What I Learned From My Exit: with Shirley from Bliss n’ Baby

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Shirley Katsumata shares tips for optimizing your AMZ business and her experience securing a sale

Bliss n’ Baby started in 2018 when Shirley had to quit her corporate job due to a high-risk pregnancy. She began designing and selling baby products on Amazon. In three short years, the brand’s reliable products had made it a leader in the space.

Shirley sits down on The Fortia Group Webinar Series to talk about her experience growing a business, securing an exit, and watching her brand scale post-acquisition.

Shirley talks about:
  • Why Bliss n’ Baby’s margins are so good
  • What she would have done differently to increase the brand’s valuation
  • Bliss n’ Baby’s growth post-acquisition
    Insight for sellers who want to exit

Jump to

00:00 Starting a business during pregnancy
00:55 The secret to Shirley’s >30% net margins
01:20 Chinese sourcing websites
01:40 Freight forwarders
02:00 Building a business part-time
02:20 Outsourcing factory inspection
02:50 PPC experts vs DIY
04:10 PPC and listing optimization
04:20 Increasing in-stock rate to 100%
04:30 How SellerX increased revenue by 40%
06:25 Improving margins with higher organic rankings
06:40 Organic rankings and external traffic
07:10 How Shirley learned patents are important

Shirley:
My name is Shirley. I started the brand Blessed Baby back in 2018. When I started the brand actually I was pregnant with a baby and I had a really difficult and high risk pregnancy. That left me with no option but to quit my corporate job and to be backed down for the rest of my pregnancy. It was very difficult. I decided to turn that into an opportunity to start my own business in Amazon FBA, because it’s something that I could manage from the comfort of my own bed, basically.

Shirley:
Then I basically almost literally gave birth to the business and the baby almost at the same time, because on my way to the hospital to give birth to the baby, actually I was placing my first inventory order with my supplier. It was quite intense. I specialized in the niche baby products that I design myself. Yeah, that’s how it started.

Emmett:
Brilliant. Brilliant. Love it. Great story.

Shirley:
Thank you.

Emmett:
Your net margins were fantastic, over 30%.

Shirley:
Thank you.

Emmett:
What’s the secret to having such high net margins? Please give some color around that. How did you manage to have such good margins?

Shirley:
I think first of all, because fortunately I speak Mandarin and so I can read Chinese. Basically, I have access to not just Alibaba, but also the 1668, the Chinese website where you can place orders, the Chinese supplier, in Chinese. When you get prices from the Chinese website compared to Alibaba, even from the same manufacturer you get completely different prices. It’s quite a lot cheaper, I would say.

Shirley:
Fortunately I know the language so they know that I can ask around, so they can’t really give me a higher price. That’s why I think my margin is lower. Plus, I think I have a pretty good freight forwarders also. They are international, but mainly based in Chinese companies. They were a little bit cheaper than the international, the big guys, I would say.

Emmett:
Given your based in Hong Kong, do you regularly visit your suppliers?

Shirley:
To be very honest with you, I have never visited them, to be very honest.

Emmett:
[crosstalk 00:02:01].

Shirley:
I was having this difficult pregnancy, so I couldn’t move basically. After I gave birth to my daughter, I was a full-time mom. I was managing this part-time. I was squeezing time out as much as I could just to manage the business, but it was so difficult. I was breastfeeding my baby, so I couldn’t be away from Hong Kong. That’s why I hired inspection companies to do all those things for me, to inspect the factories, to talk to them. I never really visited them, to be honest.

Emmett:
Right, right.

Shirley:
But I have a good relationship with them.

Emmett:
Surprising, but whatever you did, it clearly worked. Okay. Moving on. We’ve asked all of the speakers today, if you started again, what would you do differently to increase valuation? As a reminder to the audience, these slides will be sent to you and the recording will be sent to you. The question I wanted to ask really having read this was, why do you think so many e-commerce entrepreneurs do PPC themselves rather than outsource it?

Shirley:
To be honest, I think people try to. They think that’s something that they can manage maybe, and also maybe they don’t know that there’s some experts out there that can manage it for them. Of course, a price you have to pay in the beginning. It could be a few thousand US dollars, or something like that. At least that’s the ones that I talked to, but I think the return is going to be definitely worth it. In the beginning, because it was quite a small business to begin with, I’ve managed that myself. In hindsight, I definitely should have outsourced it and hired some professional to do it.

Emmett:
Okay. Okay. Very good. Let’s look at the performance of the brand since your exit to SellerX. First of all, thank you, to you and SellerX, for actually submitting a chart with performance.

Shirley:
You’re welcome.

Emmett:
One of the reasons we’re doing this type of webinar today is to show some transparency, that the aggregators have serious capabilities to improve the performance of all these brands post-acquisition. That’s really helpful to see some numbers on the page. Thank you for that.

Shirley:
You’re welcome.

Emmett:
It looks like their PPC experts at SellerX made immediate impact.

Shirley:
That’s true. That’s true. I think the listing and also the PPC optimization that increased conversion by 35% is amazing. Also, the in-stock rates has improved from 80 to 100%. These are amazing results.

Emmett:
The revenue increased by 40%. What are the two or three key drivers of that, if you were to try and surmise them?

Shirley:
I think it’s mainly the optimization, because to be honest, when I was managing my brand, I just didn’t really have enough time to do… I didn’t even have a proper A+ content page at the time. It might surprise you. I was a full-time mom, so I didn’t really have time for that. I think it’s something that they could do quite quickly once they acquired my account.

Shirley:
Of course, A+ content, [inaudible 00:05:02] did the videos. I had only a few videos that were not 100% perfect for my products, but then they did really professional, good ones. Plus also, they invest a lot more money on the PPC, the brand advertising, video advertising as well. I think that. Because my products are the type of product that are visually appealing, the more people see them, the more people would be interested in buying them. That’s why I think all those visual things such as A+ content and also hiring models to do things, the videos, they helped a lot.

Emmett:
Very good. Well, congrats on the performance. I’m sure there’s an earn-out out here for you and I hope you get your earn-out payment. To finish, the last section, we asked all the sellers, what were their top three pieces of advice for the sellers in the audience who are exploring or thinking about an exit in due course.

Emmett:
The first question I have here for you is, it’s great to see your focus on net profits, net margin. In fact, the first speaker that was due to speak first said the same thing. You clearly had a great high net margin. Did you have a good trajectory of margins coming into the exit? Did it improve over time as you got to your exit?

Shirley:
It did definitely improve because first of all, the prices of my goods decreased because I was ordering in bigger and bigger volumes. I would get discount from my manufacturers. Also at the same time, because I have got really, really good organic ranking already on Amazon for all of my products, that’s why I was spending less and less money on PPC. And also, an online magazine just featured my products as well. There was some external traffic as well, leading to my products. That’s why a lot less PPC, less expenses, and also less cost for the products. That’s why the margin increased.

Emmett:
Okay. Okay. Very good. You talk about getting products patented as early as possible. Any color there? Any experiences, good or bad?

Shirley:
Yeah, horrible, nightmare basically, because actually I design all my own products and two of my products became the best sellers on Amazon and dominated the whole category, which was really great. However, my supplier that I trusted saw that as a good opportunity. What they did was they copy my product completely and then launch it on Amazon and sell it at half the price to compete with me directly.

Shirley:
Plus, they even take down my products after inspection to put stain on my product on almost half of the products, 1,000 pieces, to jeopardize my account, to jeopardize my brand basically. That’s why in the beginning it was a nightmare. But then, that was a blessing in disguise because that pushed me to get all my products that I designed myself patented. I could just kick them off Amazon, kick off any marketplace just with a few clicks.

Emmett:
Excellent. Excellent. Shirley, we’ve run out time, but thank you for squashing in so much interesting information to a short period of time. Thank you for staying awake so late. I really appreciate it.

Shirley:
My pleasure. Thank you so much for your patience.

Emmett:
Thank you, and sleep well.

Shirley:
Thank you. See you.

 

Alejandro Marco
Alejandro Marco

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