Why FBA Private Label Sellers Should Exit Now Versus 6-12 Months in the Future
May 4, 2021
Meet The Speakers
Listen to the podcast
Nick Tuzenko is the Founder and Managing Director of Accel Club, a firm that acquires Amazon FBA businesses. With expertise in e-commerce, technology, and M&A, the team at Accel Club is disrupting the FBA industry and boosting brands to the next level.
Before founding Accel Club, Nick served as the Managing Director of Busfor, a company that streamlined the bus transportation industry by developing technological solutions to connect bus operators and carriers with travelers.
Here’s a glimpse of what you’ll learn:
- Nick Tuzenko discusses the future of the e-commerce industry as more FBA aggregators enter the market
- What drew Nick to the FBA space, and what surprises him about private label sellers on Amazon?
- The straightforward way that Nick evaluates brands for sale
- Why FBA aggregators should use brokers to find great deals
- What private label sellers should do before approaching potential investors
- How Accel Club solves sourcing issues for brands and differentiates itself from other investors in the FBA space
- Nick’s advice to brands: exit now versus six to 12 months in the future
- The tools and strategies that Nick used to grow Accel Club
In this episode…
For FBA private label brands looking to sell their businesses, it can be difficult to know where or when to start in order to achieve the most profitable exit. Because of this, many brands choose to wait six to 12 months to put their business on the market with the hope that the value of their brand will increase.
However, this may not be the best strategy for current sellers. According to Nick Tuzenko, there are some timely factors that these brands should consider first. As Nick says, these include the current high demand for FBA businesses, the uncertain economic future, and any possible shifts that could change the market. So, what is Nick’s advice to current private label brands who are thinking about making a sale?
Nick Tuzenko, the Founder and Managing Director of Accel Club, joins James Thomson on this episode of the Buy Box Experts podcast to explain why FBA private label brands should sell their businesses right now. Nick discusses how he evaluates brands looking to sell, the various ways his company helps brands with sourcing, and his predictions for the future of the FBA space. 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
- Accel Club
- Nick Tuzenko on LinkedIn
- Max Firsau on LinkedIn
- Thrasio
- Disruptive Advertising
- eComEngine
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. 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 Disruptive Advertising. For off Amazon advertising, Disruptive Advertising offers the highest level of service in the digital marketing industry, focusing on driving traffic, converting traffic and enterprise analytics. disruptive helps their clients increase the bottom line month after month. Check out disruptiveadvertising.com to learn more.
Our guest today is Nick Tuzenko, Founder of Accel Club, a firm that acquires Amazon FBA business. Previously Nick was managing director of Busfor, a firm that streamlined the bus transportation industry by developing technological solutions that connect bus operators and carriers with travelers. Nick has also been a management consultant. Nick, welcome. And thank you for joining us today on the Buy Box Experts Podcast.
Nick Tuzenko 1:48
Yeah, thanks, James. And thanks for Yeah, for Yeah, thanks for hosting me today here. Yeah.
James Thomson 1:56
So Nick FBA private label businesses are a very hot commodity these days. What do you believe has happened to generate this recent interest in businesses that have quite frankly, been around since the beginning of the Amazon marketplaces?
Nick Tuzenko 2:10
Yeah, I’m like, I guess there’s like, let’s say like three different factors here. First of all, like, like the big, big size? Yeah, I’m like, definitely the marketplace. We’re here like with for the last 20 years. But definitely, with that, what happened to was COVID? Definitely, that we see that for the three or six months. They just like condensed maybe three or five years. That should happen if there is no COVID? How would you do that? The a, like the big, big size of the market itself. Definitely the there is like the story of trisong. Like, a lot of guys like like he heard about them. And also what we believe that and also like what we have based our approach is that we’ve seen that for example, with anchor who is like the organic seller there. Yes. These were really, really great. By the evaluated by the public markets, so they went IPO last, it was like summer or autumn. And it was like really, really great success. So we do believe that all this like three factors like big size, the successful traction of rasio. And let’s say the public markets that value the organic sellers inside the Amazon ecosystem, really highly. This is like the three pack of the green, a lot of manual funding here. And this way investors really interested in this market.
James Thomson 3:45
So Nick, what do you think’s going to happen in the next two years as the number of FBA aggregators continues to grow? And they’re all looking for successful private label brands.
Nick Tuzenko 3:57
So what we believe that there’s definitely there’s a look like really great teams. But definitely we believe that the market right now is really hot. As usually there is like this, like, kinda like bubbles here. So there will definitely correction. And would you believe that maybe half of the teams that are right now in the market, they will not be with us, like one or two years? And maybe definitely there will be some like merchant acquisition in between the FBA areas? Yes, yes. Usually. So and, but yeah, and also what already happens, the biggest one that the one that I saw and other guys, they also like exploring and right now like focusing a bit more on launching products. So we do believe that you know, it’s like FBA aggregate aggregation is the only option have to enter the market. It’s on demand, like the business model itself. So it’s more about like have you would like to be like in top 50 or in top 100 sellers. You In two or three years, there’s like two options a you could like build and test and launch a lot of different products or be able just like starting aggregating some successful FBA sellers. And then like definitely you definitely at some point of time, you need to at least like mix both like buy and launching. And definitely which was a time going, I will do that. I will say like the strongest ABS aggregators, they will be much more focusing on launching new products on best new products. Then on buying Yes, so, yeah, this how we see the illusion that
James Thomson 5:39
you didn’t grow up as an FBA private label seller. So let me ask you, what drew you to the space? And what kinds of issues have surprised you most as you learn more and more about the subculture of entrepreneur that is the Amazon private label seller?
Nick Tuzenko 5:53
Yeah, you know, it’s like, there’s like a Yeah, we founded Accel Club with my partner, Max. And we really had a great experience with digital. So we sold like Busfor, you mentioned that, yes. marketplace, it was also marketplace, but without physical product. So it was like plastic marketplace. So;d that to BlaBlaCar for 100 million dollars. And also, Max was the founder and the CEO of like, put delivery company. So we do know a lot about the operations. And we really, really believe in digital, and I’m definitely we score which is much more, let’s see easier to see this digital is our everything for the next like 1012 years. Yeah. But yeah, we definitely in digital, A and B, we do that. Here’s like the other expertise, or were our skill set now. And the ambitious that we have like to be like some global company, this market is like gives us this opportunity. It’s big enough, it’s really global. And like every, like, every value chain, from supply logistic is like really global, like 70 80% of strokes are coming through China or through other countries. And the the customers also all over the world, like, yes, you Okay, so I’m like, really great mark. But but but from the other point of view, like we’re not the one that comes from like finance, or from banking background, so we are much more like I was like, operational guys. So we do, we have like, IT teams for like 100 people, and making like 30, 50 transaction is 50,000 transactions a day. So we know like how hard this like all this operational business and how hard it was like, what I believe that the real challenging was marketplace, and was selling it isn’t that it’s very easy for each micro step. There is no like rocket science, you know, to do like supply chain, or leasing, or PPC or whatever. But what’s really like, drives here, the value in what you’re doing, do you really like make the difference between like the great seller, the great beginner, and the not that good. It’s like the ability to operate to execute that kind of complexity, that kind of like 800 micro steps, all them to work and at the end of the day, and to deliver the real value to the customer to the end customer. So this like, and we believe that we make that happen. So this is what we are right now executing. So this is why we ended here.
James Thomson 8:32
So tell me a little bit about some of the early experiences you’ve had needing some of these FBA aggregators. What What surprises you the most about these types of entrepreneurs?
Nick Tuzenko 8:44
You know, it’s like, um, I would say that, I would say there’s a lot of different stuff that surprised me. When we, when I was building this vast marketplace, there was almost like, we had, like, I guess, like 1200 different partners was carriers, most stations, okay. And they’re also like, very, very similar in terms of like, the background and the, you know, the nature of the people that are doing the business. So usually they have like 5, 10 different buses, they operate in a lot of stuff like by themselves, and it’s like that kind of like interpretive sheep there. It’s like, what’s mine is the same and also that we could also we also have seen that different like bedroom people with different backgrounds. So, this is also what we see here. I would say like, really, really great diversity of different backgrounds of different like, goals that the people trying to fulfill with their with this venture this business, because there’s like a like, like, definitely a part a significant part of the sellers. They are, I would say like digital natives. So they are whether a digital marketer working like other companies are they are engineers young like like and they they do believe in digital, they do know the usual are really great. But they be less like the physical world. Yeah. And there’s a little like intrapreneurs that just trying to to be like great ideas for the products. Yeah. And they are less like, subscribed with this PPC was AI was that SEO optimization? Word? So I’m like, Yeah, what is really, really great about this market is this like, great diversity of backgrounds of skill sets, or different goals that people trying to fulfill with their FBA businesses. And this is really, really great when you meet that every day. Like, it’s really, really, really cool. So it’s not like routine. It’s like everyday, like new story. And people are really cool.
James Thomson 10:41
Let me ask you this, the Amazon marketplaces crawl around the world, they’re there to help bring better cheaper versions of products, and private label sellers are taking advantage of this marketplace to introduce better cheaper versions of products that that people may have already seen. As you think about the willingness of people to get into private label. And you look at all the accessible manufacturing capacity, it’s available around the world, that’s drawing a lot of folks into building private label brands, folks that might not otherwise jump into being entrepreneurs, how does an investment group like yours, leverage all of this enthusiasm, not just with companies that are already asking you to buy their companies? But how do you leverage the enthusiasm around helping to think about building out this marketplace further and building a long term stream of potential acquisition targets?
Nick Tuzenko 11:36
And yes, I do believe that it hasn’t yet happened that this. Like, this fact, isn’t like right now in the market. So we’re not relying on that. And I don’t believe that any current player rely on that. What we believe that you know, it’s like, right now, what’s happening is a demand itself. Isn’t that concentrated as its peers? So would you believe that you know, it’s like, they, a lot of like FBA sell big brands, they will be they are in the will stay the micro brands? So what we believe that it’s no, it’s like, the demand side, it’s like it was YouTube. Yeah. So I’m like before, like, when there was like TV, only the producer, whether everyone’s like, today, there’s in this program, or that program visit you. You could like, like, there’s like this, like, liberalisation or distribution of this, like what happens with marketplaces within marketplaces, what they bring, they bring, like the liberalisation of the distribution of physical products. So everyone was this other idea could like afford without a big budgets or without like TV promotions? Now, all that stuff? A little bit more like, based on variable parts of their core costs? Like launch products? And what to believe that this like a and b, you know, it’s like there is this kind of like, feedback loop. So what do you never seen like in Tesco and Walmart’s like, on physical stores? There’s no like, no feedback. So you didn’t know like, how many people bought this? Or that? What’s the rate? What the world was like? What the feedback? Yeah, and this is what what believe that right now, the aggregation is much more focused, and this is definitely make perfect sense for us at the first stage around this, like feedback loops. So I’m like, right now, it’s much more easier to buy to scale to, you know, to support that brands that maybe isn’t that good on the supply chain side, but have that kind of like product market fit momentum that we call that? Yeah, and and the price and the margins and the like ratings, the conversions to ratings, the ratings, self economics ratings is great. So and then definitely, I do believe that the factory that you mentioned, at the beginning of this question will definitely be there, but this will be like this, the second or the third step within this game. So after this, this concentration of the reviews of the feedback after that, like players like us will try to optimize the supply chain, but I sound like have to deal with different like suppliers, because all our brands with Uber, like definitely the most like the the game on the next level. So
James Thomson 14:31
so there are already 1000s of private label brands that are interested in selling. And I imagine hundreds of them come to you see you every week, every month, how do you evaluate these different companies and try to make sense of what might be interesting versus what is definitely not interesting to you
Nick Tuzenko 14:49
know, it’s, it’s, it’s fairly straightforward, I would say so it’s like there’s like the definitely the criteria for for the size. Yeah, so we definitely would love to see there. I like the product. Momentum market fit. Yeah. So this we call that in terms of like the definitely the size of the business. So it’s it’s hard to say if there’s like 300k annual sales, but there there’s like product market peak momentum. So it’s it starts from somewhere, just like the one or two millions in annual sales. Definitely the fragmentation of the business. Yeah. So if you have like an like, like 100, SKUs, and your major SEO releasing, is making is contributing, like 8% of the sales. It isn’t something that interests for us or for any other NBA Gators. Yeah. Because we are diversifying on the portfolio level not on the level of one business. So this almost like we’re searching for, let’s say like a hero SKU rather than the business that is well diversified. And there’s like 30, 40 different listings that are good. Definitely profit margins. Definitely the Yeah, definitely private labels. So we’re talking only about private labels. Yeah. Yeah. So trademark registry. No IP rights or configuration. So like, so we also like checking that’s definitely sometimes like sellers don’t even know that they like, efficiently this, like patent or trademark or so. There’s also like, what we assessing an estimate on our side. Yeah, but I’m like, this is like, I will say this like plus minus, plus minus eight. Yeah. So a good like product, my market momentum. And, and the financial metrics, like fields here. Like the number of sales per day, and yeah, that’s it. Yeah.
James Thomson 16:55
So many of the aggregators, at least a year ago, were relying on FBA brokers as their primary source of deals. How do you think about this long term approach of aggregators, looking for other types of sources, whether it’s private sources of deals, whether it’s going out and finding their own types of companies? How do you see brokers continuing to be involved in these transactions?
Nick Tuzenko 17:22
Yeah, there’s like, there’s like two to definitely two main value that’s, that’s broker brings to this market. The first one, if there were like, like, let’s say, like two or three or five buyers, but then for seller to reach to each of them and talk to them would be like, very easy. Yeah, definitely. When there’s like 50 or 100 buyers, I couldn’t imagine any seller who would go to every buyers Yes, talk to them. So it’s, it doesn’t make any sense. So this, like, a, like this navigation problem. Yeah, that’s a broker could help you to solve. So if the broker is really experienced, and already know, a lot of guys like buyers, they could like easily, like, recommend you to go to these guys for two data guys, because they they knew like, they they know like other profiles and just like, resupply interest, like investment file, and they they could you really, really like fast recommend you these three, five buyers, and then you will make a deal. The second one is definitely because like, as usual on any, let’s say, on mature markets, the sellers the are not the professional I like like bankers. Yeah, so they are sometimes they just don’t know, like, what’s like is good, what, what isn’t good? Yeah. So for example, let’s say this way, some sellers really believe that if they uses every leverage that other was Amazon, then they have like, the greatest business, but it’s not true. Like I can be buyers. Like, like, as we are, we are searching and trying to assess what else we could optimize without what else we could like, make better for this brand to grow like what next like 123 years. And if we realize that all believers are utilized, then I’m like it’s less attractable to us. So it’s very easy to understand. Yeah. And for example, even if there is like less leverage utilized and you have the same amount of revenue and profitability, then we are like much more like attracted by this business because we are doing this and that okay, like maybe this that this that leavers and it will have like much, much bigger and much profitable or let’s say like, my sustainable business. So yeah, so the second value that worker definitely brings here, they like each sellers have to sell their business, how to present their business, and there’s like everything so starting from the accrual financials, ending with like, where there were, real opportunities are and what’s like, professional buyers, or like some family offices or other like buyers search report? Yeah. So what is really important for us? And what, like, isn’t that much? Yeah. So.
James Thomson 20:11
So let me ask you this, you get the opportunity to look at a lot of offers potential offers every week, every month I talk to the private label sellers and tell me, what would you like to see them doing before they go to market? I’m sure you’re seeing some offers that really aren’t that interesting, because the sellers haven’t done certain legwork. Tell me what you’d like to see them do more often before approaching potential investors.
Nick Tuzenko 20:39
Yeah, it looks like this is a really big question. And I would say like, just to better understand that personal goals. Was that selling? Was that exit? exiting? Yeah. So because I’m like, what do we see like, interest? Like, there’s not that much that they can do like be short term, to the financials or to whatever, was much more like like, like, midterm a long term strategy. So there’s like, some guys, that also helps. Who’s on the consult you for a half a year or one year? And then you ask me a business? Yeah, but this is like definitely something that started from six or nine months. But in in, in short term, what you could really like make might make the overall exiting process much, much simpler for you and for, for the for, for buyers, when you like realize you’re really comfortable with your personal goals. Yeah. So whether you, you really need like, as example, much cash at closing. Or let’s say you’re more than Okay, and you’re comfortable to have more in total, but have some earn outs elsewhere. For example, you’re not like like your, for example, you don’t trust any, any buyer. This is why you wouldn’t like to have any are ours based on eBay, for example, because, or is the because you don’t sound like what because they even include, it’s very hard to track that. And even if you trust but like at the end of the day, you wouldn’t like to do that. And it also like sometimes like a video falls short. Yeah. So I’m like, just understand what you’re really searching for, you’re searching for like, one month to let the business go. And also, like have another venture or just like have some arrests? Well, you, you really would like to have some like partner who will own the business. But you will be like the advisor or consultant with really like strategic involvement there. That’s not like day to day operations, but with more hands, and have ability and in producing teaching Ontario to implement all the ideas, all the other stuff that you have in your mind, but having the resources or time or whatever or energy to do that.
James Thomson 22:54
One of the things that I’ve seen with aggregators is that they’re often much better at being able to fix the sourcing issues that a brand may have, whether that’s going in and being much more aggressive in the negotiations, being able to do larger purchases of inventory at once. Talk to me about some of the types of things that you’ve seen where your firm’s been able to go in and make significant improvements, specifically from a sourcing perspective.
Nick Tuzenko 23:20
Yeah, you know, it’s like, Yeah, yep. Right, that it’s much easier, because we’re just dealing with that on a systematic basis. Yeah. And when you do that, you definitely, much more competent and have more, let’s say, like, leverage to use? Yeah, so definitely, you know, a bit more guys there, whether it’s China or other places, right, so you could like much easier to, to benchmark your current prices to to benchmark your current costs. And to make that more, let’s say, close to market one. So also, sometimes definitely, you also understand that, that’s there’s a lot of sellers who don’t realize that they are working with the middleman. So there’s like, the actual manufacturer is also easy. In many more and you know, like more guys there, it’s much easier to understand that and to, you know, to work directly with the manufacturer. Definitely some sort some, some some, some manufacturer can manufacture they aren’t able to support the growth even like x three or x x five. So this almost like when you when you change that for another manufacturer, they also like in when you bring even, like, let’s say like, like 300k course, no cost to them, like tomorrow for new supplier. And you know, you know, like your current price, it’s much easier to negotiate this new one, if you’re like changing because you need like, higher like volumes. So this is like I said before, yeah, there’s no rocket science is very straightforward. The only way the only complexity The only challenge here is that complexity. So you need to know a lot details in different places in the world. So there’s like, for example, sellers that are manufacturing in Ukraine or in Lithuania or in Germany or indefinitely Yes. So we also like need to know the market there. How many other manufacturers are there with the market prices have tough to you know, have to benchmark them have to cross validate them? So yeah, just like much more easier when you have this systematically and when you have the scale so
James Thomson 25:30
so with so many different investors in this FBA aggregation space, how does your firm Accel Club differentiate itself from other investors that are also looking at FBA businesses?
Nick Tuzenko 25:43
Yeah. You know, it’s like the first one. Definitely. It’s more. Yeah, we definitely. First of all, like we do do this and that we are making use with people. Yeah. So even though we buy in businesses listings, there’s like physical abuse, it’s like retail. But first of all, we definitely try to make it as comfortable as fast as I like, as human as we could do that. At the end of the day, like we’re buying from, from some people for some teams, and sometimes people really touch to their businesses, sometimes they really treat this as the business and not like product, or the the last stage and they really, really much more as a commercial wise. Yeah. So we’re just trying to really fit the needs that the owners current owners have, and try to make all the process starting from the first intro ending like closing s s s human as as it could be. Definitely, we are much more flexible in the spectrum. So we could offer a different like stuff like, let’s say, based your earn out only revenue gross, not on EBITDA, gross. So it’s less less like less sophisticated. For salaries, I was asked to check. Would we need to pay to them in one year or in two years? He was making SSL to play with top line is much harder to make. It’s very straightforward, right? You can have like the access to Amazon account and definitely provide us with like, a seller’s, you know, supplying, you know, like, how much do we need to pay to show it’s much easier? Definitely. Also, there’s like, really, really fast growing salaries. Yeah. And sometimes they just like wandering, they they really don’t like yet haven’t yet a make decision, whether or not now. and here also, like within the structuring, we could also like for example, use rehabiliation over the account in three or six months. And it is really, really, really cool. Because they do understand that if they, like sell today, it’s the same if they sell like half a year. So we’ll use the same multiple imply to new LTM? Can you? Can you like earnings? Yeah. So if they grown, because I’m like, 60 year or 60% year over year, or 100%, year over year, they didn’t send that they will not like, lose any money on the table. Yeah, so they they they really, like we’ve got everything that they they would if they sold just like in half a half a year. Yeah. So definitely like the second one is like the structuring. Definitely we I’m like, in terms of the other stuff, we really, really like coming from operational business. And this also like, we do believe that it helps us to integrate like a good team in place. And this people even though we was Max, like having that much experience with Amazon, but there’s like team members now operational team for we’re working with, like top 25, top 50, Top 100 sellers. So and also like, make sure that we make sure that after the acquisition of brand we really strive even though we don’t send that maybe sound with with some of them will have some some kind of problem or there will not be that much growth, even if like we tried to push that. Yeah. So in other terms, like, definitely be the third one, yeah, it’s also very important. It’s like we didn’t have like any investment committee. So even though we have like ambassadors now, it’s much easier was there’s like, at the end of the day, like me and Max, and we like very straightforward and like we’re very transparent how we assess this grant. And as far as we are, like we just go Yes, well, there’s no like Um, like I say bureaucracy around that whether it’s like approved by by other investors or not so it’s like very easy you know to negotiate and to put the terms in place and execute them whether the price Do you itself? Yeah.
James Thomson 30:20
So let me ask you this. You talked a little bit about this but why why would you encourage firms to exit now rather than wait for them to grow over the next six to 12 months?
Nick Tuzenko 30:33
Yeah, it’s a very very good question. Definitely. We are biased because we have buyers Yeah, so we definitely would love to much more like sellers to to to come Tuesday to the marketplace and sell but we do believe that there is like at least like five really, really objective like reasons why to do this right. The first one definitely there’s a high demand for acquisitions. Yeah. So a lot of like money per day and they are not utilized term like in in one year perspective say yeah, we do believe that you know, it’s like the peak of the deals will be like this autumn because all that money that came like previous year they will be like let’s say 50% 6% utilized by by by autumn Yeah. So, and when there is like high demand definitely your mark multiples your price would be like higher Yeah, the second one definitely. We call this your your competitors. Yeah. So, definitely you could easily like track whom your other buyers bought and definitely a lot of buyers trying to fulfill for for like trying to avoid some issues buy us right or us or period or other other players are so if your two competitors for example, already are bought by some some others buyers then you are less attractive for for other buyers because everyone said that okay in this niche more much more sophisticated game started now. The third one definitely I call this no broken expectations. So this is what I mentioned at the beginning so we do believe that a lot of these teams like like Asya we have some some romantic like some let’s say like rose glasses here about the FBA business and we definitely every time I I noticed I spoke to let’s say you have more friends than sellers. Yes. So this seller said to all my friends Yeah, they just like like trying to like guys you don’t like you don’t know where you’re going like, it’s crazy. It’s not like that’s that easy to buy FBA business, it’s not that easy to operate. So they try not to say guys, like it’s like, it’s not that easier. We do some that but I’m like, but I do believe that a lot of like buyers, after like their first acquisitions like 5, 10, whatever exhibitions, they will will interact with this oldest bands problems with this, like gray black hats, practices, definitely with less growth through other channels or through direct consumer or through other marketplaces for other countries. And maybe they even like sometimes like don’t assume the proper or the like, let’s say the real overheads or the real FBA bottlenecks like stock Lehman’s? Yeah, so what happened, like, last q4, so we do understand that they would like correction of expectation of this buyers, yeah. And it’s much easier to sell your business to the buyer that have that kind of like, remained more like rose like expectations, then, for example, when in the one year or in two year perspective, a lot of this seems like with much more experience, it will be we’ll have much more experience with different like, brands, different niches, and understand like all the pitfalls, and definitely will say okay, like, but we couldn’t like pay this or that because he and he and he will need to have discount because this and this and that will not work out this way that you’re describing. So
James Thomson 34:03
So you’re saying, the longer you wait to sell, the more informed the buyers will become? Yeah, potentially more cynical will be about your business.
Nick Tuzenko 34:11
Yeah. Interesting. Because, yeah. And also like the community factor. Yeah, I’m like, today, like no one can really estimate the real COVID effect. Yeah. And it’s much easier to sell and like you have that earnings for the last year. So I’m like, it’s a very cool too. But But let’s say in August or even less in September, it will be like very easy to estimate what’s really like natural growth and what’s like the COVID effects like that data, not only for the last April or last May or last August but for this August, it’s much easier to compare and sanuki like this is COVID there’s not COVID so it’s also like your real valid days hired because like no one could really understand that effect. And definitely not like also like what we believe definitely market places have like, like the huge benefit because they they really, Amazon definitely invested a lot of money in logistics and infrastructure. And right now, like we do see that what Shopify is doing. Yeah, what other guys doing? Yeah, so and we believe that, especially for the niches where the brands, but where the products have the potential to be brands, like, like like like some cosmetics or other type of things, or the rotation Hi, in the direct consumer channels works like Facebook works, other stuff works. We do believe that this kind of they will be like more and more growth on Shopify channels on other directories and channels, and less growth within the Amazon even though definitely it will grow. But they you know, the Calgary The, the rate will be like different. So this also we believe that currently the expectation from the Amazon channel is so high. And this will also correct. Yeah. So in terms like the would expect from the direct consumer channels and what they expect. It’s much easier to enough to persuade the buyer that, you know, it’s like the niche has the capacity, for example, some cosmetics, not like 50 million annual sales, but when hiring means that are higher in 15 minutes. Yeah, for example, in two years, when there will be like even more shipped by stores even more like deliver investment in logistics or across different countries, it will be much, much, much higher to convince any of the buyers that no, it’s like that they’re extremely small. And all this gross happened on Amazon. So definitely like much more consumer, Facebook, Google, Google, shopping, all that, like instruments also will be much more utilized.
James Thomson 36:45
So let’s shift gears for just a second, I’d like to get your thoughts on, what do you think will make your business Accel Club successful in the long run? What do you need to do to be in a better place in two years, four years, 10 years from now.
Nick Tuzenko 37:01
It looks like we do believe that we need to become really true, truly a product driven company. So it’s more much more about like to really understand the product market fit. And to really have ability to to you know, to understand that and to execute that this like what we believe because we also believe that there’s like, what? A lot of buyers don’t? I couldn’t say a lot about them. Yeah. Because even though I talked to a lot of them, but I do believe that there is some kind of like, under estimation of the real product cycles. Yeah. So we don’t spend a lot of products. They come they go. Yeah, so the tumbling got so and this is what we believe that no, it’s like having that kind of like internal infrastructure, and merging that with the external infrastructure of Amazon or even like their consumer challenges Shopify etc. And really helped like a real real speed status of different products, packaging, whatever, just like the real product market is Pete’s and the ability to know to identify that and execute. This is what’s really like, will will give us ability to live here to earn here in this space, or to die. So this type would believe that will differ the greats. I would say like sellers or FBA, aggregators hear from from from from the new great one.
James Thomson 38:28
Nick, I want to wrap up our conversation today by asking you a question around. What are some of the software tools or other companies that you’ve worked with that have helped Accel Club get to where it’s at today? tools are companies that are very, very beneficial for your business to be able to do it and does? Yeah,
Nick Tuzenko 38:48
definitely for there’s like two different two different, let’s say, story. Yeah, the first step is like, m&a part. Yes. So like to assess, yeah, to assess the business. And the huge like, definitely salary boards. In other, let’s say, tools that helping us to quickly understand the bottom line of the business. Yes. Other stuff because making definitely, everyone knows that Amazon interfaces, sometimes like they are crazy. So it’s not that easy to understand what’s happening there. So this like from performance point of view, yeah, definitely like fake sports and other tools that helping us to better understand whether there is like this product market fit is like really happening, or it’s like some kind to not exist, and it’s more like fake now. Yeah. And just like the operational side, yeah. So definitely a great like PPC agencies and tools like profit veils, like management. Yeah, like they also like help us to optimize the costs to optimize the campaign so great. And yeah, definitely worked with Different with different others with different other areas of expertise. It’d be help also helping us a lot. So to inspect to logistic. So, I would say like, it’s, it’s common, yeah. But also like, what what really, maybe some some kind of like the advice for for the seller, make sure that you’re working with the right manager on the service provider side. Yeah. So because sometimes, like, what’s your experience in terms like the, your, your experience with this or that service provider? Really, really like makes a big difference with whom you’re working on on that side? So what we definitely select we changed like account manager for us. And even like the the court just like Like, like, like, change, change change rapidly. Yeah. So this like, like, there’s a lot of great like, tools, service agencies, you just make sure that you’re like in the right hand from the account manager perspective, it can mean mentioned manager site, so it’s, it’s really helps.
James Thomson 41:11
Nick, I want to thank you for joining us today on the Buy Box Experts Podcast. For those of you interested in learning more about Accel Club, please visit AccecClub.pro. Thanks for joining us today on the Buy Box Experts Podcast. We look forward to having you join us again soon. Take care. And now to finish today’s podcast, I’d like to share some final thoughts. For third party sellers to be successful on Amazon, a critical lever will be soliciting feedback from customers. We at Buy Box Experts are really big fans of the team at eComEngine and it’s tools that help Amazon sellers to simplify the process of messaging customers of Amazon orders. To learn more go, to ecomengine.com. And with that, I want to thank you for listening today and I look forward to joining you next time on the Buy Box Experts Podcast.
Outro 42:03
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