In this episode, coming from a slightly different background, we have a very interesting guest who is not an Amazon seller. Instead, he is a specialist on mergers and acquisition spaces. Taliesen Hollywood is a M&A consultant who has expertise in business valuation and acquisition. He also specializes in e-commerce in the M&A space, particularly for Amazon businesses. Tal certainly has a lot to talk about regarding the Amazon marketplace of buying and selling businesses on Amazon, and he is here to show us how to get the best price for our Amazon businesses.
Topics Covered In this Episode
Getting to know Taliesen and his expertise
Let everybody know a little bit more about yourself. What have you been working on for the past year?
Hierarchy and Structure of M&A
Can you tell us how these are structured? How does it work on the retail side?
TOPICS THAT YOU WILL TALK ABOUT in PPE3.0
Have you thought about what you could bring to the table in terms of what topics you could talk about?
Working to build up failed amazon businesses
Have you worked with people who had failing Amazon businesses? Were you able to help them rise and build the business up again?
FBA Brokers buying amazon businesses
What do you think about that? How would someone try to get more out of it?
Problems and Opportunities in 2021
In your field, what can you say are the problems and opportunities in 2021?
The Professor's Pandemic Event 3.0Are You an Elite Seller Ready To $CALE from 7 or 8 to 9 Figures?
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[00:00:00] Welcome to the Professor’s Podcast, where we discuss the best strategies to massively improve the reach and bottom line of your business in the current virtual and economic landscape. Your host Howard Thai generates over $5 billion for his clients annually using innovative tactics, both on and off Amazon.
[00:00:21] Hey everyone. Hurricane Liz here back for another Professor's Podcast, as always with the man, the meth, the myth, the legend. I missed that Howie and you’re definitely not the meth, Howie Thai. Howie, today, we've got a great guest here. We're going to speak to him shortly and I will also be letting you guys and gals know how to find out more information about the Professor's Pandemic Event 3.0, which is our third virtual event.
[00:00:46] Which again you can attend virtually live from the comfort of your own home which I usually tell people you could stream it in your underwears. Just don't stand up. And the fantastic thing about this Howie is, we had a blast on 1.0 and 2.0 and people ranted and raved about it. People can take a look at the testimonials once I give them the page here, but they will see that
[00:01:06] we meant business. There were some serious speakers on there and the people we've got for 3.0 are no slouches. These guys make upwards of $150 million per year. And again, we finally got a lady speaker, Howie. How exciting is that? You finally did it. People asked and you listened. You got a lady speaker. And on top of that, you got a bad, bad,
[00:01:26] I won't say the second word, a bad B, Howie. She makes upwards to $20 million a year. And, when everyone was in Las Vegas, she took everybody out. She bought some booze. She bought some bottles. She spared no expense to network like a queen, not a King, a queen. And we learned a lot. We learned a lot. We had fun.
[00:01:45] Howie, today's gentleman, today's speaker is again, no different than the rest of them - also a superstar in his own right. Tell me a little bit more about how you met Tal and why you chose him to be one of the speakers at the Professor's Pandemic 3.0. Wow. Tal’s pretty, I was talking to one of my friends, you know, Tarik one of the speakers here from PPE 1, he was recommending me to talk to Tal.
[00:02:09] This is a very interesting guy and told me that he has a lot to talk about regarding the Amazon marketplace of buying and selling businesses on Amazon. So, something interesting. So I want to bring him on and show our audience how to really get the best price for your business, for your Amazon business.
[00:02:30] Right. So let me introduce him, he’s none other than Taliesen Hollywood. Now Tal, I was afraid that I would butcher your name. I'd become known as the butcher of Amazon. I had to ask you beforehand. I was like, I don't want to butcher this. I don't want to put to the slab, but before I ask you the actual question that I have for you.
[00:02:46] Let me ask you this is Hollywood, your real last name, or did you change it for showbusiness purposes? I wish. I wish I could say that. It's an Irish name, believe it or not. It's not that, not that common, but it's, it's a bit more common in Ireland. It's just a normal.
[00:03:00] Irish name. Wow. That's incredible. It sounds like that's your stage name. I was just really curious about that when I saw the name and I was like, wow, it's a pretty cool name. But you told me, just call me, Tal, keep it simple. So I will keep it simple. I appreciate you telling me that, because as I said before, I'm the butcher of Amazon.
[00:03:17] I would have butchered that name, but let's get into the real question. Usually our inaugural question for every single guest is we want to have them pretend that they just got in an elevator with Howie, and they have to give him a two-minute pitch of who they are, what they'd done and why they are qualified to speak at the Professors Pandemic Event 3.0.
[00:03:33] And that's basically because Howie is such that he really wants the best of the best. So go ahead and give it your best shot. Tell us your two-minute pitch. Keep it simple. Keep it short, but let us know who you are. Sure, absolutely. And I'm honored that you guys asked me actually, cause I know that you've had some really top level speakers on these events and again, this year as well. I'm coming from a slightly different background in that I'm not an Amazon seller, obviously I'm an M&A consultant, like a broker effectively.
[00:03:58] We're in the mergers and acquisition space. We help people to buy and sell businesses. We specialize in e-commerce and with everything that's just really interesting happening in the M&A space, particularly for Amazon businesses. In the last year, we have just seen that firsthand. We're speaking to the buyers and the sellers of these businesses
[00:04:14] all the time, kind of day in and day out. There's a lot of people writing and talking about what's happening with a lot of it, new entrants into the space, buying Amazon businesses. And, you know, I guess I talked to those people all the time, day in and day out. And I'm certainly not claiming to be an Amazon expert, like many of the people that you have, because you know, just even the two of you, you have so much experience on the Amazon platform.
[00:04:40] My expertise is in mergers and acquisitions. And so if people are interested in you know, selling the business one day or how it all works or getting an insight about that, then I'm more than happy to help. Okay. So what do you consider yourself an expert on regarding the Amazon buying and selling of the business?
[00:04:59] What can you tell us about your, about this expertise that you have. I guess valuations is, you know, business valuation is key to the whole, the whole thing with mergers and acquisitions, generally, particularly in this space. And so again, because I'm seeing these deals, I've got a pretty good handle on the valuations of the different levels of the businesses.
[00:05:23] So I can certainly help with that and give expertise in that area. Again, you know, I speak to a lot of these people. It's different to, for example, you could have, and I know that you have had speakers before from representing one of the acquirers, really great people and really, really great businesses in their own rights.
[00:05:42] I guess it's a little different speaking to someone like me because I speak to all of the acquirers all the time. So I can see the differences that they bring to the table or the different things they're looking for. It gives a bit more perspective, I think. Okay. I think we talked to you about this before, regarding, you know, can you tell us about the hierarchy or the structure of these M&A or the way that it's structured and how it works regarding down to the retail side of the, of the business?
[00:06:10] Sure you mean, where are these guys getting the money from fundamentally and how it all works? Yeah, absolutely. So obviously kind of pre-2019, 20, then the people that would have been buying these businesses and that these guys are still there as well - Individual buyers, wealthy family offices, family offices, or wealthy individuals.
[00:06:32] Small private equity groups and so on. What has happened more recently is the entrance of some much larger private equity groups. So in terms of, you know, private equity funds, is still relatively small. But you know, multiple players that have raised more than $50 million each specifically to buy Amazon businesses, the total amount of fundraising in the space at the moment there as disclosed is just over $1.6 billion.
[00:06:55] It's just new money that's just come into the space specifically for the acquisition of these businesses. And, so what the structure that these guys are typically using is a mixture of equity and debt. So a small one of these private equity funds, will have raised a venture round from the people that kind of would normally invest in tech startups.
[00:07:19] You know, this is another thing that's new. The venture round would typically be equity. They're giving up some of the equity in the company. They're proving their model. They're raising, they're buying, making some acquisitions, proving that it works. Then they, like a tech company, again, they raise the next round of funding and then the next one, bigger and bigger.
[00:07:35] The interesting thing about this space is that they typically have a lot of what's called venture debt in the structure and that's becoming more and more common in tech as well. So companies like Victory Park Capital, I was speaking to the other day Start up 90. These guys are providing medium-term debt financing to these companies instead of them having to raise all of the money from equity and give up all their equity stake.
[00:08:03] They're raising a mix of equity and debt. What they typically do is raise as a next round. It might be somewhere between 10 and 15 million US dollars. Again, provide their model further and then raise an even larger round. Like we saw a threshold it's raising another $500 million. So, yeah, that's, that's, it's kind of interesting and it's really, it's really quite new for lower middle-market M&A for these guys of this size to be interested.
[00:08:29] That's pretty interesting Tal, let me ask you another question based off of what you just answered. What have you thought about speaking at the event, any three to five topics? Obviously, that was very fascinating. But what three to five topics do you think would really help mid-level to higher level Amazon entrepreneurs
[00:08:49] that would absolutely wow them at this event. Maybe potentially some acquirers that they might not have thought of like that, that end of the scale. I mean, we publish all of the ones that are, you know, these new venture funds like Thrasio, Perch, SellerX, all of those guys, anyone can find them because we actually publish the full list on our website. But there's some others out there that they might not have heard of, some alternative exit options that they might be interested in. Because, once you get to that size, obviously your business is worth more and there's more demand for your company, but the exit options aren't always as straight forward.
[00:09:25] It's not always as obvious. So yeah, there's that it wouldn't be. We help people with business optimization and to kind of help to improve the value of their businesses. Now, sellers, that I'm seeing a lot of, the sellers between kind of with sales between, you know, seven figure sellers, but between say one and $5 million, there's usually still quite a few
[00:09:45] areas where they can improve the value of their businesses. Improve, just optimize things to get a better result when they sell. I wouldn't like to assume, to teach someone who's already at a hundred million dollars in sales, how to run their business.
[00:10:00] So I'm not going to, I don't want to kind of suggest, so I'm going to, you know, give, give them some kind of insight that I haven't already heard.
[00:10:07] But we very often can help the guys that are on their way in, on their way up to that point. They're I guess, they're kind of in the main areas where we were. I think we can help. And you know, there's plenty of sellers that we have that are in that mid level area. And obviously the guys that are advanced of the guys that are advanced, the thing that I find most fascinating about them as a people, like a lot of who's been on this call and Matt who's also on the call who are potentially two of the biggest sellers we've ever had other than Travis Kilian, as well as Patrick.
[00:10:38] If I think of all four of those people, and I think how he would agree with me, these are four people all at $20 million or more per year selling on Amazon. But the thing that I've found so fascinating about them is they perhaps are the four people that invest the most in their Amazon education. And out of all the people that I've seen attend these masterminds they are the four people that were sitting at their seat, listening to what every single speaker had.
[00:11:01] Regardless of what they spoke about. And then they still went back and tried to figure out how can I use this in my business. So I think that what you have to speak will resonate to people at all different levels, particularly those people that make the most amount of money, because I feel that sometimes people that are at that high, a level of selling, of marketing, of, of business, can pick up on the most simplest things.
[00:11:24] And they're very humbled by the fact that they're making that much money and they still want to get better. So I think what you said, what I think you said there is going to resonate with a lot of people, no matter what level they're at. The Kobe Bryant, let's say Kobe Bryant would spend more time than anyone working on his free throws and it jumps up.
[00:11:41] So I think that's, I think that's going to resonate with a lot of people. So I think you appreciate that. Let me ask you another question, which I, I come across with a lot of like Amazon sellers and I have this one friend locally in town that the other day goes said that he was going to try and start picking up failing Amazon businesses.
[00:11:58] Now with COVID and all, obviously there are a lot of people whose business has exploded, but at the same time, there are a lot of people whose businesses have really had some rough times. Do you work with people who perhaps have a failing Amazon business and, or you're able to help them be able to better their situation and, or get rid of their situation and connect them with people that might want to take it over and then build it.
[00:12:23] Absolutely. In both cases, we've got connections with people that can help too. For example, if your account has been deactivated, we can help them to just connect them to people. And obviously we don't charge with it or anything. It was just, we know people in the space who can help them. And secondly, we have people who are, if they're gonna be like a business, but they're just struggling with an issue like that.
[00:12:42] And they're just, they've had enough. They were planning to sell anyway. And there's this kind of account deactivation or some kind of problem has happened just at the wrong time. We also know acquirers who don't see that as a red flag who will step in and still acquire the business, depending on, obviously they have to assess case by case basis, but, and not necessarily going to try and get the business for a steal, but if they can see a way that they can turn the business around.
[00:13:06] It depends on who you're talking to, but we, I know people, for example, that don't see a County activation as like the end of the world. There are quite a lot of new. People in this space, there's a lot of, you know, investment bankers and stuff that are come into the space without necessarily the Amazon experience.
[00:13:22] All those guys have Amazon experts in their team, but it really depends on the culture of the firm and what they've told their investors as to what, what are the red flags for each company and what they will and will not invest in. And so knowing the ones who will still invest in a company that might have a problem like that, it's kind of helpful, you know, like.
[00:13:38] It can be a lifesaver in that situation. So I also talked to you before having you on this call that, you know, like a lot of the buyers or those FBA brokers or companies out there that are trying to buy Amazon businesses. They actually, like right now, I heard is about like 2.6 times or two, three, or something like that, of the what do you, what do you think about that and how would they, how would someone to try to get more out of it?
[00:14:05] They're really? Yeah. The, the evaluations really vary depending on the size of the business and a lot of other key metrics, the more attractive the business is, the more they'll pay for it. Also, excuse me, the method you use to sell the business, like how, how you execute that process help. It really matters.
[00:14:22] If you can get. All of the key buyers involved at the same time and cause a competitive bidding process, obviously that works in your favor as well, kind of results in a better than evaluation. We've seen up to 4.5 times four for low seven figure businesses. If they are really, really attractive. So, you know, growing good reasons to believe that they'll continue to grow defensible positions of their products on Amazon, you know, in, in niches that are.
[00:14:50] Not considered super competitive. There's a, there's a number of other metrics that we can kind of talk about that the seasonality of the products and so on. If the business is, has all of those kinds of things and is growing, then you can, and you run the process. Well, then you can get a better valuation for the business.
[00:15:08] Interesting, because what we do at Signalytics, we actually have a system there so that we can have newly acquired, you know, business owners or PE firms or whatnot, able to run their new companies that they probably don't know about a lot about how to run FBA business. They can actually
[00:15:28] come to us and put their brand into our system and we will help them, like, you know, run products and keyword research, product selection to, to like, you know, deals and PPC AI, which I talked to you about last time. It's really interesting. So it sounds actually quite fascinating what you guys are doing in that space.
[00:15:52] I think there's a lot of potential too. It just makes so much more sense for a computer to be doing some of these decisions than the human. I do have another question here. So in your field, what kind of problems or opportunities do you see Amazon sellers are going to have in 2021 regarding buying or selling businesses?
[00:16:12] Tax is an interesting one. Globally, I mean, each jurisdiction is different, but generally speaking, globally, governments have spent on the coronavirus pandemic and they're expected to start eventually to rein in their spending and to try and raise more money through taxation. Yes. Tax in particular, in most countries has been taxed at a low, right?
[00:16:35] And it's a kind of soft target for fiscal authorities. People believe that capital gains taxes in short are going to go up. So if you sell the business after that happens, you're, going to pay more tax and your net benefit from the business is going to be much less than if you sell your business before that. That's one thing.
[00:16:53] It is not really in anyone's control, so it's not, but it's something to bear in mind. Secondly, there are people suggesting that there's maybe the value, maybe there's competitiveness in the space for these acquisitions of these businesses, is a little bit of a bubble. I personally don't really agree.
[00:17:09] I think these acquirers have a good business model. I think the, the only, the main reason that some of them may struggle is simply not to make enough acquisitions. Not necessarily that they'll make an acquisition and it will, it will go badly and hurt their company. I'd just say they're diversifying themselves.
[00:17:28] They're buying in very fair multiples, I believe. And I think the business one is going to succeed. I do not think this is a bubble, but some people will say, I mean, I might be wrong about that. Maybe it is a bit of a bubble. And if that, if the bubble pops so to speak and some of these new acquirers start to not perform very well, then maybe there'll be the opposite trend of what's happened in 2020.
[00:17:47] And maybe there'll be less demand for these businesses. Potentially, my personal belief is that's not going to happen. I think that I think more and more of these acquirers are going to show really good results. And they're gonna be successful and there'll be basically more entrants of equity acquirers into the space.
[00:18:05] Yeah, I do. I do see that I do have, because we, we have an agency here that we hope a lot of these big sellers of big brands where I'm their businesses. And we do help with the rollover effect and, and help them really scale with something that they have by tweaking a little here and there from right now, I have a client that we, before we came before he met
[00:18:27] me. He was probably doing like, 5 million 1st year. Second year was 10 million. Now we brought them up to like a. 20 million. Now, wait, I believe eight figures now, right? Like over 12 million-ish. And it's the bestseller and this is a line now. So he's expanding with us with more and more products. I mean, he's trying to do like a hundred products now with us, so there's a lot of.
[00:18:53] A lot of, a lot of products, a lot of, you know, sales and stuff. So we just need to make sure, cause we're not like, we have to make sure that we, we're not like a launching company where, Hey, just launch through your pockets for stuff onto our platform and we'll launch it and stuff. We kinda actually like, it's more like a marketing agency that babies it and make sure it grows.
[00:19:13] So it's kinda interesting. And I see that if that's the case where this can actually work, then why wouldn't, why wouldn't this grow this prosper for this FBA business growth and in acquisition side, you know? So that's what I'm saying. The only reason, the only potential limiting factor for them, I think is the number of acquisitions available.
[00:19:38] I think there's a lot of great companies out there. Not all of them are for sale, not it not everyone wants to sell. And so they've all promised their investors, I think that they are going to make certain number of acquisitions. And I hope, I hope that I hope it's that they, that they will make all those acquisitions because it's definitely better for me if they do obviously.
[00:19:53] But the limiting factor is the number of businesses that are for sale. And so, yeah, I think that's potentially. I'm not sure if you knew I have a society, a group of Seller society it's called. We have like 500 people inside of it and they're all big sellers. You know, at least seven to eight, nine figure sellers in there.
[00:20:13] So a lot of them are interested in selling and they just want to maybe, us to educate them even more. How do they get the bang for their buck? How do they get to that? You know, when you said 4.5 or five and multiple. So there's things that like, you know, we would like. Probably you be talking about how, how, how should they do that?
[00:20:36] What should they look for? How should they structure it before? I'll be like we one year before they want to sell now, things like that, that would be really educational for them, I believe. And you know, like I heard, like if you, if you have like a Shopify that's doing really good and that would help with multiple or, you know, Or like a big following, you know, or group, Facebook group or something like that for your brand influencing, you know?
[00:21:04] Yeah, definitely. They call it an equity story that if you have something else. That shows the future direction and why, why your business is going to grow in future, like it's huge. Following can, can be potentially an untapped resource that maybe you haven't marketed to an yet the acquire could think there's a number of different things that they can create an equity story around your brand and make it more interesting to them.
[00:21:26] That's awesome. That's a lot of good information that you gave Tal and Howie, those are some good questions at the end. I know there is a lot of people that they still want to know these things. Although it's, it seems like it's been beat over the head a ton of times, as I said before, they're the real Amazon entrepreneurs.
[00:21:44] Sometimes they don't have time to listen to it from one, one person. They see another person and they might actually enjoy you Tal more than they enjoyed the last guy, The last guy might've been very salesy, whereas you, you’re kind of very calm, there’s calmness about yourself. And like you said, there's a lot of information that you do give out just freely in order to help other entrepreneurs, which I think is fantastic.
[00:22:05] And that's why I, for one, am looking forward to your talk at the event, and I do appreciate on behalf of Howie, now you being on here on this podcast and answering our questions. Thanks very much. Any last words from you Tal before we say goodbye to Howie? Anything else you wanted to add that we might not have asked?
[00:22:22] No, I think you covered it all and you definitely didn't butcher my name. Thanks for that. And I, yeah, again, I just, you know, thanks. Thanks for having me on. I'm honored to be considered in the group with, with your speakers. Awesome. Fantastic. And, before I say goodbye to Howie, let me give you guys details on how to find out more about Professor's Pandemic Event 3.0, which is the third virtual event held from the comfort of your own home.
[00:22:42] It will be held on February 15th and 16th, live virtually from the comfort of your own home and Howie end 12 other entrepreneurs and speakers will be speaking about their area of expertise. We've already done several podcasts with some of them. I will be emceeing the whole event. It's going to be really exciting, just like one and two are.
[00:23:01] And if you'd like to look at more of people's response to one and two, head on over to howardthai.com/ppe3, to get more details. And at the present time you can get in a 40, 50% off early bird pricing. That will be good through February 1st, which is quickly approaching. And once you're in that price, you are locked in.
[00:23:21] You pay the exact same price that this elite seller society that Howie was talking about already pays. So, the brotherhood and the sisterhood of the most elite Amazon sellers on the planet get that discount regularly. You will now be locked into that 50% off price lifetime. So I'm looking forward to this event.
[00:23:39] Howie, any final words from you before I give that URL one more time? No other words. He's saving it all for the event. People, he’s saving it all for the event. So I'm fired up for that. I hope and I look forward to see what Howie's going to talk about this time and what he pulls out of his magic bag of tricks.
[00:23:55] Again, to find out more head on over to howardthai.com/ppe3. And remember, you've got only less than a week to lock in the 50% off discount and early bird pricing ends. And then we go to a little higher level pricing up until we go back to our regular price. So I look forward to seeing you guys and gals there, and I do encourage you to sign up, particularly because it is 50% off.
[00:24:18] It's going to be a heck of a lot of fun. We're not only getting to network with the best Amazon sellers on the planet, but we will learn several tactics and strategies as well as long-term business moves that we can be making in order to ensure that we can sell our business in the future and, or just.
[00:24:32] Profit more, which at the end of the day, date is what we're all looking for. So I look forward to seeing you there live February 15th and 16th, straight from the comfort of your own home and have a fantastic day, everyone. Welcome to the Professor’s Podcast, where we discuss the best strategies to massively improve the reach and bottom line of your business in the current virtual and economic landscape, your host Howard Thai generates over $5 billion for his clients annually using innovative tactics, both on and off Amazon.