Key Points From the Interview
commerce businesses are the dream for many people.
Run from anywhere.
Highly automated.
Few of the "people problems" that afflict service businesses.
In a word: freedom.
That's what attracted Alex Michael to ecommerce.
But let's not romanticize it. Ecommerce has its own challenges.
Highly competitive, both for your product and as a buyer to actually acquire an ecommerce business.
It's solitary. Just you, the screen, the spreadsheets.
And last but not least, in the case of FBA businesses, you've got a master: Amazon. (For the uninitiated, FBA = fulfilled by Amazon.)
In today's episode with Alex, we delve into it all.
Alex recently acquired Wallaroo, a small FBA ecommerce brand whose main product is a little pocket sleeve that sticks to the back of your phone.
Here are the numbers:
- Wallaroo was doing $650k in annual sales
- SDE was $180k
- Alex acquired it for $675k, plus a seller-financed $50-60k for inventory
For me this episode shone in 2 ways:
First, Alex explains how to actually compete and win a business like this, at a reasonable multiple.
Alex was a tech sales guy; he knows how to build rapport quickly. Learn from him.
Second, it's a great primer on FBA.
You may know what FBA is, but in this episode you'll learn the risks, the costs, and the overall FBA game.
Even if you're not looking at ecommerce, this is a cool story & great tutorial on a dynamic, ever-more-popular type of business.
Check it 👇
If you want to get in touch with Alex, he's active on LinkedIn.
Also, if you're interested in ecommerce, make sure you also listen to yesterday's episode with Joe Valley:
Good News for Ecommerce Buyers
Joe talks about what the next 12 to 24 months look like for ecommerce buyers given the pullback by aggregators and a variety of other factors.
Until next time,
Will
Sponsors
August Felker is a 2-time successful searcher — first with a traditional search fund; the second time around, he did a self-funded search.
Today August runs Oberle Risk Strategies, an insurance firm with a dedicated practice group for searchers and acquisition entrepreneurs like you.
If you've got a business under LOI, Oberle will provide complimentary due diligence on that business's insurance and benefits program. A great, no-risk way to get to know August & team.
They love helping searchers; they've worked with hundreds. Oberle is a specialty insurance brokerage for searchers, by a former searcher.
Check out the Search Fund Team at Oberle.
