The E-commerce Leader

[00:00:30]Intro: [00:00:30] Hey folks, welcome back to the e-commerce leader. And we are talking about how to buy e-commerce businesses or e-commerce websites to expand your business. In the last episode, we talked about, what sort of business should you acquire and should you even acquire it and the sort of price you may want to pay today?
[00:00:46] We’ve got four tips or so from Jason about the, how to piece and. A few do’s and don’ts as well, things not to fall into classic errors. So lots of very practical value from a man. Who’s done it now, 12 times in Jason’s case, I’m extremely curious about this model and I’m looking forward to making my own acquisitions at some point in the next couple of years, but Jason’s managed to actually done it.
[00:01:08] So this is as much my learning as yours. I hope that you enjoy this as much as I enjoy talking to Jason about it. So here without further ado, let’s get into the show.
[00:01:17] Michael: [00:01:18] So the how piece, what, what are your tips on how to actually go about this?
[00:01:21]Jason: [00:01:21] Yeah, a couple of tips. Yep. The first one I would say is don’t buy retail. Unless you have to, and you don’t have to. So, and what I mean by buying retailers, there’s a ton, a ton, a ton of, marketplaces now for buying companies.
[00:01:34]Shopify has a marketplace for buying companies. There are other, marketplaces like Flippa empire flippers, micro acquire, Effie international there’s there’s broker business brokers that are out there that have constantly, you know, have new listings, just like real estate, really. And, you know, stuff’s out there.
[00:01:54] That stuff is what I would call full retail. I don’t think that’s the best place to find deals, the best place to find deals as a relational connections and meeting people in the marketplace, knowing them, being in touch with them. And this is how our best deals have come together. And. You know, so you put yourself out there and you say to your, to, to your network, I’m looking to acquire, brands and, you know, I’d love to chat with you about that.
[00:02:19] And that’s a networking thing. The reason that’s so incredibly more valuable than painful retail is you’ll end up hearing about, people who want to sell, but aren’t really, I guess you could say they’re motivated sellers in a way they’re they they’re selling because they’re done. They want to retire.
[00:02:41] They’re exhausted. They’re, they’ve just given up on their business. You’ll find people who have business assets that are more in the category of unwanted, than anything else. And if you, if you go to just Flippa or empire flippers, what you’re stepping into is a scenario in which the sellers there are.
[00:03:03] Fully ready to maximize the value of their asset and have it all shiny and happy and a story to tell. And, you know, they’re gonna, they’re gonna, you know, impress you with how things are sorted out and, you’ll pay full retail for that. And, and, and so I guess what I’m describing here is being a value shopper and finding things that are the less loved assets.
[00:03:31] And you know what I mean? It’s just, you know, some, some people, because it’s businesses, a venture that you would go into, you always leave. Everyone always quit at some point. You want to find people who are, ready to get out of it. And those create the buying opportunities that are more valuable. And that’s just, it’s just like real estate in a way.
[00:03:47]You know, so that’s, that’s how to look.
[00:03:50] Michael: [00:03:50] By the way, super smart insight. I guess I’ve spoken to a ton of, business brokers and business acquires for the podcast over the last three, four years, especially in the last few months, as you say, it’s a feeding frenzy really, that there’s such a big market for buying and selling e-commerce businesses right now.
[00:04:05] It’s, it’s absolutely insane. But you’re right, that those are the guys talking about, you know, creating this sort of shiny looking business and getting great value for the seller. But as the buyer, it’s not the body place. The thing about the motivated sellers think that has a bit of a funny story.
[00:04:19] Feel to it in the real estate market, because obviously it feels a little bit like you’re trying to take some of these home away from them. And under the value that you quote should, or shouldn’t, I would say that you could feel a lot better about, I dunno, buying, for example, an email is to several hundred thousand names, which is pretty much valueless to the general market, or in, in the couple of acquisitions you’ve made outside of your, you know, the, what do you call it?
[00:04:40]Pixie Faire that’s really, if they didn’t sell to you, they were probably going to sell to nobody. Right. So in a way, I think you’re adding huge value where there was pretty much nothing. And I think you can feel pretty good about that. I mean, what’s your feeling? You’ve, you’ve done that a couple of times.
[00:04:53] How did you feel after the deal?
[00:04:54]Jason: [00:04:54] I’m happy about everything we purchased, to be honest, I don’t feel like we’ve purchased anything that was, you know, a fail. And you’re right. I mean, the cynical person would say, you know, There’s something wrong going on, but if you find a buyer or sorry, if you, if you find a seller who is done, they’re exhausted, they don’t even have the energy to market their company.
[00:05:18] And you say to them, Hey, I’m happy to give you a fair price. Let’s just make this easy. You’re doing them a huge service you’re right. I mean, many times some of this stuff would just be like, I quit, I’m giving up, I’m shutting down my Amazon account or, you know, whatever, shutting down my website. So those, those people, if you, if you can find them and if you can talk to them and broker a deal, you you’re doing it.
[00:05:40] Huge value. You know, you’re offering them a huge value. So there’s no shame in that. I mean, I love Warren Buffett’s investing style and I love his early writings and his early story. And if you’ve never really geeked out over his story, go get the book snowball, but then you can also read the Berkshire Hathaway, annual letters.
[00:05:58]Charlie Munger and Warren Buffett described their early business, acquisition efforts as what they called, Taking the final puff of cigar butts that they find on the sidewalk that is such a horrible idea. They’d find a cigar, but they take a few puffs, they light it up. That’s a horrible way to describe what they were buying, but that idea was they were finding businesses that had some value in life left in them that, or relatively easy to acquire and, that they found value and that the other people didn’t that other people had discarded.
[00:06:32] And, I remember one of their deals, they talked about one time, Warren buffet, told this story that I think it’s a snowball and it was about, cartography business, like a Mac map making business. And, it’s over time, it’s top-line numbers had gone down, down, down, down, down, you know, going down to zero.
[00:06:49] And, but as it happens, they had an investment portfolio. I think it was like $4 million of these. Good stocks. Well, on the basis of the profit of the business, the value, the business value is really, really low, but on the balance sheet, they had this investment portfolio. So, you know, he bought that business for a song.
[00:07:10] And, what he was really buying was that investment portfolio that the company controlled, I think it was in their pension or your program or something like that. And, and so, you know, that was, that was one of the ways he, no, he did it. So, so these are the, the ideas you want to think about and don’t, you don’t want to look at it as being, anything other than helpful.
[00:07:30] And that’s what you’re being, and there’s opportunity to be helpful for e-commerce sellers who are. Be an e-commerce sellers. You know,
[00:07:37] Michael: [00:07:37] I couldn’t agree more on, by the way. I think there’s so many people to shut down. I was in businesses in, in two ways that are completely wrong. The first one is deluding themselves.
[00:07:46] Anyone who’s going to buy a bunch of stock that didn’t sell. If it didn’t sell, then it isn’t going to sell anyone else probably. And by the way, over six months, the market would have got twice as competitive. So it didn’t sell six months ago when you ordered it and you’re not trying to sell it 12 months later, that’s not going to be better.
[00:08:00] But the other, the flip side of that is they don’t value the, the hidden assets. Yes. That the profit may not be there, but you have, you know, 10,000 Instagram followers where you have a fantastic relationship with them, you would just allows you to doing the economics of ordering. For example, the flip side of that, I’ve, I’ve come across business.
[00:08:14] As I spoke to him, tried to persuade into. You know, getting some coaching or join the mass one. They’re like, no, I’m done. I’m completely sick of it, but they are fantastic at ordering and, and product development. The stuff that I think is super hard and importing, but they’re just not very good at marketing on Amazon.
[00:08:28] Now, frankly, so many people are good at marketing Amazon these days, or you can hire agencies, even if you’re not good, that are pretty up to date with that, but they’re not, you know, the hard thing is developing products and getting the economics of that to work. So I was desperately trying to persuade him to sell his business for tons of money.
[00:08:43] And he said, no, I’m not really that interested, but you could put me in touch with somebody if you want so that these people are out there. Who’ve just kind of given up. Actually viewed from a certain angle, there was just a ton of value there. So whether it’s a tiny business has given up, but actually they’ve got a patent on, a formula that’s unique and could be worth a lot of money and get you six months down the line, very swiftly from developing yourselves to saving time in essence, or it’s something more extreme where somebody made several hundred thousand dollars a year and just kind of give it up.
[00:09:11] It’s surprising what’s out there. It always amazes me. And, it’s really worth looking. It is. Yeah,
[00:09:16] Jason: [00:09:16] yeah, it is. And what, what, when you go through this cycle, a bunch of times, what you realize is that business is so much harder than just making sales and even making profit. I mean, there’s a lot of mindset, a lot of, you know, strategy stuff that has to go into it.
[00:09:34] And, and we all fail in our businesses constantly. You know, I, I heard somebody describing it this way recently, like. Fail on day today, fail tomorrow. Fail the next day. The next day, fail six days in a row or take a step. Actually, he did the way he described it was take a step backwards today. Take backwards, backwards, backwards.
[00:09:53] So six days in a row backwards. And then on the seventh day, you take a 10 step forward leap and. That can get exhausting and people can just be like, you know, I I’m stuck. I don’t know how to get unstuck. I’ve tried to get unstuck a few different ways. This isn’t working for me. I’m done, I’ve I’ve reached my limit emotionally and in a time and energy.
[00:10:12] And you’re, you know, a lot of times, if you have a spouse that it can be done before you are, and they can make you done, you’re done with this. Yeah. I know. I hear
[00:10:22] Michael: [00:10:22] you on that. I’ve heard that one more than once. And to be fair as Powell suits, I would probably upset you. Right? The other thing I’ve seen actually thinking.
[00:10:30] But we’ll move on in a sec, but this is an important campaign. I think I’ve recently come across quite a lot of quite despondent e-commerce sellers who are selling now in whatever it is, August, July. There were saying maybe 30%, 50%, or even less of what they were doing a few months before, because they were selling into a lockdown where everyone was buying like absolutely crazy.
[00:10:50] However, if you look on the year on year numbers, they’re doing incredibly well, but their mentality is it’s dropped relative to what I was used to. And, and the guy was mentioning who I thought was sourcing a really fantastic product and handed rough for me. The hard bit of the business model was actually doing pretty well, but just not as well as you had two years ago.
[00:11:08] And I probably let overhead grow in response. And therefore the profit, the business was looking pretty, pretty poor. But if you strip that back out, or if you, if you could duplicate that, as you were saying earlier, if you’ve got your back office functions or whatever it is, you can consolidate that to me, felt like actually viewed objectively, not what you’ve just got used to recently.
[00:11:27] It’s fine, but I think a lot of people do get quite despondent based on fairly recent history of their business. If it’s not going up, they’re down. If you know what I mean,
[00:11:34] Jason: [00:11:34] if, your comments are absolutely identical to a few conversations I’ve had recently. And it’s very interesting that you said that, because there, there is that recency it’s called the recency effect.
[00:11:45]If you’re down over the last six, three months, or, you know, 60 days, 90 days, you, you could be emotionally devastated, but if you zoom out and say, what’s my year over year success, and I have literally had those conversations with, you know, people we work with and, and, but it is an emotional roller coaster.
[00:12:02] And, sometimes that is off a cliff and people like, I, this, this is not working. I’m done. So anyway, so that’s the first thing is, you know, don’t buy full retail. That’s my first tip, find people who were done and work with them. Yeah.
[00:12:14] Michael: [00:12:14] Excellent. So what’s your second tip then?
[00:12:18] Jason: [00:12:18] Yeah. I, my, my, second one is don’t buy what you don’t need and can’t afford.
[00:12:23] So there’s no need for heroics. In this situation, you have a good business that’s viable, you’re an e-commerce operator. Find something that fits in your wheelhouse that you definitely see value bolting into your existing business. That will definitely make sense for you. And that there’s no question about.
[00:12:44] And, and then, make sure you can afford it. You know, I mean, don’t, don’t take a leap, financially, that’s not worth it. And so go, go, go small and find something that you can afford to do. And that adds value to existing business. And just be careful not to go too, too aggressive, I guess would be my, my tip there.
[00:13:04]Yeah,
[00:13:05] Michael: [00:13:05] there was a person who said, I think it was. David Packard, the founder of Hewlett Packard, who said more businesses die of indigestion than starvation. Now that’s obviously for the businesses that do a lot of acquisition, but there is something about that, right? That if you have buying something, if you bite off more than you can chew, that’s, it’s quite a phrase, but that could kill your business.
[00:13:24] And that’s a very interesting statement actually, because I think most of us haven’t had the experience of that, but I think it could be something that could really do Wally quite
[00:13:31] Jason: [00:13:31] quickly. Right? Yeah. Buffett is again, a good, good person to quote on this stuff. He has tons of business quotes on, on these types of things.
[00:13:38] A few quotes that I was loved of his, first of all, he said, in terms of investments, your, in a situation like a baseball player at the base at the home plate, a batter, you can take a million pitches, see a ton of things and never. You just can sit there. And so, you know, you don’t have to swing at something that’s a bad pitch.
[00:13:58]And so that’s a thinking model that I really liked. The other thinking model is a quote from him that said to acquire in essence, this is what he said, I’ll adapt it a little bit, but to acquire what they didn’t need, they risked what they did need. And that is foolish, you know, so never put at jeopardy your core business for the hope of somehow acquiring something greater.
[00:14:22] That’s foolish. That’s not why. So, so you don’t want to risk a what you have going. That’s doing well with the hope of growing something bigger that, you know, it’s just a, it’s a bad.
[00:14:33] Michael: [00:14:33] And by the way, just, this is one of the, again, the correctives to a default entrepreneurial mindset that I’ve seen, which is swinging at everything.
[00:14:41] And, and when you tiny business, when you have no idea what you’re doing, and you have very little to lose, that actually makes quite a lot of sense as a very broad startup kind of strategy. However, I think it’s really important to transition to more of an investment policy, which is you’re very, very selective.
[00:14:55]And that’s, that’s a big, big mental transition that I think that’s one of the reasons why this sort of conversation is important for business owners to to think about because that may investor mentality can sometimes be the diametric opposite to the swing at everything, try everything mentality.
[00:15:08] And I actually, that can be a good way to take a business from zero to a million dollars a year, and then tear it back down again. You need to transition at some point. So I thought that’s a great metaphor. I really like that we’ve touched on before, but just very briefly, how do you get the money together?
[00:15:24] Is it your own money? SBA loan. Do you put a group of buyers together? Yeah. So
[00:15:29] Jason: [00:15:29] those are the, those are the ideas, yeah. From pay from earnings, just cash from your savings account, business savings account. You can take a loan product. You can do seller financing where the seller actually, you know, gives you terms and then, you can bring it in an investor.
[00:15:43] Those are four common strategies for paying for it. Sure. Okay.
[00:15:47] Michael: [00:15:47] So sticking with the, how question, what else do you need to look out for when you’re buying a business or pitfalls?
[00:15:53] Jason: [00:15:53] Yeah, another tip I would have is don’t fall in love with the business you want to acquire until it’s yours. And don’t overpay and get emotional, stick to your valuation.
[00:16:04] In essence, what you’re you’re, what you’re doing is in that mindset of acquisition is you want to see something that is so exciting to you, that you want it, and you’re, you’re willing to make an offer, but not so exciting to you that you lose your mind and that you say I’m going to acquire this at all costs.
[00:16:23] And so that’s where you want to just stick to your valuation. And, and so we’ve done that. We we’ve, we’ve offered somebody a fair price and they’ve said, I want more and we’ve held our ground and then the deal didn’t go through. So that’s a, that that happens. And at the end of it, as I look back on the case, I’m thinking, yeah, I’m okay.
[00:16:44]You know, I, if I would have gotten the deal done, I would have been happy. Was I willing to pay more? No, no, I don’t think I was. And I think I, in, in high, cause you know, you kind of go through this, like when you’re thinking about it, you really get amped up. You’re really like, oh, I want this. But then in the cooler, calmer hindsight of, you know, two or three months later, you’re like, what was that again?
[00:17:07] Why did I think that was valuable? But, and so, you know, you just want to stick to your guns and if you create a valuation and you go into the negotiation, be firm about it and, and two good things could happen. Either they cave and you don’t and you get what you wanted for the value, you thought it was fair at.
[00:17:23]Or they say no, and you don’t, you don’t take a risk. You don’t take a gamble. And both of those are good outcomes, you know? So.
[00:17:31]Michael: [00:17:31] Like it’s, it’s the, the businesses you don’t buy that you’re talking about. I guess the, the, the, you know, the pictures that you don’t take a swing at. That’s, that’s very good.
[00:17:39] As you said, that the best way to negotiate is to genuinely be happy with walking away. And if I don’t an emotional level, if the seller senses that you’re more likely to get a good deal, as you say, oh, you just walk away and I there’s a good outcome. So the final tip you mentioned before about this, but another sort of warning about, you know, related to this sort of rushing in wearing just fear to tread
[00:18:00]Jason: [00:18:00] final tip final tip.
[00:18:00] Yeah. Final tip is go slow, start small and add one acquired business at a time, and then see how it goes. And the beauty of this model, it’s the great game of e-commerce and entrepreneurship is amazing. It’s just, it’s just so amazing how many, you know, I don’t want you to call, you know, mental areas of, of, ex expertise you can geek out over, but the fun of this acquisition of effort work is you can about your, your progress over time.
[00:18:34] And so things you want to learn as you go one at a time methodically and, and reflecting on what you’re doing is am I good at adding new businesses to my existing company? If you do one deal and it is a complete disaster that you hated, and it was horrible, then you’ve learned their lesson there. But if you say to yourself after one was done, man, this was awesome.
[00:18:56] Let’s go for another one. Then you’ve learned something about your, your own psyche and you know, your mindset. The second question is, are you good at valuing things and thinking it through, like, did you do your diligence work properly? Did you evaluate the return on investment? Did you give it time enough so that you evaluate the ROI questions?
[00:19:15] Is it actually valuable the way you thought it was. And, and you want to learn that, you know, and it’s like, you know, maybe you’re wrong about this stuff and you need, if you need to correct course, and, and reevaluate, then it’s wise to do these, you know, sequentially, third thing you want to learn is, am I good at the deal making with the sellers?
[00:19:32] You know, that’s a whole art and you want to be good at it. You want to get good where people like you, they know you, they trust you. They would look back and say, this was a fair deal. They would look back and say, this is a good person that they would look back and say that these guys weren’t, you know, in any way, you know, an on professional.
[00:19:49] And so, you know, that’s something to learn. And then the first, the third thing is, is your core business. Actually growing and benefiting and valuing because of these acquisition strategies. So you want to learn all of these things and a lot of other things about it, but that’s the, I guess the fourth tip is go slow, start small, be methodical, do one at a time and learn it.
[00:20:09] Learn your, your core lessons and take time to reflect back and think about. Yeah,
[00:20:14] Michael: [00:20:14] I really love this because I think what it does is make you a better businessman. And then it seems to be Warren buffet day-to-day at, at, econ, the e-commerce leader towers, but Warren Buffett said something like the better business, man, I’ve become the better investor.
[00:20:24] I become an, the better investor, the better business person. So I think what you’re saying, kind of ties into that really. So one, one or two final questions for me. First of all, there are any deals you’ve lost out on that you really bummed out about or that you really wish it was the fish that got away.
[00:20:38] Yeah.
[00:20:39]Jason: [00:20:39] Yeah, actually actually there, there’s a couple of deals that we were pretty, you know, deep into the weeds on that did fall apart or didn’t work out. One was, one fell apart. I, gosh, it was a year and a half, two years ago now and I regret it. I didn’t bring enough money to the table. And the evaluation I thought was fair was, evaluation in hindsight.
[00:21:00] That was really me trying to be. Riskless as possible. And I basically, we were, I guess, at the altar, you could say the marriage terms and, and we didn’t, you know, we didn’t, finalize the deal and, and, and it was also a time pressure thing. And I think that was part of the trigger for me. We haven’t talked about this, but it’s sort of an interesting twist.
[00:21:24]The, there was a time constraint and, and the, the seller wanted to be done at a certain time. It was a retirement thing. He was moving and, and all that. And he wanted done, he wanted out, he had inventory that he was storing, which we haven’t talked about inventory. We talked about that before we wrap up too.
[00:21:38] But, but he, he wanted to be done at a certain time. And I was thinking I was, I was researching, I was being a little slower than I needed to be maybe. And, and he sold to somebody else and wouldn’t, you know, the people who he sold it to, to have just. It’s just a beautiful, beautiful thing and I could have done, I could’ve made it a beautiful thing and, and, they took it and it’s literally now, like what happened specifically?
[00:22:11] I’ll tell you, I can tell you the details. I guess it was, an heirloom seed company and it sounds sort of like a wildlife, what in the world, but as heirloom seed company and this guy had it for like 45 years and it was a mature long established business and, and he wanted to retire. He wanted to, he was, he was moving, I guess I’m just sharing the details.
[00:22:27] It doesn’t matter. But, so, so that was sort of context. And then, so it didn’t work. He sold to somebody else. And then I walked into Barnes and noble and, saw the company that he sold to. They had a huge lack of this fat, almost like a farmer’s Almanac. But it was. It was a heirloom seed, huge magazine, like as an advertorial, like it was like, old fashioned, like that whole earth catalog, you know, those big kind of cool, and it was all heirloom seed stuff.
[00:22:56] And that was the company and they, they were acquiring brands, and adding to their empire so that it was a strategic acquisition for them. And they were well much more well-suited to do what they did than I would have been. But nonetheless, I would have looked back on that, I think with some, fun, and I think it would have been a very profitable and I lost the deal and I do look back and think, how can I learn from that?
[00:23:23] And I think that only take away from that for me was I did see value in it that wasn’t currently there in its current state. And I guess I was just only marginally. Satisfied by knowing that another company also saw strategic value in it in a way that wasn’t there, you know, in the, in the moment and then that they did, they really did do something amazing with it and seeing somebody else do really well with it made me kind of reinforced my thinking that I did see value.
[00:23:57] Yeah. I did know what I wanted to do with that business, if I would have acquired it and I just didn’t get the chance. And I’m so, so anyway, so you’re pausing,
[00:24:07] Michael: [00:24:07] you’re lost, you’re lost deal here. Yeah.
[00:24:10] Jason: [00:24:10] You can tell this is fun, right?
[00:24:12] Michael: [00:24:12] It’s funny. The learning curve, it seems it’s not just in the acquisitions you make, but the ones that got away, I mean, I would say to be fair to you in terms of the truth of what you were just saying about developing the, if you like the trade skills and the emotional trade skills, if you will, that now that you’ve seen the one that got away and the fact that somebody else built value on it, you’ve learned to build trust in your evaluation, your instincts, there is value here.
[00:24:35] Right. And, and so maybe the next similar deal to that you will take. Okay.
[00:24:39] Jason: [00:24:39] Yeah. Anyway, so, so that’s a, that’s a fun one. And you know, I think there’s lessons to be learned. In all scenarios in this, you know, this, this effort. So there you go. So, yeah, that’s, hopefully this has been helpful. Yeah,
[00:24:50] Michael: [00:24:50] very interesting.
[00:24:51]By the way you mentioned infantry and you said that we also talked about if we got time to talk about that today, or do you want to do that with another time?
[00:24:57] Jason: [00:24:57] Yeah, let’s just add it as sort of a footnote. You know, one of the deal points for e-commerce businesses in particular would be, the stock on hand.
[00:25:05] And how, how do you understand what value to place on inventory that people have? And to your point, as you made the comment, it triggered my thinking on this, which is, you know, a lot of e-commerce sellers who have come to the point of quitting will have products that they sourced and inventory on hand that is not selling.
[00:25:26] And you know that in their mind, it’s an asset. Actually technically in many ways it’s just a liability and a cost. And in there in the reality of it, that to them, it’s a sunk cost and they see value in it. If they could sell it, the issue is they can’t sell it. And the question is, could you sell it?
[00:25:46] And so that’s one of the tricky points of, you know, an, a physical goods e-commerce businesses is the inventory on hand. And so you want to just think through that and really be honest about your ability to move those goods. And, you know, people can do a lot of shenanigans to juice sales. So you, you really want to understand, you know, is their sales velocity, is it declined over time?
[00:26:13] Completely vaporized or is it completely on the back of very expensive ads that have made it not profitable, but nonetheless have propped up the sales, those things you want to discover, understand, and really think through before you place a value on, on inventory. And so the deal though at the end of the day would look something like an offer for the business based on the rules.
[00:26:36] And in a payment for, inventory on hand, you know, that would be two parts of the deal in essence. And, and sometimes you can say, I don’t want this and I do want that, or, you know, but there’s, there’s, some sorting out to do there in that regard. So I just, I wanted to make sure we mentioned that before we wrap up.
[00:26:51] Yeah,
[00:26:51] Michael: [00:26:51] thank you. I think that’s a really important point, which has makes e-commerce businesses different from something with more digital assets. For example, one thing I would say is this is probably a maturity test for the seller. If they genuinely believe that the value of the stock is what they paid for it, or that they’re stuck in some cost fallacy, they’re going to be difficult to do a deal with.
[00:27:09] I would say by the way, a lot of fairly early stage people would give up. I think, to be stuck in this, the more mature people might say that as a negotiating tactic, but the truth is they know in, you know, and they’ve done the calculations of what the true value is, and it may be attentive what they paid for it suddenly.
[00:27:25] So that’s a, yeah, one of those reality check conversations that may or may not go well, depending on the material of the seller, I would suggest. So listen, fascinates you staff, and thank you by the way, for sharing the things that didn’t go your way as well as it did that, the ones that did so really huge.
[00:27:38]From, for me from today’s conversation, really, really fascinating. Can you summarize a few takeaways from, today’s sort of how you evaluate the deal? What kind of deals you should do the house? You know, do’s and don’ts
[00:27:49] Jason: [00:27:49] yeah, I would just say the first question is. Does the business you’re looking at acquiring add strategic value to your work.
[00:27:57]If it does that, then it’s an interesting opportunity to pursue. And, then the second question is, can you acquire a reasonable price? You don’t know that until you get into the negotiation. So those are the two top level triggers to think through. And if those things can start to sort themselves out, then the tips are, you know, don’t buy retail, you have to, and don’t buy what you don’t need and you can’t afford.
[00:28:23] Number three, don’t fall in love with the brand or the, the assets, until you’ve actually acquired them. Be willing to walk away. Number four is go slow, start small, add one at a time and learn your lessons as you go. When you do those things, you’ll start to add real value to your business in a new and interesting way.
[00:28:41] And I think if you go through this process a few times, you’ll become a better business operator for the effort. And there you go. That’s the summary.
[00:28:49] Michael: [00:28:49] Of it. Yeah. This is great stuff. Well now segwaying, smoothly to, our contest winner, which has got pretty much nothing to do with the topic at hand, but we have money contest.
[00:29:00] Obviously, if anyone who wants to subscribe to the show, wherever that might be Spotify, apple podcasts, Google podcasts, et cetera. And I believe we have a winner it’s us a little bit.
[00:29:09] Jason: [00:29:09] We did. We ran the contest in the month of July. And so if you’re listening to this now, afterwards, and thanks for entering all those who did, Rebecca Murray is our winners she’s been contacted already.
[00:29:19] So that’s super exciting. Thumbs up. Thank you so much, echo for the support for the show, a fun little shenanigan on our side to just have people hit that subscribe button and follow us on their podcast player of choice. So we really appreciate that. It’s an honor. So for everybody who entered it, I just want to thank you again for your support for the show.
[00:29:38]It really means a lot for you to share these episodes with your friends, to share them into your Facebook groups, or hanging out with other entrepreneurs, all those kinds of things. I will also just make one final shameless plug at the end of this conversation, if it’s all right. Thanks. If you have a business asset that you want to sell and you think there would be an opportunity to, talk to me about it specifically, feel free to reach out the contact form on e-commerce leader.com is available.
[00:30:05]If you’re ready to sell an e-commerce business and you’re trying to do what we’ve described here, where you’re networking and you’re trying to, you know, find somebody to buy it, maybe, you know, you don’t think it’s, listable on the big marketplaces, something like that. Then please do reach out.
[00:30:22]I’m currently in the market specifically for, home and garden out like outdoor and garden brands, and, SAS software related to econ. And so those two things would pique our interest. But, there you go. And Michael, if they reach out, maybe you’ll become an acquirer of brands who knows.
[00:30:38] So, yeah.
[00:30:40] Michael: [00:30:40] Well, I, if you’ve got something that’s outside of the sort of facets that you think is more accessible than a big marketplace and not in home and garden or SAS. So, so outside of Jason’s space, then it’s probably worth contacting me because I do know a ton of business brokers and business acquirers.
[00:30:54] I’ve got a list of people that I’ve got pretty close relationships with. And I have actually, got some deals going through for some clients so that they know what they’re doing. They can trust where they people. So you can always reach out to me, just Michael at amazing FBA is probably the easiest thing.
[00:31:07] So there you go, folks, not only can you get to subscribe for fantastic advice for free, but you could also potentially sell some assets that you thought you couldn’t sell. So all the value here, Jason, it’s been a real, you know, really great, Feet on the ground, take on a complex topic. So as ever thank you, man, for your wisdom and insight, really privileged to be part of this
[00:31:27] Jason: [00:31:27] thing with you, honored to do it, man.
[00:31:28] Thanks so much.
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