Smashing your e-commerce business in 2021 - Amazon Business Tips with Ben Leonard - Part 2
Things we discussed in this session:
A. Part 1
B. Part 2
Things we mention in this session of Seller Round Table:
Episode 104 Transcription:
[00:00:01] spk_0: Welcome to the seller roundtable e commerce coaching and business strategies with and er [00:00:06] spk_2: not and amy Wiis [00:00:08] spk_1: mm Some other things that I assume um that if sellers have in place will get them more money in terms of multiples would be you know, systems or maybe uh staff or um you know maybe something proprietary like some software that they built to manage uh inventory. Um you know, anything like that I assume um you know that that when you're shopping that's that's like a huge value add for those those people looking to buy. [00:00:38] spk_0: Yeah, all extremely important. If you've got systems, uh standard operating procedures in place, automation is in place. Perhaps you've come with your own processes um for things uh forgetting reviews through social media, you know, anything that you do that I like to talk about it. I call it micro agility, anything special. And nimble that you do that created the success of your brand provided result with in terms of service. Mhm. Keep records of that. This is going to a boost your evaluation and be when you're having these conversations with a potential buyer, you can show off, show them all this fantastic stuff. Here's all the great stuff I've done to build my brand, here's what my brand can bring to you. Because remember this buyer can potentially roll out all this neat stuff you've done to the other brands that they're buying, potentially you could even charge them a consultancy fee to teach them all this stuff. Launch new products for your brand and there are other brands. Perhaps lots of things you can think about. [00:01:38] spk_1: Yeah, it's interesting one thing that um you know, because a while back when she was pretty early on, I approached them because I was thinking about selling my business, my amazon business. And the one thing that stopped me was is they wanted and I totally get this for like due diligence but like really early on in the process not to talk crap. I mean I'm just sharing my experience um and you might be okay with it. So I'm just saying my my own trepidation was they wanted full access to my account like like really early on um And you know I was like well wait a minute so I could give you full access to my account, you can pull all my data and mind my data and see all my tips and tricks and you know I've been doing this for a lot of years so I have some stuff that probably you know a lot of people don't know how to do or do it differently. Um You know like you said kind of some secret sauce um And and that took me back because I'm like all right, there's this giant company that could easily take this data. I mean of course they would say they wouldn't but you know human nature and you know they might say you know have some kind of India or whatever but once that information is in your brain it's it can marinate into you know ideas that are maybe an iteration. But it's still you know originating from my you know what I was doing. Uh So that was kind of scary for me. So um I mean do you guys how do you protect the sellers in terms of kind of their I. P. And you know kind of like what they're doing if it's unique um You know when you're shopping these deals. [00:03:04] spk_0: So one thing I would say is that this space has come on a long way in the couple short years that this has been happening and that type of thing doesn't happen too much. Generally speaking, a potential buyer should only get access to your accounts and it should be read only access once during the due diligence phase. Nds have been signed, letter of intent, signed, etcetera, etcetera. At that point, they're going to have to have access because they can't buy your business if they can't, they haven't seen it. You can't, you're not going to buy a house if you haven't been to see it and you haven't seen the report. So unfortunately, um, it is true that they will see the details of a business that they may then not going to buy. And as you say, they may see some stuff in there that marinates in their brain, as you say. But they're seeing so many potential businesses. I really don't think it's that big of a deal because if they did see stuff they liked chances are they're going to like it enough to buy your business if that makes sense? [00:04:02] spk_1: Yeah. No that's a great that's it. But it's yeah [00:04:05] spk_0: we protect sellers is when we're presenting a potential business to a potential buyer it's anonymous sized. So they see the high level broad information. If they want to see more they need to pay a fee for us to unlock that information. Now there are some buyers that we built a relationship over time and we know that there are serious vetted buyers. But if it's somebody new to us said it's a competitive rather than a big aggregator or it's a private individual for instance they're gonna have to pay a fee to unlock that data and whoever it is they're going to have to sign an N. D. A. And so nobody gets to see any specific data until we have ascertained that they're not a tire kicker and they're serious seriously potential potentially going to buy this thing and they've signed an N. D. A. [00:04:54] spk_1: Awesome. That makes a lot of sense. Yeah like I said this was a while ago and I can't remember the exact terms but I just remember like you know I'm pretty experienced in the space just being a little bit taken aback by like wow you want this all this stuff this early on like it was it was a little bit sketchy for me like you said though it's matured quickly so I'm sure they might have some some other um you know things in place to to kind of protect uh I. P. And and systems and things like that. Um Are there any you know I'm sure that you get a lot of brands that come to you that are, you know, you talk about this a little bit before, kind of Me Too products, you know, you know, opportunistic things like that. Not really a lot of it here or things to um you know to protect. So like, you know, we have a lot, we have a wide range of audience here, right? We have people just starting out, we have experienced people. So like, I always like to ask, you know if somebody is starting out today and their end goal, you know, they like amazon, but they're like, you know what, I'm I don't want to do this forever. I want to build a decent sized business, sell it and go do something else. You know, what would you uh somebody just starting out today, kind of, what would you tell them to craft a business from the beginning that would be easier to sell? Uh, you know, maybe a year from now. [00:06:08] spk_0: I think it goes back to what I said before, is to build a brand, right? Build a brand around a particular group of people, ideally something you're interested in. You need to have patience and be prepared to play the long game and think about this in terms of, well, if I was buying a business or what I wanted to look like, right, it's the same thing as if I was going to buy a house, right? So understand things from the buyer's point of view. Uh, try and get into the mindset of the buyer. Um, one thing that you could do is you could actually go and do some research, pretend for a moment that you are a buyer and go and start doing some research into buying e commerce businesses and think about things from their point of view and that will help you to reverse engineer what you're gonna do again. I would recommend the book built to sell. Once you're decently established, your business is taking over, get it valued and then think about, okay it's worth X. What would I be willing to walk away from the way I like to think about it with that is suppose you are drawing down salary or you're taking business money out of the business in whatever form you or whether it's dividends or salary or whatever. Yeah. Find out what the business is worth and what you'd be willing to sell it for and think to yourself, okay it's worth X. How many years would I have to work drawing down this amount that I'm drawing down to make the same amount of money and it's probably gonna be a long time if you have a gut feeling that you want to sell, it probably means it's time to start planning to sell. But the key, it's like I said before is you can't just wake up and say, I want to say into plan, that's the key thing. [00:07:55] spk_1: Yeah. For me, you know, if if I if I went back to 2000 and 12 when I started on amazon, there are a lot of things that I would have done differently and one of the, you know, I've shared this before, but I think it's very relevant in terms of, you know, I've made the mistake so that you guys don't have to, so some of the things that I would say on that same kind of token would be get an accountant super early on and don't just go, you know, the other mistake we made is we got an accountant but we got some, you know guy locally and in our small town in California who wasn't an expert in e commerce, you know, for for a long time, like completely lead us astray on what we, you know, formation wise and um you know how our, how we were doing things um so go out, find somebody special who specializes in e commerce accounting. Um that would be one thing super early on. Then the other things you talk about is trademark, you know, getting the trademark up uh you know ASAP um niche ng down to um you know uh Uh not a ton like you know, we had at 1.800 skews, I was trying to launch a skew a week, you know, it got to the point where the the account was unmanageable, you know, 8020, even at that point doesn't work because you just, there's just so much to manage. So, you know, keep focused, you know, I would say anywhere from 5 to 20 products, probably no more than that. I mean if you have variations, um things like that, you know, you know, that can grow, but just management wise, you know, you want to try to keep the business um as tight as possible in terms of the more products you have now, it's like, you know, instead of having to manage three listings and make sure that they're perfect and the photography is perfect and you're just pushing those products now, you've got, you know, 30 50 whatever and you're trying to push all these different products, you're just gonna get spread way too thin, so really stay focused, build the brand, make sure you got the insurance in place, make sure, you know, if you if you've got products that maybe are a little bit more risky, make sure that you, you know, you do your due diligence there. Um if it's something that's consumable or something that's got batteries, et cetera, et cetera, those are all a lot of things that you guys want to think about if you're just starting out now. [00:10:05] spk_0: Yeah, I agree on on all of that. And a couple of things you raised, maybe maybe think of a couple of things. So I see it all the time in the facebook group, people will say, where can I get a trademark? And somebody will, will chime in with all you can do yourself, you know, for a few £100 or a few $100 just head over here and go and do it and then some of those chime in. Yeah, I did that and I got my trademark. It's like, well, yes, you did. It's very easy to go and do it yourself. But the trademarks barely give me worth the paper. It's written on until you've actually had it done by a professional who has been able to get you a trademark which has an extremely broad scope for anything and everything you may ever possibly sell your trademarks. Not worth very much. I made this exact mistake myself. I recorded a screen cast of it a little while ago where I compared the trademarks I originally applied for myself and I thought I was fantastic. After I've done it with the trademarks, I did a year later after I realized my mistake, exact same trademark, right? Same name, same logo. But one was done by me and one was done by a professional. Guess which one had the broadest scope of protection and added the most value to my business. Right. Same goes for insurance. Don't scrimp on insurance, something that you can just fill in some form online, talk to an experienced insurance broker, make sure you have the right coverage. Insurance is one of those things where you, you know, you get the building, you think I'm never gonna need this and then one day you need it and if you've if you've been in a pickle without the right insurance, well, that's one way to make your business not sellable. Right? So make sure that you're covered from that point of view, especially if you're thinking of selling your business entity, which a lot of people in the UK want to do because we have something called entrepreneurs relief, which is a tax relief if we sell the business entity rather than the assets. Because of course, when you sell the business entity, the buyer is taking on the risk and the liability associated with that business. So you need to make sure you've always had the right insurance right from the very start, because somebody buying it now will not be liable for something that the business did two years ago. If you didn't, you know, you got to make sure that you've got everything covered. [00:12:02] spk_1: I love that. So one of the, one of the things that, you know, we love to ask people, even if it's not, you know, e commerce, you know, related in terms of, you know, you're no longer e commerce, you're more of a service based business now. But um, you know, when you started the business with running the business is what are some like, really big challenges that you faced in your own business? And what did you do to, to, to push through those challenges? [00:12:24] spk_0: Yeah. So with one springs to mind and it's a learning that I've taken to. I'm still building brands actually in the reason for that is I love it. But I also, I need to still be like on the ground and have an understanding of it. I'm going to advise people in this way and one of the learnings I took from the first business which was bustier was to jump through hoops. So for instance, I remember I was selling in the U. K. And I wanted to join the Pan EU program which was going to allow me to fulfill my products pretty easily right across europe. But I needed to say this was about 2017, so it's a bit more difficult than I needed just for VAT in France, Germany, Italy Spain Poland and the Czech Republic. And it was not an easy process, all sorts of forms to fill out. Remember. I think for spain, I could only get documents translated by certain select group of translators on their registry and I had to get the, some of my documents physically stamped with a wax seal um, by a registered notary, all sorts of crap that I had to do. It took weeks. But after I did it, I pretty much doubled my sales overnight. Now. How many people looked at that process and just thought, nah, not gonna bother. Too much hard work. Not for me. I'm quite happy just taking over as I am. Well, that's fine because for all the people can't be bothered to jump through the hoop. When I jump through the hoop, I emerged on the other side without competition. So when I see a barrier, I think, well, that's wonderful. So for instance, look at all this stuff now with inventory limits and people are frantically thinking about 3rd party warehouses. It is a massive headache. But if you can get yourself sorted, get your ducks in row and get on top of it better than anyone else. It's actually an opportunity for you because it's a barrier. It's a hoop that you have to jump through. So when you see hoops in the road, it's very tempting just turn around or take an easier path. Now, I'm not saying we don't want the path of least resistance in your business, but what I am saying is hoops are transparent, sonic. The hedgehog could see through them before he got to them. Look through the hoop, think about what's on the other side and if it's worth it do it. That was a big lesson. [00:14:36] spk_1: That's that's great advice. And I feel like with amazon that's more true every day. I mean there's there constantly throwing up roadblocks for running your account, right? I mean you got, you know, products being taken down for like safety issues and all these FDA things and like they, you know, update their ai bots and then they release them every 3 to 6 months and you get products taken down, you get, you know, incompetent sellers support, you get all this all these major issues where yeah, a lot of people and I've been there, I've been there where I'm just like screw this, I'm done with amazon because there's so many roadblocks that are thrown up. But I agree with you in terms of if you have the grit and the wherewithal to to kind of step back from it and be like, okay, yeah, this sucks. But if I get through this, you know, there's a lot of opportunity there, it's a long game and if you can look at it like that, you know those are the people that are still around who are still selling on amazon, who are still making the money are the ones who are um you know, I've always said that my my dad gave me advice, you know, a long time ago, it was in regards to marriage, but it completely applies to business. He's like, you know you're gonna have to eat a shit sandwich, right? It's like what shit shit sandwich are you going to eat? And if you eat that then you know, it doesn't matter where, you know if you're working a 9 to 5 jobs, you hate your commute or you know what I mean, is so like you have to step back and look at amazon and be like okay, it's a different shit sandwich, but like, I'm gonna eat it so that I can, you know, I can progress and choose, you know, choose the the choose to eat it. That's a terrible analogy, you know, that I'm thinking about it in terms of grossness, but you get the point in terms of, you know, a [00:16:10] spk_0: good analogy, I'm gonna use it more. Please [00:16:13] spk_1: do please do you know, and I love when when people with Scottish accents costs, it's it's absolutely stunning, I love it. Um but uh but yeah, I mean, I think that, you know, stepping back from it um is, you know, the the grit, the the determination to whatever it is, is to to get to the next level, you know, it's like at the gym or whatever, you know, so so many different ways to to use that analogy. But yeah, that that's completely great advice. Um anybody who's here in the zoom meeting, if you have any further questions for Ben, please drop them right now. Um while we're doing that, I'm gonna ask Ben, we always like to ask this of our guests because you know, we're one of those people, if you're, if you're a real entrepreneur and you're not, you know, learning every single day you're gonna you're gonna lose because your competitors are, they're learning, you know, new tricks, new tactics, new personal development, all those kinds of things. So you mentioned a few books, Ben, but anything else you listen to watch, that kind of pushes you uh through um eating that shit sandwich. [00:17:13] spk_0: Yes, I'll give you a fun, I'll give you a serious one and then a fun one. so serious book, I've got a bookshelf behind me, I'm just gonna turn around and have a quick look. Um Start with Why by Simon Sinek uh is an absolutely amazing book which has pushed me to constantly think about, you know, both in terms of brand. So I spoke before about how important building a valuable brand was in order to build a valuable brand. You have to think about the marketing of that brand. And start with why is a great book for thinking about how you market your brand. There's some great examples in there from Apple and all sorts of stuff, but also you can take a slight sidestep from that constant. Think about what is your why, like why are you doing this? And for me when I began to think about the fact that my business might have some decent potential and some potential to become something valuable that I could sell and make my family secure. Well that was my, why write my family. So that's a, That's a serious one. That a fun one is. Uh, so we have a two year old daughter and uh I watch a lot of kids cartoons and I suppose I'm guessing you guys don't have this over there. We have a cartoon called Peppa Pig. You guys are going to have to look it up. [00:18:34] spk_1: I've heard I've heard of it, but no Peppa Pig, my kids love Peppa [00:18:38] spk_0: Pig. Peppa Pig. It's awesome because I'm so glad you like it any. Otherwise no one on this call everyone and he was just like, what the hell has been talking about Peppa Pig? I just freaking hilarious because it's uh, I don't know if you find this amy but the right thing. I think it's written for the parents and not the kids. It's so funny, like the adult humor that runs through that it's just incredible. So I watch a lot of kids cartoons at the moment and I just Peppa Pig, you're having a bad day, you put on some Peppa pig and you're saying you're like it's an excuse, you're like I said my daughter's college about, it's about you want to watch some Peppa pig and she's like, yeah really? It's me that wants to watch Peppa Pig, right? So I'm like part of that, [00:19:16] spk_1: I just love their accents. Mommy pig, daddy pig. You know where those evil parents that you know don't let our kids watch much tv and you know make them not eat gluten and dairy and you know where those were those people were when we, when the server comes to our table at the restaurant, they're like oh these people really? But you know I'm [00:19:40] spk_0: One of those two. [00:19:41] spk_1: Alright, alright, good. I like that. You gotta have your, you got your cheats right? Our kids watch um Well like I said, we rarely let them watch tv but they watch um what is it? It's a, it's an amazon prime like um dang and I can't think of it. Um Anyway, it's like this, you know the animated uh computer generated kids show that uh Yeah, they get to watch once in a while, but that's about it. So where those mean, you know evil mean parents that make them go play outside, like it's standing outside, go outside, leave us alone so bad. Let people know how they can get in touch with you. [00:20:19] spk_0: Absolutely. Um So I'm on pretty much all the main social media channels. My handle is at Ben Leonard Pro for instance on instagram, I'm on linkedin. Just search for Ben Leonard. It's L U N E R D like the golfer Justin Leonard um Econ brokers dot co dot UK. Um Head over there, click on sell your business even if you don't want to sell your business, just click on that, putting some numbers, we can get back to you with a rough idea of what your business is worth. No hard sell. Um We don't necessarily sell somebody's business straight away, we'll work with them over a period of time. That's right too. You know, hold their hand through the process almost manage their route to an exit to achieve what they want to achieve. Um or you could head over to Ben Leonard dot Pro, which is my website, if you want to benefit from some of my experience in e commerce and see how I can help you. [00:21:10] spk_1: Awesome, thank you so much for Ben for being on uh if you guys haven't joined us live, remember we do this every Tuesday at one pm pacific time seller round table dot com forward slash live. You get to come into the zoom meeting, ask the experts like Ben questions on the spot. Um you know, without without having to fill out that email form, you can just jump in here live, talk to him, you know, face to face and uh get your questions answered. So uh yeah, thank you guys so much for joining us live. The people that join us live in the zoom meeting. We're gonna end live right now. Um and then we do kind of a little Q and A after the fact that does not get broadcast does not get recorded. So do you guys want in on that? You gotta go sell a round table dot com forward slash live and join us in the meeting? We love having you guys. It really ups the game in terms of content because we get to ask our guests questions that we may not have thought of. So thank you guys so much. The podcast continues to grow. If you haven't yet, please rate, review, subscribe. And uh yeah, we'll see. We'll see you guys next time on the seller roundtable. [00:22:10] spk_0: Thanks for tuning in, join us [00:22:12] spk_1: Every Tuesday at one PM Pacific standard [00:22:15] spk_2: time for live Q and [00:22:16] spk_0: a and bonus [00:22:17] spk_2: content after the recording at [00:22:19] spk_1: cellar round table [00:22:20] spk_2: dot com, sponsored by [00:22:22] spk_0: the ultimate software tool for amazon [00:22:24] spk_2: sales and growth seller [00:22:25] spk_0: S C o dot com and amazing [00:22:27] spk_2: at home dot com.