Tue, 28 May 2019
Dreaming of the big payday?
Coran woodmass shares his secrets on the brands getting bought and sold today. How does he know?
His registered buyers have over 830 million available for buying product brands: Coran is the Founder and Managing Partner at FBA Broker, the first company to focus exclusively on physical products that have an Amazon sales channel.
Want to know what’s killing it in the ecommerce space and what criteria business buyers look at before acquiring?
[3:43] For the last 2 years, FBA Broker has been producing a monthly business price guide that tracks and reports on all the public business sales in the industry.
The last 12 months were dismal, the market is flooded with low quality small businesses leading to record low sell through rates.
Comparatively, record levels of capital is being raised to acquire physical products brands.
[7:50] In the 2 to 5 million range, the sell through range is 39% whereas in the 100k range, we’re looking at 13%.
So what is working? Brands. Here are the 5 elements for a brand to always sell, regardless of market condition:
1. Brand synergy — repeat sales to one demographic
2. Product uniqueness and diversification — don’t rely on one hero product
3. Revenue diversification — keep the 30% rule in mind
4. Size — most buyers are not interested below 1 million revenue
5. Growth — Year over year trend
Coran also shares a very important buyer criteria: margins, they are all looking for healthy margins. 30% is the average tracked.
[14:54] What if you don’t have the 5 key elements? Build or acquire them! Coran explains how to do just that.
1. Think like a bigger business
Look offline: US based businesses valued under 50 mil present the greatest legal investment opportunity available. The next 15 years will be the largest intergenerational transfer of private biz in the history of the world worth an estimated 10 trillion.
2. Think strategically
Vertical, Horizontal, operations, shared services, logistic, supply chain: what you want is multiple arbitrage: buy low, combine, sell for a much higher multiple.
3. Get money (Where the f*ck do I get the money?)
There is zero shortage of capital in this world. The shortage is in entrepreneur-led operational teams that know how to deal with product brands.
If you can find the good deal, you will get the capital, if you have an operations team and you find the deal you can get all the capital you want.
[22:24] Coran’s parting thoughts: pay attention to your mindset, read as much as you can, participate in events, hang out with people that are not holding you back from your crazy dreams: be with like minded people, pay for all access, VIP, join the backroom!
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Mentioned in this episode
Direct download: BBP_5_27.mp3
Category:Business -- posted at: 5:00am EDT