Episode 181
On today’s episode we are joined by Ben Leonard for the second time. For those of you that missed it, we interviewed Ben back in the summer of 2021, on Episode 73, where he told the story of starting, growing, and eventually exiting his private label brand “Beast Gear.” Since then, Ben has started an eCommerce focused consulting company – Benleonard.pro and a brokerage that helps eCommerce companies bring their brands to market and maximize value. On todays interview, we are going to dive into some of the major changes in the eCommerce market and what strategies are going to work in 2023 and beyond.
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00;00;43;04 – 00;01;12;03
Speaker 1
Welcome, everyone, to the Firing the Man Podcast. On today’s episode, we are joined by Ben Leonard for a second time. For those of you that missed it, we interviewed Ben back in the summer of 2021 on episode 73, where he told the story of starting growing and eventually exiting his private label, brand Beast Gear. Since then, Ben has started an e-commerce focused consulting company, Ben Leonard Dot Pro, as well as a brokerage that helps e-commerce companies bring their brands to market and maximize value.
00;01;12;04 – 00;01;22;17
Speaker 2
On today’s interview, we are going to dive deep into some of the major changes in the e-commerce market and what strategies are going to work in 2023 and beyond. Welcome to the show, Ben.
- Weetman, Catherine (Author)
- English (Publication Language)
- 496 Pages - 11/24/2020 (Publication Date) - Kogan Page (Publisher)
00;01;22;18 – 00;01;26;06
Speaker 3
It’s good to be here. Thanks for having me, David. Hey, Cantwell, Good to be back.
00;01;26;08 – 00;01;35;16
Speaker 2
Absolutely. So for those of our listeners that did not tune in to the first interview, can you share a little bit about yourself and your path in the ecommerce world?
00;01;35;23 – 00;02;00;23
Speaker 3
Sure. Slightly unconventional route into e-commerce. So I’m here in northern Scotland, where I live, just south of a town called Aberdeen, which is the oil town in Scotland. It’s kind of like the Houston of the UK. So I got into the oil industry. It wasn’t something that I ever really intended to do. My background is ecology. I’m a marine ecologist and so my role in the oil industry was to tell the oil guys and the engineers that they couldn’t throw chemicals in the sea.
00;02;00;26 – 00;02;22;13
Speaker 3
So I helped those guys to comply with the regulations, and sometimes they didn’t like that very much. But I was trying to spend 2016 or actually late 2015. I got quite sick with a heart condition and I’m fine now, but for six, maybe nine months I was signed up work, couldn’t do my fitness hobbies while I recovered. I had to take all the drugs and so I was pretty miserable and I needed something to do and something to distract myself.
00;02;22;13 – 00;02;40;28
Speaker 3
And I hit upon this idea of starting a fitness equipment brand and selling the products into gyms. And it was while I was developing my first product that I realized that that was a stupid idea. And actually I should sell the products to people like me on the Internet. So I had this idea to do it to my own website and discovered this thing called Shopify that let videos like me do websites.
00;02;40;28 – 00;02;54;18
Speaker 3
And then I found out that when I was buying stuff off Amazon, I wasn’t buying it from Jeff, I was buying it from other people like me. And I put an FBA account and about three years later the business was doing $6 million a year in sales. By this point I quit my job and I sold my business.
00;02;54;18 – 00;03;02;18
Speaker 3
It was the first European e-commerce break ball by one of the new and aggregators that emerged at the time. So that was the slightly unconventional route.
00;03;02;20 – 00;03;18;21
Speaker 1
That’s awesome. I really like your story. Ben is kind of like, you know, it was like a whole career change and like starting something new and then growing it to a Goliath and capitalizing on it. And it’s like, it’s like, whatever what he’s after. And so I really like the story. Thanks for sharing and thanks for coming back on the show.
00;03;18;21 – 00;03;35;15
Speaker 1
Excited to have you back on. As David mentioned earlier, it’s been 2021 is the last time we chatted and so very different landscape in ecommerce in 2021 to 2023. Can you maybe hit on some topics of like what’s changed since then? What what should people be focusing on and kind of what’s the atmosphere look like right now?
00;03;35;16 – 00;03;52;11
Speaker 3
Yeah, absolutely. So clearly, some pretty major things happened, right? I guess when we spoke, it would have been kind of in the middle of the pandemic and depending on when we spoke, it might have been when a lot of e-commerce business owners were very happy or really after that, when a lot of the e-commerce systems were definitely not very good.
00;03;52;11 – 00;04;09;01
Speaker 3
Right now, let’s assume it’s pop up. Things were looking pretty good because everybody is buying stuff. Online sales are going crazy. Shortly after that, everything major dropped down in China. So we had that and then we had the issues of, well, where is our supply coming from? And the shipping prices were rocketed. So suddenly our margins were absolutely tanked.
00;04;09;01 – 00;04;27;12
Speaker 3
So for a selling perspective, things have been pretty hard since that time. Things are getting significantly better now. For instance, factories are typically open again. Shipping prices have come right back down. Competition continues to rise. What’s great is the more and more people are becoming entrepreneurs, I think that’s also like entrepreneurship used to be weird and now it’s like a desirable location.
00;04;27;12 – 00;04;46;01
Speaker 3
It’s like a sexy thing, mostly thanks to like celebrity entrepreneurs, I guess people like Elon Musk. But that means that there’s more competition for us as e-commerce entrepreneurs. There’s more and more people coming in. All the time, and it’s getting harder and harder for us on platforms like Amazon and most people listening, probably Amazon’s main sales channel. And you know, Amazon isn’t hard enough.
00;04;46;02 – 00;05;00;04
Speaker 3
It’s harder to review or get reviews, it’s harder to rank, it’s much more of a pay to play platform. And it used to be like you’d hear you hear the latest hype on a podcast, you read about it in a Facebook group, you’d go and implement that and you’d be ahead of your competition for a few months until it got shut down.
00;05;00;04 – 00;05;18;04
Speaker 3
But that’s not really happening anymore because the loopholes or shut everybody is aware of all these hacks. Now, really, what’s winning on Amazon and e-commerce generally is building a real brand, building something that looks and feels and behaves like a legitimate consumer packaged goods brand. Some people have been doing that from the start. That’s always the approach I took because I didn’t want to just sell an amateur.
00;05;18;04 – 00;05;35;18
Speaker 3
I want to build a fitness brand, right? And when you take that approach, you’re building something with like something that’s sustainable and something that’s going to last and that’s how you’re going to win. So if you’re taking that approach, you’re going to be all right. It is much harder. Fees, for instance, are way higher across the board on Amazon, though, you know, he who invests in brand wins.
00;05;35;20 – 00;05;39;07
Speaker 3
Really that’s where I think the answer lies.
00;05;39;07 – 00;05;58;22
Speaker 2
I would agree with all of those changes that you brought up. And, you know, some things that we’re definitely experiencing in our business is that pricing pressure in margin compression. You know, March 1st, FBA fees went up and there seems to be, you know, it used to be long term storage fees. Now we have a nine month storage fee and in prices haven’t moved a whole lot.
00;05;58;22 – 00;06;16;26
Speaker 2
You know, we keep looking to our competitors to adjust prices up, to adjust and it’s it’s a challenge. And so so with these things that we pointed out, what does the entrepreneur do? Do they stay on Amazon? Do they build a lifeboat in the form of a DTC website? Or maybe, you know, explore something like Walmart? What is the entrepreneur?
00;06;16;26 – 00;06;17;18
Speaker 2
What do you think?
00;06;17;18 – 00;06;50;06
Speaker 3
I think you do quite a few things. So I’ll start with the obvious, which is directly to do with the price on Amazon. Let’s play with that and let’s test that hopefully pretty obvious. And people have been doing that. I’m a big fan of raising prices and if you have built a brand that provides a high quality product and actually develops a relationship with your customer off of Amazon, whether that’s your email marketing, your chat boards through social media, you have them subscribe to our YouTube channel page, or even subscribe to a podcast that you’re doing about meeting because you’ve got a meeting brand or whatever it might be, and you’re providing them with exceptional
00;06;50;06 – 00;07;03;14
Speaker 3
service and a real backend experience so that they know they can trust you in their account of your brand. Then all the people that are stuck in the Amazon goldfish bowl just constantly chasing the next sale are going to struggle to raise their price. But you could you’re going to have to test it and play around with it.
00;07;03;14 – 00;07;17;21
Speaker 3
And I’m not saying you won’t lose a little bit of market share, but over the long term that could pan out. Well, let’s look at some of the other stuff you can do, not the number of people that I speak to all the time, for whatever reason, probably to do with the fact that they’re not really they don’t have the right mindset.
00;07;17;21 – 00;07;38;04
Speaker 3
They got into e-commerce when they really thought that it could just be an easy way to make some some cash. They know it was never occurred to them to negotiate with their suppliers, not just on the per unit cost, but on the payment terms. You know, can we negotiate with our suppliers to move from 50% down 50% on completion to 30 down 70 to 8010, 90?
00;07;38;04 – 00;08;02;11
Speaker 3
What about net 30 that in terms of net 60 day terms, even better net 30 or 60 day terms after they’ve landed so that you’re actually selling through the inventory before you paid a penny. Now, this can be tough, but if you taken the time to build a relationship with your supplier and you build out forecast and demonstrate to them what you can do, I even take baby steps, say, look, I know you’re not going to give us, you know, 20% down 80% net 60 days after it landed yet.
00;08;02;11 – 00;08;25;26
Speaker 3
But let’s take baby steps towards that. Let me prove it to you now. Show you how we can grow. And then next time, let’s move to this. And next time, let’s move to this. That’s a great way to do it. Another thing that I’m a big fan of is actually paying the deposit and negotiating a deal whereby your manufacturer will draw your inventory and you will drip feed it from your country of manufacture, whether that’s China or Vietnam or India or Pakistan, wherever, or Mexico.
- Larsson, Tanner (Author)
- English (Publication Language)
- 372 Pages - 10/03/2016 (Publication Date) - CreateSpace Independent Publishing Platform (Publisher)
00;08;25;26 – 00;08;40;15
Speaker 3
And as they drip feed it, you only then pay the remaining, say, 70% on that portion that they that they should be that way. You’re not paying for the whole lot at once. You know, lots of things you can do here. How about we think about how to change our packaging so that our product is smaller? How about we think about using Drip?
00;08;40;18 – 00;08;56;11
Speaker 3
Are we using software like so, so so that we’re tracking our inventory and we’re not overpaying on fees. There’s a lot of things you can do which you’d be surprised your competitors aren’t doing, which will then allow you to actually, if you’re not going to increase your price, get a bigger margin at the same price, and then invest more in PPC and crush them That way the sky is going to fall.
00;08;56;15 – 00;09;21;28
Speaker 2
It pays to be an optimist. And I agree with you on that follow up question On the branding piece, there is probably somebody listening right now that has a brand that maybe they sourced on Alibaba but haven’t put a lot of they have a product and they’re selling it and they’re likely saying, well, sure, I would love to have daily social media posts in a YouTube channel and a podcast in and all types of ways to engage my customers.
00;09;21;28 – 00;09;42;24
Speaker 2
But I’m a solopreneur and I have a limited amount of time and I have a limited amount of capital. And so for somebody who is wanting to step up their game on the the branding side of things, what are some I don’t want to say easy but economical in terms of time input and capital input that you think moves moves the needle.
00;09;42;24 – 00;10;00;23
Speaker 3
First of all, I would say make sure that you understand your customer and ideally you’re already going to understand your customer because hopefully you are your customer or someone in your organization is your customer. And if you’re not your customer, go and do some work to understand your customer and build a customer avatar and make sure that your brand reflects who your customer is, but also who they aspire to be.
00;10;00;23 – 00;10;17;06
Speaker 3
First of all, what are the things that I can that I only help to do once? So the obvious ones are the things that everybody’s talking about all the time. You know, improve your listings for conversions clearer. But then let’s just take an example of something that I used to do. I spoke about this last week in London.
00;10;17;08 – 00;10;33;26
Speaker 3
So in Sessions Life, I used to know I say used to, I still do this. I would have URLs and QR codes within my packaging on an insert or on the packaging saying to my customer, here’s where they get the user guide. They would follow that and land in a messenger chat which people think are dead. They’re not dead.
00;10;33;26 – 00;10;50;00
Speaker 3
They’re phenomenal. It’s just that people only use them for rebates and like 2019 and they didn’t think of using it to build relationships. So the line to my chat bot where as promised, I give them a link to go and get the user guide. The user guide is posted on my website so that subscribe to my chat bot now where I can deliver them value like once a week.
00;10;50;00 – 00;11;06;01
Speaker 3
Send them a helpful article about whatever subject matter my brand deals and that can be automated. So you do once it’s done and it can be cheap, they get the user guy on my website if I want to. I could put it behind an email gate so I can get their email address. Now that’s going to decrease conversions because a bit more resistance there to putting an email address.
00;11;06;01 – 00;11;21;12
Speaker 3
But presumably they really want the guide so they know how to use your product. So you could try that again. You really have to, you have to build that form once. Now I can email marketing, I’m always automated flow, so I have to make ones relatively cheaply. These email marketing platforms, the pricing scales as you add more email addresses.
00;11;21;12 – 00;11;38;02
Speaker 3
So it starts off pretty cheap to be honest. And by the time you’re doing lots of things, you can afford it because you’ve got all the customers. Then within the same shop workflow, I’m going to offer them a discount, perhaps on Amazon or perhaps on my website, drive them there where they’re going to get helpful content that I’m producing that I won’t have to produce, want it Evergreen All these things you only really have to do once.
00;11;38;02 – 00;11;55;21
Speaker 3
I’m sort of round along, but I’ll give you one more really easy example that just blows people away with the bulk. With this year we had a line of boxing products. I filmed a video of myself on my kitchen table, wrapping my hand. The boxing carrots. It was I wanted to explain to my customers how to properly use the products without saying contract bought where I deliver the user guide.
00;11;55;21 – 00;12;21;15
Speaker 3
I also gave them a link to go watch this video which is on YouTube. When they click the link. They landed on YouTube today. That video has had five 5 million views. Now I haven’t sold 5 million pairs of boxing up. Well, I recorded the video in 10 minutes on my phone I uploaded to YouTube and in about 5 minutes I added that to the chat and automatically all my customers got that When they clicked to watch the video and liked the video and subscribe to my channel all of that is giving YouTube positive signal to show that video to more people.
00;12;21;15 – 00;12;35;04
Speaker 3
So not people who are not my customer but want to know how to wrap their hands for boxing, find my video and they then subscribe and they like my video. They watch my video and on my YouTube channel I can now show them more content. Again, all videos I make once in 5 minutes. It’s not hard work, it’s not expensive.
00;12;35;04 – 00;12;51;15
Speaker 3
It’s free, actually. And of course, all these people who don’t know my brand yet watch the video and click the link in the video to go buy my product on Amazon. Guess what? Amazon likes external traffic. So I’m not. I’m gaming the YouTube URL and the sorry algorithm and the Amazon algorithm all on autopilot for very cheap automated.
00;12;51;15 – 00;12;57;22
Speaker 3
Because I’m thinking about customer experience, I’m escaping the Amazon goldfish bowl. So this idea that it’s like too hard is, is not.
00;12;57;22 – 00;13;10;06
Speaker 2
True or somebody I’m not asking for a friend. I’m asking for myself if somebody wanted to to replicate what you just talked about. I mean, we don’t need to go and do a ton of detail, but what do you use for chat by what are you used for? Like what should they tools?
- Audible Audiobook
- Cyndi Thomason (Author) - Cyndi Thomason (Narrator)
- English (Publication Language)
00;13;10;06 – 00;13;24;23
Speaker 3
I tell people are really easy way to learn. Just go to Ben Leonard dot pro slack tips and there is like a free e-book and a 30 minute video that explains some of the stuff there. But I will I’ll still directly answer your question, right? The first chat bot tool that I used to use was called Seller Chat Bot.
00;13;24;24 – 00;13;39;00
Speaker 3
It was the first chat bot tool developed for ecommerce sellers, specifically Amazon unfortunately doesn’t exist anymore. Good news is the money chat is great. I use many email marketing, I use Klaviyo, plenty of other good ones as well. I’m just a big fan of Klaviyo. I’ve always used it. I don’t think I’ll ever remove YouTube. Is YouTube right?
00;13;39;00 – 00;13;56;28
Speaker 3
I have a whole bunch of other nimble, all automated and semi-automated strategies that people can use to build relationships and some of it even the semi-automated parts that require humans, you can pay somebody. And in another economy in the world, what is for them a very good salary that can support them and their extended family and for you is cheap.
00;13;56;28 – 00;14;14;04
Speaker 3
So everybody wins. I do that. I have a team in the Philippines and it’s fantastic because I’ve worked with some of those guys since 2017 and we have an amazing relationship. They work incredibly hard. I’m able to pay them really well and look after them and their families. But for my economy, it’s cheap, so people should consider that it really makes a difference.
00;14;14;05 – 00;14;33;21
Speaker 1
Yeah, absolutely. So to kind of touch on. So whenever we have on experience successful entrepreneurs such as yourself, I always try to pull out as much information, information as we can and share with you. And so you started back here never having any experience kind of switch career started this year, grew it exited out. Now are you growing?
00;14;33;21 – 00;14;47;26
Speaker 1
Are you have you started another brand? And if you have, what have you applied to to the other brand that you learned from back gear? That’s also work kind of share with everybody, Hey, this, you just took a system from one plugged into the next and is that working and can you share what it is?
00;14;47;27 – 00;15;08;28
Speaker 3
Absolutely. So I own two brands. I have minority equity and a couple of others as a as a consultant. So one of the brands that I own hasn’t launched yet. It will launch on Kickstarter later this year, but I’ll still share with you what I’ve learned there because it is quite kind of interesting. That brand is a brand that I could not have started as a brand of parent and baby products, and I’m not ready yet, but when I am, I’m going to be fully transparent about it.
00;15;08;28 – 00;15;23;24
Speaker 3
But I believe that anyone who is is coming on podcast are positioning themselves in the e-commerce space as an expert has like a duty to share what they’re doing. I’m a bit suspicious of anyone who’s not, which is why I talk openly about these scared all the time. This brand. When we launch, I’m going to go completely public with it.
00;15;23;24 – 00;15;38;12
Speaker 3
An open book in two ways. One, because it’s great content to make parents. So I want to buy the products interested. And two, because I want to share what I learned with the ecommerce community. And even if the brand fails, well, that’s still great learning content, I think, right? It doesn’t make me a failure. It just makes it means that I’m learning.
00;15;38;12 – 00;16;09;01
Speaker 3
So what I’ve learned from that brand is, or what I’m applying to that brand is, is the high barrier to entry. I have spent close to 70 grand designing. The first product I couldn’t have done would be year before, before base gear because I didn’t have the money. But what I learned would be steer. If I can find a way to engineer a high barrier to entry, I well, so like for example, in 2017 I jumped through a whole bunch of hoops so that I could register for VAT in France, Germany, Italy, Spain, Poland, Czech Republic, Sweden and the Netherlands.
00;16;09;01 – 00;16;25;24
Speaker 3
So I think it’s a bit easier now. But it was such a pain. Registering for VAT in in Spain was actually hilarious. There’s this process you go through where they literally require to have a document stamped with like a medieval style wax seal. You know, the kind of thing we would use to seal letters. You know, you’d expect like Game of Thrones or something.
00;16;25;24 – 00;16;44;10
Speaker 3
And my competitors couldn’t be bothered to do it because it was too much of a high barge entry. So I absolutely wiped the floor with them when I got into the Amazon panic program and I doubled my sales overnight. So now wherever I see the opportunity to have a high barrier to entry, I do. So in this case, the high bar to entry in this industry is a high cost to design the product.
00;16;44;10 – 00;17;03;14
Speaker 3
But when I do that, I’m developing significant IP and a very high quality product. And I think that the basis of a successful brand is a high quality product. Can you can’t out market a crap. So that’s one of the things I’ve learned that I’m applying the brand that exists now as a sports brand, selling some similar stuff to be serious, to sell My non-compete with the new owner of B series is over.
00;17;03;14 – 00;17;24;27
Speaker 3
And so we’re applying many things that we learned, things that I learned from Bicester that I wish I had done at the start, such as the benefits of really building deep relationships with your customers and turning the page. What similarly to micro-influencers, you know, tell me who wrote Influence? One of his principles of influence is this idea of unity, this idea that people connect better with people who are like them and buy from them.
00;17;24;29 – 00;17;36;01
Speaker 3
That’s why micro-influencers work better than celebrities. So our social media feeds are just full of real normal. Average Joe is using our product, gives us free content and makes other people want to buy it. So that’s worked really well.
00;17;36;01 – 00;17;51;05
Speaker 2
I have a follow up question on the user generated content. So I would imagine that there’s some sort of offer, whether that be discounts or free product. So what is your offer and what is how are you communicating with these people to get that user generated content?
00;17;51;05 – 00;18;08;22
Speaker 3
So for a minority of people, we’re approaching them and offering them a free product. And I would I would say that’s not user generated content. I’d call that influencer generated content because they’re not they’re not a genuine customer, but the majority is just customer. People post about your product because they’re proud to be seen with it and people post on social media because they want the attention.
00;18;08;22 – 00;18;29;21
Speaker 3
So within our products, on our instance, we do say, Hey, look, if you post, you know, the best post when in surprise everyone. But actually we don’t even need to do that because people are happy to just post. And why do people post they want attention. So when the branded they posted about it then pays them personal attention, like literally in the DMS, which is what we didn’t, the balloon went and we brand the picture up a bit.
00;18;29;21 – 00;18;45;28
Speaker 3
We repost it, we tag them there, excited to be tagged by this brand. They’re getting even more attention in the DMS. They’ll do anything. We want them as a review and we’ll have a nice conversation. We’ll actually pay real genuine attention to them. We’ll ask them how they’re doing. We’ll say, Hey, I noticed you were in you know, you were in San Francisco last week.
00;18;45;28 – 00;19;01;05
Speaker 3
That’s my favorite city in the U.S. blah, blah, blah. Kaizer training going or how’s your knitting going? Or I hope you managed to change the wheels on your skateboard with our new wheels that we sold you, whatever it is, and people are blown away. And then when what we do is we save each post. So it’s Instagram, right to a collection.
00;19;01;05 – 00;19;14;04
Speaker 3
And then two months later, we’re launching a new product. We come back to our collection, click on each post, click on the username, box the conversation up again. Hey, Dave, it’s been a couple of months. How are you getting along? Loved your video the other day of you running in the park with your dog. That was hilarious. They love it, right?
00;19;14;04 – 00;19;27;27
Speaker 3
You build up, say, rapport, we’re launching on you product. Would you like it is. Of course they would. You give them the keywords they go search, find, buy it. You track it in a Google sheet free cheap launch with a review that’s going to stick because you’ve taken the time to build a relationship and your competitors are stuck in the Amazon goldfish.
00;19;27;27 – 00;19;42;23
Speaker 3
Now I know that somebody’s listening or announcing, but Ben, that doesn’t scale. It does. I’ve done it. I’ve done it When we’ve been doing 6 million bucks a year in sales, it does scale. All you do is you build that so soapies and templates and give them to a team and instructions and it completely works. You just have general attention to it.
00;19;42;24 – 00;19;46;24
Speaker 3
Ben Leonard Pro slash tips. I’m not this free like no charge.
00;19;46;27 – 00;20;06;07
Speaker 2
Awesome. We’ll post a link to that in the show notes. One follow up question and this has to do with international marketplaces. What are your thoughts on Amazon’s international marketplaces? And you know, specifically in the UK, that’s your home base. What are your thoughts there relative to the U.S. and and if there’s any, stay away from love to hear that as well.
00;20;06;07 – 00;20;20;28
Speaker 3
Let’s assume that you’re selling in the US and you’re doing pretty well, so you’re turning over app or even what about once things are taken over and you got it relatively dialed in provided you have the cash flow to support it obviously, and it’s not going to distract you from your bread and butter and everything. You’ve got everything nailed and things are going to fall to bits.
00;20;20;28 – 00;20;40;14
Speaker 3
What you started looking at something else you should expand international. The first place I would go to is Canada, because from the U.S. it’s really easy. And generally speaking, Canada is going to get you an extra 5 to 10% depending on your category of whatever you’re already doing in the US. If you’re doing half room in the U.S. pretty reliably, you turn on Canada, you start storing inventory in Canada, you’re going to do another 50.
00;20;40;18 – 00;20;57;22
Speaker 3
Why not? So then I would be going to the UK because it’s an English speaking marketplace. You don’t have to go to very much effort at all to get there, although you’re going to have to register for that and jump through the legislative hoops and the regulatory hoops. But there are plenty of organizations that can help you do that.
00;20;57;27 – 00;21;11;03
Speaker 3
I would also get into mainland Europe because it’s guess what is a barrier to entry? I talked to people all the time like you haven’t to find a European like, well, you know, you seem like quite a lot of effort, right? Yeah, of course it’s a lot of effort. Like entrepreneurship involved effort. It’s just insane. Hustle. I take this seriously.
00;21;11;05 – 00;21;29;14
Speaker 3
I call it treating your business with the respect it deserves. You know, it’s a real business. So go to the effort. Because if your competitors aren’t, then you should. So yeah, expand internationally. And while you’re at it, get on more channels, right? You don’t have an ongoing business because you’re not. Jeff But I don’t think Jeff has this anymore goal whatever these various about a ton of shares.
00;21;29;15 – 00;21;49;03
Speaker 3
So yeah, get onto other channels Now it’s important to think about what channel the right for you is Wal-Mart right for you don’t know try and see what our fair then if you’re familiar with there be a i r e It’s really kind of cool. It’s particularly good for handicraft and homeware kind of things. It’s a it’s like a wholesale platform.
00;21;49;04 – 00;22;12;10
Speaker 3
So you’ll put your inventory there. And Bong, who owns a little store in Nebraska, saying go on there an ordered 100 units from you and stop them in his shop. It’s pretty cool. And there’s another one similar to Cold Tundra. I’ve worked with clients who have managed to get their stuff on Costco’s website. It’s done well and Costco then placed enormous orders to test it out in their Costcos in Texas, and that went well.
00;22;12;11 – 00;22;24;00
Speaker 3
So then they went across the whole of the country and the the brand that was like bonkers. And then it was right. We’re going to stock it in our European stores as well. So you never know what might happen when you try a new channel or get into a new territory.
00;22;24;01 – 00;22;41;15
Speaker 1
No, it’s excellent advice. And I would like just to highlight for all the listeners then made a comment. It’s like when someone says, Oh, that takes work. Yeah, it does. And that those are the people that choose to do that are the people that are successful and the people that choose to not do that or the people that you’ll be just one of the highlight that I want to touch on in a little bit.
00;22;41;15 – 00;22;58;20
Speaker 1
So it’s been a couple of years since we’ve had you on, Ben, and you know, you’ve got your your your hands in the air quite a bit. And so what does the mini look like in the e-commerce space from, you know, 2021? When we last chatted, it was like full steam ahead. We had aggregators everywhere taking over the world and now in 2023, what does that space look like?
00;22;58;20 – 00;23;15;10
Speaker 3
Yeah, so that’s kind of deconstructed a little bit. I like to think that there are kind of two comings of the aggregators, right? There’s like 2018 to 2 to 21 will say, right, and then 2022 to present. And so the first, the first coming of the aggregators. Yeah, the, the first part of the first coming of the aggregators.
00;23;15;10 – 00;23;36;09
Speaker 3
Right. I would say was in 2018 to kind of 2020 the start of the pandemic. Right. They were paying, they were buying basically everything but more or less at about 3 to 4 X, But a lot of people with pretty crappy businesses were able to sell. These guys were well-funded, fairly arrogantly believe that these businesses were the no real businesses, such just selling crap on Amazon.
00;23;36;09 – 00;23;58;08
Speaker 3
Like we’ll just roll wheels up and make bank right. The business model was cash flow arbitrage. Well, it was buy these businesses at a low multiple to get it their work more than the sum of their parts anyway so the moment they buy them, they were like triple or quadruple the multiple. But also we’re going to benefit from economies of scale and improve operational efficiencies to increase the uber wonderful on paper that works.
00;23;58;08 – 00;24;18;02
Speaker 3
Our paper kind of wasn’t working when the pandemic hit. Multiples went absolutely bananas and we saw people with really very poor businesses selling them for absolutely incredible multiples and a lot of terrible business owners got very rich and good on them. Right? I don’t blame them. It’s fantastic. What they were doing was buying absolutely anything and seeing what was stick.
00;24;18;04 – 00;24;42;24
Speaker 3
You know, capital was so cheap, they just wanted to rapidly grow their portfolio. Unfortunately, though, the aggregators had a lack of foresight. They failed to realize that these are real businesses that require serious operational capability and they failed to hire the talent who could actually run the things. They also bought a lot of businesses which worked in the old environment, easier to rank, easier to get reviews, less competition, more loopholes in hacks, PPC way cheaper.
- Amazon Kindle Edition
- McMahon, John (Author)
- English (Publication Language)
00;24;42;24 – 00;25;03;29
Speaker 3
But now in the new environment, those those businesses, which I was going to call them brands, they remain them weren’t even brands. They were just a mishmash of stuff just didn’t work and the wheels completely fell off and the lack of operational capability and the lack of let’s, you know, look at some of the nimble things I just spoke about involving chat bots and email marketing, YouTube, DM podcasts there don’t do any of that.
00;25;03;29 – 00;25;26;15
Speaker 3
So all the stuff that the owner might have put together ask me how I know they just stopped doing and then they wonder why the brand tanks, right? Then of course, with what has happened through the second half of the pandemic and following the pandemic, the macro economic environment completely changed, investors very, very spooked. And many of the aggregators completely pulled back on acquisitions, buying basically nothing.
00;25;26;15 – 00;25;44;19
Speaker 3
In fact, several of the top old old school aggregators completely got rid of their entire M&A teams because they needed to get their shit together internally, improve operational capability, strip out tons of basins that weren’t making sense and get their act together. I’m pleased to say things are looking up. A lot of the aggregators have got themselves in a much better spot.
00;25;44;19 – 00;26;05;29
Speaker 3
They’re still not perfect. They’re still never going to run. The things as well as as individuals do, I don’t think. But there’s also some really great newer aggregators who are not financial guys who raised money. They’re ecommerce guys who baseline and they get it and they know what they’re doing. We’ve also seen people who never thought they would be aggregators become aggregators agencies, for instance, who really know what they’re doing and realized we could buy these.
00;26;06;01 – 00;26;35;11
Speaker 3
That would make a lot of sense for us. So now where we are is this If you have a meta commodity selling random stuff, you’re going to struggle to sell it for very much or not at all. But if you’re building a great brand that looks and feels like a real brand is building a following of customers and wants your brand and your products and your treating with the respect it deserves, you can absolutely sell that business for a fantastic multiple for a great deal structure, provided you take it through a serious mergers and acquisitions process.
00;26;35;11 – 00;26;47;01
Speaker 3
So that doesn’t mean flipping it, it doesn’t mean sticking it on a marketplace. It means going through a real well-thought out strategy potentially for many months, finding the right buyer and getting the right deal. So that was a bit of a ramble.
00;26;47;03 – 00;27;04;10
Speaker 1
I think it was an excellent kind of, you know, phase one, phase two, before and after. And so, yeah, that was awesome. Before I handed over to David for any other final questions, I wanted to give a shout out then I can’t remember which platform I sent. I’ve seen it on before, but you’ve released a series of videos.
00;27;04;10 – 00;27;06;03
Speaker 1
I don’t know if those are still live or not.
00;27;06;03 – 00;27;09;27
Speaker 3
Oh, it was. Yes, we did. Oh yeah. You can still get them. You can still get them.
00;27;10;02 – 00;27;11;24
Speaker 1
Can you share with the audience where they can see?
00;27;11;24 – 00;27;30;11
Speaker 3
I’m certainly can, yes. So we made some funny videos to explain some pretty dry stuff and also to hopefully save people from doing the wrong thing. If you go to Ecom Brokers echo Dot UK slash movie, you can see these little video clips. Each one’s like a minute long and then there’s like a little Hollywood style trailer. I encourage you to watch them all because they’re good fun.
00;27;30;13 – 00;27;36;06
Speaker 3
Starring yours truly. And some people who are are better at acting than me. Yeah. Econ brokers Dakota UK slash movie.
00;27;36;09 – 00;27;43;11
Speaker 1
That’s awesome. Yeah. If you’re listening to this, wait till you stop driving. Go that. They’re hilarious. Awesome. David, over to you for any final questions.
00;27;43;11 – 00;27;53;27
Speaker 2
Yeah we’ve talked about Ben Leonard Pro we’ve talked about e-comm brokers. Can you tell us more about those and how what types of clients you’re looking for and how our listeners may benefit?
00;27;53;27 – 00;28;15;02
Speaker 3
Absolutely. So ballot approach is my website. To be honest, the website probably needs a bit of a refresh. Started out as a site where I was I was mentoring folks and doing a little bit less of that now. Now it’s more sort of consulting. So people that I consult with our commerce businesses large and small, got clients who are sort of private equity backed or folios of brands who realize that it’s the guys on laptops in spare rooms that are better than they are.
00;28;15;02 – 00;28;28;13
Speaker 3
And we’ve got people who have got a big ambition. Their business is doing, you know, 150 grand. They’ve got a lot of ambition and I’m consulting with them and I always find a way to make it work. If there’s somebody that I feel there’s a fit with, you’ve got to be building a real brand and you’ve got to have passion and ambition.
00;28;28;13 – 00;28;54;15
Speaker 3
E-Comm brokers, these are our brokerage. We’re more than just a middleman or a brokerage where, you know, we’re accountants were M&A experts were e-commerce. Business owners who bought and sold are our own brands are North American deal director John is an Amazon insider and aggregator insiders and you brings that and we will work with e-commerce business owners to plan and execute a real M&A process treating your business with the respect it deserves rather than flipping it like a garlic press.
00;28;54;15 – 00;29;08;19
Speaker 3
That’s kind of those two, those two things. And then I guess the other thing that that’s kind of, you know, what I do is I’m kind of on the speaking circuit a bit with no real goal other than I enjoy meeting people at events. And, you know, I think speaking is a is a good kind of business card.
00;29;08;23 – 00;29;15;00
Speaker 3
It kind of you can prove on stage that you know what you’re talking about and who knows what doors that opens. And I’m writing a book which comes out in October.
00;29;15;01 – 00;29;21;06
Speaker 2
Awesome. We’re going to have to have you back on when you when you released that book. So all right, Ken, why don’t we get into the fire round?
00;29;21;07 – 00;29;24;18
Speaker 1
Yeah, let’s do it then. Are you ready for the fire? This is fire round number two.
00;29;24;19 – 00;29;26;27
Speaker 3
I am ready for the quick fire round.
00;29;26;29 – 00;29;28;04
Speaker 1
What is your favorite book?
00;29;28;08 – 00;29;35;04
Speaker 3
My favorite old book is The E-Myth Revisited by Michael E Gerber. And my favorite new book is Quit Stalling and Build Your Brand by Ben Leonard.
00;29;35;09 – 00;29;39;02
Speaker 1
That’s awesome. I like to do it. I’m gonna get the new one. What are your hobbies?
00;29;39;02 – 00;29;41;14
Speaker 3
Fitness, training, paddleboarding and travel.
00;29;41;14 – 00;29;45;14
Speaker 1
Very cool. What is one thing that you do not miss about working for the man?
00;29;45;14 – 00;29;48;12
Speaker 3
Incompetent people higher up the org charts in me.
00;29;48;14 – 00;29;55;23
Speaker 1
I love that. One last one. What do you think sets apart successful e-commerce entrepreneurs from those who give up fail or never get started?
00;29;55;23 – 00;30;06;10
Speaker 3
Well, first we give ourselves permission to start and then while we’re going through it all, we’ve got resilience, we’ve got adaptability, and we take risks, but we take calculated risks, not stupid runs.
00;30;06;13 – 00;30;09;09
Speaker 1
Excellent answer. Excellent advice over you, David, to close out the show.
00;30;09;09 – 00;30;18;02
Speaker 2
All right, Ben, if somebody is interested in working with you, either with the consulting company or through e-comm brokers, what’s the best way to get in touch?
00;30;18;04 – 00;30;24;03
Speaker 3
You can email me Ben at Ben Leonard or Ben at Ecom Brokers Echo UK.
00;30;24;03 – 00;30;30;00
Speaker 2
That sounds great. Well, we want to thank you for being a guest on the Firing The Man podcast, and we’re going to have to reconnect with that book launches.
00;30;30;00 – 00;30;31;28
Speaker 3
Yeah, let’s do it. I’ll send you guys.
- Richards, Gwynne (Author)
- English (Publication Language)
- 424 Pages - 03/31/2020 (Publication Date) - Kogan Page (Publisher)