How to Exponentially Grow Your Amazon Business

– Hello, everyone and welcome. My name is Bobbie Ttooulis, I’m the marketing director for Global Freight Solutions. And it’s my pleasure to be introducing the next session, “How to Exponentially Grow Your Business on Amazon.” And we’re joined by Carla Valenti, who is the senior strategic integration manager. So, Carla, I’m sure there’s a lot of interest in this session because it sounds so intriguing, growing your business on Amazon, exponentially, so, take it away.

– Thank you very much, Bobbie. So, first of all, I would like to maybe introduce myself to everyone, I think it’ll be helpful. And also share a tip that I think will be helpful for everyone. I would like to make this as interactive as possible, so please interrupt me at any point, making comments through the chat, so that Bobbie can reach out to me.

– Yeah

– And make any questions, because I think that’s the way that we can make this the most interesting as possible. So, who am I? I’m a Spanish person. I’m senior strategic integration manager at SellerX, like Bobbie was saying. I was working in consulting and law before joining the e-commerce platform, SellerX. And before joining SellerX at Boston Consulting Group as a consultant working in Barcelona and globally, quite Europeanly, but globally too. There I was working in different sectors to improve operations and profit margins for different businesses, and for these different brands, which help me later on help launch this growth at SellerX. And since I’ve joined SellerX, I’ve integrated over 10 businesses, focusing always on having the right integration, but on growth, because that’s what we’re looking for, whenever we’re acquiring a company. And also being a startup, I’m also working on creating and improving processes that we currently have. My passion is really on growing businesses and that’s why I joined the e-commerce sector and a hyper growth startup like SellerX, traveling in emerging markets and volunteering on my free time. Maybe just to make sure that everyone is on the same page about what’s SellerX, so SellerX is an Amazon aggregator. We started in October, 2020, we’ve acquired over 30 businesses since then, and reached the unicorn status since December last year. And our idea is to actually acquire businesses that we believe have a potential to more or less double their size in the next three years. Being a companies that are operating in the evergreen product, type of product, so this means no technology or fast-paced fashion, but more categories like pets, kitchen, sports, baby, where we see that the products that we’re selling today will continue selling tomorrow and in three years. And mostly focused on Amazon and FBA right now, although we are currently expanding into other marketplaces and other types of Amazon, so like FBM or vendor central. So, let’s kick it off. Fundamentally when we’re talking about growing businesses and when we acquire a business, there’s two types of growth that we’re looking at. So the first type would be, what can we do with the current business in the current marketplace and geography that we have? So that would be operational efficiency and brand development. And then once we have that in the best way possible, how can we actually grow that outside its current status quo? So we would talk about regional expansion, channel expansion and product expansion. I will start with the operational efficiency. So once we acquire a company, there’s different things that we are really looking at, to make sure that it’s operating in the best way possible. And with the target to improving the efficiency of every business by 30% approximately. So what are the different things that we’re talking about? We’re look at talking about supply chain. In supply chain there’s two things that we really, really, really focusing on: The first thing is obsessed on not being out of stock. I know every seller is obsessed with this, but each and all of us for sure have had an out of stock situation, but it’s something that really, really, we work on this. And we actually have a demand planning team, working specifically on my making sure that the inventory coverage is good there. And the second part would be the inventory performance index, so the IPI score, with the main focus on looking at the sell through rate, because we’re seeing that this is one of the main levers that is moving the IPI score. And in order to have a good IPA score, so over 400, if possible, also related with a metric coverage that you will have, we’re always looking at a sell through rate is adequate. And here, I would focus on two things, when we’re talking about sell through rates: The first thing is long tail ASINs that we have. So making sure that the stock levels are not very high in these long tail ASINs. And if they’re not selling, trying to find different mechanisms to sell these long tails out. And the second part is the top 20% of your ASINs, or top two, three ASINs, depends on how big your company is, making sure that those will never be out of stock, because that will really impact your IPI score. The second part we will look at would be content. So that’s one of the quick wins, or quick fixes, that we do whenever we acquire a brand. Here, we would be talking about having more than five pictures, not more than 10. When we’re talking about more than five pictures, also the type of picture that you’re putting is important. So the first picture having a white background, having a picture that shows the features of the product, having a picture that shows how the product is actually used for. So for example if you’re selling baby blankets, making sure that you have a baby blanket picture with a white background in which you see very well, the quality of the product, the characteristics of the product. Later on seeing the baby blanket with a baby, and later on seeing what type of material is the baby blanket of? And if there’s any other thing that you would like to show off that product. And then we would also talk about video. Many, many sellers that we actually acquired do not have videos, although priority would be in the pictures and later on would be focused on the video. Having A+ content, so making sure that the title is the right title, you have the right bullet points, keywords are both in the title and in the bullet points. Languages are super-important, so when you’re selling in more than one country, making sure that the translation is adequate to that country and it’s just not a Google translator translation. So making sure that it’s adequate for that country is super-important, and then checking the results on a cell phone, which is something also that we have improved in many of the companies that we acquired. Sellers were not looking at this. So making sure that it’s not only adequate when you’re looking at it from a website, but also from the cell phone, as many sales from Amazon come from actually a cell phone and not a computer.

– Mm-mm.

– So please, Bobbie, if there’s any questions from, or any comments, feel free to-

– I’m keeping my eye, I think there’s, yeah. I am watching the chat, so guys, please, if you’ve got any questions, I mean, this is fantastic insight that we’re getting from Carla. So please do ask questions, I’m learning so much myself.

– Great.

– Yeah.

– So,

– I continue, unless you have anything to-

– Don’t have any questions at the moment. Yeah, don’t have any questions at the moment.

– Great, so regarding marketing, PPC and SEO positioning, what we are looking here is to check our SEO keywords on a regular basis because this may change, so let’s make sure that we have the updated SEO keywords. And adapting our PPC campaign for our market strategy. And when we’re talking about PPC campaign, we have to think about the PPC campaign related to the pricing strategy that you have, because they will both be together. So here, when we’re talking about the strategy that you have, both on PPC and on price, you have to first plan it, test it and then react. And when you’re planning it, you need to make sure of what positioning you are right now in the market. Are you entering the market? Are you having a defense positioning? Or an offense position because you want to get more market share from your competitor? And also when you’re doing this, you have to take into consideration, what’s the competition looking like at the moment. So, do you have a competitor that is out stock, potentially they’re not going to sell, so you’re going to have a better pool of clients. So you maybe don’t have to be as aggressive, as if they were also competing with you because they do have stock. So just like, let’s make sure that, we’re looking at competition. What is our position right now? Entering the market, defense, offense? And then once you have this plan tested, and based on how the market is reacting, both to your PPC campaigns and your price movements, react to them, making sure that, and looking at what competitors are doing based on your strategy. With this, price and PPC would be going together, but of course you would also have deals, coupons, that we recommend to plan annually. But of course, like I was saying before, reacting based on how other players are moving in the market. So these two would go quite together, marketing and pricing. The fifth thing that we would actually look at, will be the process. So, making sure that we are setting up the weekly, daily, monthly checks, that you have to look at now in your company. So daily, weekly, look at account health, IPI score, if there’s any verification process that may block your account. Look at all of these nitty gritty details that you have in Amazon, to make sure that you’re operating well and that you won’t have any problems. Listing quality. So make sure that you have the updated keywords, that you have the right title, that you have the right content put in place. And then customer reviews. On customer reviews, of course we’re looking at whenever we’re acquiring a companies, companies that have more than 4.0 ratings, and that have a great number of customer reviews. In here, we would recommend on the reviews specifically, that there’s some tools that you can use. So for example, FeedbackWhiz, is a tool that we are actually using at SellerX, in which what you can do is actually see what, how is the experience of your customer. And based on the experience of your customer, decide who are you going to ask a review to? For example, if you see that your customer is receiving the product later in time, as per what he expected or she expected, then you won’t ask a review to that person. You will try to only ask reviews to the people that had a good experience on the product, of course, being fair with Amazon, and making sure that you’re not deciding on who are you going to target, but only those that had a good experience of having the product. And the last thing, but not least, would be to benefit from Amazon programs. So there’s different programs that benefit different brands and this is like a tailor-made ad hoc approach. So for example, small and light will apply, and you’ll have a lower fees, Amazon fees, for small and light, for products that are under certain dimensions and under certain grams. But it’s very beneficial because you would pay lower fees than if you’re just using an regular Amazon account. PanEU, super interesting for those companies that are very well established in our country. This has happened to many of our brands that we’ve acquired in Germany. As a company, SellerX is based in Germany. At the beginning most of the acquisitions were based there and in the US. So PanEU was great to actually launch to the rest of the European markets. And it’s quite simple operationally, because everything is based from one of the countries in EU, and Amazon is in charge of then spreading it out to the rest of European countries. B2B or FBA export. So giving, authorizing Amazon to actually sign a commercial invoice in your behalf and exporting to other countries. That could be interesting too if you if you have any specific market that could be interesting for your product. So, this is quite a tailor-made approach, and we’ll talk about it a bit more also on the geographic expansion and marketplace expansion, because it’s a very ad hoc exercise that we’re doing there.

– Carla, so I’ve got a question here. I’m just looking at this, when looking at pricing and market and competitive strategy, are there any specific tools that you would recommend?

– Yes. So when looking, I know that our marketing team is using some pricing and market pricing tools, and some PPC tools as well. I don’t know the name of them right now, but whoever has a question, feel free to reach out on LinkedIn, or if I can connect with them later, I would ask them what are the tools that they are using and I can reach back to you.

– Yep, whoever submitted that question, you can go onto SellerX’s showcase and you can connect with Carla there, and even submit your question, okay? Great, thanks, Carla. Thank you for your question.

– Thanks for the question. Great, so moving onto the next part, would be brand development. So, when we’re talking about brand development, the exercise that we’re doing here is moving backwards, no? So, since the moment in which our customer is seeing our product to the end partner, when we are actually selling the product and we’re trying to get customer engagement, what is this path that the customer is experiencing with us? So the first part that we’re looking at, is the reach. So actually, how are we reaching our customers? And here, in the different sellers that we have acquired, we have seen many different strategies. So for example, we have a paint company, that is using Facebook groups, explaining the qualities of the painter to actually get more engagement and actually to reach many of their clients, which later on go through Amazon and I actually purchase their product. Most of our sellers have an Amazon page and they do put the description, but they don’t, sometimes they have an own webpage, but doesn’t have much traffic it’s just to back it up. Therefore, Amazon is your main reach platform. Other ones maybe in other marketplaces, so we have had some of our brands, which were very present in Otto, in Germany. So it will depend on each one of the brands but it’s very important that this main place of reach is very well established. And also to think about whether for your brand, it would be interesting to have other places where you could actually build a greater reach to your customers. And also, for example, this Facebook pages that the paint company created in yeah, in Facebook. So super-important to have a good reach there and to see whether you can expand that or not. The second part will be trust. So there has to be a clear price value proposition that is coherent and unfair somehow. So here, of course, we talk about more premium high products on one side and low priced, basic products on the other side. We buy both types of products so we’re looking at margins, but we have both more lower price that we’re doing more of our price competition situation products, which are more basic. And we also have this premium high priced products that are quite differentiated, no? From the rest of the products that you find in the market. So for example we have a pet company there that is selling a specific food for dogs, and it is super-premium and super-high priced, very differentiated from the rest of the market there. But making a coherent fair choice for your customers is super, super-important there. So generating trust in your customers. The third part would be content. We’ve spoken quite a lot about content, but it’s extremely, extremely, extremely important. That’s the way that your customer is actually seeing your product before acquiring it. So, making sure that you have these at least five pictures, first picture with a white background is second, third picture explaining the characteristics, and how is the product use. So you would find here, how would you use actually the product, which helps the customers see the dimensions, the quality, and then seeing also like for what would you use the product and what are the characteristics of this product now, explaining it to the customer? And here, of course, translating to the different languages in different countries, which is quite basic, but we have found cases in which this wasn’t the case. Yeah.

– Then the unboxing experience, super-important, and unboxing, it’s a combination of two things. One that it’s coherent with your positioning of the product. So this low, basic type of flow price, basic type of product or premium high. So your unboxing experience should be coherent with the positioning that you’re having there, but also from a price perspective of our side, let’s try to make a box or a packaging that is also good, economically for us. Meaning, for example, we had this brand in which before we had many different types of packagings and after with working with our different companies, where we decided to one single package that had our brand, but that could be actually adapted for the different products. So this is much, much better than having five different types of boxes. Operationally it’s much easier to actually run the business like that. And it’s something that is, I mean that you need to dedicate some time to it, but it’s really, it pays off, so we really recommend trying to do that. It’s not always possible, but if it is, I would really, really try to do it. So once actually the product arrives to the customer, they have the unboxing experience, the fifth part would be usage and that’s where they actually see if the positioning that you are telling is true or not. If the quality is as expected or not, regarding the price. And that’s where you would get the reviews and the ratings. So, as I was telling you before, making sure that all of these feedback that you’re getting from customers is actually put into the product to actually develop it and improve it if needed, and also to understand what’s the customer perception there and what’s your positioning versus your competitors there. Super, super-important. And the sixth and last part would be engagement and customer service. So here, of course, and especially for those products, yet you have a more than a one-off sale, which will depend on the type of product you’re selling. Engagement is super-important and great. And on this paint company I was telling you about, the Facebook pages worked great and that was a great space for customers to actually say, “I’m sure this engagement now,” and this also generates trust for other customers to come and buy your product, so it’s super, super-important. Great, so we went through the super first parts which is with your current business, in your current marketplace, in your current geography, how can you actually optimize it to try to reach, in our case is 30% efficiency, whenever we acquire a brand.

– [Bobbie] Mm-mm.

– But then the second part and the most important part when you’re talking about growth and about actually increasing the revenues, would be expansion. So on expansion we’re talking about three different types of expansion. There would be regional expansion, channel expansion and product expansion. And here complexity differs quite a lot, both between these three types of expansion and within each one of them, meaning normally channel expansion will be more complex than regional expansion. And normally new product launches, not variations, new product launches would even be more complex than channel expansion or regional expansion. But this is like a generic point of view. Then you have to go into the brand and say, “Okay, what would it make sense for the brand to do?” And that section is something that we do whenever we do the due diligence of a brand. One of the key parts that we’re looking at is, “What is the expansion plan of this brand?” Now we sit down with the sellers and we see what is their feedback? What is their point of view? What is our point of view? How do we see the market actually evolving? And where do we see that we could actually grow this brand? But it’s something that is really, really, really fundamental, both for the expansion plan, and later for the business plan that we have with each one of our brands. So moving into the first one, regional expansion. Here, we would be talking about two types of expansion, continental or inter-regional expansion and intercontinental expansion. Continental or inter-regional expansion is the easiest way, by far. And many of our sellers do not always do this. And we really, really recommend if possible to do that, for whoever wants to grow. So, for example, if you’re selling in Germany, launching the PanEU Program, this is something that we launched at least with five of our companies, and it’s a really low dedication, you have to invest more in stock, that’s true, inventory, but it’s a low dedication of resources in the sense that Amazon will take care of launching for the rest of the European markets. And it’s a very good way of doing it while operating in a very similar way to what you’re doing right now. So we really believe recommend that. On that sense, going back to content, make sure that your listings are adequate for those countries. I mean, it’s very difficult that you speak all of the different languages as spoken in Europe and it’s very important that it’s very well and tailor-made for that country and that it’s very well written. And the keywords are adequate for that specific country, which may not be the same that the ones that you’re using for your country. So here we would talk about PanEU, for example, expansion. We’d also be talking about US to Canada, or US to Mexico, it’s quite easy as well to be done. And of course it will depend on the country in which you are selling right now, where is your continental expansion going to be launched at? So here more or less, we take three months to prepare. So making sure that we have the stock, the listings, stocking with the warehouse, the 3PLS. And later on it will take six months to reach full potential, so the ramp up. I’m seeing a question, I think?

– Yeah, do you want me to ask you the questions now, Carla, or at the end, it’s up to you?

– We can wait, okay, I can actually go through regional expansion then we can jump into the questions.

– Okay, yeah. ‘Cause we’re getting some good questions through.

– Great, super. So, the second part would be intercontinental expansion, so that would mean going from Europe to the US, or from the US to Europe, in general terms. We have also expanded to Australia, Japan. We were looking at India, but logistically, it was very, very complex, so it’s going to be a priority, too, for us. But especially I would recommend sellers to look at US to Europe, Europe to US. In this case it is much more complex, so it would be six to nine months to prepare, why? Because VATs, EINs, all the tax and legal documentation. Sometimes you need to create a legal entity, you need to open a bank account, create new credit cards. VAT and EINs, especially in Europe, they take more time, so all this tax documentation. So making sure that you have all of this is really, really, really important. You cannot launch in that other country and that’s why you will take more time to actually do it, six to nine months. And then again, six months to reach full potential, so the ramp up period that we call. And there’s two things that when we’re doing regional expansion that we are really thinking about, the first is review transferability. So, this is very important. Whenever you’re doing a, for example, you’re selling in Germany and you’re doing the PanEU, take that launch as a super-important period of time, because you have your reviews transferred to the rest of the countries for a specific time, which will depend on your sales, and how fast are you selling. So once you sell and you sell fast, you’ll stop having all of these reviews that you had in Germany, where you were super-well positioned, and you will start having your independent Spanish, for example, reviews. So this time at the beginning that you have to launch to the other markets, really, really, really take it into consideration with your pricing strategy, with your PPC strategy, to make sure that you’re taking the most out of it and that you’re positioning super-well in this, just once you launch, when you’re having this review transferability. So really, really, really important to have that in mind, whenever you’re launching. And the second part would be the trademark risk infringement. So this affects only intercontinental, when you’re moving to the US, to the EU, and from the EU to the US. You have to look at what is your IP situation there? So your patents, your trademarks, your copyrights, that you have in Europe are they used, and do you have the protection in the US or vice versa? And if not, you will have to say, “Okay, what is the potential risk benefit situation that you have there?” But we will always recommend you to try to have a good patent situation, IP situation, wherever you’re going. So, making sure that you have your trademarks, your copyrights, your patents, in the new geography that you’re going, before you’re launching. Because if not, it can happen, that actually you have a great success. Someone goes, sees that you don’t have the IP protection, just copies your product and takes you, kicks you out of the market because they have the legal protection. So make sure that you have that in place as well.

– Right, Carla, I’ve got two questions. Where do you tend to see the biggest increase in performance when you acquire a business?

– Yes, that’s a great, great, great question. It would depend, I would say it’s an ad hoc situation, it will depend on the brand. So, some of our brands that we have seen, have a super-high stake costs, so marketing spend is extremely high because the seller did not know how to do a good PPC strategy, for example. On those cases we should get the PPC manager, we structure a PPC plan, we do it and its stake cost improvement what we see. In other cases, for example, we have suppliers. So for example, we have a brand which we acquired, and we had a very similar brand in our portfolio, which we could share suppliers with. So in this case, for two reasons: One, because the supplier was cheaper overall. But two, because our volumes are bigger, we could get better prices and that was a great impact on performance. In other cases, for example, we work with specific 3PLs. So sometimes moving from the 3PL of the brand to our 3PL, also will improve a operational costs. And also like for us, it would be much easier to run the brand. So that’s also an efficiency that we see there. And to be honest, it’s more of a medium term, but regional expansion, especially within Europe, has been great in many of our brands. So that’s also somewhere where we have seen an increase in performance there, whenever we acquire a business.

– Okay. How do you find the keywords for your products on Amazon?

– Yes. So on the keywords of our products for Amazon, what we do is that we have our market intel team, that is in charge of looking for the different ASINs that the brand management team is telling them, in a prioritized way, what are the keywords that they should search? So that would be the market intel team that is in charge of doing that.

– Yeah.

– And they are the ones that are looking for them.

– And we’ve got a tax question, which I think you covered earlier, but how do you manage the indirect tax compliance side, VAT, sales tax, et cetera, of all your acquisitions? So how do you manage the compliance side?

– Yes, that’s a super, super-important question as well. And it takes a long time sometimes. So, what we do is in due diligence, we already have a tax due diligence, in which we understand what is the current situation of the seller. So understanding what are the potential risks and what are the different things that we should do whenever we actually acquire and onboard the brand within us. And if everything goes well in all the senses, because we have the tax, financial, legal and commercial due diligence, if all of these four parts of the due diligence go well, then we actually acquire the company. And the same team that is doing the tax due diligence, will be doing the tax onboarding, and making sure that we have all the tax in place, in the right way and sometimes this can be complex because we have two types of acquisitions. We have share deals and asset deals. In the case of shared deals, we are actually acquiring the legal entity, that is the owner of the brand. In the asset deals what we’re doing is that we’re buying the assets within the brand, but we’re not buying the legal entity. So of course, tax liabilities may be higher, or tax risks may be higher when we’re doing a share deal, than an asset deal, because we’re getting all the tax risks that the brand was going under on the owner, which we can do the due diligence in a best possible way, but surprises can come along, no? So once we actually acquire the brand, it is very different. It will be that share deal and an asset deal. Share deals will have higher risk, because what I just told you about, but they will be easier to actually onboard, because what you do is that you have the legal entity with the VAT numbers, ENT numbers, that you will be continuing to use because they’re linked to that legal entity. Whenever we do asset deals, which is the most of our deals because of the risk criteria I was just talking to you about, we have to actually create new VATs, new EANs, new tax numbers, because we’re actually just getting the brands. So that will be much, much more complex, but our tax team is the one that is doing in charge of that.

– Yeah and would they manage that process? I think that’s one of the questions. Would they manage the sort of, apart from the due diligence upfront, once you’re trading would the, submitting all your returns and everything, would that all be managed through SellerX?

– Exactly, so that would be managed by our tax team,

– Correct.

– but it’s true that sometimes also we work with external accounting companies there.

– Great and there’s one question, I think is about, what are the barriers to entry in the marketplaces, not in the UK when you are a B2C business, based in the UK? So you’re a B2C business in the UK, you’re tryna be a seller on a marketplace outside of the UK, do you have to have a minimum turnover, for example?

– So I don’t think you need to have a minimum turnover in order to enter a new market. Like, for example, if you’re selling in the UK, in Amazon, and you actually want to sell in Germany or in Europe, or in Spain or in France, you don’t actually need to have a minimum turnover to do that. You just need to register yourself in the PanEU, make sure that you’re stock is there, get your VAT numbers. I mean all the admin stuff that you need to do, and then you can just start selling there. I dunno if I understand well, the question there. But there’s no barriers to entry, into other marketplaces.

– Yeah. Fantastic, okay. And I think that’s the questions that we have at the moment. So, I will… Ah, is there an option to preview the tool, or have a test account to see the possibilities? I think this was going back to the question around tools to be able to trial them, to be able to track things like PPC and pricing and stuff like that.

– Yes, I can get back to her

– Yeah.

– on the question to know which tools to look for.

– Okay. Do you buy brands or companies with an annual turnover below $1 million?

– Yeah, that’s a very good question. So, normally, our criteria is to buy companies over $1 million, but it is true that if these are companies that are growing very fast and exponentially, meaning at a 60% rate, something like that, then we will be open to acquiring companies that are having less than 1 million turnover. Maybe it would make sense to go quickly through the criteria, of the brands,

– Yeah. like, what are we looking for?

– Shall we, I would say we’ve got 20 minutes left. So I think there’s so many questions, let’s carry on, complete the, let’s go through your content, and then let’s go through all these questions, Carla, ’cause I know there’s a lot

– Okay.

– to be asked.

– Great, so let’s finish this. So channel expansion, as I was telling you, this one is a very tailor-made decision that you need to do based on your brand, and where does your brand fit here? So geographical expansion, you can more or less wherever you’re selling, you just expand geographically and US, Europe, normally are okay, here, no. Here you need to do a very tailor-made approach and decision. So what are the different things that we’re looking, or taking into consideration when deciding whether it’s a good decision or not, to expand that brand into new channels? So the first part would be the fit with the product and the brand. So this means that, for example, Etsy. Etsy it’s a marketplace that it’s specifically done

– Gifting.

– for tailor-made products, handmade products. So if it’s a product that you’re positioning is price low quality, or just like a very basic type of product, then I would not go for Etsy, I would go for an Amazon or an eBay, or another type of marketplace. The second part would be the size of the marketplace and the category. So Amazon is a huge marketplace and with huge categories, and with huge amounts of sales and sellers. In the case of other marketplaces, this may not be the case. So you have to make sure that your category, so for example, if you’re selling kitchen products, so kitchen within the marketplace, let’s say Walmart, eBay, bol.com, Shopify, it’s a good category, meaning that you have enough customers there to actually sell a minimum for sure. So make sure that your category in that marketplace is big enough. Competitors. Competition dynamics in different marketplaces are extremely, extremely different. Meaning, Amazon is one of the most competitive marketplaces, and Amazon US is one of the even most competitive marketplaces. If you go to other marketplaces, your competition may be much, much, much lower.

– Mm-mm.

– So also look at that. It may be very interesting, as you probably will be different in the positioning. The fourth part would be easiness to expand across geographies. So you potentially don’t want to enter into a new marketplace in different geographies, that potentially may be risky and expensive. But having that into consideration, so for example, having an eBay or a Shopify that operate globally, versus a bol.com, an Allegro, operating in Germany or in Poland, may be more interesting in the sense that once you establish your brand, in that specific geography in that marketplace, and it’s working, you can actually grow quite fast into other geographies within the same marketplace. So that’s something also we’re taking into consideration. The payments complexity, and here we’re talking about payments complexity, but make sure that there’s not other legal, finance, tax complexities that you will encounter wherever you’re trying to expand to that marketplace. So for example, you need to create a PayPal account to go to eBay. And you will find these other like details that each one of the different marketplaces will be operating in a different way, make sure that you understand them well before going there and that you’re willing to open a PayPal account , or the different requirements that this marketplaces will ask you. And the last part, but extremely, extremely, extremely important, is the supply chain complexity, the operational complexity. So here, what we do at SellerX, is to determine different types of priorities, whenever we’re looking at expansion to different marketplaces. So priority number one will be Walmart and bol.com, because both of them they have their own fulfillment system, like FBA for Amazon. So it really, really makes it much easier, operationally, to actually grow into those marketplaces. Then we would have Kaufland and Otto, because they’re present in Germany and our FBMs capabilities in Germany are quite advanced, and therefore it makes sense to go into Kaufland and Otto, and eBay because it’s very easy to launch. That’s why we’re also looking at eBay. And also the potential of eBay is huge, based on it operating, being big, and operating in many of the geographies that we’re operating. Our second priority, whenever we’re looking at channel expansion would be new marketplaces, where Amazon is not as strong as a market leader. So we would look at allegro in Poland and eMAG also in Western Europe or as relevant as Amazon. So, for example, Cdiscount in France is as big as Amazon. So those are marketplaces where the different competitive dynamics may be interesting for you to get into there. And the last part would be other marketplaces. So for example, Wish, as a global mobile first marketplace leader, or we’re looking at a Korean marketplace that was potentially interesting, or for example, we have launched Decathlon or Zalando. Decathlon in the case for a sports brand that we have, and Zalando for also sports brand, but a clothing brand that we have. So, it’s as I was telling you, a very, very, very tailor-made decision. Look at the different criteria that I was telling you about and then see if it makes sense to enter into any marketplace or any specific geography, within the marketplace. And the last part here would be the product expansion. So here there’s two types of product expansion that we’re talking about: New products, so from scratch, or new variations. It is a completely, completely, completely different process. New variations are much easier to do than new product launches, I’m sure everyone knows that. New product launches you need to actually brainstorm a new product that you are going to complement your portfolio and make a bigger brand out of it. So for example, we’re talking about a woman’s health company that is selling peri bottles, so potentially selling other women health products there, could be a good idea to grow the brand, because it’s growing a lot of them. We have a lot of customers that are actually asking for their products, so. But really creating these other products that are completely different. You need to take all the decisions, so, content, suppliers, really like positioning that product, creating the listing. It’s a completely different, new product, so really needs far more time. We would be talking about two to three months of brainstorming, six months to check the samples, the quality, ordering and carrying of the stock, and then six months to achieve a full potential ramp up. On the other side, we have variations. We have launched many variations in our different brands. This is much easier. And our recommendation here is, listen to your customer. So of course, look at what you believe makes sense, to grow that brand, but listen to your customer. And here I have quite a good example. So we had a brand that was operating in the different health nutrition products, and they were selling apple cider gummies. We were seeing that many of the comments on Amazon, and these apple cider gummies are to actually lose weight. So many of our customers were actually asking us, whether these were sugar-free apple cider gummies or not, and they were not. So we decided to launch sugar-free apple cider gummies. To be honest, quite scared of whether these sugar-free gummies were going to cannibalize our apple cider gummies. This was not the case. We actually grew a new type of products within our portfolio. It’s a great, successful story within our portfolio. But the key takeaway here is, listen to your customers.

– Mm.

– Look at what they’re asking you because there’s one of the best resources of ideas of what are they looking for, that they’re not finding in your product. So here we will be talking about two to four months, checking the samples, ordering, carrying stock, and again, six months to achieve full potential, for the ramp up. So I believe we can go quickly through examples, both of them are quite similar, so I’ll just explain them quite fast. So our first acquisition was a European art supply brand and the sixth acquisition was a US baby brand. In regional expansion in the European supply brand, what we did is to double the share of sales outside Germany from 10% to 20%. And we actually launched in the US. In the US baby brand, we actually launched into Europe, so the other way around, this is quite common. The in-stock rate improved from 68% to 98% in the European art supply brand, and in the US baby brand from 80% to 100% since closing. Listing optimization of the art company, we optimized 37 listings for PPC campaigns, SEO and content, and conversion rate increased by 5% all points. And in the case of the baby brand, we optimized all the listings, of course this portfolio was smaller, for PPC campaigns, SEO and content, and increased conversion rate by 35%. We launched 10 new products since closing in the art supply brand. In this case, we’re completely new products. In the art supply market is really led by new product launches, because that’s what customers are looking for, so it’s super-important to launch products there. In the case of the baby brand, we launch three new product design variations, based on the daily baby brand that we have. And the next steps are in the art supply brand to expand to other channels. So B2B and other marketplaces, and focus on growth in the US as we just launched there. So as you launch, you have to actually monitor quite closely that market and make sure that it’s ramping up. And in the case of the US baby brand, actually, we’re just finalizing a new branding for them. And we really want to push growth in Europe, which we just launched, and make sure that we also looking into channel expansion. So here we’re potentially looking at Etsy, as a mega marketplace, but we are also looking at the possibilities of B2B, the own online shop or eBay, which will happen in this Q1. So I went quite fast through this last slide,

– Yeah,

– Share that we’ve got-

– well, we’ve got some, that was amazing, there’s so much information there, Carla, thank you. One of the burning questions is, what do you look for when you’re evaluating whether to buy a brand?

– Yes, of course, that is a super-good question. So what we are looking at is, what I was telling you before, an evergreen product, so making sure that, these are products that are selling today and the future, so pets, kitchen, sports, baby categories, are these type of products. Amazon is normally 60% of the sales, accounts for 60% of the sales, and then other marketplaces or channels would account for the rest. Sometimes we had 100% Amazon, that’s great. And FBA is normally 75% of those sales, so that’s what we looking at.

– Okay.

– Sales normally are above 1 million and they have a CM 3 of around 200K, so 20% margin. That’s what we’re looking at minimum, normally. Between 20 and 30%. Although we would may be open to looking at lower margins in the case that we see a clear optimization on our side, that we’ve push margins much higher. But as I was telling you before, we would be considering brands that are selling under 1 million, if we really see this exponential growth of the past months or years.

– Yeah.

– We look at businesses, so that they’re growing at a double digit growth, and that our best sellers are well positioned within Amazon, with good customer reviews and ratings of 4.0 more or less, minimum.

– Okay.

– And then we’re geographically agnostic, so we have bought companies from all over the world, Australia, US, Europe, India, and there we’re looking for majority of ownership.

– Okay.

– We’re not looking to invest on a minority stake, but always to have this majority ownership.

– Sounds phenomenal. And then what kind of timelines are we looking at from the point of a brand approaching you, to have a conversation, discussion, around potential acquisition to then potentially, make it go through diligence and actually acquiring, completing the acquisition?

– Yes. So no, this will depend a lot on the brand, and on the complexity of the brand. But for example, on December, we actually reached out to a brand, did the due diligence, and actually acquired the brand in one month, one and a half months. So it can be quite a fast process, but of course it will depend a lot on the brand and on the risks, or different things that we’re actually finding on the due diligence. So in this case, everything was good. The seller was providing all the information at that point, so it was super-collaborative and we managed to reach out and close, from reach out to closing was one and a half months.

– That’s really phenomenal. I think the point you made on the operational side and one of the KPIs being stock turnover or sell throughs is so vital because you can have so much, well, first of all, you can have so much of your capital tied up in stock.

– Yes.

– You didn’t mention returns, though, are there any KPIs around the return,

– Yes.

– turnaround rates on returns?

– So we’re looking at-

– ‘Cause that is a big area.

– Yes, that’s completely right. Normally we’re looking at return rates, and on most of the brands that we’re actually acquiring, it’s always under 10%, but many times under 5%. And I would tell you also that return rates also depends a lot on the type of product that you’re selling. So of course we would adapt that to the type of product on, for example, clothing. So even if it’s sports clothing that is not a fast fashion, you will have faster returns,

– Yeah.

– than in baby blankets, for example.

– Of course, yeah.

– So it will depend a lot on the type of company that you’re looking at.

– Yeah and then do you also look at things like, I mean, one thing that was interesting, when you talked about the brand experience and what one of the key success factors for a brand, is not just, you didn’t mention anything about the delivery experience. Which, I come from delivery, and we know how vital it is, not only for customers to get a good delivery experience and how that impacts a brand, but also it’s part of their upfront decision, whether they buy in the first place at the point of checkout. So, what’s your views around delivery? Do you see this as a big challenge for a lot of the brands that you go to or what’s your view?

– So, to be honest, on most of the brands, I believe delivery is going well. I think Amazon is playing a great role on that.

– Yeah.

– Most of our brands are selling through Amazon, like most of our sales are through Amazon. Therefore, and FBA most of them, so it’s Amazon taking charge of that delivery for them.

– Yeah.

– I mean it’s one of the best-in-class platforms that we have for that. Of course not always perfect, we can expect that, but overall we’re having a good experience on delivery there, thanks to Amazon.

– That’s fantastic. That’s fantastic. Because yeah, I guess, from selling, what most merchants will say to you, is that you can live or die by the customer reviews, right? And that’s one of the things that you,

– Yes.

– you’ve mentioned is, being the importance of making sure you do get those positive reviews and manage that. I’m just seeing if you’ve got any other questions, ’cause we’ve probably got time for one or two more. Who is in charge of conducting the expansion tasks at SellerX?

– Yes.

– So, I think we talking about the growth side of things.

– That’s a great question. So, the expansion side of SellerX is connected by a combination of people. So you will have the brand manager, and the brand manager has to have a very clear idea about what’s the expansion plan. But the brand manager will get help from three different teams. There’s a geographic expansion team, there’s a marketplace expansion team, and there’s a product launch team. So each one of them will help them make sure that everything is done well. So for example, and within them, they’re actually working with other teams. So for example the expansion team needs to work with the tax team, with the legal team, in order to have all of these VATs, legal entities created, credit cards, bank accounts created. So, it’ll be the brand manager leading an expansion, helped by the different expansion teams that are specifically looking at the performance of expansion geographically, in marketplaces, or in the different products.

– Yeah.

– And then, each one of them will also be working with the different teams or support functions, to make sure that that happens.

– Yeah, that makes sense. So the brand manager within SellerX, who would be responsible for that particular brand, would then draw on the resources of the expansion team to make sure you got the right strategy in place, that cuts across product, channel, and geographical expansion, just to maximize a growth for that brand.

– Exactly.

– It sounds phenomenal.

– Execution-

– It sounds really…

– Execution is key. Execution,

– yeah.

– it’s one of the most important things. So that’s why having these teams that are experts on how to expand or experts,

– Mm-mm.

– on how to enter this marketplace, or expert on what are the different things that you need to do to have a product launch, really, really, really helps because in the end, I mean they know what are the roadblocks that you can find, and they will help you have these roadblocks settled. So make sure that you talk with the tax team early enough. Tax team, like tax, are one of the things that make you wait longer, just because you wait for the tax authorities to give you a number. So, actually having them that are helping you, not only make sure that your strategy makes sense, because you cannot, for example, expand in one month to the US, but also like to make sure

– Yeah.

– that all of these roadblocks that you may find, they actually think about them and they’re telling you, be careful with this, be careful with that. And they’re talking to the different teams to make sure that this-

– Which is phenomenal, because as we know, one of the biggest challenges, for businesses selling online, is that they are so involved in the day-to-day running of the business,

– Yes.

– that they don’t have time to step back and think about the strategy and think ahead. And maybe not even have all that expertise in-house, so what you offer sounds fantastic. So the last question has got to be,

– Yeah.

– If someone’s interested in talking to you, what’s the best way to contact you?

– Yes, so I would tell them both, either to reach out to me directly on LinkedIn, super-happy to connect and to get to chat. And also if you’re interested in selling your business, just go to sellerx.com, there’s a part where you can actually go and upload the inform of your business, and our business development team will reach out to you.

– That’s fantastic. Well, look, thank you so much, Carla, that was just amazing. So much information there, so thank you.

– Thank you so much. It was a pleasure to be here and I hope it was helpful.