Strategies for Investing in Health and Wellness Brands on Amazon

September 7, 2021

Yadin Shemmer

Founder and CEO of Intrinsic

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Yadin Shemmer is the Founder and CEO of Intrinsic, a company that acquires and accelerates digital-first health and wellness brands. Before that, Yadin served as the CEO and President of three pharmaceutical and health-related businesses, all of which had successful exits. Yadin holds an MBA from the London Business School and a BA in Psychology from the University of Pennsylvania.

Here’s a glimpse of what you’ll learn:

Yadin Shemmer talks about the increased interest in FBA private label brands and his thoughts on the future of the market
What attracted Yadin to the Amazon space?
The most common issues faced by Amazon entrepreneurs
Yadin’s reasons for investing in health and wellness brands and how he evaluates brands to buy
What brand owners should do to prepare for a successful sale
How Yadin identifies growth potential in brands
Yadin explains what an Amazon brand means to him and how he builds brands into household names
Yadin’s tips for ensuring that health products are formulated and tested effectively
How Yadin helps business owners decide on the best time to sell their brands

In this episode…

Starting and successfully scaling an e-commerce brand in the health and wellness sector can be challenging. There are many regulatory and packaging requirements that brands have to meet before they can start selling to consumers, and this often creates barriers to entry on Amazon.

As an investor in private label health and wellness brands, Yadin Shemmer has some tried-and-true methods for finding, evaluating, and selecting brands with growth potential. And, once he’s acquired a brand, Yadin and his team work to improve the brand’s content, pricing, and advertising strategies, all with the goal of expanding and scaling the business. So, what is Yadin’s advice to brand owners and investors hoping to succeed in the health and wellness space on Amazon?

In this episode of the Buy Box Experts podcast, James Thomson interviews Yadin Shemmer, the Founder and CEO of Intrinsic, about how Yadin’s company evaluates and invests in health and wellness e-commerce brands. They discuss the common concerns brand owners have when selling on Amazon and share some practical strategies these sellers can use to make their businesses more attractive to investors. Stay tuned.

Resources mentioned in this episode

Buy Box Experts
Controlling Your Brand in The Age of Amazon: The Brand Executive’s Playbook For Winning Online by James Thomson and Whitney Gibson
James Thomson on LinkedIn
GETIDA
Intrinsic
Yadin Shemmer on LinkedIn
Thrasio
Tony Robbins

Sponsor for this episode…

Buy Box Experts applies decades of e-commerce experience to successfully manage their clients’ marketplace accounts. The Buy Box account managers specialize in combining an understanding of their clients’ business fundamentals and their in-depth expertise in the Amazon Marketplace.

The team works with marketplace technicians using a system of processes, proprietary software, and extensive channel experience to ensure your Amazon presence captures the opportunity in the marketplace — not only producing greater revenue and profits but also reducing or eliminating your business’ workload.

Buy Box Experts prides itself on being one of the few agencies with an SMB (small to medium-sized business) division and an Enterprise division. Buy Box does not commingle clients among divisions as each has unique needs and requirements for proper account management.

Learn more about Buy Box Experts at BuyBoxExperts.com.

Podcast Episode Transcripts:

Disclaimer: Transcripts were generated automatically and may contain inaccuracies and errors.

Intro 0:09

Welcome to the Buy Box Experts podcast we bring to light the unique opportunities brands face in today’s e-commerce world.

James Thomson 0:18

Hi, I’m James Thomson, one of the hosts of the Buy Box Experts podcast. I’m a partner with Buy Box Experts and the former business head of the selling on Amazon team at Amazon, as well as the first account manager for the Fulfillment by Amazon program. I’m the co author of a couple of books on Amazon including the recent book Controlling Your Brand in the Age of Amazon. Today’s episode is brought to you by Buy Box Experts. Buy Box Experts takes ambitious brands and makes them unbeatable. When you hire Buy Box Experts you receive the strategy optimization and marketing performance to succeed on Amazon. We also support investors with due diligence services go to buyboxexperts.com to learn more. Before I introduce our guest today, I want to send a big shout out to the team at GETIDA. A global leader in Amazon FBA auditing and reimbursements, GETIDA analyzes your Amazon data, reconciles your FBA inventory and files claims for reimbursements on your behalf. To learn more, check out getida.com. Our guest today is Yadin Shemmer, founder and CEO of Intrinsic.us. A company that acquires and accelerates health and wellness brands that are selling online. In the prior decade, Yadin served as CEO, president and founder of three pharmaceutical and health related firms, all of which had successful exits. Yadin, welcome, and thank you for joining us today on the Buy Box Experts podcast.

Yadin Shemmer 1:40

James, thanks so much. Thanks for having me.

James Thomson 1:43

I want to start with a general question about these private label Amazon businesses that are now hot commodities. What do you think has happened to generate all this recent interest in businesses that have been around since the start of the Amazon Marketplace?

Yadin Shemmer 1:58

I think a couple things have happened. In Concert. One is ecommerce as a whole has risen. And with the rise of Amazon, the prominence of Amazon being the most valuable company in the world kind of Trading Places with Apple here and there, I think people have woken up to how important this channel is. And that’s one thing that I just think raised everyone’s consciousness about what’s happening online with online retail. And then I think the other thing that happened here was a company called Thrasio really starting out three years ago, growing incredibly quickly, and becoming becoming known in the kind of founder and finance community. I think that woke a lot of people up to this class of company this small, you know, the small entrepreneurs, micro entrepreneurs who are building private label brands on Amazon, Thrasio to basically illuminated that this was an interesting asset class, right? was overlooked before, and that you could actually buy historically, at least at reasonable prices, and enroll up. And I think that’s really what happened to get people’s attention. Historically, this class, a company, a company that was doing a couple million bucks of revenue, that’s run by one or two people part time on the side, that was a category that was overlooked by institutional capital. Right Thrasio success, really just brought attention to that to that part of the market.

James Thomson 3:35

So let’s fast forward a year, year and a half. Now we’re well through our way through COVID. Lots and lots of companies playing in the space. What do you think’s going to happen with all these investors who are placing bets today? Do you see things changing in major ways that will affect companies like yours? I

Yadin Shemmer 3:54

think for the author, it depends on the lens that you’re looking through, I think for the entrepreneur, it’s it’s a great moment in time, and it will continue, I think these entrepreneurs will now have options that they didn’t have before to get liquidity. I think for the buyers of these companies, I think there’s going to be a reckoning, there has been so much capital that has flooded in. Yeah, I think so much of the capital that has come in is naive capital that believes that money is important. And operations are secondary, when in fact, the opposite is true. It’s about marketing. And it’s about operations first and foremost, and capital to acquire these companies is really just a means to owning a brand. It’s not the main event in the business. And I believe a lot of these, a lot of the companies that are in the space that are finance first or there’s going to be a reckoning and I think there’s going to be a correction when they realize just how hard it is to run these businesses, how volatile Amazon can be as a channel and I think it’s Gonna be a healthy thing for the industry where there’s a bit of a correction.

James Thomson 5:03

As a person who runs an Amazon agency, I can tell you, it is hard. It is very hard running the operations day to day of dozens, if not hundreds of brands. And I couldn’t agree more with you in terms of people who are used to raising money saying it can’t be that hard to get in and manage these businesses. And yet, the proof is in the pudding that you get that crazy seller performance notice, or you get a ticket from Amazon, you don’t know what to do with it. If you’re if you’re, you’re not sure what you’re doing, you could end up with your whole account being suspended, all because of some small minutia little issue. So right, let’s let’s talk for a few minutes, you’ve been involved with online businesses for many years. Let me ask you what has drawn us specifically to this Amazon centric brand space that you’re looking at today, with interns a

Yadin Shemmer 5:51

couple of things. First and foremost, just my experience, I spent the past 15 years in healthcare on the regulated prescription side of the house for lack of a better description. And in those 15 years, I noticed something that was frustrating to me, I noticed that there were companies that had huge scale, but very low impact on on people’s health and well being companies like everyday health that I was a part of companies like Web MD, in many cases, even insurance companies, you know, 10s of millions of people that they reached, but very low impact on health. On the other end, you had people with very low scale, but very high impact. That could be anything from your local doctor’s office to, to certain companies that were very successful, like livongo, there was nothing in the middle where you could have high reach and high impact. And I thought to myself, that consumer products could actually do both, you can reach millions of people, and you can actually have a profound effect on their health. And that that’s one of the reasons that I was drawn to the CPG business to I have a kind of David Goliath underdog love for the underdog. And this story of the brands of the future, being born online, and taking on the incumbents is an attractive story to me, I find that fun and interesting. And I want to be part of that. And then third, from a business model perspective, I thought it was a really interesting model that combines kind of to two things into one, it combines a finance, business and an m&a engine with an operating business together. Those are defined, they fit well with my background, and I just thought this displayed to my strengths.

James Thomson 7:38

So from your time working with brands that are growing up on Amazon, tell me a little bit about the kinds of issues that have surprised you the most about these want to call it a subculture of entrepreneurs.