree and stuff in supply chain and uh production.
8:41
SPEAKER_01: So I knew that space really well.
8:44
SPEAKER_01: Then I got into the world of high-tech uh and doing software and did six startups there, um, on to seventh one now.
8:53
SPEAKER_01: Three of those fortunate enough to have exits.
8:56
SPEAKER_01: So e-commerce was a perfect kind of blend of those two worlds.
8:59
SPEAKER_01: So take that brick and mortar, combining that with the the high-tech stuff.
9:04
SPEAKER_01: It's like, okay, here's an interesting culmination of two kind of acts into this thing that just makes a lot of sense now.
9:12
SPEAKER_01: Like, okay, there's you can be doing sales and of like you know, products and stuff, but just do it all online.
9:17
SPEAKER_01: And there's all this technology and stuff that's involved that you know, like I said, we we didn't have any technology, it was all pen and paper, and now it's all technology, and you got so much data that you can use to make decisions.
9:29
SPEAKER_01: Where before it was all best guess, and if you weren't paying attention, you you know, you just looked at you know what product's moving, and that's how you decide it.
9:38
SPEAKER_00: That's impressive too.
9:40
SPEAKER_00: Six, six, uh, six companies, six startups.
9:42
SPEAKER_00: You're working on the seventh, and uh, and you were fortunate enough to have, would you say, four exits with the covering three of those?
9:48
SPEAKER_00: That is a I mean, that's a lot of entrepreneurs' dreams.
9:52
SPEAKER_00: So it sounds like you have just quite the experience and very relevant to today's main topic.
9:56
SPEAKER_00: So let's jump into it.
9:57
SPEAKER_00: Startup to exit strategies uh for launching, scaling, and exiting your e-commerce brand.
10:03
SPEAKER_00: So let's kick it off at the beginning.
10:05
SPEAKER_00: So launching, we're in startup phase.
10:07
SPEAKER_00: What are some key factors to consider when you're choosing a niche or product to launch in the e-commerce world?
10:15
SPEAKER_01: Once again, I I think when uh you have to decide where you're gonna be starting.
10:20
SPEAKER_01: Um you know, if you go D2C, so I was just talking to somebody recently that you know they uh they had this idea for this product and you know he he spent like 5k on the prototype.
10:33
SPEAKER_01: And you know, there it's a it's a product, there's some technology involved in it, but that was without any product research, without uh any market research to say you know what need am I solving for?
10:45
SPEAKER_01: Yes, there is a you know, sure, it's a you could product you can take to market, but and it comes back to if you're bringing something new to the market, you want to make sure there is enough demand.
10:56
SPEAKER_01: And part of that means is there other people using it?
10:59
SPEAKER_01: And I think a lot of people think of innovation as like, okay, I want to do something radically new.
11:04
SPEAKER_01: Well, new means it's gonna be expensive, meaning that you have to spend a lot of time and money educating the marketplace to help them understand the need for that product.
11:14
SPEAKER_01: And if if uh if nobody's solving that, so you know, coming from the the the tech to tech world, talk to investors and stuff as an investor, then one of the things they're always looking at is, you know, what's your competition?
11:24
SPEAKER_01: Most people fear competition or don't think of competition as a good thing, but competition means a couple of things.
11:30
SPEAKER_01: You know, one is that there is a need that somebody is solving that need through whatever products and services, and that they're also kind of absorbing that cost for educating the marketplace.
11:43
SPEAKER_01: So you want competition because it's going to help to say, okay, there's some validity to what you're kind of taking to market.
11:49
SPEAKER_01: Uh, if nobody's, you know, buying that, if there's no competition from an investor standpoint, they're looking at like, okay, well, maybe there's not enough of a need for that.
11:58
SPEAKER_01: Uh, it's not a big enough market.
12:00
SPEAKER_01: Uh so you want to look at, okay, I've got so many dollars.
12:05
SPEAKER_01: Do I want to be the one that sits there and spends all my dollars in kind of educating the space?
12:09
SPEAKER_01: And that's kind of the problem he's gonna run into is the fact that he's something so radically different.
12:15
SPEAKER_01: Um, you know, when he's looking at it, it's like, well, I can replace so many different things that are on the market, but how much education is that gonna take to do that?
12:24
SPEAKER_01: And what's the cost of that?
12:25
SPEAKER_01: And you know, where do you want to spend that dollars?
12:27
SPEAKER_01: Is those those dollars are gonna go into production?
12:29
SPEAKER_01: Is it gonna go into marketing your own product or marketing the whole market about the need for that product?
12:36
SPEAKER_01: So I think a lot of it begins as okay, where do you want to start?
12:40
SPEAKER_01: Uh, if I'm gonna start with the D2C, then I'm doing a lot of kind of customer discovery and market research on my own.
12:46
SPEAKER_01: But I'm starting a marketplace, you know, Amazon with all the different tools and technologies that are out there, there's tons of data.
12:54
SPEAKER_01: You know, you you don't have to get creative, you don't have to get innovative, just use the data that's there that tells you exactly what the need is and just do it, you know, put your own little twist on it, do it better, faster.
13:04
SPEAKER_01: Uh and that's how you can kind of stand out.
13:06
SPEAKER_00: That's some really good points I hear there.
13:08
SPEAKER_00: And actually, that's uh what you said about you know, educating the the market, that's that's expensive, but also changing consumer behavior is equally as challenging.
13:18
SPEAKER_00: You know, I look at innovations like uh you remember Friendster, Myspace, and who's the champion?
13:23
SPEAKER_00: Facebook slash meta now.
13:25
SPEAKER_00: You know, there were these concepts, and even Uber had versions of Rideshare before it and Uber who still can't make money off it, is you know, they ch they changed the consumer behavior, but it took a lot of investment.
13:38
SPEAKER_00: Uh, and then the other side of that is like, how long do we get to profitability?
13:42
SPEAKER_00: And unless you're a business with really deep pockets, like that's very difficult.
13:46
SPEAKER_00: And I couldn't imagine being on the uh side where you're going and asking for funding, like what that looks like, and having to educate your investors before you even have to educate the audience or on or the customer base on what that opportunity is.
14:02
SPEAKER_00: And you know, you hit some really good points.
14:04
SPEAKER_00: And just to dive deeper, and let's just assume that most of the audience here is not looking to change the world, they just have some really great innovations to uh to product ideas.
14:14
SPEAKER_00: So, market research, uh, I love that.
14:17
SPEAKER_00: Very important.
14:18
SPEAKER_00: How do you look at market research for the initial stages of launching an e-commerce, Brandon?
14:23
SPEAKER_00: And what methods do you recommend?
14:27
SPEAKER_01: Yeah, so just to go back on the the Uber thing, it was interesting to understand that the bigger challenge was not even the changing the behavior, it was changing something that's so ingrained with most folks, which is don't talk to strangers.
14:42
SPEAKER_01: And now you're basically saying, Oh, okay, I'm just gonna get in in a car with a stranger, and that was okay.
14:49
SPEAKER_01: You know, taxis at least had this kind of uh the association that if you saw a yellow cab or if you're in UK UK, you see a black cab, you know that that that that color and that that shape basically made it okay to be getting in there with that stranger, but Uber's like I don't know who this person is.
15:09
SPEAKER_01: They're just gonna come by and I'm gonna get into it.
15:11
SPEAKER_01: So that was the biggest hurdle they had was how do you overcome this trust factor?
15:15
SPEAKER_00: Yeah.
15:16
SPEAKER_00: And you do a lot of traveling with Uber.
15:18
SPEAKER_00: I know uh some states I visit, those Ubers are you know really nice Lincoln Town cars, and other times I'm getting in a Corolla with the hubcat mist, and I'm like, man, I hope this guy gets me in one piece.
15:30
SPEAKER_01: Yeah, I have had some scary incidents uh where I'm glad that there's this the whole technology, which goes back to kind of the whole reviews and all that stuff, kind of uh validating kind of the benefits uh and the value of those types of things, uh, because I probably would not have gotten in otherwise.
15:49
SPEAKER_01: Yeah, very true.
15:51
SPEAKER_01: Uh so to go back to your question was around doing the market research, right?
15:57
SPEAKER_00: So yes, yeah.
15:58
SPEAKER_00: What are some of the initial stages and uh for e-commerce brands and what tools or methods do you recommend if you were, you know, if you're gonna launch a brand and you're really passionate about something, like how would you start that market research?
16:12
SPEAKER_01: So once again, it goes back to where are you gonna launch it?
16:15
SPEAKER_01: So if you're you know going with the Amazon, you've got you know tools like data dive, uh, Jungle Scout, Helium 10, all these things that help you.
16:22
SPEAKER_01: Uh, even uh most people don't know about if you're gonna launch on Walmart, uh Celebrate is another uh great tool.
16:27
SPEAKER_01: It's basically uh data dive, helium 10 for Walmart specifically.
16:32
SPEAKER_01: Um uh and that seems great over there building something out to solve that problem.
16:37
SPEAKER_01: But if you're not on one of those platforms where there's a lot of data to help you kind of decipher and make this, you know, those decisions as to where that need is, um, if you're going D2C, it's really doing a lot of investigative work.
16:50
SPEAKER_01: It's very similar to how um a software company would kind of go to market.
16:54
SPEAKER_01: It's like, okay, I I have this hypothesis, and it goes back to understanding kind of problem space.
16:59
SPEAKER_01: Um do I understand, you know, a lot of people have this idea and they get really excited.
17:05
SPEAKER_01: So I recently, uh as you know, I you know, do a lot of listening to different pitches for investor stuff.
17:11
SPEAKER_01: So, and I noticed when this person was doing this presentation, got really excited about the solution, but just kind of quickly brief, you know, went over the problem stuff.
17:23
SPEAKER_01: And one of the feedback I gave was like, you know, you're so there's so much enthusiasm about the solution, but very little kind of care, concern about the problem.
17:33
SPEAKER_01: And if you really understand the problem space, then you can always pivot and figure out how to best solve it.
17:40
SPEAKER_01: Maybe it's not this product, maybe it's a different product, maybe it's a different variation of a product or different delivery, different service uh around it.
17:47
SPEAKER_01: So if you can really understand the problem, it makes such a huge difference rather than saying uh because everybody's like afraid, like, well, I don't want anybody to take my idea.
17:56
SPEAKER_01: Well, you know, idea really means nothing, it always comes back to execution.
18:00
SPEAKER_02: Yeah.
18:01
SPEAKER_01: So and execution is about to understand the problem well enough to say this is how to go execute solving that problem.
18:09
SPEAKER_01: So if you can, you know, take a hypothesis and say, okay, I'm gonna go take it to market by asking folks, you know, it could be something as simple as let me do uh a survey, put some dollars behind it on Google, just to see if what kind of click-throughs do I get?
18:27
SPEAKER_01: Is there enough people searching for that type of uh uh problem?
18:31
SPEAKER_01: And are they clicking through just to see is there any interest about it?
18:36
SPEAKER_01: So there's a lot of things you can do now that are very cost effective that you couldn't do before.
18:41
SPEAKER_01: Uh the reach that people have is so incredibly greater than before.
18:45
SPEAKER_01: You're not having to go just around your neighborhood, you can literally go tap into the whole world or tap into parts of the country or parts of the world.
18:52
SPEAKER_00: It's actually amazing.
18:53
SPEAKER_00: And I think Jeff Bezos, I can't remember if it's Jeff Bezos or Bill Gates.
18:57
SPEAKER_00: So forgive me as I butcher this quotes, but any idea left in the dark will shrivel up and die essentially.
19:02
SPEAKER_00: And you know, it goes to your point is like people have tons of ideas, but if you're not sharing it, you're also not getting feedback from potential, potentially your market, and so on and so forth.
19:13
SPEAKER_00: And you're right.
19:14
SPEAKER_00: Nowadays there's, you know, I've ran surveys for businesses to get concepts validated at MVP.
19:20
SPEAKER_00: We use Mechanical Turks, they have like uh PicFoo software, there's uh oh, there's just tons of software.
19:26
SPEAKER_00: You can really Google it, and there's tons of audience of people ready to give you feedback on everything from your website to your product concept to anything at ideation.
19:35
SPEAKER_01: So I think this is again I was gonna say in one piece of that when you're asking the question, one of the things you want to be mindful of is you have a solution in mind.
19:45
SPEAKER_01: If you're asking the questions just to validate your solution, that's gonna give you skewed data as well.
19:53
SPEAKER_01: So if you're asking it from the problem standpoint, then you know at least you're getting a true feedback on the problem, not asking in a way that you're kind of priming them to say, well, you know, is this validating or invalidating my potential solution?
20:08
SPEAKER_01: You really want to ask clean to understand what is their experience with the problem.
20:12
SPEAKER_01: Because if you understand that, then once again, maybe your solution solves it, maybe it doesn't, maybe it's a variation of it, maybe it's a pivot around it.
20:20
SPEAKER_01: But then you have a better understanding of the problem, not a yes or no against your own solution, which is a lot of you know, people ask the problem from a solution frame.
20:31
SPEAKER_00: Yeah.
20:31
SPEAKER_00: Sounds like a lot of people get the what is it, the chariot ahead of the horse.
20:35
SPEAKER_00: And it sounds like that's a perfect example.
20:37
SPEAKER_00: Uh, and you know, I think we're all guilty of it, especially as young entrepreneurs who, you know, join the space.
20:42
SPEAKER_00: And to your point, you do you do hear a lot of pitches.
20:45
SPEAKER_00: So I imagine people are just super excited about their idea, where you know, it just may not, they may not be solving the right problem.
20:52
SPEAKER_00: So to your point, and for our listeners, problem first uh is really the most powerful.
20:58
SPEAKER_00: And in my experience, I'm sure similar to yours, the brands that really have the biggest impact and resonates the most is like they're solving a very specific problem for a very specific group of people, being everything to everyone is a pathway, A, to spend all your money, but really not to solve anybody else's problems.
21:14
SPEAKER_01: Yeah, one thing I like to always say is you know, fall in love with your problem, not your product or your solution.
21:21
SPEAKER_01: Uh because then you'll always know how to you know figure out a way to solve for it.
21:26
SPEAKER_00: Yeah, I like that a lot.
21:27
SPEAKER_00: Fall in love with your problem, not your solution.
21:30
SPEAKER_00: You should put that on a coffee mug and a t-shirt, sir.
21:34
SPEAKER_00: On that note, so uh can you share some strategies for so let me just let's fast forward now.
21:39
SPEAKER_00: We got a product idea, I got an MVP out, uh, I got market validation, uh, my widget, or you know, let's do a pet product.
21:47
SPEAKER_00: I got a specific pet leash, and this leash is has a unique property.
21:53
SPEAKER_00: Um so what what are some strategies you would recommend for an effective launch on a platform like Amazon?
22:00
SPEAKER_00: For example, or even Shopify if you think that's a better route to go.
22:04
SPEAKER_01: Yeah, so you know, when you're you know, so what's interesting about e-commerce is you can success actually costs a whole lot more than failure.
22:14
SPEAKER_01: Meaning like if you if something's not gonna work, you lost what you lost.
22:18
SPEAKER_01: But if you're successful, then you have to decide with very little amount of data.
22:25
SPEAKER_01: I mean, what where I'm getting at with this, like so say you've got a a 60-day lead time and you you basically get into FBA, the product start selling.
22:36
SPEAKER_01: If it's gonna do really well, you're starting to put ad dollars behind it, you're starting to getting some reviews in.
22:42
SPEAKER_01: Well, the last thing you want to do is stock out.
22:44
SPEAKER_01: So you have to very quickly decide, you know, this was my uh uh test run of this.
22:50
SPEAKER_01: So maybe I bought 500 of these.
22:52
SPEAKER_01: Am I gonna commit to the next thousand or the 1500 or 2000?
22:56
SPEAKER_01: I have a very short window to make that decision if I want to keep inventory in stock.
23:02
SPEAKER_01: You know, you yeah, you can manipulate some things, slow down sales, you know, play with pricing.
23:08
SPEAKER_01: You have a lot of data, but you have to act a lot quicker and sometimes with a lot less data.
23:13
SPEAKER_01: Um and look, at the end of the day, you know, good uh entrepreneurs and stuff are typically making decisions with about 40 to 70 percent certainty.
23:25
SPEAKER_01: That if you're doing it too soon, you're gonna have a misstep.
23:28
SPEAKER_01: If you're waiting too long, you're missing opportunities.
23:30
SPEAKER_01: Yeah, so you want to have about a 40 to 70 percent certainty to say, yeah, let's you know pull the trigger on whatever decision it is, either no, this is not gonna work, let me kill it off, or yeah, let me go to take further action on it.
23:44
SPEAKER_00: So that's a that's a really good point, too.
23:47
SPEAKER_00: And just uh chime in, like we've seen the inverse of like uh somebody having success for a product that went really well.
23:53
SPEAKER_00: But I love it in novelty because I see this a lot in novelty category where you know, like look at fidget spinners where you know, if you were first to market with that, you were selling them like hotcakes, but if you committed to maybe a 10,000-piece order as these products were fading out, you're gonna end up having, you know, these fidget spinners for life, you know.
24:13
SPEAKER_00: I had you know, and it happens, but then you know, what do you do?
24:16
SPEAKER_00: You're you're tying up all your capital, you you don't have money for marketing and building an audience, and uh you're really limiting your ability to grow and expand your brand, which I would say is pretty important early in your early days as you're solving a problem and bringing a product to market.
24:31
SPEAKER_00: Do you have any uh additional comments on that?
24:34
SPEAKER_01: Yeah, I mean, you know, it goes back to uh also what to when are you launching and what what is the you know a product you're launching?
24:41
SPEAKER_01: Is it something that is a kind of a stable need, or is it something that's very topically, it's just uh uh a trendy thing that you want to tap in and jump on that will maybe have a short life, but you can make a lot of money very quickly.
24:55
SPEAKER_01: Um, for example, during COVID, I knew so many people that were just making uh so much money on masks very, very early on.
25:04
SPEAKER_01: They figured out they tapped in and they were getting you know just hundreds of thousands of masks coming in because they just figured that it was it's a bit of a gamble because it was really early.
25:14
SPEAKER_01: I mean, we're talking uh, I think around April.
25:18
SPEAKER_01: Wow, that was early on.
25:19
SPEAKER_01: Really early, and they they just you know, if if you're tapped in, I mean credit, some of these people were tapped into they're already buying a lot of stuff from China, so they're getting a lot of information coming in, so they started importing stuff in very early.
25:34
SPEAKER_01: You you just never know, you may could have all blown over inside of uh six weeks, and you would have been just sitting on containers and containers of task.
25:43
SPEAKER_01: In their case, they literally bought containers and containers, and they still didn't have enough.
25:49
SPEAKER_01: So, you know, it it depends on something like that versus I'm gonna go do a tooling product that you know it's gonna still sell pretty steady throughout the year.
26:00
SPEAKER_01: Um, or it's like a beach item that, okay, well, it's gonna have a season in summer, you know, Q2, Q3 will do really well, but I need to have other products uh throughout the rest of the year, otherwise I'm gonna have a very kind of lumpy um sales cycle, uh, which you know I see a lot of folks do.
26:17
SPEAKER_01: You know, they'll they they started off with a product that is very seasonal and they didn't quickly add additional products throughout the rest of the year.
26:26
SPEAKER_01: Uh, and makes it hard to scale that type of business because once again, a lot of times you're in this business to really scale, you're gonna need to outside capital at some point.
26:35
SPEAKER_01: And from that standpoint, you need to have kind of consistency in sales, and that's where it becomes a challenge.
26:41
SPEAKER_00: And the consistency makes sense, and you see it across the board.
26:44
SPEAKER_00: You know, I th uh we work with a lot of some block brands and bathing suit brands, and they're always looking, especially at apparel, it's like, okay, we have our summer line, you know, how can we take this and move a winter line?
26:55
SPEAKER_00: So at least we have that consistency throughout the year.
26:58
SPEAKER_00: Because to your point, if eventually the plan is to grow this thing to exit, you know, uh investors, and you'll know this better than I do, they're gonna want to see that consistency and they're gonna want to see that that pretty steady growth trajectory.
27:11
SPEAKER_00: Um, so being aware of that.
27:12
SPEAKER_00: So actually, before we jump on the next section, how early on in the process are you thinking of what my product's gonna look like at an exit?
27:21
SPEAKER_00: Is that something you're thinking from day one, or is that more as the opportunity comes and you're just focused on uh doing the reps?
27:29
SPEAKER_01: Yeah, I think you know, it's it's it depends on what the intent was to get into the business.
27:35
SPEAKER_01: If you knew you're getting into the business to like when I talk to people, you know, I've I've talked to some uh Amazon sellers, they're on product five.
27:44
SPEAKER_01: They mean they've had four prior exits.
27:46
SPEAKER_01: I mean, they know they're getting their whole job is they're gonna get in, get out.
27:49
SPEAKER_01: They're doing it, they're turning it really inside of 24 to 36 months.
27:53
SPEAKER_01: And they've just gotten down, they figured out the machine and they know how to work that machine.
27:59
SPEAKER_01: So that's a very different intent than somebody that started off with you know retail arbitrage, went to wholesale, decided to go launch their first product, and it's kind of every step of the way is testing the waters.
28:12
SPEAKER_01: They're not yet thinking, brand, they're not yet thinking what that brand means because until you have that brand, and you know, you really don't have any intellectual property, you don't have anything, uh, which goes back to you know, what type of business are you in?
28:25
SPEAKER_01: There's cash flow businesses and there's growth businesses.
28:28
SPEAKER_01: Uh, and and I come across this a lot where people don't understand what type of business there is.
28:33
SPEAKER_01: And if they, you know, like a cash flow business, you need to be taking money out on a regular basis.
28:37
SPEAKER_01: Uh, too many people reinvest money in a cash flow business, and there's no point in reinvesting money in a cash flow business.
28:43
SPEAKER_01: I mean, you do some, but not to the same extent you would on a growth, because there's no exit event the same way you would have on a growth business where you're gonna have a brand.
28:52
SPEAKER_01: So if you're coming from that kind of retail arbitrage, wholesale background, you need to have that shifted mindset to say, okay, now I'm shifting to a growth type business.
29:02
SPEAKER_01: Then what do I want to do?
29:03
SPEAKER_01: Because now I actually have a potential for an exit.
29:06
SPEAKER_01: I have a potential for an exit.
29:08
SPEAKER_01: What does that look like?
29:09
SPEAKER_01: You know, do is it am I launching this brand as a separate PL and the separate business?
29:16
SPEAKER_01: And I'm gonna, you know, use some of that funds to basically go start this next company that's a brand, and then sell that off while this cash flow business keeps basically fueling these other types of ventures.
29:27
SPEAKER_01: That's a perfectly you know good strategy to have.
29:31
SPEAKER_01: But you know, at that point, yes, you want to be thinking, you know, where is the end point in this?
29:36
SPEAKER_01: Is it uh a product that I can see there's some big buyers for this?
29:41
SPEAKER_01: If it's a CPG, maybe it's a Unilever that could potentially buy it because yeah, I know they kind of buy these type of brands.
29:48
SPEAKER_01: Uh, and can I get it big enough to be attractive to somebody uh of that size and scale?
29:54
SPEAKER_00: Yeah.
29:54
SPEAKER_00: For those companies too, is it better to build it from the ground up or just buy yours that you already have an audience?
30:00
SPEAKER_00: So it's almost a no-brainer.
30:01
SPEAKER_00: And I'm actually really glad we're talking about finance, and this will kind of tie into scaling the business.
30:06
SPEAKER_00: But for entrepreneurs to effectively manage cash flow and finances, or sorry, how can e-commerce entrepreneurs effectively manage cash flow and finances during a scaling phase?
30:18
SPEAKER_00: So we're deciding to scale up.
30:20
SPEAKER_00: Maybe we're gonna have a reduced ROAS.
30:23
SPEAKER_00: You know, how do you make sure you stay positive enough to make sure you keep the lights on, you're able to buy inventory?
30:28
SPEAKER_00: Do you have any tips and tactics around financing?
30:32
SPEAKER_01: Yeah, so one is having sales consistency, uh, you know, quickly identify, you know, if you've got uh seasonal products and stuff, you know, bring in more products or you're gonna have consistency throughout the year.
30:43
SPEAKER_01: Uh, the other is just managing your books.
30:46
SPEAKER_01: It's crazy how many people I come across that just, you know, they're like, uh I like the creative aspect of e-commerce and that, but I don't do numbers.
30:55
SPEAKER_01: It's it's the fact I've heard I don't do numbers so much is it scares me because e-commerce is so big in numbers.
31:01
SPEAKER_01: I mean, it's such a capital-intensive business.
31:04
SPEAKER_01: Uh, it I would I would uh lose sleep at night if I didn't have kind of an awareness and understanding of my numbers.
31:10
SPEAKER_01: Uh and and the space with there's so much money movement that takes place, it's easy to not know.
31:18
SPEAKER_01: So, for example, uh, I was working with somebody who didn't know that uh the the previous month or two months back, every product that was sold or every uh order for that particular SKU they lost$14 on.
31:33
SPEAKER_01: Um because I can add up the ad yeah, the ad spend was way too high and they're just losing money.
31:39
SPEAKER_01: So you know, once again, there's so much that's happening, you've got so many different SKUs, it's easy to miss something until it's too late.
31:49
SPEAKER_01: So staying on top of all of that is very crucial.
31:52
SPEAKER_01: Um, the other is like I said, the consistency, the other is blending uh outside capital in, meaning that I I come across so many people that there's there's a pride in I did this with my own money, I did this on my own, uh, until they can't, and then they go for outside capital.
32:10
SPEAKER_01: You it's very hard to get money when you need money.
32:13
SPEAKER_01: It's easier to get money when you are doing well and you have options.
32:18
SPEAKER_01: Uh, it's gonna be always cheaper money when you don't need it than when you do need it.
32:22
SPEAKER_01: It's gonna cost you a lot more, and you may not be able to get it at all.
32:26
SPEAKER_01: So, ideally, if you can start blending in outside capital and say, okay, if I take, you know, uh this much of my money and I reinvest it back into the business, how do I say I'm gonna start blending in about 30% of that from outside capital and 70% of that's gonna be my own money?
32:45
SPEAKER_01: So start blending that in.
32:47
SPEAKER_01: You're mitigating some of that risk, you're also pocketing some of that money, taking it outside the business so that you can have kind of, especially if you're doing Amazon, you at some point along the way, you're gonna get an account suspension or something's gonna happen because at the end of the day, it's Amazon's world.
33:02
SPEAKER_01: So you want to have money parked away for what I call your sleep well number, you know, whatever that number is, so that you know that what are problems and stuff you run into, you've got the the capital to go, you know, pay attorneys, whatever it takes to get everything back open.
33:18
SPEAKER_01: That's a really good point.
33:19
SPEAKER_01: And that number keeps growing.
33:20
SPEAKER_01: I mean, like you got a$10,000 store versus if you got a million-dollar store, the problems are gonna get bigger.
33:26
SPEAKER_01: The amount of dollars it's gonna take to solve that problem is gonna get bigger.
33:30
SPEAKER_01: So you want to have that, you know, think of it as a percentage that keeps scaling with you.
33:35
SPEAKER_00: That makes sense.
33:36
SPEAKER_00: And you that 30% is really a good benchmark of trying to acquire capital.
33:41
SPEAKER_00: And what are some vehicles for capital that some of our sellers should be aware of?
33:45
SPEAKER_00: Is it just straight going to the bank?
33:47
SPEAKER_00: Or am I knocking on VC doors right away?
33:50
SPEAKER_00: Is it relatively easy to get access to the capital?
33:53
SPEAKER_00: Like in your experience, how you know, for an e-commerce seller who's selling, let's just hypothetically it's their first business and they want to scale, they have good numbers, they're profitable.
34:02
SPEAKER_00: You know, what what would you recommend to get started without without obviously giving up equity unless that's the name of the game?
34:08
SPEAKER_01: Yeah, so a couple of different avenues, right?
34:11
SPEAKER_01: So, first off, e-commerce is very hard for them to go to any traditional bank and get capital just because there's they have nothing.
34:18
SPEAKER_01: Traditional banking looks at okay, what are you going to collateralize so that I can you know underwrite this and give you money?
34:24
SPEAKER_01: Well, it's e-commerce, everything's in the air.
34:26
SPEAKER_01: It's like there's there's products and stuff, and no banks are gonna go underwrite your inventory because they don't want to get into that business.
34:33
SPEAKER_01: Um, so you know, most likely if you're taking any type of money, you're you're usually you know doing a personal guarantee, which means it's still on you.
34:41
SPEAKER_01: Uh, there's uh a lot of other in the space, there's other kind of vehicles, uh options around funding that are specifically around uh, you know, they're financing your um revenue.
34:53
SPEAKER_01: So it's like revenue-based financing.
34:55
SPEAKER_01: Um, they're looking at that.
34:57
SPEAKER_01: Some are actually underwriting your inventory, some are uh underwriting just kind of the overall business.
35:04
SPEAKER_01: Um, so there's different ways uh there's different uh companies and they all have different uh underwriting strategies of how they do it.
35:11
SPEAKER_01: Uh, but at the end of the day, they are able to give you funding and from a non-dilutive standpoint.
35:18
SPEAKER_01: So unless you're really ready to give up equity, you want to explore, okay, you know, if I'm gonna have an exit, can I have an exit as you keep 100% of that money?
35:28
SPEAKER_01: Because I leverage capital without giving up equity.
35:32
SPEAKER_01: In other times, you say, okay, maybe I do want to give up equity.
35:36
SPEAKER_01: Then you want to go find uh investors that, you know, are investing in e-commerce uh brands or CPG brands, and then it's figuring out, okay, well, how much do I want to uh give up to get the equity and scale the business?
35:52
SPEAKER_01: And at those times, really, it should be probably less about the money and more about what doors does that investor help you open?
36:00
SPEAKER_01: You know, what uh contacts, what uh, you know, can they be potentially strategic partners?
36:06
SPEAKER_01: You know, there's a lot of big companies that have strategic investment orbs that are looking at, you know, if I put money into this uh business, this product, maybe down the road we'll just buy them all together.
36:19
SPEAKER_01: Um, but they'll make a strategic uh initial investment.
36:22
SPEAKER_01: So that could be a potential partner you look at to say, okay, well, maybe I can sell to them.
36:27
SPEAKER_01: Um, and they can potentially unlock a lot of doors for me.
36:30
SPEAKER_01: So you want to think about always from the standpoint of money is a piece of it, but network is another.
36:36
SPEAKER_01: You know, what access do I am I getting?
36:39
SPEAKER_01: Uh portfolio companies, uh, other contacts and stuff, can they get me into retail stores if I want to go that route?
36:46
SPEAKER_01: So there's a lot more to things than just money, but also depends on where you're at scale uh and what's your where you're at in the journey.
36:55
SPEAKER_01: You know, are you year one into kind of scaling or you year five into scaling?
37:00
SPEAKER_00: That makes a ton of sense.
37:01
SPEAKER_00: And um, you know, on the agency side, we work with brands that get acquired and we end up working with a lot of private equity uh firms because when you have a bunch of brands, it's just easier to hire an agency than to hire like individuals.
37:14
SPEAKER_00: And uh something I've noticed with the private equity companies that we've had the privilege of working with, they tend to be really siloed into categories.
37:23
SPEAKER_00: Uh, we've worked with uh private equity that's like just beauty, uh specific types of beauty brands.
37:29
SPEAKER_00: And same thing with like supplements.
37:31
SPEAKER_00: They're solving a problem for either specific demographic, but like they're drilled down into those categories and they don't really mess around.
37:38
SPEAKER_00: And what I found really interesting is like a lot of these private equity companies will have a mission of like, you know, we want to bring natural remedies to the masses, and then that's how they build their uh their portfolio.
37:52
SPEAKER_00: So to your point, and for our listeners who hopefully are, you know, if you're at the phase where you're scaling and you're trying to raise money, strategic partnerships really resonates.
38:01
SPEAKER_00: And while myself as an agency, I don't have as much experience with it.
38:05
SPEAKER_00: It sounds like Oz on your side, you've seen it and maybe work with companies as they as they've gone through this phase of raising money and making these connections and building these relationships.
38:15
SPEAKER_01: Yeah, and VC's private equity, they'll all have a thesis.
38:19
SPEAKER_01: So you want to make sure you're talking to somebody that's aligned with, you know, your product and your mission is kind of aligned with their thesis.
38:26
SPEAKER_01: Uh, it's just, you know, respectful of your time and theirs, um because it's not going to go anywhere otherwise.
38:32
SPEAKER_01: Um, but you know, you should always consider having these conversations because you never know where that goes, uh, what kind of doors that opens just from having the contacts and stuff.
38:42
SPEAKER_01: Plus, you gotta start getting a sense of what's the valuation of my company, how does somebody else uh as a potential acquirer look at it?
38:50
SPEAKER_01: Um and then it also goes back to what's the reason to sell, you know, which uh, and we may, I don't know if we want to go there just yet, but it's like that is something to think about.
39:01
SPEAKER_01: Why why are you selling?
39:03
SPEAKER_00: What's the objective you're going for at that point?
39:06
SPEAKER_00: What are some typical reasons you see sellers wanted to sell?
39:10
SPEAKER_00: Is it always about the big paycheck?
39:12
SPEAKER_00: Do you find a lot of them just get burnt out from being uh in that role?
39:15
SPEAKER_00: Like uh if if you wouldn't mind, you might sharing some of like why did you decide to leave your first company or second, third?
39:22
SPEAKER_01: Yeah, so I think it's it's a combination of timing.
39:25
SPEAKER_01: Uh, you know, one is just okay, personal timing.
39:28
SPEAKER_01: Okay, this is the right move for me where I'm at, kind of uh in my journey.
39:32
SPEAKER_01: The other is like, okay, if you waited too long, I every company has an arc, meaning that you know, you'll get a sense of okay, maybe it's time to sell.
39:42
SPEAKER_01: Maybe you get it right at the tip at the at the apex, or you get it right afterwards.
39:46
SPEAKER_01: If you get it right afterward, that means you're probably hitting the the burnout phase.
39:49
SPEAKER_01: You're like, okay, I should have probably gotten out six to twelve months ago.
39:54
SPEAKER_01: And the uh other factors could be that it's just the market, meaning that what's happening in the world, uh, I think that uh to weather what's coming up, I don't have the deep enough pockets to do it, but probably a private equity firm does or some aggregator may.
40:12
SPEAKER_01: So it's better for me to kind of exit now.
40:15
SPEAKER_01: The other is maybe I've hit kind of whatever goal I had in mind that okay, I set this out, you know, initially was just to have this kind of side hustle, but it's like, you know, if I ever got to the point where I got to a five million dollar business, I'm happy with that.
40:29
SPEAKER_01: I feel like I've achieved what I wanted to.
40:31
SPEAKER_01: Maybe that's the reason.
40:32
SPEAKER_01: The other is like, okay, you know what?
40:34
SPEAKER_01: I know Amazon really well, but I'm not about to go tackle the DTC world or other marketplaces or go international.
40:43
SPEAKER_01: Maybe that's you know the next phase for the business, but I'm not the person to go do that.
40:47
SPEAKER_01: So maybe that's a good time to make that exit.
40:49
SPEAKER_01: Wow.
40:49
SPEAKER_01: So understanding kind of you know what got you into it, and that will help you understand when is the right time to get out of it.
40:56
SPEAKER_00: Beautiful.
40:56
SPEAKER_00: Yeah, and that makes sense too, especially if you don't have the passion.
41:00
SPEAKER_00: You know, I'm sure after a while you're like, I don't want to do this anymore.
41:02
SPEAKER_00: But also if you don't have the experience, you know, taking a brand international, doing the D2C, like uh there's a lot that goes into it.
41:10
SPEAKER_00: Uh, you know, a lot of agencies and consultants like work specifically in that area, and that's all they do.
41:16
SPEAKER_00: So it says a lot about like the knowledge that's required to get success on whatever that is.
41:22
SPEAKER_00: And now that we're talking about exiting and kind of strategies, can you share some insights on how to maximize the valuation of an e-commerce brand?
41:31
SPEAKER_00: Like typically, what do you see uh somebody who's looking to acquire?
41:34
SPEAKER_00: Like, what KPIs are they looking at?
41:36
SPEAKER_00: And for our sellers in our audience, like what should they be considering if they're getting to the point where they're like, hey, I think we're we're hitting the apex.
41:43
SPEAKER_00: What, what, what do I what does an investor need to see that they're gonna go, yep, let's dance.
41:48
SPEAKER_01: I mean, the the key thing is gonna be with any businesses, EBITDA, which is really your earnings uh before interest tax, depreciation, amortization.
41:57
SPEAKER_01: Um, it's not a number that's you know gonna show up in your QuickBooks and stuff.
42:01
SPEAKER_01: So you're gonna have to talk to your accountant to kind of back into that number.
42:05
SPEAKER_01: Um, but that's really gonna be the the key number, or they're looking at uh SD, um, which is if you're running the business and then you you're basically uh giving yourself some benefits and stuff, but it's meaning that if somebody else is gonna acquire it, you're not gonna be that person.
42:22
SPEAKER_01: So they have to replace you with a manager or operator to cover that expense.
42:26
SPEAKER_01: So they have to factor that cost in as well.
42:30
SPEAKER_01: So that's kind of the key metric.
42:33
SPEAKER_01: You know, are you talking about the the health of the business?
42:35
SPEAKER_01: And that's what most businesses are evaluated as okay, is there multiple of the eBIT?
42:40
SPEAKER_01: Um, and you know, during the heyday, what about a couple of years ago, it was people getting seven to eight X, uh, which really skewed a lot of people's perceptions uh as we were 2024 now, right?
42:52
SPEAKER_00: So last year put some aggregators out of business too, man.
42:55
SPEAKER_00: It was pure mayhem.
42:58
SPEAKER_01: So, you know, it do the the last 12, 18 months, I think it's a lot of been just you know bringing people's expectations back down to what's realistic, you know, four or five X.
43:10
SPEAKER_01: Yeah, I mean, uh in the a brand on wholesale, I've seen up to two and a half X.
43:16
SPEAKER_01: Um, you know, if you have really good operational efficiencies in place and you've got uh a specific kind of contracts to resell stuff for particular brands, uh, then they actually have some value in it.
43:30
SPEAKER_01: Um, but if you're doing straight brands, yeah, four to five X is kind of what you're looking at.
43:34
SPEAKER_01: Um, and so you want to just have a good understanding of your numbers, you know, make sure that you know you've got employee agreements in place, you've got you know all your compliance documents in place.
43:43
SPEAKER_01: Uh if you're doing like supplements and stuff, you've got the reports and show that you know everything's been tested properly.
43:50
SPEAKER_01: Um you just want to have all your ducks and roads.
43:52
SPEAKER_01: This is a business.
43:53
SPEAKER_01: Somebody's acquiring uh something that's either value or a headache.
43:58
SPEAKER_01: Uh so you know the You want to make sure that uh you're you're giving something that's in a good position that somebody's gonna go take and make some money off.
44:08
SPEAKER_01: And you know, some people think about it from the standpoint of let me not even go execute on this strategy just yet because it's an easy, low-hanging fruit for somebody else to come in uh and quickly get some quick returns.
44:21
SPEAKER_01: Uh there's a gentleman uh that I know that you know he knows his strategy so well from uh uh ad standpoint that he's like, okay, I can take pretty much if I find the right businesses, I can make a quick 25% increase in business.
44:37
SPEAKER_01: So every six to 12 months, he can just buy a company, a brand, and just turn around around and sell it off again.
44:43
SPEAKER_01: But he'll have increased it by 25%.
44:46
SPEAKER_00: So that's somebody who has their processes down to a science, man.
44:50
SPEAKER_00: That is next level smart.
44:52
SPEAKER_00: And and there's lots of people who do that.
44:54
SPEAKER_00: Once you figure it out, why not rinse and repeat if you can make a lot of money?
44:58
SPEAKER_01: Exactly.
44:59
SPEAKER_01: So it's knowing your numbers, it's knowing kind of you know, choosing the the right uh kind of business to buy.
45:06
SPEAKER_01: Um so you know, if you do it enough times, it's just kind of play it's running that playbook, right?
45:12
SPEAKER_01: So that's why I see there's another person I know that's so he's on brand five, but prior to that, it's always been different supplements and those type of brands.
45:22
SPEAKER_01: This time got into a retail or into apparel.
45:27
SPEAKER_00: So radically different.
45:29
SPEAKER_00: That's a tough category to operate in.
45:31
SPEAKER_00: I'm not gonna lie.
45:32
SPEAKER_01: He's hating every minute of it, you know.
45:34
SPEAKER_01: It's like uh where you have returns up to almost 18, 20 percent versus supplements was just easy, you know.
45:40
SPEAKER_01: Pretty much, you know, you put they buy it and it was just sell, uh, and it's repeat, you know, you're subscribed and save, all those things.
45:47
SPEAKER_01: So you have to decide do I want to do what I'm good at and do it, you know, quicker and bigger, uh, or do I want to go for something totally new and take a risk?
45:59
SPEAKER_00: Yep, I like that.
46:00
SPEAKER_00: And just kind of wrap up exiting real quick.
46:02
SPEAKER_00: Do you have anything else you think our listeners should know about exiting, about considerations for planning, or uh any last two cents before we jump on to learn about e-commerce sellers or e-commerce sellers HQ?
46:15
SPEAKER_01: Yeah, one thing I'd say just to folks look, at the end of the day, when you get into e-commerce, it's there's a lot of risk.
46:23
SPEAKER_01: There's high returns.
46:25
SPEAKER_01: You know, if you were especially right nowadays where you've got you know high yield uh savings accounts, if you're putting 100,000 in in a year, you're gonna get 5k back.
46:35
SPEAKER_01: You can get 5% return.
46:37
SPEAKER_01: Well, if you took that same 100,000 and put it in an e-commerce business, and if you netted out even uh, you know, a five percent profit, but if you can have four turns in a year, well, now you've got 20k.
46:49
SPEAKER_01: So you got 20% return on that same 100k versus 5%.
46:52
SPEAKER_01: So, you know, the the math can work really well in your favor if you're doing e-commerce, but the challenge with that is it may not as well.
47:01
SPEAKER_01: So if you end it with zero exactly.
47:04
SPEAKER_01: So if you're doing it, take some money out and say, okay, think of it as you know, this is an asset class.
47:10
SPEAKER_01: You know, e-commerce is one of the asset classes.
47:13
SPEAKER_01: I can have uh other asset classes where I can take that money and uh put it in.
47:17
SPEAKER_01: So let me move it from something this that's high return, or you know, higher risk but higher return, and let me move some of that money into lower returns but lower risk, so that you start looking at this as a whole portfolio and where is my money uh across kind of that whole portfolio.
47:34
SPEAKER_00: Beautiful.
47:34
SPEAKER_00: And I like that view too, the portfolio view, also reinvesting where it makes the most sense.
47:40
SPEAKER_00: These are some really great insights on exiting and even just scaling, financing, and you know, launching the business.
47:46
SPEAKER_00: I feel like we had a really full-spectrum conversation today.
47:50
SPEAKER_00: But now I want to turn it back.
47:51
SPEAKER_00: I want to learn a little about a project that you're working on, e-comm sellersHQ.
47:56
SPEAKER_00: Um, so e comm sellers HQ is known for bringing together the fragmented e-commerce ecosystem under one roof.
48:04
SPEAKER_00: Can you explain the mission behind the brand and and how it supports e-commerce sellers and scaling their businesses?
48:12
SPEAKER_01: Yeah, it really started off just kind of scratching my own itch.
48:15
SPEAKER_01: People are always coming to me asking me about, you know, what's a good resource for this or that?
48:19
SPEAKER_01: It was either in my head or in a spreadsheet I'd put together.
48:22
SPEAKER_01: So I just decided, let me build out a whole platform because it is so fragmented from, you know, some of the stuff, information being in a Discord, a subreddit, to a Facebook group, to if you didn't hit this event, you didn't hear about it, to a WhatsApp group.
48:37
SPEAKER_01: I mean, it's just all over the place.
48:38
SPEAKER_01: So it's like, can we bring all that in one central place from launching, scaling to exiting in one kind of platform, all the different uh knowledge, uh, all the different service providers, all the different software, uh, so that you just have it all in one place.
48:54
SPEAKER_01: And you know, what really helped solidify for me is I came across somebody and they she decided to get into e-commerce, spent like$14,000, got the product here, and got an FBA.
49:07
SPEAKER_01: And when we started talking, I was like, Well, how much have you allocated for uh advertising?
49:13
SPEAKER_01: She's like, I need to advertise.
49:15
SPEAKER_01: I was like, Well, it's not gonna sell itself.
49:18
SPEAKER_01: So she had no awareness of advertising, she had no awareness of doing reviews.
49:22
SPEAKER_01: In her own mind, the whole business was really just half the business, which is getting a product here and getting into Amazon, not anything about the other half of the business.
49:32
SPEAKER_01: So the fact somebody can spend that much money and have that kind of a disconnect is like that's there's something missing that you know you should have enough information, at least centralized that you can go to wherever you're at in the journey and say, I can come here, I can get enough information to say, okay, what do I need to do next?
49:49
SPEAKER_01: If I'm even I've been at this for a couple of years, what software do I need to be looking at next?
49:53
SPEAKER_01: Or do what MA person should I be talking to?
49:56
SPEAKER_01: What attorney should I be talking to?
49:58
SPEAKER_01: So have all those resources in one place so that there's not a misstep in that journey because it can get very expensive and you can basically put you out of business completely.
50:06
SPEAKER_00: So yeah, especially for startup brands, small businesses like that really resonates.
50:11
SPEAKER_00: Um, myself and my co-founder, we started off with retail arbitrage, and I'm sure there's a lot of sellers that that's kind of their first route.
50:19
SPEAKER_00: And to invest that much money, you know,$14,000 when you're working a job that pays$60,000 a year, for example, you know, that's that's a lot of savings.
50:27
SPEAKER_00: And that money could have gone towards your family or could have gone somewhere else to be put to better use than having inventory uh in stock.
50:35
SPEAKER_00: So I definitely understand the benefit of having an ecosystem where you have vetted out uh agencies and service providers that are there to help these people make sure they're allocating their resources properly and they can go in eyes wide open.
50:49
SPEAKER_00: So really cool.
50:50
SPEAKER_00: Do you have anything else to add about uh about e-commhq, uh e-com sellers HQ?
50:56
SPEAKER_00: Anything, uh any features, anything cool you want to share before we jump on to our final topic?
51:01
SPEAKER_01: The the platform is completely free.
51:02
SPEAKER_01: So my only ask to the listeners would be you know, take a moment, go to ecomsettershq.com and go leave a review for whatever you had experience with.
51:12
SPEAKER_01: The beauty is uh I I'm the platform is neutral.
51:15
SPEAKER_01: So it doesn't matter if it's good, bad, or otherwise, it's a place where you can share whatever your experiences have been with whatever you've used, uh whether it's a service provider, a product, uh software, um, a consultant, coaching.
51:28
SPEAKER_01: I mean, like I said, the whole idea was to and it still continues to grow, so because it's constantly changing.
51:32
SPEAKER_01: That's the other part to keep loading, adding more uh things as I come across them.
51:37
SPEAKER_01: And if you don't uh see something, you can put right from the site, just request to add it.
51:42
SPEAKER_01: Uh, we'll get that added on there.
51:44
SPEAKER_01: But just leave a review so it helps future sellers uh on their journey as well.
51:47
SPEAKER_01: And like I said, you can go read reviews, it benefits you and it benefits others, and it's totally free.
51:52
SPEAKER_00: Gotta love the community.
51:54
SPEAKER_00: Very cool.
51:54
SPEAKER_00: And I love what you're working on, Oz.
51:56
SPEAKER_00: We have a little tradition here.
51:57
SPEAKER_00: We like to discuss the future of e-commerce from some of the most smartest and brightest uh leaders in the industry.
52:04
SPEAKER_00: So, Oz, on that note, with your extensive experience in retail, wholesale, and high-tech startups, where do you see the future of e-commerce heading in the next five, 10 years in your in your crystal bar, particularly in terms of technological advancements and consumer behavior?
52:20
SPEAKER_01: You know, I grew up in the era of Jetsons.
52:23
SPEAKER_01: So I'm really still looking forward to where you know 3D printing and stuff, I can just push a button at the house and I want clothes, uh, it knows my size, it knows materials I like, it can just create you know whatever I want on demand.
52:38
SPEAKER_01: I I think look, if you can do three, you know, 3D houses and stuff now, it can it can't be that far off that uh you know we can have this kind of technology in place to just use all this 3D printing and you know uh push a button.
52:54
SPEAKER_01: So I I'm not sure what the impact that that has on brands and stuff.
52:57
SPEAKER_01: If you say, you know, uh if everything goes back to you know the brand is the raw material, so use my uh silk or use my uh you know plastic.
53:09
SPEAKER_01: I I don't know what it does to the brands, or maybe uh the brands or the designs they're selling.
53:15
SPEAKER_01: And what you're doing is you're taking that 3D printing and you're either put this as a template, and I do this template, and that's what uh the output, and then that's what the brand is.
53:25
SPEAKER_00: That is pretty exciting.
53:27
SPEAKER_00: And what I'll say if uh everybody in five to ten years from now has a Rosie in their house.
53:31
SPEAKER_00: Remember, you heard it here first from Mr.
53:33
SPEAKER_00: Oz.
53:34
SPEAKER_00: Oz, thank you so much for sharing your invaluable insights and expertise with us today.
53:39
SPEAKER_00: It's been a pleasure having you on the show.
53:41
SPEAKER_00: Before we wrap up, could you let our listeners know where they can find you and if you have anything else to add that you'd like to share?
53:48
SPEAKER_01: Yep, the uh easiest way to find me, uh email is Oz at ecomsellershq.com, the website is ecomsellershq.com, the handles are at ecomstellershq.
53:59
SPEAKER_01: Um, that's probably the the quickest way.
54:02
SPEAKER_01: If I'm if you're on LinkedIn, I'm just Oz Merchant on LinkedIn.
54:06
SPEAKER_01: So you can find me there as well.
54:08
SPEAKER_00: Beautiful.
54:09
SPEAKER_00: Well, just so everybody knows, the links are gonna be provided in the show notes, so make sure you check those out.
54:14
SPEAKER_00: Oz, thanks so much for being here, man.
54:15
SPEAKER_00: Enjoy the rest of your day.
54:16
SPEAKER_00: Will thanks so much.
54:18
SPEAKER_00: Take care.
54:19
SPEAKER_00: Thank you for tuning in to this episode of Selling on Giants.
54:22
SPEAKER_00: I hope you found my conversation with Oz as insightful and inspiring as I did.
54:26
SPEAKER_00: Oz has provided us with invaluable tips on launching, growing, and exiting an e-commerce brand.
54:32
SPEAKER_00: And I'm sure many of us are eager to implement these strategies to grow our own business.
54:37
SPEAKER_00: Remember, the journey from startup to exit is filled with challenges, but with the right guidance and perseverance, success is within reach.
54:45
SPEAKER_00: If you enjoyed this episode, please like, follow, and subscribe wherever you're tuning in.
54:49
SPEAKER_00: Your support helps us bring more expert insights and actionable advice to e-commerce sellers around the world.
54:56
SPEAKER_00: A big thank you to Oz for joining us today and sharing his expertise.
55:00
SPEAKER_00: Be sure to check out e comm sellerHQ for more resources.
55:05
SPEAKER_00: And also the links are in the show notes below.
55:08
SPEAKER_00: Until next time, this is Mr.
55:10
SPEAKER_00: Wells signing off.
55:11
SPEAKER_00: Keep pushing forward and scaling your businesses, and most importantly, stay classy, people.