#348 - How To Build Authentic & Solid Amazon Brands Ready For Exit with Ben Leonard

#348 - How To Build Authentic & Solid Amazon Brands Ready For Exit with Ben Leonard Speaker 1: We're back again this week with episode 348 of the AM-PM Podcast. Those of you that were in Puerto Rico with us last week, I hope you had a great time. For those of you that missed it, the Billion Dollar Seller Summit just concluded last week in Puerto Rico. It was a really great event. There are replays available if you missed the event. If you go to BillionDollarSellerSummit.com, You can actually perhaps get a copy of the replay. We normally don't make these available, but for the AM-PM Podcast listeners, we might be able to hook you up if you actually missed the event so you can see some of the amazing content. It was mind-blowing. Some of it was just mind-blowing. But this week I've got another great guest. He's coming to us from Scotland, Ben Leonard. Ben started his Amazon journey in 2016. By 2019, he had sold it for a hefty seven-figure sum. And now he's doing it again with a couple new brands, plus he's helping sellers out. He's got a great story, really smart guy about branding and how to really differentiate yourself. I think you're gonna get a lot from this episode. And don't forget this summer, I'm debuting the Billion Dollar Sellers Newsletter. It's 100% free for listeners of this podcast, so be sure to go to BillionDollarSellers.com and put in your email address and name to get on the beta list so you can be one of the first to get this brand new newsletter. It's going to be chock full of advice and tips and strategies and hacks for e-com and Amazon sellers. BillionDollarSellers.com. Unknown Speaker: Welcome to the AM-PM Podcast. Welcome to the AM-PM Podcast, where we explore opportunities in e-commerce. We dream big and we discover what's working right now. Plus, this is the podcast where money never sleeps. Working around the clock in the AM and the PM. Are you ready for today's episode? I said, are you ready? Let's do this. Let's do this. Here's your host, Kevin King. Speaker 1: Ben Leonard, welcome to the AM PM podcast. I think everybody's gonna hear a little bit of an accent, but not too bad of an accent. That's a Scottish accent, right? You're coming to us from Scotland right now, correct? Speaker 2: That's right. I'm in Scotland. It's funny you should say that though, because if you asked anyone here if I had a strong Scottish accent, they'd say, no, he doesn't. Speaker 1: Yeah, you don't. I've been to Scotland, Edinburgh and all over Scotland. I've looked for the Loch Ness Monster and didn't see it. You know, I've done the whole nine yards and you don't have a thick accent, that's for sure. Speaker 2: No, I don't. My parents are both from England. I was born in a part of England and they came up to Scotland for the oil industry when I was a kid. And I've lived here my whole life and it's strange. My brother has a strong accent, but I don't. The only time I do is when I'm watching my favorite soccer team and shouting abuse at the players for being incompetent. That's when I sound quite local. Speaker 1: Which team is that? Speaker 2: Aberdeen. Speaker 1: Aberdeen? Ah, okay. Yeah, I always remember when I was in Scotland, it was probably 12, 13 years ago or so. I just remember the fried Twinkies or something like that or fried Snicker bars or I don't know. Unknown Speaker: Deep fried Mars bar. Speaker 1: Deep fried Mars bar, that's what it was, yes. Speaker 2: You know, I live in the village, well, the town, I guess, where that was invented, the deep fried Mars bar. You know, I've been waiting for ages for somebody to put together an e-commerce event, an Amazon event perhaps in Scotland and Edinburgh would be a great place to do it. So we should do that and everybody can help. The caterers can do deep fried Mars bars for everyone. Speaker 1: What is it with the deep, what is it with that? What, how did that, now you see them at, I see stuff like that at state fairs here in, you know, the Texas State Fair or how a deep fried Snickers bar or something like that. Speaker 2: It's ridiculous. Yeah, well, the Scottish diet is incredibly interesting. And one day somebody thought, I know, I'll take this candy bar, cover it in eggs and flour and put it in hot oil for a few minutes until it's become deep fried. And now it's kind of like a delicacy. Speaker 1: It's really, really good. It's something that, you know, you have that with a little bit of Scottish, you know, adult beverage and you're good to go. Speaker 2: Absolutely. Yeah, that's the way to do it. Speaker 1: For the audience that doesn't know who you are, you've been around doing this e-commerce thing for a day or two, right? Speaker 2: Yeah, it feels like it. I got started in 2016, which I think e-commerce years are kind of like dog years because so much happens in e-commerce. The world now compared to early 2016 when I started is completely different. Still the tail end of, you know, we used to talk about the Wild West days, right? And it was the tail end of that really. You know, you could still, Amazon still allowed you to have little things in your reviews. People would write a little message at the end of the review saying, I received this product for free in exchange for my honest review, five stars, right? And those were the days. And yeah, so I've been doing this for a while now. Speaker 1: What were you doing before you actually did the e-commerce? Speaker 2: Something very different. So I mentioned that Aberdeen is an oil town. It's the oil industry capital of Europe. My background is actually zoology and then ecology. I'm a marine ecologist. I'm a dolphin nerd. And I was working in the oil and gas industry as like the token tree hugger who had to tell the oil guys that they couldn't throw certain chemicals in the sea, that type of thing. And I basically enjoyed it, but I was a small cog in a big machine and I knew I had some sort of entrepreneurial spark inside me. I wasn't sure what though. And then I got really sick with a heart problem and I was signed off of work for quite a few months. I had to take a whole bunch of drugs and I had to stop my fitness hobbies. At the time I was really into CrossFit and boxing and things like that. So I was pretty miserable and my then girlfriend, now wife, was studying. She was super busy with that and she encouraged me to do something with my time whilst I was getting better. I remembered that I'd had this idea years before while I'd been training at CrossFit with some buddies for a fitness brand. I just thought of this name for a fitness brand at the end of a session of training, Beast Gear. I thought, oh, that's a kind of cool name for a fitness brand. And I did nothing with it. That was probably like four years before I had my idea. And then when I was sick, I was looking at my gym stuff that I wasn't using, you know, my gear, and I thought, well, I could do a better job of that. And so I did and I actually didn't intend to start an e-commerce. I had no idea, right? I thought that I would develop some products and sell them into gyms across the country. Speaker 1: And these are like small products or like big machines or like handheld type of stuff or what type of small stuff? Speaker 2: So I started out the first product I developed was a jump rope and then eventually the largest product I was doing was a weightlifting belt. And I was developing large, big products like punch bags and stuff like that by the time I sold the business, but I never brought the really big stuff to market. Speaker 1: So how do you differentiate a jump rope or a weight belt? Speaker 2: Sure, yeah. Speaker 1: I mean, those seem to me like they're almost like, you know, pretty much they do one function, they're pretty much the same. How do you actually differentiate that? There's so many of them out there. What was your approach with Beast Gear? Speaker 2: Yeah, there's the kind of jump ropes that you'd imagine kids in the playground would use. And then there's jump ropes that crossfitters and boxers and general fitness fans would use, which are typically a steel cable coated in a plastic protective coating and joined to a handle with ball bearings. And so the first one of the... The reason I started with a jump rope was I wasn't very happy with the one that I was using, but it was pretty obvious to me that this thing could be made in China for just a few dollars. So after doing some initial research and identifying manufacturers and going through some basic samples and finally settling on a manufacturer that I felt was providing high quality samples, I basically went through this process of creating what I guess you'd call a Franken product. Right, I didn't have the money to do any custom molds or my own designs, but what I was able to do was say to the manufacturing partner that I'd found, hey look, I liked this one that you sent me, I liked that one that you sent me, and I liked the other one that you sent me, and I didn't like this. What if we took this bit, changed that bit, made that bit a bit longer, etc., and came out with Prototypes that were taking components off the shelf so it was different than what was already out there but it wasn't costing me a ton of money to develop. And then I would run those past athletes that I was friends with from my boxing gym and that type of thing and refine them and so on and so forth until we came up with a great product that was better than what was on the market. Speaker 1: And did you sell that, were you selling in Europe or were you selling in the US when you launched this? Speaker 2: The UK first, just the UK. So in the process of developing the first product, I became aware of this thing called Amazon FBA. Turns out that when you buy something on Amazon, you're not just buying it from Jeff. I was one of these people that didn't know this in early 2016 when I was putting this stuff together. And I developed a website on Shopify and was selling to customers in the UK. Then in 2017, I got on to the Pan-EU scheme and sold right across Europe and later I got into, I was one of the first sellers into the Middle East, Amazon.ae and one of the first into Australia as well. So by the time I sold the business in 2019, we were in UK, Europe, Middle East and Australia. I didn't go to the US and I regret that. Speaker 1: So within three years you were able to take an exit. Was it like a seven-figure exit, an eight-figure exit? What type of exit did you have? Speaker 2: Yeah, so I sold my first product to a stranger on the internet in June or July 2016. And the deal to sell the business was done Halloween 2019. At that time, we were turning over about six million US dollars in annual sales. And yeah, it was a mid seven figure deal. And it was actually the first deal that one of the quote unquote aggregators did with a European brand. Speaker 1: So a US-based aggregator bought it. Speaker 2: Yeah, it was the first as far as I'm aware. Speaker 1: Yeah, so how many products did you develop that into from the so from the jump rope to when you sold it? Speaker 2: What was uh, I mean, yeah, not skews because you might have had different color jump ropes But how many different actual products must have had somewhere between 10 and 15 parent products with a bunch of Child variations under them and we kind of served three main categories of customer there were general fitness fans And I include in that conditioning and CrossFit and that type of thing. There were strength training athletes, and I included in that Olympic weightlifters and powerlifters, and then there were boxers and martial artists. Speaker 1: So you had three different avatars that you were targeting? Speaker 2: Yeah, three kind of sub niches under this umbrella brand. Speaker 1: All under Beast Gear? Speaker 2: Yep. Speaker 1: And what did you do for marketing? Were you doing a lot of outside influencer type of stuff or getting fitness trainers? Or you said earlier you originally developed the idea to actually sell it directly to gyms. Did you follow that route at all or did you just put all your eggs in the e-commerce basket? Speaker 2: 99.9% of my eggs were in e-commerce. As kind of a happy side effect of the recognition that the brand got, I did get sort of gyms coming to me and asking for bulk orders. And so I would just cut them a deal and run it through my website, which was fine. It was great. It worked. That worked well. And in terms of influencers, you know, I turned a lot of customers into influencers. So, you know, one of the great things about when you go into a niche in which products are particularly photogenic or suit social media well, so it's not just fitness but perhaps food-related niches or hobbies like knitting or arts and crafts or, I don't know, motorcycles or something, if it lends itself well to social media, you can turn your customers into micro-influencers. Because your customers often will just post about your product or your brand without you even asking. But even more so if you give them an incentive. So in all of my packaging, you know, there would be incentives to post on social media because there would be a prize draw every month for the best post. So then my customers would post there and I would do two things. One, I would engage with them. So I'd like the post, we'd comment on it. I say me, you know, I did it originally and we scaled this up. You know, I can't, when you're doing $6 million, you can't comment on every post, but you can have a team do that. And we DM them and have a conversation with them, show interest in their life. And then you turn those people into raging fans who are going to buy all your stuff. You can ask for a review. You can repost their image. So free user generated content. And for some of them, you can turn them into real bona fide influencers. Because I would, you know, with our website, our off Amazon Shopify site, we had an app called a plugin called Refersion, where you can turn customers or even people who weren't customers into Affiliates, they would get a discount code and or a link and when that code is used, the customer gets a discount and the affiliate gets a commission, either cash or just credit towards your store. So that worked really well. Speaker 1: And that website's still around and still a lot of marketers are using it. It's a really good, really good reversion. It's a really good, really good thing. So you would put, so you would, in your package in search, you would put something that would say, post your photo on social media and tag us. That's how you would find it, right? So you had people that would just search for whatever those tags were, and then you would, that's the ones that you would comment on. That's how you would locate them all. Speaker 2: Yep, exactly. And people are delighted by it because, you know, why do people post on social media? For attention. So when they get attention from their friends or strangers, that's fine. But when they get attention from the brand that they've actually posted about, they're blown away. They're delighted. And then when you take that to the next level and actually have a conversation with them in the DMs, showing interest in their life and, you know, in my case, how's their training going? But in somebody else's case, it might be, well, how's your knitting going? You know, it doesn't matter. People are gonna love it. And that's how you build these evangelical fans who will keep coming back for more. Speaker 1: How much did your personal story with the heart condition and everything play into your brand story and developing the brand? How much did you weave that in or did you not? Speaker 2: I did, and it worked well. And I think one of the reasons it worked well was authenticity. So, you know, it wasn't a sob story, boo-hoo, woe is me, I had a heart problem. In fact, I didn't really talk about that that much. But what I talked about was the fact that I'm a normal guy. I'm an average Joe who's averagely fit. I've got asthma, right? But I still believe that I should have access to high-quality fitness gear at an affordable price, and so do my customers. And so it was quite refreshing for them to see the face of a fitness brand who wasn't like the biggest, the strongest, the fastest, the most muscly, the skinniest, the heavyweight champion of the world, whatever. He's someone like me who's pretty fit and takes his training seriously. And I can relate to him. And so I was saying, everybody's welcome. Like you could be like, the heavyweight champion of the world, you're welcome. Or you could be someone who's only just getting into like a couch to 5k or something. You're also welcome. Everybody's welcome. And that worked really well. Speaker 1: Did you target in your marketing the differences between men and women or was it everything was just unisex? Speaker 2: No, I did. So a really close friend of mine, she's actually, she was Scotland's first professional female boxer and was Commonwealth champion. I took a lot of advice from her and there's a really fine line to tread actually in this situation because you don't want to stereotype things and just make like pink products and target them a woman. At the same time, there are women who that will appeal to you and you want to make sure that you're showing respect to women And that they, you clearly appreciate that they're taking their training seriously. So, you know, I actually, you know, people out there listening to this will be looking up my brand. And I'd like to just kind of point out that a lot of stuff that you now see with my old brand, bearing in mind, I sold it, you know, three and a half years ago now. Isn't necessarily the way that I would market it. So for instance, not that long after I sold the brand, I was seeing images of like women with my boxing hand wraps with pink painted nails. And I'm just like, that's actually insulting. Because no woman who boxes is going to have pink painted nails while they're training. Now, they might paint their nails pink when they go out, you know, to a fancy restaurant or something, but they're taking their training seriously. So that kind of mistake really pissed me off. And that is what happens when you don't pay attention to your customers. And that's what makes the difference between these sort of me to just selling crap on the internet brands and actual brands. Speaker 1: So is the brand still going strong now? Did the buyer end up boosting it? Or is it just kind of just treading water and just kind of doing the same? Or what's happened? Like you said, you're upset they've kind of gone a different direction on a few things. Speaker 2: So in the immediate term after I sold it, the brand absolutely crushed it for two reasons. One was the flywheel that I'd got spinning from everything that I was doing was going so fast it was kind of unstoppable. COVID hit and I was still helping. Now it's just kind of creeping along. And I don't really have very much to do with it. I don't actually know what the numbers are now, but products that were previously launched have disappeared and ratings on products have plummeted. So it's, it's a, and it's, that's not uncommon. We see that a lot with brands that get acquired, which is a shame, but hey. Speaker 1: Yeah, I know someone that sold their brand a few years, about the same time as you, maybe 2019, 2018, 2019, somewhere around in there, for $16 million. Speaker 2: Nice. Speaker 1: And it was in the supplement space. That brand today, he just bought it back, I just found out a couple months ago, he bought it back for $400,000. Speaker 2: Oh, we might know the same person. Speaker 1: Yeah, I don't want to say the name here. Speaker 2: Yeah, I'm hoping to say the name because they're pretty well known. Speaker 1: Yeah, we probably know the same person. Yeah. Speaker 2: Yeah. You know, and if I could buy my brand back, I would consider it, but the damage might already have been done. And it's a real shame because actually, from day one that I sold it, I was basically offering to teach them what I did and allow them to cross-pollinate that learning across their brands. And it seems, this is not, you know, I'm not... I'm not being mean about the buyer that bought my business. I actually have a lot of affection for them. It just kind of frustrates me. It's kind of like a frustrated parent. And, you know, it's not unique to them either. So many aggregators in the e-commerce space are guilty of this. It's like there's a business and then they actually, all the stuff that made the business so good that they wanted to buy it, they stopped doing. And then they scratch their heads in surprise when the business doesn't perform as well anymore. Speaker 1: What do you think that is? I mean, we see that a lot with, you know, they can brute force something just because they have money. So they can, a buyer, whether it's an aggregator or just an individual buyer, can, you know, double your sales just because they could expand you to the US, they say, or they could buy more inventory or get a little bit more at scale. But a lot of them end up And I think that's the difference between a business owner and an entrepreneur. You're more of an entrepreneur and you're in the weeds and you have a passion, you're more guerrilla marketing, you're more into it versus these buyers are much more corporate. They don't have a passion for the product. It's just a line item on a P&L. And I think there's something and then they hire people that may have some maybe smart people and talented people, but they just don't have experience in doing this and they don't have any skin in the game really. I don't really care. You had skin in the game and it's your baby and you wanna show off your baby, it needs to win the beauty pageant. But versus them, they don't care, it just needs to satisfy whoever lent them 10 million bucks to buy a couple brands or whatever. What do you see? I mean, you said you stayed on for a little while to help them. What were the frustrations that you had after that or what were you seeing that, man, this is just a different world? Speaker 2: Yeah, so I mean, there's a whole bunch of light bulbs going off in my head about everything you've just said there. So, you know, I think the reason for it is a few things. One is a little bit of arrogance, right? They thought, this is easy. These aren't real businesses. This is like a computer game, right? Just online businesses. We'll just buy these up, roll them up and make bank. And they didn't really appreciate the blood, sweat and tears and hard work and effort that actually goes into these businesses. And these are real big boy grown-up businesses. The other part was an inability to hire the talent because the talent doesn't want a job. The talent wants to build a brand and then sell it. And I'm not saying that everyone that works for aggregators isn't talented. I don't mean it that way. It was a failure to understand the model. A lot of what we're seeing as well is the brands that previously were succeeding in the environment then are struggling in the environment now because, for instance, Amazon is so much more of a pay-to-play platform. So there are businesses that kind of worked in the previous conditions that don't really work in the current conditions. Or businesses where actually the owner and the team behind the brand were hammering so hard on fantastic customer services and getting great reviews and making sure they didn't have negative reviews and all the off Amazon stuff. But when they bought these brands, they didn't keep on with that stuff. It just fell to pieces because they failed to recognize that, which is why it was frustrating when I was trying to teach them this stuff and say, look, this is what worked. Why aren't you doing it anymore? Or this is what worked and I can teach you how to apply it to all of your brands. Why don't we do that? It's not that hard. I was doing this in a cupboard on a laptop with three freelancers in the Philippines. Surely you guys with all the money you've raised can manage to make this work across all of your brands. It just would make sense. But I was banging my head off a brick wall. However, I'm involved in the M&A space for e-commerce with a brokerage firm that I co-founded. And what we're seeing now is that many Many aggregators now have done two things. One, they have taken some time to pause acquisitions, reflect on what went wrong and get better. So I'm happy to say that now brands that are acquired now are actually, many of them are not seeing what we've seen happen because the aggregators have got the rack together. Many of them have, not all of them. We're also seeing newer aggregators who rather than being financial guys who raised a bunch of money to buy e-commerce businesses because they thought it was easy. They know it's not easy, but they're not financial guys. They're e-commerce guys that have raised a bunch of money to buy e-commerce businesses. So they kind of know what they're doing. Speaker 1: That's a big difference. That is a huge difference. Speaker 2: Yeah. And we're seeing aggregators get way more creative in the deals that they're offering to sellers. And rather than, so when I stayed on, I didn't really stay on. I had an earn out that wasn't contingent on me staying on. I did some consulting and I negotiated a profit share on new products that we launched. What I failed to do, and this was a failure on my part, was to include in that deal assurances that they would launch products that I developed. So I would develop these products and then they wouldn't get launched. Which really frustrated me, obviously. So now what we're seeing is aggregators getting way more creative and being willing to get more creative in the ways that they keep the talent in the brand. So I'm not saying that you sell your business and you find yourself working for the man, working for some big corporation, no. But it's getting creative with consulting deals and profit shares and you teaching them how to do what you do well so that the brand can succeed. Which is great. Speaker 1: So why did you pivot into a brokerage? Was it the frustration? You're like, I want to help other people because they don't understand? Or what was the reason to actually, once you exited, to actually say, hey, I'm going to partner up with some people and help others out? Speaker 2: Yeah, so a bit of background. I was very fortunate in that I was one of the early customers in 2016 of an accountancy firm. I was their guinea pig and they basically went on to become probably the best accountancy firm for e-commerce in the UK, if not the whole of Europe. And then when I sold the business, the broker that I used was not great. And they made a few errors, one of which would have cost me half a million dollars had I not spotted it and my accountant, Alison, not rectified it. So after everything was smoothed out and we got the deal done, we said to each other, well, the obvious thing to do, you know, the classic entrepreneurial thing here, you see a problem, you fix it, is to create a better brokerage firm. which provides a better experience for sellers and actually is a happy side effect, also a better experience for buyers. So we created Ecom Brokers, which is really the first specialist e-commerce brokerage firm in the UK, but now we're all over the world, got a deal director in Chicago. So that was the motivation for doing that. It was, you know, classic entrepreneurial scratch your own itch kind of thing. Speaker 1: How many clients have gone roughly just gone through there? Speaker 2: We've sold around about 30 businesses. So it's quality, not quantity. Speaker 1: All in the Amazon space or just all, they could be Shopify sites or other stuff or primarily Amazon? Speaker 2: Most of them are on Amazon in some form. In fact, most of them probably have the majority of their sales on Amazon, but that's not all of them. You know, we've sold, there was one in particular that I was really fond of actually that was 50% Etsy, 50% own website. That was one of our earlier ones. But yeah, the majority are selling through Amazon in some form. Speaker 1: So what do you think you can bring to the table when you're helping someone sell that some of the other brokerages can't? Is it because you've actually gone through the process with your own skin and blood? Speaker 2: Yeah, there's that. I mean, that's definitely part of it. Speaker 1: So there's empathy there? Speaker 2: Yep. So there's a range of experience kind of around the whole sphere of e-commerce, if you like. So I've built, grown and sold my own brand and I'm still building brands now. So I still kind of have my feet in the trenches. I understand what it's like. And I understand everything from, you know, product development through to, you know, email and chatbot marketing. Right. But then Alison's got 30 years mergers and acquisitions experience and is a specialist e-commerce accountant and has 15 or 20 people working in her firm. John, who's our deal director in North America, he's ex-Amazon, ex-KPMG, ex-Forum brands, owns his own brands, has built and sold and bought brands. So it's that kind of lived experience on all sides of the equation rather than what we're often seeing is either just a process that sort of commoditizes a business and just kind of lists it or a process which is somebody who might have experience brokering You know, the butcher, the baker and the candlestick maker on the high street, but actually they know diddly squat about e-commerce. Speaker 1: So what are you seeing different now, someone that's going to sell their business versus when you'd sold, like you said, you're one of the earlier ones for the aggregator that bought you, one of the bigger aggregators in the space. And things got crazy in 2020, 2021 with just ridiculous multiples going to, you know, six, seven, eight X, all this competition, just crazy money being thrown. And now things have calmed back down and like you said a lot of them have learned, they've buttoned up, they've fine-tuned, some of them had their money cut off, some of them are now instead of buying, they're trying to launch new products and extend what they have. As a seller, right now, what is it like out there? To try to sell your business, is it much more difficult? Can you not expect as much in the deal or do you expect a lot more scrutiny? As a seller, if I'm thinking like, man, I've been doing this for three years, I missed that bubble, but I still would like to sell, how are things different or what should I be considering now? Speaker 2: It is way harder to get a deal across the line now, which is why, even more so than before, it's so important to work with a really good intermediary who's going to take you through a mature process to prepare your business to sell so it's as attractive as possible for buyers. Because what happened was, buyers got burned. They raised a ton of money. And thanks to the macroeconomic conditions at the time, it was cheap for them to do that. And in many cases they just bought anything in order to see what would stick. And to grow quickly. And in many ways, there was kind of nothing wrong with that strategy on paper, but they got burned. You know, when they were conducting due diligence in 30 days, they were not finding everything that they ought to. So one of the reasons that it's so much harder for somebody to get a deal over the line now is because of everyone who's gone before them. Because every deal that's been done has added extra layers of scrutiny to the due diligence that buyers are performing. They are now under much greater pressure from their own investors to focus really on legit brands. So, you know, whereas previously somebody with, frankly, a pretty poor business, just kind of selling stuff. With no real moat around it and no real longevity to it would have got lucky and could have sold their business for a 5 or a 6x. Now is either not gonna sell it for very much at all or just not sell it because there's no appetite out there to buy it. So what people need to focus on now is building a legit brand that looks and feels and behaves like a real consumer packaged goods brand. And present it in such a way to a buyer that is going to de-risk the acquisition for them. It is a business that has growth history, has growth potential, has intellectual property, has a real brand identity and Is in a much different position than just stuff that might have got acquired for a very attractive multiple, you know, 18, 24 months ago. And so many conversations I have are really delivering the bad news that your business isn't sellable in its current state to a lot of people. Speaker 1: I know several people that were right place, right time. They maybe got onto Amazon 2014, 2015, when it was easy, like what you're talking about earlier, where you could do all the review manipulation and ranking manipulation. And they just were able to grow because they were first in line with getting reviews and just kind of rode that wave. And then when they sold, a lot of them were these type of businesses, as you said, the aggregators bought, that really weren't that sound of a business. And when they sold, then those same people, some of them made enough money, it was FU money, and they could just, you know, go do whatever they wanted. Others- Get on them. What's that? Speaker 2: Get on them. Speaker 1: Yeah, good on them. Others are like, we're going to do this again. And most of them have failed. Because most of them actually don't know what the hell they're doing. They were right place, right time. Yeah, but like you said, good on them. Good job. You won the lottery. But that's the big difference now, I think. And when people are analyzing these brands is like you said, it's it's got to be solid. And it's got to be more and more of it's towards branding and not just products. Speaker 2: 100% yeah, and you have to you know, it's not it's not all about People get dollar signs in their eyes and think about oh Well, if my profit is this and if I get a Forex multiple, then I'm gonna make whatever but you've got to remember In order for you to sell the business Somebody else has to buy the business, right? So put yourself in the buyers shoes and think about what they want, right and they want A brand identity. They want sustainability. They want profitability. They want growth history and growth opportunities. They want a de-risk acquisition that is going to make them some money back. So you need to have that in mind as you're building your business. Speaker 1: It is the difference in finding products or building brands. They're two completely different things. And that's one of the things like Steve Simons and I have a company called Product Savants. And one of the things that we do in this company is we actually, we take a couple of the pain points out for big aggregators and big sellers. It's not for the small guy. It's not a done for you service or anything like that, but finding, we started out finding new products. So we were using the tools and we're like, oh, there's a great opportunity to sell, you know, I don't know, baby headbands or something. I'm just making this up, but baby headbands. And so we would provide the data and then go out and package that up, which source it. And China or wherever, India, Vietnam, wherever it is. And then we would present that to a buyer and say, look, we found this opportunity. It's baby, it's baby headbands. This is the, introduce you to the supplier. Here's the, here's all the numbers and the metrics. It's like a 25 page report of competitive analysis and everything. And then they would pay us a fee for that. And then they would go and take the product. They would brand it. They would work out, work with the manufacturer. They do the launch and the marketing all themselves. And we pivoted from that. We saw exactly what you're saying is the market is changing to more brands. So then we switched it to what's called brand genesis. And so you can't come to us and say, I just want a product. You come to us and say, I want, in essence, a brand in a box. Here's five products that are around a brand. And it can extend an existing product line you have, or it could be something totally different. We had to shift that because of this, like you said, the shift And where the opportunities are and where the differentiation can be. And I think that's what's happening with Amazon. Amazon's been emphasizing that with brand registry and all the additional benefits that they give if you're a brand. But a lot of people, I think, are still approaching this the old way of, because they see YouTube videos or webinars or whatever, of finding something on Alibaba, sticking a logo on it, calling that your brand, and then putting it out there. Versus like what you talked about with your fitness, with BeastGear, the way you tested it, the way you market it to different audiences, it's very clear that you knew exactly who your buyers were and you tailored it to them. And I think that's where a lot of people right now are missing it in this space. Speaker 2: Yeah, it is frustrating actually because some of us have been talking about brand now for quite a few years and a lot of people are still missing the point. But folks, Amazon is now all about brand. They're giving us all these opportunities and have been for a few years now to talk about brand. And when Kevin and Steve are saying that it's all about brand, then you know, listen up, it's all about brand. So, you know, the days of just launching a random product and a variety of random products have well and truly been over for a while now. Speaker 1: I mean, I think you could still do that. It depends on your approach. And this is what I say is people say, how much money does it take To start selling on Amazon, I think it depends on what you're trying to do. For us in the West, if we're making $1,000 a month profit, it's not going to change our lives. We may be able to have a couple extra beers at the pub with our buddies or something. But for someone in Pakistan, $1,000 a month in profit is life-changing. Because we're there, even as a doctor, you're making $600 a month or something. So that can be life-changing. So I think there's still great opportunity in finding individual products at the lower end or the very niche, niche, niche, niche, niche for those type of people. But for the other people that are really wanting to have an exit or build a business or build something where you can actually live off of this and take a decent salary out, you've got to be switching your mindset to more about creating a brand with avatars and, you know, like you said, you had the three. You were very clear on that earlier when you were ahead of the game on this whole e-commerce space and doing that. Speaker 2: Yeah, so you've hit the nail on the head. To me, a brand is a group of products that solves problems for a particular group of people. And your branding is basically how you make those people feel. So people need to take the time to take a step back and think about, well, who are my people? What are their challenges? What are their pain points? What are their values? What are their goals? What are their problems that my products can solve? Understand them and build a brand that reflects partly who they are, but also partly who they aspire to be. And when you do that, And you reflect that in your, you know, if we're going to talk about Amazon, in your listing, in your copy, in your images, and then if we're talking about off Amazon, in your social media, in your ads, etc., etc. You're going to do so much better than somebody who's just slapped something on Amazon or on a Shopify site because your offer is so much more compelling and people are so much more inclined to buy from you because they're going to know, like, and trust you because they can see that your brand understands them and that your brand is an authority on the topic. Speaker 1: So on a, as, as when you're dealing with your brokerage side of what you do, it's how, you know, there's something on a, on a balance sheet called brand equity. It's actually a line item on a balance sheet and that number can be low or it can be really high to, you know, how important is it now to buyers? To have a lot of brand equity, are they just looking for the customer list and the cash flow or are they actually looking for like, I can actually, this brand is actually worth something because I can throw my ideas into it and help spin it into even more cool products, not just merge it with whatever existing distribution channels I have or additional money I have to explode it. Speaker 2: Yeah, so what we don't see is You know, the brand equity, so to speak, doesn't affect the SDE or the EBITDA. Well, let's keep it simple for people listening. It doesn't affect the profit, right? But in terms of what's on your P&L sheet, But what it does affect is the multiple. So we see this all the time. Two businesses in the same niche selling virtually the same stuff. One with a strong brand identity, one with a weak brand identity. Which one's gonna sell for more? Clearly the one with the strong brand identity. Speaker 1: And when you say strong brand identity, when you're looking at a business and the brokerage, what makes a strong brand identity? Is it how many people are searching for it by name on e-commerce? Or is it a pretty website? Or is it beautiful logos? More passionate customers than the other guy? Lots of influencers talking about it versus the... What makes that? What's the definition of that? Speaker 2: Everything you just said is part of that. It is the sum of, and when I say sum, I don't literally mean mathematical sum, but it is made up of a whole variety of components, including everything you just said. It is the difference between An Amazon account selling a bunch of widgets and that's it, that's all they're doing and a business which is represented by a brand for which Amazon is a sales channel. So let me give you an example. I'm talking into a Rode microphone and Rode create audio equipment for people who create, for creatives, podcasters, gamers, that type of thing. So their products solve problems for a particular group of people. I could probably go onto Amazon and buy pretty much the exact same microphone that I'm using for a fraction of the price from some company with a very long Chinese sounding name, which has absolutely no brand equity, no social media accounts, no content producing helpful, compelling, engaging information that provides value to me, that makes me know and like and trust them. They don't have a YouTube account where they're providing content to help their existing customers to get the most out of their products and help new customers find their products. They're not communicating with me in emails every week, telling me the latest information in the audio world. They're not doing any of these things on the back end to provide an experience or even on the front end to bring in new leads. They're just selling stuff. Now, they might be selling stuff profitably. They might even be growing. But if they don't have the same brand equity as, for instance, Rode, then they haven't de-risked it for a buyer as much because there's nothing to stop anyone else coming in there. The whole house of cards could just fall down tomorrow. There's fewer opportunities for growth. There's fewer opportunities to expand internationally into new channels. There's fewer opportunities to work with influencers or affiliates because there's nothing there. There's nothing tangible there. It's just A widget which somebody has searched for, somebody might have searched for USB microphone rather than an evangelical fan of Rode who wants to buy all their audio equipment of Rode who will search for Rode microphone. Do you see the difference? Speaker 1: So how's the brand for this new baby line that you're doing gonna stand out? Like you said, you're doing a baby carrier and you're going through the design process. There's tons of baby carriers already selling on e-commerce under Chinese brands and other decent name brands. What makes you any different? Why do you think you have a chance? Speaker 2: I'll answer that question in a moment, but I'll say one other thing about this. So you mentioned the fact that there's tons of baby carriers. There are, because there's tons of babies. So I only need a teeny tiny fraction of a percentage of that huge market to make this a success to me. So what's different about this? So the reason I started this brand was, again, classic entrepreneurial thing. With our daughter, I didn't get on well with any of the baby carriers we used. They gave me back pain. And I wanted, on the other hand, if I carry a heavy rucksack, like a heavy kind of backpacking, hiking rucksack, I don't have pain because the weight is really nicely distributed through my hips as it should be. And it's a really well designed product ergonomically. So I set out to create a baby carrier which was better from an ergonomic point of view. And which rather than looking like all the baby carriers you see when you go into the store, which are kind of generically flowery and feminine, felt more like something that I would actually want to buy, that would look... Speaker 1: As a man? Speaker 2: Yeah, well not just as a man, we're not just marketing this to dads, it's for mums too, but would look more at home in an outdoor shop than a mother and baby shop. And I knew there was a market for this because I've spoken to plenty of other parents like me and there are other products similar-ish to what we're creating. The next part of it... is environmental sustainability. So I mentioned before my background is in ecology. I'm a bit of an eco nerd. The way to change our impact on the planet is not through changing customer behavior, because people are lazy and they won't change. What we have to do is change supply chain and just make products by default be more environmentally friendly. So my product is made from 100% recycled materials, including plastic bottles recovered from the ocean. And it's recyclable. So when you're finished with it, you can recycle it. So what we can say to parents is, hey, you want to leave a better planet for your kids? Well, put your money where your mouth is and buy this, which is made from plastic bottles recovered from the ocean. Speaker 1: And usually that comes at a premium. Are people willing to pay that premium? Speaker 2: Certainly are. Yeah, they certainly are. Plenty of people with lots of money want to buy the best thing for their new kid. And after obviously I sold my first brand, when I bought my first 500 jump ropes in 2016 from China, they were costing me a couple of bucks a unit. This is going to cost me like... North of 30 bucks a unit, close to 40 bucks a unit actually to make these. And that's a high barrier to entry, which I like. The higher the barrier, the entry, the better. So I'm basically dabbling in a market of huge corporates who aren't as good at telling a brand story as me and aren't as nimble as me. And I've spent a lot of money with a top designer to develop this product and make sure it performs extremely well. So what's different about it is all the things that I just mentioned, the ergonomics, the looks, the environmental sustainability, the fact that it's a parent's product and not a kid's product, and the fact that I can nimbly market it as a small business rather than a corporate bay-em-off will help. And the fact that I only need a teeny tiny percentage of the market will help. Speaker 1: Awesome. Speaker 2: That's what I'm doing. Speaker 1: Cool. Well, I wish you the best of luck on that. I hope that that turns out really good. Speaker 2: Yeah, doing a Kickstarter later this year. So I'll let you know how it goes. Speaker 1: You're doing something else later this year too. I hear through the rumor mill that you're actually going to be releasing a book or something. I think around October-ish, something like that. What's this like about your journey? Is it the next Harry Potter series? What's this going to be about? Speaker 2: Yeah, so the book is coming out in October. It is a bit about the journey. It is a book for any aspiring e-commerce entrepreneur who's had an idea but hasn't done nothing about it because they don't think that they have the experience that they need. And I'm saying you don't need a business degree to crush it in e-commerce. The book is called Quit Stalling and Build Your Brand. It's coming out in October. It's also a perfectly good book actually for an experienced e-commerce entrepreneur who wants a set of guiding principles from someone who's been there and done it. So what it isn't, it isn't a nitty-gritty tactical book of, you know, download this extension and do this to rank on Amazon because those books are useful but they go out of date pretty quickly. This book is about building a brand and it is timeless principles. Yeah, I throw in some useful tactics in there, but they are cross, you know, they can be cross-pollinated across any platform that might exist between now and the next, you know, 100, 200 years. So it's a set of timeless principles for entrepreneurs. So yeah, quit stalling and build your brand. It's coming out in October. And I can't wait. Speaker 1: So why do a book? I mean you're a busy guy, you got a newborn, you're developing some new brands, you doing the brokerage stuff, going into the pub every once in a while and having a beer, get a workout. Why spend some time writing a book? Speaker 2: I've got a story to tell and this book doesn't exist. It didn't exist for me when I started and I'm frustrated at a lot of the information that I see out there in the space. And I feel like I've got something to offer. So here it is. And you know what? I've enjoyed the process. So yeah, that's why. Speaker 1: And what was the name again? Speaker 2: Quit Stalling and Build Your Brand. Speaker 1: Quit Stalling and Build Your Brand. And is there a website or anything where if people want to learn more about that, where they could actually go to get on the wait list or the notification list or something? Speaker 2: Yeah, the best place to go right now is benleonard.pro slash tips And that is where you're going to get for free a bunch of the best tips of the things that really made a difference as I grew my first brand. And I'm going to go into more depth on these in the book. And hopefully that's a really enjoyable resource that people are going to get a lot out of. So it's benleonard.pro slash tips. And you can also head over to QuitStallingBook.com to get on the wait list. Speaker 1: So that's Ben Leonard L-E-O-N-A-R-D for those of you who don't know how to spell it, Leonard.com forward slash tips or quick... Speaker 2: Almost. BenLeonard.pro. Speaker 1: Oh, dot pro, sorry. Dot pro, not dot com. Dot pro, dot pro. Speaker 2: BenLeonard.pro slash tips and then QuitStallingBook.com. Speaker 1: Awesome, man. Well, Ben, I really appreciate you coming on the AM-PM Podcast and sharing. This has been great. I guess those are the two best ways for people to reach you, or are you on LinkedIn or anywhere else if someone wanted to just ping you? Speaker 2: I'm on all social media channels. My handle is BenLeonardPro. Hit me up. I'm a chatty person, so come say hi. I'm always happy to try and help in any way that I can, and I appreciate you having me on, Kevin. Speaker 1: Awesome, man. We'll have to do it again. Speaker 2: Absolutely. Speaker 1: Branding is definitely where it's at for long-term success when you're selling on Amazon or in e-commerce in general or just building a new business. You can always sell products and get a little bit of cash flow and maybe you guys start out there in the beginning because you're limited in resources or time but always be thinking about how can you push yourself into developing a true brand just like what Ben was talking about and it's really gonna give you an edge and a leg up on all your competition. And I think that's where most of us need to be thinking as we continue into the future. We'll be back again next week with another awesome episode. In the meantime, I've got some words of wisdom for you. You know, what, what lights you up? What, what makes you fulfilled? Because, you know, progress equals happiness, but fulfillment equals growth. That's right. What really lights you up? Stop and think about it. What really makes you happy? What makes you fulfilled? Because if you're just making progress in your business, that can definitely equal some happiness. But when you have true fulfillment, that's when you have the true growth. Take care. We'll see you again next week.