#196 – Tips on How to Sell Your Amazon Business from Two Experienced Sellers
Do you find yourself peeking at your phone or computer screen regularly throughout the day in order to check your Amazon sales? It’s tempting to want to know exactly how your business is doing.
We all want our Amazon business to be as profitable as possible. However, there’s one way that Amazon sellers can achieve their biggest payday ever. In the last couple of years, a new business model has popped up focused entirely on acquiring, optimizing and repackaging Amazon businesses.
Today on the Serious Sellers Podcast, Helium 10’s Director of Training and Chief Brand Evangelist, Bradley Sutton welcomes two Amazon selling pros to talk about what’s involved in selling an Amazon business. Paul Miller was on the podcast last year to talk about product licensing and is preparing to sell his Amazon business. Today he’s joined by Kellianne Fedio, who has recently sold her Amazon business and has great advice to offer.
Between the two of them, you’ll get a clear picture of the process, and what Amazon is really looking for in an e-commerce business.
In episode 196 of the Serious Sellers Podcast, Bradley, Kellianne, and Paul discuss:
- 02:10 – Kellianne’s Origin Story
- 05:05 – Drop Shipping Gave Kellianne Her Start in E-Commerce
- 08:10 – Amazon Business Exit Strategies
- 10:00 – How Licensing Can Help Amazon Sellers
- 12:00 – Opening Up Keyword Possibilities
- 16:00 – Amazon Business Acquisition is Exploding
- 17:25 – How Did Kellianne Get Ready to Sell Her Business?
- 21:10 – “At the End of the Day, Your Amazon Business is an Asset”
- 23:25 – Valuing Your Amazon Business
- 26:50 – OK, You’ve Sold Your Amazon Business, Now What?
- 30:50 – After Profitability, What Attracts Buyers?
- 33:15 – FBA Loans Tip the Scales for US Amazon Businesses
- 36:15 – How to Contact Kellianne and Paul
Enjoy this episode? Be sure to check out our previous episodes for even more content to propel you to Amazon FBA Seller success! And don’t forget to “Like” our Facebook page and subscribe to the podcast on iTunes, Google Play or wherever you listen to our podcast.
Want to absolutely start crushing it on Amazon? Here are few carefully curated resources to get you started:
- Freedom Ticket: Taught by Amazon thought leader Kevin King, get A-Z Amazon strategies and techniques for establishing and solidifying your business.
- Ultimate Resource Guide: Discover the best tools and services to help you dominate on Amazon.
- Helium 10: 20+ software tools to boost your entire sales pipeline from product research to customer communication and Amazon refund automation. Make running a successful Amazon business easier with better data and insights. See what our customers have to say.
- Helium 10 Chrome Extension: Verify your Amazon product idea and validate how lucrative it can be with over a dozen data metrics and profitability estimation.
- SellerTradmarks.com: Trademarks are vital for protecting your Amazon brand from hijackers, and sellertrademarks.com provides a streamlined process for helping you get one.
Bradley Sutton: Find out today what it takes to sell your Amazon business for a big payday, by someone who has recently done herself and a previous Serious Sellers Podcast guest who is in process of doing it right now. How cool is that? Pretty cool, I think.
Bradley Sutton: Hello everybody. And welcome to another episode of the Serious Sellers Podcast by Helium 10. I am your host Bradley Sutton, and this is the show that’s a completely BS free, unscripted and unrehearsed organic conversation about serious strategies for serious sellers of any level in the Amazon world. And we’ve got two serious sellers on the line with me today, Paul and Kellianne. How’s it going guys?
Kellianne Fedio: Doing great, Bradley.
Paul Miller: Great, Bradley. Good to be back with you.
Bradley Sutton: Yes, indeed. We’re going to be listening at the first part of this episode, a little bit more to Kellianne because actually Paul, we got hit a lot of his great backstory on a previous episode of the podcast. So, guys make sure it was actually one of our first milestone podcasts. I specifically picked Paul to be on episode 50. So, Paul you’re in a kind of rarefied air because you’re the first kind of like big even number. I was like, okay, we got to have a special guest is going to be Paul for episode 50, Manny Coats was going to be episode 100 and then episode 200, which is coming soon. It’s actually something special. I was just telling you guys off the area is going to be an episode that I filmed from the Maldives. But anyways, Paul you’re in rarefied air here, but we’ll save that for our important guests.
Paul Miller: I’m honored Bradley and just really happy to be back on. Thanks so much.
Bradley Sutton: Thank you for coming back. So guys, if you want to hear more about Paul’s or we’re going to catch up with him in this episode as well, but it’s really great info that he had in episode 50. So make sure to go back on whatever platform you’re listening to on, but Kellianne, this is the first time that you’ve come on the show. So I always like to do is first of all, just to kind of like chronicle your–and just a couple of minutes, your journey to where you are now, but taking it back farther than other podcasts may go. So I know you’re in Southern California now, around Redondo beach. Is that where you were born and raised?
Kellianne Fedio: No. We’ve lived here for about six years. I was born in New Jersey and spent my early childhood there. And then we migrated to Northern California at San Francisco Bay area when I was a teenager and I spent my college years and law school years in Sacramento, and then other areas in the Bay area and then Southern California is now home. And I think it will be at least for the foreseeable future until my kids graduate from high school.
Bradley Sutton: Okay. All right. Now, going back to when you were growing up in Jersey, I guess it was what did you, I mean, obviously you didn’t envision yourself becoming an Amazon seller that–FBA.
Kellianne Fedio: I’m old enough to say that. There was no such thing as the internet back then?
Bradley Sutton: No, I don’t know. I didn’t go that far, but anyways what did you envision yourself being when you grew up?
Kellianne Fedio: Oh my gosh. I really didn’t have that. The biggest thing that I thought that would be glamorous to do when I was younger was to be a flight attendant. And so that was my big goal when I was like a child. And then once I got into my teenage years, I knew I wanted to do something in international business. I never realized that it would actually take the form of becoming an e-commerce seller and sourcing products and traveling to China. But it did. But in between there–
Bradley Sutton: What did you go to university for then, or college? I should say, well, sometimes I get so many foreign people from Europe on here and they all refer to it as university. So I keep saying like, no, this is America. We call it college. What was your major in college?
Kellianne Fedio: My major was actually international business. And I minored in economics and in Spanish and thought that I was going to be this high powered international business woman, but it was pretty early on in college that I decided I wanted to go on for an advanced degree and decided I wanted to go to law school. So that was kind of my plan after that.
Bradley Sutton: Was this year in California?
Kellianne Fedio: Yeah. I went to law school in Sacramento to a private university called McGeorge school of law, part of University of the Pacific. And then I practiced all of my legal career in Sacramento at one of the biggest civil lit firms in Sacramento.
Bradley Sutton: Oh, wow. This is stuff that I didn’t know about. I always like trying to find, I mean, even though I’ve known you for a while, I didn’t know about these details, so that’s pretty cool. So then what was your first kind of entry into the e-commerce ecosystem?
Kellianne Fedio: It wasn’t till several years later after I got married and had kids and decided that I didn’t want to be practicing law anymore and wanted to do something different that I wanted to have some type of a way to make a living, working from my laptop. That’s all I knew at the time. And started down all of those rabbit trail, like how to make money online, how to work from home, blah, blah, blah, blah. And of course, you go into all these different things. And I tried a lot of things, but luckily kind of stumbled into e-commerce pretty early on and started with drop shipping. And that’s how I got my kind of first taste of selling physical products online.
Bradley Sutton: Around what year are we talking about here?
Kellianne Fedio: That was around 2013.
Bradley Sutton: Okay. So drop shipping. You would, what platform are you selling on?
Kellianne Fedio: I was selling primarily on eBay, but then eventually I was actually drop shipping from other online retailers and I was selling it on Amazon and I think it was actually against the rules to do that, but I was doing it and my seller account was hanging on by a thread, but I was somehow getting away with it. And that’s when I realized, this is just a job I’ve created for myself. I was making good money, but I decided I really need to control the process here. I need to have my own products. I need to create them. And just so happened that I got an email in my inbox from something called Amazing Selling Machine. And it was all about building your own physical products brand and selling on the Amazon channel. And I was like, well, this sounds exactly what I’ve been looking for. And I joined and didn’t look back.
Bradley Sutton: Okay. So now when you were started doing the drop shipping, were you still practicing law or was this now you had already quit doing that full time by that?
Kellianne Fedio: I had left my legal career when my kids were little, because I just didn’t believe in it anymore. I was just, it was just too hard. It was too hard being a mom and being a litigator and share the story on other podcasts. It just, I didn’t feel like I was being the mom that I knew I wanted to be.
Bradley Sutton: You got into private label. What was your very first product?
Kellianne Fedio: My very first product was an infusion water bottle and it turned out to be my best seller.
Bradley Sutton: This was like, what, 2014, 15, 16?
Kellianne Fedio: 2014 when I launched the product. Yeah.
Bradley Sutton: And it was just that one product for the first year, or did you launch a variety of different ones?
Kellianne Fedio: Yes. I just, I was able to hit seven figures really early on with just that one product with a few color variations. And I didn’t start expanding the product line until 2015. So, that’s really when I started to focus on building a real brand, not just a product and started to think about, okay, what other types? Well, first of all, who am I serving? What is the customer that I’m looking to help with my products and what can my brand solve for them? And so I started to launch other products that I thought would meet that avatar, and a lot of them failed, but I had a lot of winners too. So it was a great learning experience.
Bradley Sutton: So then, I mean, I was just on your podcast, the Amazing Exit podcast. And we’re going to be talking about that building up, with both of you today about building up your Amazon brands with the idea of maybe an exit in the feature. Now you’ve accomplished that. But like when did you decide in your journey? I mean, you were selling on Amazon for like four or five years. At what point was it like, Hey, that’s my goal is to possibly sell this business, or was that the goal from the day one or, like in the middle of your journey, you’re like, Hey, this could be a possibility.
Kellianne Fedio: That’s a great question. I think back in the early days of selling on Amazon, 2013, 2014, I don’t think there was even a market to sell an Amazon business there. It just didn’t even exist. So I certainly didn’t start the business thinking that I was going to sell it, but a few years into the business, as I started to mature and realize what my special sauce and talents were and what it would take to grow the brand off of Amazon, I realized I’ve built something pretty special here. And I’ve heard that there’s a market for these types of businesses. And so I started doing some digging and although there wasn’t a lot of information out there, I knew then that I wanted to reposition what I was doing and focus on building my business to sell it. And so I spent a solid year of really optimizing everything about my business, increasing the profitability and making it as attractive as possible to a potential buyer before I actually went to market with it in 2019.
Bradley Sutton: Okay. All right. We’re going to come back to you, but now, Paul might have fallen asleep over there.
Bradley Sutton: Now, Paul, we talked about how an episode 50, we went over your story and one of the main takeaways from that episode is how licensing really helped you scale up. Now in the last year you’ve been helping other sellers, like understand about the licensing opportunity. I mean, without mentioning names or brands or anything like that, unless you can, is there any stories other than your own that you can share with us that might inspire more people to, Hey, the licensing opportunity is still very viable here in 2020 and 2021.
Paul Miller: Well, yeah Bradley. I have continued to get contacted by sellers who are interested in licensing. We have some conversations with them as you know, I have a course out there at nextlevellicensing.net kind of help people with it, but I’ve had probably three folks so far who have both inquired about it. I’ve kind of guided them along and directed them to the right resources who have actually been able to obtain licenses and put on their product. So some of them who I guarantee you know, but it’s been kind of fun to watch them take their–
Bradley Sutton: People I know or brands that I already know?
Paul Miller: People and brands that you know. It’s not an easy task, as I explained lots of times, it’s not easy or cheap, but it’s a great way to differentiate your brand.
Bradley Sutton: Now, just refresh my memory. When you started your headphone brand, it was without licensing at first. Just, was it just like a generic– your own private label brand?
Paul Miller: Yeah, we started the very much of a private label formula find a product out there, make a modification on it, use your label. And that was in the sleep headphones category. So I was doing an adult sleep headphones, but what we did that was really unique as I took a spin-off of that. And I said, Hey, wouldn’t it be cool to make this for kids? And we made that kind of a fleece headband headphone into a kids’ headphones called it cozy phones and put a character on the front of it. So, through kind of the Amazon formula, find something and then innovate around it. We created this whole new category of headphones that never existed before.
Bradley Sutton: Would it be safe to say that you would not have reached the success you have now, if you hadn’t, if you just kept going with your own private brand, but the licensing really helped you scale?
Paul Miller: Yeah. The licenses, we’ve got licenses with Nickelodeon now, Batman, Sesame street, those things just add this tremendous amount of credibility to you, opens up a whole new world of keywords. I could go on and on about the benefits. And so that really did help in a big way,
Bradley Sutton: Quick break in the action for my BTS. What does that stand for? Maybe stands for Bradley’s 30 seconds or behind the scenes or bonafide terrific strategies, whatever you want to be about. But anyways, this one is going to be about product research. And so if you’re on Amazon and you’re looking into estimating sales for a listing that has variations, that’s something that has like colors or sizes. Amazon gives the same BSR, bestseller rank, for all child items. So, there’s no real way to know how much each one is selling, but if you want to see which one potentially it has the most sales, like which color, which size, or which variation, you can run Review Insights by Helium 10 in the Chrome extension, and then see which one has the most reviews. Usually something dominates the reviews has like 50 or 75% of the reviews, one of the variations, and then you can kind of bank on that being the big seller. So, if you guys want to use that even for free, just go to h10.me/extension and use Review Insights.
Bradley Sutton: Kellianne, in retrospect, I’m assuming, for your water bottle, you didn’t do licensing. If you had it to do over again, would you have maybe seen about possibly hooking up with some brand in order to add some more of that credibility that Paul’s talking about?
Kellianne Fedio: Absolutely. And in fact, Paul, with his success with licensing, he introduced me to it, and I went to the licensing expo in Vegas with him. When was that, Paul? Was it in 2017?
Paul Miller: I’m going to say 17.
Kellianne Fedio: Yeah. And so that really opened my eyes to all of the opportunities within licensing. And I actually did end up, it wasn’t a traditional type of a license situation, but I ended up doing something with Kathy Ireland and did a lot where basically I was able to use her name and leverage that. And all– she’s a billionaire, a product builder and former model if people don’t know who she is. And, so that was awesome. And I never would have had that opportunity had it not been for Paul introducing me to licensing, but I definitely learned a lot about it. And if I had had more time in my runway to flesh that out and to build those relationships, I definitely would have taken advantage of it.
Bradley Sutton: Cool. Now this is just a very general question. I’m not sure if you guys have the answer, but the thing to me that has boggled my mind in the last, I don’t know, year and a half or so is how just, it seems like out of nowhere, it is now huge business to be buying Amazon businesses. We just kind of what you’re talking about. I remember the very first time I heard about it, I, it was actually the very night that I met Tim Jordan in person, and I didn’t even know who he was at the time, but he was throwing a party in Bourbon street. I remember, I was just, that was my first kind of like networking party I did. And I was just there and somebody was like, Oh yeah, my business is planning to buy 30, 40 businesses over the next year. I was like, wow, that’s just like, I had never heard of this about two and a half, three years ago. I’m like, I had never heard of that. That’s pretty weird. And now all of a sudden, it’s like all the rage, we’ve got Thrasio, the fastest American company to get a valuation of a billion dollars. And their entire business model is buying Amazon businesses. We had Perch here on the podcast. A while back, you guys have a podcast dedicated to this whole concept itself. What happened? Like what, how did this, has this always been happening behind the scenes? And just maybe it wasn’t mainstream or like, what is with this big rush in the last two years of this business model?
Kellianne Fedio: I know it’s crazy, right? Well, a massive opportunity exists to sell your Amazon business for a huge profit. And obviously Thrasio was one of the first big aggregators to come on the scene. And as we all know, valued at $1 billion buying up Amazon businesses, but now they’ve got competition. There are a lot of other aggregators, acquirers on the scene because these businesses have real value. And just a few short years ago, Bradley, they just having an Amazon based business, did not have a value in the marketplace. So a whole industry has spawned just like it did when selling on Amazon became popular back in 2013,a whole industry, the Helium 10’s of the world spawn, SAS, and different service providers. Well, now that same type of momentum is gaining traction in the acquiring Amazon business space.
Bradley Sutton: Excellent. Excellent. Now, what was your process like Kellianne? So, you kind of beat Paul here to the finish line. So what– can you, I mean, obviously again, that will take another two hour episode, but can you give us the cliff notes on from like the time you decided to do it and how long the whole process took and some something you would do differently, something that worked out swimmingly, whatever you want to talk about?
Kellianne Fedio: Well, and I would have to say that now, as opposed to just even a year or two ago, there are so many more resources for sellers, including the Amazing Exits Podcast, selfish plug, to learn about what you need to do to get ready to sell your business. And I am of the firm belief that all Amazon entrepreneurs, all business owners should have an exit strategy, whether or not you ever decide to sell your business by having an exit strategy and primarily knowing your numbers, knowing what your business is worth at all times is super, super important. It’s probably one of your biggest assets. It could be maybe your biggest asset. And if you don’t know the value of that, you’re just not operating business and you’re not operating your life in an optimized way. So I just wanted to say that first, but I would say that I spent probably a good year just trying to learn how businesses in this space are valued, because even just a couple short years ago, things were still really not solidified. And there wasn’t a lot of educational resources out there, at least in a cohesive manner. And there still aren’t. And so that’s why Paul and I started the podcast and I knew that I needed to focus on my bottom line for the first few years in business. I was so much focused like most business owners are on top line growth, which is fine, and that’s necessary in order to prove that you have traction in the marketplace, but at the end of the day, the money that goes into your bank account isn’t your revenue, it’s your profit and anybody that’s going to come along and buy your business. They’re just buying a future revenue stream. They’re investing in a revenue stream. That’s all it is. And if you can’t prove that you have sustainable, predictable and transferable cashflow to a buyer, then you’re not going to have any chance to ever sell your business. So, I really want to get the word out to sellers that focusing on the top line and that vanity metric, does you no good when it comes time to sell your business. And most Amazon entrepreneurs were taught how to grow businesses and how to run businesses. We’re not taught how to sell businesses. So, I really focus on that bottom line that was really important and getting a good bookkeeping system in place. I had had a local bookkeeper doing my books prior to getting ready to sell. And she just wasn’t cutting it. She didn’t know e-commerce. She was doing everything on cash accounting. So I hired a really good bookkeeper who knew e-commerce, who switched everything over to the accrual method of accounting, which is very important in e-commerce businesses. And I also started to look at what were the different types of options for selling my business in terms of who I would use to help represent me, and also what types of buyers were out there. And there were a lot of different types. And so I investigated all of that. I ended up deciding on hiring a M&A advisor or an investment banking firm to represent me as the intermediary to sell my business. And they did a phenomenal job, and they’re not the best fit for everybody. There are a lot of other options, but that’s who I chose. And it couldn’t have gone better. I mean, the process for me was a little bit elongated because the buyer and his partners were using SBA financing. And unfortunately, the lender who they were working with had never done an e-commerce deal before. So, they didn’t know what the hell they were doing. So, it elongated the process. But from listing my business to close, it was about eight months and the sale closed in February of this year.
Bradley Sutton: All right. Congratulations. Congratulations on that. Now, do you still find yourself checking out your product at all, like seeing how it’s doing the BSR stuff?
Kellianne Fedio: I keep in close contact with the gentleman who purchased my business and he actually just updated the website and he changed around a lot of things, which was kind of kudos to him because he’s grown the business since taking it over. So he’s doing a phenomenal job, but I still look at that thing as my baby. I’m not kidding. It’s so much of your identity is tied up in building these brands, but at the end of the day, it’s an asset and the asset you can choose to live off the cash flow, or you can choose to get all that cashflow liquidated into your bank account and have financial independence, which is what I chose to do.
Bradley Sutton: Now you guys have talked to and gone through the process yourself, some people might be listening. Oh, wow. Well, yeah. Kellianne was a high seven figure seller and you probably have to be a seven or eight figure seller to sell your brand. And of course, if you are that kind of a seller and you’re profitable, I’m sure there are these companies who would love to look at it, but on the low end of the spectrum, what would you say would be the minimum kind of, or is there a minimum kind of yearly revenue that somebody needs to be making before they can even consider getting approached by one of these firms?
Kellianne Fedio: Yeah. I know the space very well now, and I do consulting for one of the aggregators and generally, and I’m just going to give you some general numbers. I mean, they’re looking for top line revenue in the area of about 500,000 a year, because at least that’s proof of concept that something has gained traction, and a 20% profit margin. So that’s kind of like the minimum. Now that’s not to say that there’s not a market for everything in between. I mean, so maybe this is a good time to kind of go over some of the different ways that you can sell your business so you can use a business broker. So, there’s lots of them out there, like quiet light brokerage is a really good one. There are M&A advisors, like the one that I use, global wired advisors, there are also website marketplaces where you can list your business and kind of sell it yourself, places like Empire Flippers, and Flippa, and on some of those marketplaces are where you’ll find kind of some, you’ll find very expensive businesses, but you also find kind of on the lower end there. So, generally these aggregators, if we want to talk about them, they’re looking for something with proven, proven history with not only past growth, but future growth opportunities and something that can be possibly expanded off of Amazon as well. That doesn’t mean that you’re the one that needs to have expanded off of Amazon. In fact, most of the aggregators are looking for most of the rental revenue being generated on Amazon itself. So, I don’t want anybody to take those numbers as gospel because if you have something of value and if you know the value and can articulate that to a future buyer, you can sell your business, but definitely you want to have a very healthy bottom line. So I don’t care what your top line is hopefully your bottom line is at least 20% or higher.
Bradley Sutton: Okay. So like, let’s just give a hypothetical situation. Obviously, every single case is different depending on what, who they’re using and what kind of products category I’m sure, but let’s just say somebody has $500,000, top line revenue yearly, and they’ve hit that 20% of profit margins. What is the ballpark that they’re looking for or what should they be shooting for getting from a company interested in buying them?
Kellianne Fedio: Well, it depends on who you speak to, again, as far as who’s purchasing your business, if it is a financial acquisition, meaning that in generally anything below a $10 million enterprise value is going to be considered a financial transaction, where it really is looking at your trailing 12 months IBIDA or net profit and applying a multiple to that. The multiples that we’ve been seeing in the Amazon industry over the past couple of years are in the two to four range. And there’s multiple things that can affect that actual multiple. And it’s all has to do with risk, it all has to do– The more risk there is in the business, the lower the multiple.
Bradley Sutton: Okay. So can you break that there are some terms in there that, I know of I’ve dealt with IBIDA and stuff like that before, but then when you say stuff like two and four and IBIDA, can you break– could you give us the purchasing for dummies those yellow, but that’s what they were called. All those yellow books. I used to always remember, I would buy those yellow books for, and I tried to learn Microsoft Excel or something like that.
Kellianne Fedio: That’s what we should do, Paul, is create a book, selling your Amazon business for dummies.
Paul Miller: Oh, there you go. Let me tee it up. And then I’m going to pass back to Kelli. So in your example, to break it down into just numbers, you said 500,000 with a 20% profitability, is that right? So someone, let’s just use a hundred thousand dollars for the net profit or the IBIDA, although it could be a little bit different. So take it from there, Kelli, what could somebody get for a business that’s got a hundred thousand dollars net profit.
Kellianne Fedio: So again, typical multiples for this type of financial acquisition would be anywhere of a two time multiplier of that bottom line net profit. So, two times 100,000, which would be 200,000 up to a four time multiple. So four times the net profit, four times 100,000 is 400,000. So two to $400,000.
Bradley Sutton: Okay. That’s perfect. I think that everybody can understand that. Now the people that you’ve worked with who have done that, or even you yourself, Kelli, what’s the next step. I mean, how many people do you know, do they just take that money? And now they’re like, okay, let’s start from scratch again, or no, you know what, I’m just happy with this money. I’m just going to sit on it and, and live in the Maldives or something like that. What do people do after selling other than start a podcast with their good buddy, Paul. What do they do?
Kellianne Fedio: It really all depends on your life’s mission and life goals. And for me, I personally am huge on building wealth and building legacy wealth. And this is just my first stepping stone into that. I truly believe that building a business and then selling it is one of the fastest ways to achieve wealth, because think about it. If you’re earning a 20% bottom line on an Amazon business, where else can you invest your time and money and earn 20%, right? That’s the opportunity cost you have to look at. So the way that I can earn 20% is I could start another business, but then I can invest my profits or my windfall after selling into a more passive vehicle, like real estate. And that’s something that I really love talking with sellers who are going to sell their business, telling them how they can build wealth beyond this and all the tax planning that goes into it, even though I’m not a tax attorney or tax accountant, there’s just so many different ways that you can really use this to catapult your future. And what I like to call it as achieving financial independence. I mean, if you’re talking about an eight or nine figure high eight figure exit, yeah. Maybe that’s true financial freedom, but I don’t know many entrepreneurs that just want to stop working and stop doing stuff and creating, they always want to onto the next thing. And so being able to have that peace of mind and that financial security of having that money in the bank, so to speak allows you, it frees up your bandwidth and your time and your creativity to go and do it again, or do something else. So, really the possibilities are endless.
Bradley Sutton: Paul, anything to add to that?
Paul Miller: I do. So it really comes out– we start with kind of the end of the mine and what we’re trying to help people think about is what do you want to get out of your business? Is it the total financial freedom? Is it the financial independence? Is it just de-risking because let’s face it, you know, and you got big Amazon loans out there, and you’re worried about Amazon shutting down your account. Do you just want to de-risk your life somewhat and have two or $300,000 in the bank, so they can really blow up your next product. So, it really comes down to what you want. And now I’m going to selfishly pitch something. We created something we call the freedom score on the Amazing Exits website. And it’s just a base line for somebody to go in and put in some of their goals for what they want to get out of their business, kind of what their level is at, and to identify the opportunity areas that they have to work on in order to get their business ready for sale.
Bradley Sutton: Now, I’m sure the basics of Amazon apply to somebody who does want to have an X in the future. Hey, obviously you got to be profitable, have a good quality product that has good reviews and you’ve got good PPC strategy, et cetera. I mean, those kinds of things go for anybody who wants any kind of success on Amazon, whether they’re going to have their brand for the rest of their life, or they’re trying to get out, or to sell the brand. Now, what I’m curious about is what about some of the extra things that can help grow a brand, on one side, somebody might think, or I might think that man, if I have some amazing off Amazon strategy, like an amazing face, social media, I grew Instagram really big. I have a big YouTube channel for my account and huge following, like some people might think, Oh, this is like really, really good because, not that this differentiates yourself from other Amazon sellers. However, what if– does that now all of a sudden delimit who might be interested in your brand because maybe some of these companies who buy these Amazon brands don’t have the infrastructure to manage a whole social media team or something. So, can you talk about that a little bit? Are there things you should and should not do that, that help you be become more attractive to these purchasers?
Kellianne Fedio: Paul, you want to take that, or me?
Paul Miller: Sure. I think the answer Bradley is it really depends on the buyer to what we call an aggregator. And I’m going to take a risk and say a Thrasio or somebody whose business model is just a buy an Amazon brand and grow it on Amazon those things. And they’ve got a model and what they call it, an investment thesis, what they’re going to do with that, those extra assets that you’ve maybe created a great Amazon or a great social media list. For example, that’s just topping on the cake for them, but really they’re good at the end of the day, they’re going to value your business on the Amazon metrics. And that’s why they like this because they understand the Amazon metrics. They’re not going to buy an off Amazon business today. Really don’t understand they know what they can do. If they understand your sales, your advertising, and your cost of goods, they know what they can do with your business. Now for somebody else, another type of buyer, maybe someone who’s like Kellianne’s business or someone who is even a strategic buyer, those social media lists, and those email lists is going to mean a lot more to them if they have a skillset of marketing off Amazon. So, it really, again, it depends on the buyer, whether or not the buyer finds value in those other things, but to you as the seller, there’s risks to you in building those things, just like Kellianne mentioned earlier, all the time and effort she spent building off Amazon. Same thing with me when talking about one of the mistakes that I made earlier was going too wide, too fast, spending lots of money on Facebook, lots of money on Shopify, trying to go into Europe really fast and diluting myself across many channels where I would have been better off focusing on that golden goose.
Bradley Sutton: So, then speaking of the golden goose, which I would assume is Amazon USA, have you ever heard of companies buying businesses that are exclusively on Amazon Europe or every single one at least has a foundation in the USA, and then maybe it sells in Europe as well, but there’s none that are sold only in Japan, or only in Europe.
Kellianne Fedio: That’s a really good question. I think it depends on the enterprise value of the business. So, if the selling price of a business is anywhere 5 million and below, then your widest pool of potential buyers is going to be those using SBA financing and SBA financing is only available for US-based companies. It’s something very special and unique to the United States. No other country has that type of financing. So, it really depends on the value. Now, I would say that most businesses that are selling in with the types of like aggregators that we spoke with definitely have their foundation on Amazon US. That doesn’t mean that they don’t have some component elsewhere, but certainly the majority, or at least a good portion of the sales are being done on Amazon US.
Bradley Sutton: Okay. All right. Now I would love to keep going here. I can’t believe we’ve already been at it over for 40 minutes. This is great. Now, you guys have been giving us tips and strategies about a lot of these things throughout this episode, but we come to the part of the show. We call that TST, or the TST 30-second tip. So, we’ve actually got two of you today. So we’re going to have two 30-second tips for the price of one. So let’s start with Kellianne. What is something that you haven’t talked about that’s very valuable, actionable that you can say 30 seconds or less for our listeners, it doesn’t have to be about exits, but by all means it could be.
Kellianne Fedio: Well, I’m going to make it about exits. I think if you really want to simplify it into its most basic form, in order to sell an Amazon business for maximum value, you have to create a brand and be able to source and sell a high volume of profitable products. And your business needs to have healthy profit margins and ROI. I think that kind of sums up everything you need to do as an Amazon brand builder to sell your business for a big pay day.
Bradley Sutton: Excellent. Paul, pass the baton to you.
Paul Miller: I’m going to give you a $30,000 tip on how to increase the value of your business by $35,000. Take a look at your business and your spending and find out how you can convert a thousand dollars a month from expenses into profits. If you can do that by eliminating some unnecessary subscriptions, of course, Helium 10 is not on that list, but unnecessary stuff in your business. And by doing that in a year, you can create $12,000 worth of additional profit or IBIDA at a three times multiple, that’s $36,000 you created by just eliminating $1,000 a month in expense.
Bradley Sutton: Wow. I like it. That was great, Paul. Now guys, you’ve been subtly plugging your things throughout the episode, but it wasn’t so such an overstep. So, I’ll allow it, but let’s be upfront now, how can we find you, your podcasts out there? How can we find your website, the one that you referred to about how they can start, maybe seeing if this is something that they’re interested in, how can they find you guys in the inter webs?
Kellianne Fedio: Awesome. They can go to amazingexits.com. That’s our website, and that’s where you can take your freedom score. And then we have the Amazing Exits Podcast, which is on all the major podcast apps. And I would urge people to please subscribe and leave a rating after you’ve listened to an episode or two and tell us what you think.
Bradley Sutton: Excellent. So, Paul, this is your second time on the podcast and we try and keep bring people back once a year. So we’d love to have you be one of the first to be on here three times next year in 2021. And especially to see if, how you’ve progressed or if you’ve already sold your brand, if you’ve already exited and, and Kellianne, who knows, maybe you’re going to get the itch again and hop back in with a fusion Tupperware or something like that next. So, we’d love to hear from you next year.
Kellianne Fedio: I’ll buy a brand– new brand myself. And so I’m definitely got my eyes open. I’m itching to start a new one.
Bradley Sutton: Awesome. Awesome. Well, thank you guys for coming on the show and we’ll talk to you next week.
Paul Miller: Thank you, Bradley.
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