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Grab Your DeLorean—Put Your Amazon FBA Two Years Ahead With This Strategy
By Mark Daoust
Raj Patel ditched his dreams to be a lawyer when he realized he could make way more as an Amazon FBA entrepreneur. After bootstrapping two businesses on his own, Raj realized there was an easier way to boost cash flow: buy healthy Amazon FBA businesses and grow them like crazy. Mimic Raj’s process in your own entrepreneurial journey to skip over the heartache of bootstrapping eCommerce startups—and get straight to the fat paychecks.
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Have you ever wished you could hop in a time machine? While some folks would kill to revisit Prohibition-era speakeasies or castles of the Renaissance, many entrepreneurs would choose to see the future. After all, with a time machine, you can fast forward to the best parts of your life!
Business owners are dreamers. If you could fast-forward your business by two years to skip the hard work of bootstrapping, you’d probably do it, wouldn’t you? You could pretend all the issues with funding and crying over bad prototypes didn’t happen.
The thing is, serial entrepreneur Raj Patel made this happen in real life—without resorting to a souped-up DeLorean. Raj’s specialty is acquiring thriving eCommerce businesses and growing them even more. Thanks to his method, Raj has been able to skip the pesky business of bootstrapping and building altogether, enjoying tasty profits from the get-go with matured Amazon FBA businesses.
In fact, 80% of Raj’s revenue is from Amazon FBA. Although he does direct sales through some of his websites, he’s all about Amazon. Isn’t it time for you to get a piece of the booming eCommerce market? Learn how Raj fast-forwards acquired businesses to earn more with fewer headaches.
Let’s journey to the past for a sec, shall we?
26-year-old Raj was in university studying to become an attorney. He dabbled in Amazon FBA eCommerce on the side out of curiosity. What shocked him was that he already earned more doing Amazon FBA than he would out of school as a lawyer.
What kind of schmuck would bother finishing a law degree when he was already earning good money? Instead of tying himself to the courtroom, Raj realized he wanted to reap the perks of growing a business: independence, freedom, and room to travel the world.
Raj decided to bootstrap two businesses from scratch instead of becoming a lawyer. He started these 4-5 years ago as experiments, but they worked out! Raj still has these two brands under his belt today.
However, after growing these businesses and finally seeing healthy cash flow, Raj had an idea. Why bother growing a totally new business when there were perfectly good businesses out there for sale?
Raj took a gamble and purchased his third business. It went so well that he decided to purchase Beard King from Amazon FBA seller, Nick, for a total of four businesses in his portfolio.
Raj has laid his wild and crazy days of Amazon FBA startups behind him. Today, he’s all about acquisitions. Thanks to accumulated capital from his first two businesses, he’s able to comfortably research and acquire businesses that fit his needs.
Raj’s approach is different from what many Amazon FBA sellers are doing. If you have an Amazon FBA product, you’re probably scaling and building it yourself. But, as with many things in entrepreneurship, the decision to go against the grain can be a fruitful one. Most people don’t even think about acquiring a biz instead of building it. Fortunately, the times are a’changing, with entrepreneurs trending towards buying instead of building.
It’s About Time
It’s easier to get ahead when you’re buying a business that somebody has already grown. Sure, you could build something yourself. Or you could dedicate yourself to other interesting things in the meantime and buy that business once it’s up and ready to go.
Raj prefers the latter approach. To him, it’s all about time. He likes to expand aggressively with his businesses. If he buys an Amazon FBA business, he wants to see a return on that investment within 2 years of purchase.
Of course, not every entrepreneur is ready to buy a business outright. You need a lot of money, for starters, as well as some experience. Raj put in his time when he grew his first two businesses, which gave him the capital to buy up other Amazon FBA products.
Now that he has moolah, Raj skips right over the long, painful hours required when you’re bootstrapping a business. “Now that I have the capital, I’m able to skip those two years of hard work,” he says. It’s like hopping into a time machine several years in the future, where your business is already earning several figures.
The key is to buy a business that’s cash flow positive to make it worth your while. So Raj had Nick create and grow Beard King for a few years before taking ownership of it. Thanks to his capital and experience, Raj had the confidence to tackle Beard King head-on.
If you’re tired of the “bootstrap, build, sell” model, there’s a healthy alternative. For Raj, that meant evolving from a builder to a buyer. You won’t be the same business owner in five years. Acquisitions might not be right for you now, but as you pick up knowledge and capital, the future can look very different.
If only we had a time machine, eh?
Science is woefully behind on developing a time machine, but that doesn’t mean that you can’t skip forward to the future with your business. Raj recommends you use these 4 tips to locate a business that’s ripe for fast-forwarding.
1. Look For Amazon FBA Businesses
It’s kinda obvious: Amazon is killing everyone else at eCommerce and has been doing it for some time.
If you want to see awesome growth with your acquisition, why not become an Amazon FBA seller? By acquiring an Amazon FBA business, you’ll be able to scale on an established platform with a healthy audience base.
Some entrepreneurs are hesitant to look at Amazon FBA, fearing that Amazon is a fad that will leave them high and dry on their returns. But here’s a thought: Amazon probably isn’t going away. Previously, it took business owners years to build a thriving eCommerce business. Thanks to Amazon, you can have a fully functioning business in less than 3 months if you put in the elbow grease.
Raj recommends buying Amazon businesses because the platform is so easy to use. If you’re a fan of the “passive income and sipping on a margarita on the beach” lifestyle, Amazon is perfect for you. Raj likes Amazon because, once everything is set up, it’s mostly on autopilot, giving you time to do other things (like sip spirits on the beach, if that’s your thing).
Now, will Amazon stay like this forever? No, of course not. You’re an entrepreneur, though—change is your middle name. To be successful as a business owner, you have to be willing to adapt.
If you’re tentative about Amazon, Raj says you shouldn’t put all of your eggs into one basket. That’s why he likes to have multiple streams of revenue on the Amazon platform, going so far as to expand internationally (more on that in a bit, though).
2. Take Time Looking For “The One”
Raj doesn’t make an offer on any ol’ business that he comes across. He recommends that anyone interested in business acquisition spends a lot of time on research so you find the right fit. Actually, if you shoot over to the Quiet Light Brokerage site, you can fill out an NDA to go through as many of these listings as possible. It’s like speed dating, but for acquisition.
When he was getting ready to buy Beard King, Raj looked for 4-5 months. He subscribed to several brokerage emails and sifted through the listings aggressively every day. “I subscribed to every single email list out there,” Raj says, laughing. During that time, around 40 listings caught his eye.
Instead of skimming through the dry memorandums, Raj read them cover to cover. This helped him understand if that particular business was a good fit for his goals. But even if the business wasn’t a fit, Raj still learned a lot about other businesses’ models, processes, and products.
As long and boring as memos can be, Raj insists that reading them was never a waste of time. So even if you don’t want to buy the business, the process of looking at these listings can be pretty helpful, too.
During the five months he was shopping, Raj made around 4 offers on a few companies. On one he actually made it to LOI, but he missed the deadline by a day and another buyer swooped in. Sorry, buddy!
It all worked for the best, though. After months of hard work, Raj found Beard King and knew it was the perfect fit. He spent a lot of time looking, but ensuring that the Amazon FBA product was a fit meant Raj could hit the ground running with this acquisition.
3. Build Relationships With Brokers
Few people want to hop on the phone or a Zoom call to chat with another person. We’re living in an email world where it’s super easy to shoot off a written message. But if you want a good deal on an Amazon FBA acquisition, you need to get some face time with brokers.
Raj recommends that you talk to brokers any chance you get. This is especially true if you send an offer that’s lower than what the Amazon FBA seller is asking for. “I would always try to talk to the broker because, when you send a lowball offer by email, it doesn’t seem genuine,” he says. By chatting face to face, you can explain why you gave the offer you did, and justify your opinion why you’re shooting a little lower.
Now, the broker might laugh in your face and say, “Nah.” That’s okay. The goal is to start a conversation and see what you can work out with them. More often than not, being likable and starting a conversation will get you a better deal. When a broker trusts you, you can share your reasoning for offering a certain dollar value, opening the door for negotiations.
And, actually, if you build a good relationship with the broker and the seller, that’s ideal. You can get a much better price this way, too. That’s because business owners are selling a part of their soul when they sell their business. They’ve been working on this thing for years. Amazon FBA sellers don’t want to sell their business to someone who’s only driven by profit.
Raj has greater success because he’s genuine about his intentions to grow the businesses he acquires. Because of that, his sellers sometimes accept lower offers because they know he’s passionate about the business, not just the dollar signs.
4. Focus On Proprietary IP
One of the most unique things about the Beard King transaction is that the company owned several utility patents and copyrights. This is unusual to see in the eCommerce space, which made Beard King stand out. Now, patents and trademarks can make the process a little stickier, but they have big benefits to you as a buyer.
Raj bought Beard King knowing that it already had intellectual property protection sewn into its fabric. “IP makes it easier to take away competitors,” Raj says. Thanks to these patents, Raj could turn around and use the Amazon patent protection program to kick spammy counterfeiters off the platform, driving up Beard King sales.
Brush up on your patent and trademark knowledge, folks. If you want to buy a unique Amazon FBA product that has a lot of competition, patents help you knock out copycats. Enforcing intellectual property takes competitors out of the field, putting more dollars in your pocket.
I should note that, even though Raj is the new Beard King, he professes that he can’t grow a beard. But let’s not hold that against him, shall we?
After running Beard King for a good quarter of a year, he’s recognized what it takes to bring the business into the future. Follow his 4-step process to press “fast-forward” on your newly-acquired Amazon FBA company.
1. Embrace The Learning Curve
Even if you’ve already done the “bootstrap, build, sell” cycle before, acquisitions is a different ballgame. Heck, every business is different. That’s why you have to lean into the learning curve.
For a lot of entrepreneurs, that means absorbing as much knowledge as you can. Raj is all about learning, but he says you don’t need a $2,000 course to do it. He’s never paid a cent for a course because he says you don’t need it.
“I’m a simple guy. I just listen to what Amazon puts out there,” Raj says. As an Amazon buyer, all you need to know is what Amazon tells you to do. His personal fave resource is Amazon Seller University, where Amazon will tell you everything you need to know—for free. Of course, there’s also good, old-fashioned YouTube.
A lot of people think you can buy a course and become a business genius. It just doesn’t work like that. The best way to learn is through trial and error. It’s okay if you don’t have a clear path to follow because life doesn’t come with an instruction manual.
Another way to avoid mistakes is by connecting with other Amazon entrepreneurs. Raj says you can skip right over those 1,000-person Facebook mastermind groups. The most effective way to connect with other business owners is to have a small network of people you can chat with at any time. Raj partners up with a handful of fellow Amazon FBA power-sellers to chat about the platform and spitball new ideas.
2. Lock Down Branding
Raj purchased Beard King in part because its branding was so on point. The founder, Nick, was a graphic design and branding guy, so it made sense that Beard King would surpass expectations in every aspect of its branding. “Nick has a keen eye for representing a product that appeals to everyone,” Raj says.
With that said, branding made Beard King what it was. As you buy a business, you need to make sure its branding is super-clear. Ideally, you should buy a business that’s already branded to the nth degree, but if it’s not, make that a priority.
Beard King went viral because of its branding, which skyrocketed sales in time for Raj to acquire the business. Get yourself a well-branded Amazon FBA business and you can take over the freakin’ world.
3. Overhaul The Logistics
As great as Beard King was, it had a weakness: logistics. “There was a lot of money left on the table in terms of the cost of goods,” Raj says. The founder, Nick, had been manufacturing locally in Florida and shipping in materials from China. That made everything crazy-expensive to produce, increasing Nick’s cost of goods.
The first thing Raj realized was that the cost of goods was leaving money on the table. By chatting with a few suppliers, Raj dramatically reduced the cost of goods and made the bottom line explode. He knocked 80% of the cost of goods on Beard King, which Raj had never seen before. This was without modifying the actual product at all, mind you.
After optimizing the cost of goods, Raj is now considering making adjustments to the products themselves, as well as adjusting the shipping options.
When you buy an Amazon FBA product, you have to look for quick wins like these. Logistics are easy(ish) wins that drive a ton of value to the business quickly after you acquire it. These improvements require a little bit of money and tweaking, but the results make them super worth the time.
4. Expand Internationally
Raj’s final note to fellow Amazon entrepreneurs is to be open to expansion. “I’ve hit the ground running in terms of launching in different countries,” Raj says. People aren’t just buying stuff in the United States, you know. Amazon has thriving markets available in several international countries.
“If you expand to different Amazon markets, you’re going to have multiple streams of income,” Raj says. Raj believes in being aggressive with his international expansion. That’s why he’s planning to take Beard King to Amazon marketplaces like Canada, Australia, the UK, Germany, and more.
Now, these markets are smaller and contribute maybe a 10% boost in sales. But you know what? That’s still a 10% boost in sales. Raj doesn’t think you should leave any money on the table when you acquire a business, and Amazon FBA expansion is another easy way to fast-forward your business growth with little effort.
For Raj, business ownership is all about time. Today he spends 15 hours a week on Beard King. If he were bootstrapping the business, he’d likely be working 12-hour days, agonizing over marketing, fulfillment, and a lot more.
Building a business is a valuable experience for any entrepreneur, but it isn’t your only option. Once you get your sea legs, it’s time to think about acquisition.
But don’t just acquire any old company.
Find a time machine-friendly business by going for Amazon FBA, taking your time, chatting with brokers, and seeking out proprietary IP. Once you acquire your Amazon FBA business, lean into the learning curve, focus on branding, and get quick wins with logistics and international expansion.
Science hasn’t given us a time machine yet, but with Raj’s process, you’ll be able to grow earnings like you have one. Use this process to fast-forward your business so you can press “play” on the more fun aspects of your life.