RMRB 1382 – Building an Amazon FBA Business Making $128K per Year in the Outdoors Niche

In this episode, Lauren talks to the seller of an Amazon FBA business created in June 2016 in the outdoors, survival & security, hobbies, and culinary niches. Listen in to find out how the business makes an average of $128,427.00 per year in net profit, why the seller has decided to sell, the lessons learned from running the business, and much more.

Visit https://empireflippers.com/listing/91033 to learn more about this business.

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Transcript

Forget gurus. Forget anyone claiming to be an online business expert without going through the challenges of entrepreneurship themselves. The Real Money, Real Business podcast is here to prove that the best insights in online business come from your fellow online business builders. We dig into the stories of entrepreneurs selling their businesses on the Empire Flippers marketplace so that you can learn how they made their businesses profitable, how they overcame obstacles, and what lessons they learned on their online journey. If you want to take your business and your knowledge to the next level, you’ve come to the right podcast. Let’s get started.

Hey, everyone. Welcome to another episode of the Real Money, Real Business podcast. We record these interviews so that potential buyers can learn more about the business and the seller to help them make an informed buying decision.

If you would like to learn more about this business, including details like what type of business it is, how much revenue and profit it makes, and all of the assets included with the business, simply visit empireflippers.com/marketplace and search for this business’s listing number, which you can find in the video thumbnail and description. Or, if you’re watching this on YouTube, you can click the link in the description to go straight to the listing.

So, without further ado, let’s get into this interview.

First up, let’s learn a little bit about you. Can you tell us about your background in building and running online businesses?

Yeah. So, I looked into moving into Amazon as a stream of passive income about four or five years ago, which meant lots of YouTube videos, lots of Reddit, joining Facebook groups, just trying to read and learn and get acquainted with it. Did I want to do wholesale? Did I want to white label? Did I want to private label? Did I want to create my own molds? There were so many different options, and really, the biggest thing I didn’t realize was how impactful ad spend would be.

That’s ultimately what made me buy this business: I found that there’s a ton of value in buying a business with strong reviews, BSR, and organic ranking, without a lot of competition. All my products are not in a very competitive environment, which is good because you don’t have to run the risk of five new sellers popping up in the exact same aisle.

I own some of the molds for some of my products. Some of them are essentially white label, but all of them are in a very neutral, long-term environment. I didn’t launch a product six months ago that kicked ass and took off. These have all been around for years and years and years.

The only reason I’m looking to sell is because it’s become too cumbersome for me. I have a pretty large real estate portfolio, as well as a full-time job and a family, and I want to move away from this so I can go back to focusing on those things. But if you can carve out about 10 hours a week, you can really improve this business from where it’s currently standing.

Why are you selling the business now instead of keeping it and growing it further?

When I purchased this business, I was in a different life stage. Now I have a family with kids, and I have a job that requires about 60 hours a week. So the business has become a bit of a liability for me. It needs someone who can focus and really improve it.

It’s priced at a position concurrent with its current T12. However, if you put in some time and resources, you can certainly improve both the top-line revenue and bottom-line profits.

Can you describe the amount and type of work you do on this business to maintain it?

Fortunately, as of now, I’m only doing about two to three hours a week, and that’s almost all on advertising. I’m pretty locked in on ads, and I think the ads are great because these are such old listings with good ranking. You’re not sitting here launching a new product and really trying to invest heavily in your TACoS and CPCs. Overall, this is just a very good account from that vantage point.

If you can dedicate somewhere between 10 and 20 hours a week—especially, I’d say, closer to 20—you can really kick ass and make some improvements. If you can dedicate about 20 hours a week over the first three months and then bring it down to probably 10 hours moving forward, you can really improve it.

So, if you were to keep this business, what are some of the ways you were trying to grow it?

It comes down to the time-management factor. For me, I would probably go really heavily into TikTok and Walmart, and possibly also Lowe’s and/or Home Depot. These products would do well there. TikTok makes up such a large portion of things, and I have a pretty good amount of inventory on hand, plus a low cost and a quick procurement timeline. You can pretty easily get this going and scale it on TikTok or Walmart.

I sold on Walmart for a short period of time. I just didn’t dedicate the time to it like I wanted to, and I didn’t set up MCF so that Amazon would fulfill the orders. If somebody could sit down and work on getting a Shopify store, connecting it to TikTok, Walmart, and eBay, then you can really increase the top line.

And what would you say are the biggest risks with this business that buyers should be aware of?

This is a hard question because there aren’t a ton of risks with this account. As I alluded to earlier, the account’s been around for years. There’s really no competition with the listings themselves.

I would say the biggest risk would probably be time. Some of the products sell a lot faster during certain times of the year, and if you’re not working to stay ahead on inventory, you run the risk of running out of stock. Then, next thing you know, you’re trying to expedite a shipment, get your folks out in China to do it, or you’re just screwed.

I try to stay on top of my inventory, and it’s accounted for in some of the actual costs. Sellerboard helps with that a lot, so you can see what products are currently doing well and are needed. You also need to be forward-thinking and look at how a product did at this time 12 months ago and 24 months ago, and lean in on AI to help steer that.

How much support are you willing to offer the buyer who acquires this business?

I’m very flexible in this regard. I do work a lot, so I can’t obviously be involved for 10 hours a week for months on end. But especially over the first few weeks, I’d really like to come in and help. It’s going to depend on the type of buyer here. If someone’s coming in with no experience, I’ve got no problem holding their hand and teaching them things. But obviously, if it’s a different seller, then that won’t be needed.

I’d like to be pretty hands-on for the first two weeks, and then, for the next two weeks, maybe we connect every other day—say, on Monday, Wednesday, and Saturday. What’s going on? How can I help? What are you seeing? Stuff like that. Then I can provide any type of support on a case-by-case basis for the first eight weeks, essentially. From there, maybe we go to email support. Ultimately, I’m very flexible. I’m not trying to just dine and dash here. I hope that this account can blossom and do better under my leadership, and I’m flexible.

Are you open to negotiating something like an earn-out agreement? Are there any loans associated with this account that would need to be paid off in order to move forward with the sale?

Okay, final question. If you had to put yourself in the shoes of a buyer, why is your business worth buying?

This account’s a whole lot older than many you’ll see. You’re probably going to see some listings that have had a massive spike in profit over the last few months because they launched a product that’s kicking ass. But that product may very well become saturated pretty soon.

A lot of what drives people to sell is almost hitting a home run and then trying to sell it at a home-run price, with somebody gambling on getting a grand slam. This account has had numerous singles and doubles. This is the Moneyball here.

You’re coming into an account with listings that have hundreds of reviews. There’s not a ton of competition in the market. It does not operate in a Q4-driven way. Essentially, it’s a very steady and stable account. If you invest in the actual brand, there’s a lot of potential. There are a few different brands under the account, all of which are trademarked and brand-registered. One of them specifically has so much potential. There’s value in the name alone because it’s a very common name. And so there’s value in the name alone.

I can promise you that you may not have a Q4 that’s going to do quadruple the income of Q2. However, your Q4 and Q2 are going to be consistent year over year. And when you ultimately look for an exit, you’re going to be seeing the same thing.

All right, everyone, thanks for listening. To learn more and see if this business is still for sale, head over to empireflippers.com/marketplace and search for this business’s listing number, which you can find in the video thumbnail and description. Or, if you’re watching this on YouTube, click the link in the description to go straight to the listing. Once you’ve unlocked this listing, you’ll find everything you need to know about this business.

Thanks for joining us. See you next time. Sam.