Over the past few months I’ve been talking a lot about the mounting challenges of selling on Amazon. One of these conversations led to an introduction with Richard Jalichandra, today’s podcast guest.
Richard is the Founder and CEO of 101 Commerce, an ecommerce company that aims to become the next generation retailer by acquiring businesses that own “microbrands” primarily sold via FBA.
In this episode Richard talks about their goal of acquiring 101 brands (they are currently at 14 after 6 months of operations), how they manage to still be comfortable with the mounting risks of selling on Amazon, and what they’re looking for in an FBA business that makes them want to buy.
He also gives tips on how to better prepare yourself if you plan to sell, how to increase your multiple, and why honesty and transparency can preserve your relationship with a buyer even if your business has problems.
Want to sell your business?
101 Commerce is 87 brands away from their goal and they are on the look out for brands to buy. Below are the characteristics they’re looking for in a brand:
- Is 100% or predominantly on Amazon
- Has brand potential and doesn’t sell highly commoditized products
- Has a trademark and is on Brand Registry 2.0
- Has good gross margins (around 70%)
- Has a good review structure (quantity and velocity)
- Has been around for at least 2 years, preferably 3
If your brand checks all these boxes, click this link and fill up the form to let Richard and his team know.
Until the next one, happy selling!
Full Audio Transcript
Intro: This is Mike and welcome to episode number 207 of the EcomCrew Podcast. So glad to have you guys along with us today. We’re almost half of 2018 heading into 2019. And before we do, I have a great guest one with me, Richard from 101 Commerce. 101 Commerce is buying Amazon businesses or e-commerce businesses I should say, but mostly focused on Amazon and creating a company that has a portfolio of these sites. They have purchased 14 so far as of recording this, and as he discloses they’re looking to get to 101 of these businesses at 101 Commerce. Just a fascinating conversation because I’ve gotten to the point recently where I’m just a little bit gun shy of some of the Amazon stuff.
We changed our business plans and our business model a little bit throughout the second half of 2018, we’ll be talking more about that over the course of the first quarter of 2019 as we start setting goals and talking about how things are shaped up for this year. And it’s not because I don’t think Amazon is a good platform any longer. I do with, it’s just our risk profile has gone a little out of control with the amount of inventory we have, the amount of sales we have out of one account. We’re going to try to fix some of that stuff. And also, I do think that the chances of something going wrong on Amazon have increased. Let’s say that’s going from a half a percent to 1%, whatever it is, I think it’s not zero increase. So it does change the risk profile somewhat.
But I do think if you are well capitalized, or just getting started, don’t get yourself in a position where things are a little too scary. It’s still an amazing platform, and I still think it’s in its infancy, and I see success with not only ourselves but a lot of our students and people that comment on all of our stuff and also conferences I go to. I mean, just still such a wealth of opportunity out there and it’s exciting. And obviously these guys see that and a lot of smart people with a lot of money are working towards buying these businesses and because there’s such a great investment when you think about putting your money in the stock market versus doing this, it’s still probably way better to do this. So anyway, without further ado right after this intro, we’re going to hop into it with Richard from 101 Commerce.
And before I do, I just want to remind you, you can go to EcomCrew.com/free, sign up for all of our free training. If you’re just getting started on Amazon or even if you are intermediate, we have several free training courses over there on selling on Amazon, importing from China, and a couple of others at EcomCrew.com/free. All right guys, let’s hit this.
Mike: Hey Richard, welcome to the EcomCrew Podcast.
Richard: Good to be here.
Mike: So just so everybody knows who you are, you’re Richard from 101 Commerce. We’re going to dig into all that. But basically you’re an Amazon conglomerate. You’re buying up a bunch of Amazon businesses and rolling them up under one umbrella. And I’m excited to talk to you about all of that today. I actually found out about you through a friend of mine, Greg Mercer, a mutual friend. I’m not sure exactly how you guys got to know each other to begin with, but we were at lunch one day and I was just talking about my frustrations with Amazon and potentially looking to have an exit at some point.
And he said I should reach out to you and I have, and it’s been interesting getting to know you so far. I thought man; it’d be great to have a podcast about just what you guys are doing. And it’s interesting because I think that I’ve come to a different headspace than you guys have and you guys are probably way smarter than me. So I’m curious to kind of peel back the onion and find out why that is.
Richard: Well, we’re either way smarter or way dumber. So it’s one of those two things that I guess we’ll find out in a few years.
Mike: History will tell but you’re using someone else’s money so that already makes you smarter?
Richard: Yeah. Well, maybe it’s other people’s money, but it’s my time.
Mike: Right, fair enough.
Richard: But yeah, thanks to Greg for introducing us. I actually got to know Greg quite a bit because I stalked him when I was kind of conceiving this idea. And so I wanted to reach out to some of the more prominent people in the FBA ecosystem and pick their brains and get a bunch of data. And as it turns out, now I’m in a mastermind with his wife, so I’ve got multiple connections with the Mercers.
Mike: Awesome, yeah, Liz is a sweetheart. And I mean, so is Greg. He’s just like infectious man. The guy is like if you’re in a bad mood, you get in a room with him, it’s hard to stay unhappy. The guy is just always smiling and just super genuine nice dude.
Richard: Yep. Yep. And now he’s a neighbor down here in Austin.
Mike: Oh, cool. Well, I’m going to be in Austin later this year, so I’ll definitely have to catch up.
Richard: I look forward to it.
Mike: Cool. So let’s just — I tried, I did my best explaining what you guys do. If you could maybe give our audience a quick 30 to 60 second Reader’s Digest version of what 101 Commerce is, how it came to be, and what you guys are planning on.
Richard: Yeah, I mean, it’s kind of a ball from what the original idea was. But the way I like to think of us is kind of building the next generation retailer. And the way we’re kind of going about it is we’re kind of investing in a trend that I call the new paradigm in brand and that is basically the rise of micro brands. And these are the tens of thousands of micro brands private label brands that co brand themselves with the Prime logo and sell on Amazon. So that’s kind of what we’re doing. We’re investing, acquiring, and launching. The goal is to have 101 brands hence the name 101 Commerce. So that’s essentially what we’re doing.
Mike: Got you. And how far on this journey are you at this point? How many of the 101 have you done?
Richard: We have 14 brands now, and so we got a little bit of work to do to get to 101, but we just started a little over six months ago.
Mike: Got you. That’s quite a bit of work already man. I have a hard time running four brands, I can only imagine what it’s like trying to get 101 under one roof. So as you’re going through and acquiring these without giving away too much secret sauce just at a high level, what is it that you’re looking for? Are you looking for established brands? Are they in particular niches? Are they people that have XYZ business experience? What is it that attracts you guys, the ones that you’re putting under these rules?
Richard: Well, if I get back to what I just said about trying to become the next generation retailer, the next generation of retailer, any retailer has a whole portfolio of brands. And what we’re trying to do is kind of build a portfolio of these micro brands that are really successful. So there’s a few things that we look for. First off, they have to have some brand potential, it’s not just a commodity that anybody could sell, and it doesn’t really matter what the brand is. We are looking for brand potential, they have to have a trademark, they’ve got to be in Brand Registry 2.0. And then, of course, in e-commerce, your margin structure is always incredibly important. So we look for certain characteristics around gross margins and net margins.
And then lastly, because of the importance on Amazon, you’re looking for something that I collectively call review structure which is a combination of quantity and velocity and several other quality and quantity metrics around reviews.
Mike: Got you. It makes a lot of sense. So, now you and I have talked because I mean it’s interesting I mean, I had this same conversation with Greg because the thing that makes me just so gives me like the wet [inaudible 00:07:53] these days because we’re so all in with Amazon. And just so much stuff I see happening in the landscape with Chinese sellers coming in and fake reviews, and whether it’s fake negative reviews, fake positive reviews, false IP complaints, and just the frequency of Amazon shutting down listings or accounts, and when you’re playing in someone else’s pull, or sandbox if you will, obviously risk goes up. And I think that I can relate to this more than the average person because I’ve been in the situation and had my toast up with this before. So how are you guys getting comfort level with that type of a problem?
Richard: Well, I think anywhere you are in the technology landscape, you have some platform dependency, and hence platform risk. So before I got into e-commerce, I was in media and publishing and I have to say I probably had my career or lifestyle ruined by Google at least a half dozen times. And so, it doesn’t matter whether you’re on Amazon or you’re in the open web running a Shopify site or something like that. You have some platform dependencies related to Google, Facebook, Instagram, Twitter, whatever the traffic sources are, you’re always going to have some of that. And then, of course, with products, physical products and physical goods, you have different compliance and regulatory things. There’s just manufacturing risk, there’s a whole bunch of different dependencies that you have.
So I think I’ve just gotten comfortable with having some platform dependence, and if anything, kind of the way I think about it is instead of being afraid of it, sometimes it’s better to lean into it. And I think if you’re going to lean into it, you’ve got to go at it about as above board and white hat as you possibly can, you’ve got to be squeaky clean. That’s not going to keep you 100% clean from some of the competitive threats that you outlined or whatever, but that’s really kind of the way we approach it is just like not be afraid of it and instead lean into it.
Mike: I think that makes perfect sense and to be honest with you, that’s exactly the approach that we took as we were building the brands and the company that we built. The thing that got me uneasy is the things where you even when you’re squeaky clean there’s nothing you can do about it, so that’s the outside threats of the fake carpet bombing of fake reviews whether they’re the negative reviews strategy, the positive review fake strategy or false IP complaints or people buying stuff and reporting used even though it was sold as new. And all these, there is actually just this amazing journal, a Wall Street Journal article that just came out and video investigative reporting thing about all this stuff.
And I just see when there is money to be made, there’s always people that are willing to do it unscrupulously and that’s what scares me because my strategy just like you were saying like I have had my hand slapped by Google as well several times. And a lot of it quite frankly is because I was I probably needed to have my hand slapped. I was buying links or doing may be a little bit too aggressive on page SEO, or whatever different things that Google over the years has slapped people’s hands for. And once you’ve had that happen a few times in your life, if you’re smart enough, you’ll learn your lesson and I feel like I have. And certainly, I was always able to sleep easy at night knowing Amazon will never shut my account down because I’m not doing any of these things. But now, things have kind of gone a little bit further than I really foresaw and that’s the thing that kind of makes me a little uneasy.
Richard: Yeah, well, and I would also say that it’s not like we aren’t concerned about some of the things that you outlined as well. We definitely think about those things and those are just risk associated with the business. And again, like I said, if you’re going to do any kind of e-commerce business, you’re going to have some risk. You’re always going to have some, so you just kind of got to get comfortable with it. I guess it’s why, what everybody that’s listening to this podcast, we’re all entrepreneurs. And I think we’ve just decided collectively and individually that we’re going to live with a certain amount of risk. But I totally get that sometimes; yeah the risk tolerance may not even go down and may just get tired.
Mike: Yeah, yeah. And I think actually, you made a really good point I just want to touch real quick because this is another thing I’ve also realized. It took me a lot a lot of years of business to kind of really get comfortable with this, but you’re right, every business is going to have some sort of inherent risk. There is no perfect risk free business; otherwise everybody would be doing it. And the other thing that I’ve also realized is that the reason everyone always talks about the 80/20 rule is because it’s pretty damn true.
So, even if you go into a business with the best of intentions, trying to diversify, like create this just perfect business model, this utopia thing on a piece of paper over time things shift and reality is that you’re going to have particular skews that do better than others. And if you have multiple brands, particular brands that do better than others, and if you’re multichannel, you’re going to have a channel that does better than another. And that is typically the one that ends up getting more effort put towards it. And next thing you know, you’ve probably got an 80/20 business where 80% of your revenue is coming from 20% of your skews, your brand, your channels, or whatever it might be.
Richard: I think that’s even true of our business. And we already have a portfolio now. So you see the same kind of portfolio distribution here, we’re somewhere around 12, 13 skews at this point. And I would say the 80/20 rule definitely applies to that.
Mike: Yeah, yeah. So the brands that you’re looking for, are you looking for things that are 100% Amazon? Are you guys looking for things that have other components to it as well?
Richard: Anything that grows is going most likely going to have a multichannel opportunity at some point, but the things that we’re targeting right now are predominantly vast majority of their revenue is on Amazon or maybe 100% of the revenue is on Amazon. And the reason that we’ve chosen to take that approach is that you just get more operating leverage that way when you start having to build out your own fulfillment and generate your own traffic and maintain your own websites and things like that, you lose a lot of that operating leverage. So, in a lot of my research, I found that well run FBA businesses are significantly more profitable than well run Shopify businesses. That’s a big general statement but it just seemed in the sampling of literally almost 1,000 small e-commerce businesses that I looked at in the lead up to this, that’s what I saw.
Mike: Yeah, and it makes a lot of sense and I’ve talked to lots of people about this. I mean we’re also partially off Amazon and I wish on paper it can be 50/50 or something where Amazon wasn’t as large of a component or a threat to our business. But the reality is that every sale that we get on Amazon is significantly more profitable than ones we get off Amazon, like just the cost of advertising is way lower. They handle all the labor of the pick pack and ship and the bulk of the customer service and they’re shipping things significantly cheaper than we could ever ship things and just the logistics are pretty actually smooth realistically compared. If we’re looking at we’re selling almost $10 million worth of stuff a year, we’re shipping almost all of it into one warehouse in Ontario, California. Compared to if we were doing all that ourselves, it’s significantly easier.
And so I’m always trying to be cognizant as much as I’m frustrated with Amazon. I also am very thankful that the whole platform or channel exists because it is a lot easier than we used to do, because we came from the pre Amazon world. I mean we were doing it all ourselves. We were doing all the pick pack and ship ourselves, and having to deal with the scaling and the hustle of all that. And Amazon definitely makes things easier, which is why I think it’s exploded not only from a customer purchasing standpoint, but there’s tons of people still flocking to start Amazon businesses. And I think it’s still in its infancy stages compared to where things are going, because most people I know like to shop on Amazon because it’s so damn easy.
Richard: Yeah, no, I looked at my own behavior and my wife’s behavior and it doesn’t matter how strong the brand is, we always try and buy it on Amazon first, because we know the experience is going to be zero to two day free shipping. And it’s just a good experience. And there’s — we’ve all returned products there and we know it’s a really smooth process in there too. So the customer service is great, too. So anyway, I think the light bulb moment for me kind of went off a couple of times in researching this where I would meet a sole proprietor doing $15 million a year and there’s like no other platform you could do that. I wish I could do that.
Mike: Yeah, it’s amazing, right.
Richard: Yeah. No, it’s pretty amazing. But like you said, it’s not without its pitfalls and challenges and whatnot. But again, one of the things you hear in the investing community all the time about what makes a good opportunity; it’s when it is hard, and when it is scary, and all that. That usually creates opportunities and that’s kind of what we’re hoping that we find.
Mike: So going over some of the metrics that are thrown around a lot, and I want to just kind of back up because we’ve had someone like Joe Valley on the podcast before who’s talked about getting your business setup for sale. And I think that people hearing these numbers over and over again, help kind of reinforce things. And it’s cool to get a point of view from someone who’s also buying and we were just talking, it turns out you’ve actually bought three businesses from Joe Valley, which is pretty cool. He’s a cool dude.
Richard: Absolutely. So where would you like to dig in, the buy process?
Mike: Yeah, so I mean first things first, you’re looking at an Amazon business, what’s like the minimum amount of aging you want to see.
Richard: We prefer to see about at least two years and preferably three years. That’s a pretty season to count. That said, we’ve broken that rule once but it had to have some other really strong organic traits to it without, and when I say organic, I’m talking about non paid traffic and sales growth.
Mike: So what percentage of sales are you guys willing to tolerate that come from PPC?
Richard: We don’t really have any set formula for that. Generally though, we like to see businesses where the total ad spend is less than 10% of sales. And again, that’s an area where you couldn’t do that if you’re running a scaled Shopify or standalone site just because that’s one of the reasons you give 30 cents on the dollar is not just the fulfillment, it’s Amazon’s traffic as well.
Mike: Exactly yeah, no doubt about it. Okay and then in terms of like gross margins, I mean is there a level of gross margin you guys are shooting for?
Richard: Well, I’d love to have 100% gross margin.
Richard: Wouldn’t we all?
Richard: I think that’s – I was going to say you’d make the joke it’s probably drug dealing drugs but even drugs is probably 100%. But no, I mean I think if you’re — we’re looking for things that start with over 70% gross margin and that are in the I will say the net margins are, but again, if you kind of have those high gross margins whether 70, 80%, then by the time you strip out all of the other cost of FBA fees and advertising and any other operating costs that you have, you end up with a pretty healthy net profit.
Mike: Yeah, and this is something that I talk to people about all the time. I don’t know why people gravitate towards getting themselves in these situations where they don’t have enough margin. That’s one of the reasons why I want to bring this particular topic up. Through EcomCrew Premium, I see this a lot. It just like, it pains me so much because people, I think they get married to an idea, they get excited about sourcing a product and then once they get it in, they realize they don’t have enough margin. And for me, the reason that we target higher margin products at this point is because we’ve been through several cycles of this.
So we know that there’s always more products to find. You think of the hundreds of millions of products that are available on Amazon, there’s always going to be another product that you’ll find, but there’s only so much money to invest. And if you skip over the ones that don’t qualify, that don’t have enough margin, eventually when cash flow becomes a problem because you can only invest so much money, you can have a much healthier business. And also margin helps you deal with mistakes better. You can spend more money on PPC or eventually lower your price if you have to, do other outside advertising off Amazon to get things moving. If you have a higher margin, it helps fix a lot of those problems. And so, we’re in a similar boat like that’s about the same margin that we’re targeting ourselves. We’re actually at 65% is like our lowest, but we’re moving towards 70 ourselves.
And I think that that’s one of the probably the biggest lessons that people can take away as they’re looking to develop a brand or products to just make sure that they aren’t cutting things too thin, because again, you just never know. And the other thing that you can also guarantee is that Amazon is not going to make things cheaper in the future, right? They’re not going to be like Santa Monica, you know what, we decided we’re going to lower affiliate fees or our storage fees or whatever it might be. So you’re baking in future costs as well. So when you do get to sell your business in a couple of years, you’re still going to have a healthy margin after things inevitably change.
Richard: Yeah, no, I think you hit the nail right on the head. It’s you’re protecting not just marketing mistakes; there’s all kinds of different mistakes that can come up. But then the reality is, over time, you’re always going to get a little bit of margin compression. And in some categories, a lot of margin compression, but it’s a little bit of downside protection for you. And generally, you can always make something work online, if you’re above a 70% gross margin, worst case scenario is you usually can breakeven.
Mike: Yeah. All right, and the last one I have on my list here, the one that people always throw around is multiples. So, what’s the multiple range of the 14 businesses that you guys have been paying if that’s not too much to ask as far as secret sauce goes?
Richard: Well, I won’t tell you what we paid but I can tell you kind of what I see in the market and it’s not really a secret and of course, it’s segmented by the size of the business. But typically things that are in the high six figures to low seven figures, you’re going to see around three times seller discretionary earnings give or take a couple of tenths of a multiple in bear variance there. And as you start getting towards 5 million, the multiples creep up into the three and a half, four range and above five, you’re certainly going to see multiple expansion there.
Most of the stuff that’s going on in this ecosystem, when you get to eight figures, you’re probably going to see somewhere in the — I mean, I’ve seen it really depends on the net margin and the growth factors get in on some of those larger businesses because, again, I’ve seen eight figure businesses like really large eight figure businesses that are only trading at five times but that’s because they’re not growing anymore. They have low net margins or something like that. So there’s a lot of other variables to get into valuation, but I think for a lot of your listeners, they’re going to be interested kind of in that half million to $2 million range. And that’s where you’re going to see multiples at the low end there are two and a half up to up to three and a half.
Mike: Got you yep and that’s very similar to what Joe has said as well and that seems to be where things are shaking out right now. And then you’re still, yeah I think it’s very much a seller’s market. I mean it seems like there’s still lots of money, lots of people like you guys, you aren’t the only conglomerate out there that’s doing this type of a roll up thing. I see businesses that are listed for sale selling relatively quickly but the multiples are still I think relatively low.
So I mean it’s still even though it’s a seller’s market it’s also still a buyers’ market. I think people out there, they can pick up these businesses that have the risk tolerance and aren’t — I think the thing that’s really shaken us a little bit these days is just like we’re just so all in like percentage of net worth of our life on Amazon versus just being shaky about Amazon. Just we have $1.2 million in inventory and this large business that just kind of came out of nowhere, but I still am very high on Amazon. I think it’s still an amazing opportunity.
Richard: Well, just to back up for a second. I love that you just called us a conglomerate. We bought a bunch of small businesses, we’re hardly a conglomerate, but I love that you threw that out. And then I think the other thing I’d like to correct, I don’t know, I really don’t even like the term roll up. Because again, a lot of what we’re buying are we’re buying good small businesses where there was a really good Mom and Pop bootstrapped or that probably just didn’t have the working capital or the access to a whole deep bench of expertise. So I like using the term build up better than roll up because we’re really building these things. We don’t just — if we were just like trying to do a financial arbitrage and consolidate a bunch of these, that’d be a whole another playbook. We’re really trying to grow these things.
Mike: Yeah, it makes a lot of sense. So if there’s someone out there listening, I’m going to give you an opportunity to pitch yourself, and what you guys are doing and how people can contact you if they meet the criteria you’re looking for and are looking to potentially sell their business. How can they do that?
Richard: Well, part of me hesitates to tell you to contact me because anytime somebody says I’ve got a checkbook, you’d be surprised how many people will email you.
Mike: Half will think you are sugar daddy.
Richard: Yeah exactly. No, we basically have a web form on our website and one of the things, the guidance I’d give people is we’re looking for something like I said, it’s two years old, is probably in the trailing 12 months, did at least a half million dollars in gross merchandise value. So, I’d start there but remember we get a lot of inbounds not just from our website but from guys like Joe Valley and some of the other great brokers out there that we have a lot of deal flow. And I’d remind people that if they don’t hear back from us immediately, it’s not because we don’t like your hair, it’s just there’s a lot of activity going on in this ecosystem.
Mike: Yeah, I mean it makes a lot of sense. And I think that a great follow up question as I look at this in the same way that as resumes coming in for when we have a job that we put out. We get thousands like literally thousands of people apply for the job.
Richard: Can you send some our way.
Mike: Well, it’s hard to find the good one, that’s what the problem is right, how you pick them out. But I mean, it’s a similar thing when people — I mean you’re looking at probably an equal number of businesses because I mean again, I’ve been on these [inaudible 00:28:01] list and Empire Flipper list since the beginning, since before they even started it seems like and BizBuySell. I mean there’s hundreds of thousands of businesses out there at all times for sale and you’re picking one of them out of that bunch or two, what is it like I mean if you were to — I don’t know how to quantify it, but what are the things that make them special, that make them investable, that make them something you guys want to purchase?
Richard: Well, I’ll just tell you also the anecdote to have kind of like the scale to describe the scale is that we looked at over 400 FBA businesses in 75 days just to kind of give you an idea.
Mike: And bought 14.
Richard: Yeah, yeah. It wasn’t – it’s actually less than 14, it was 14 brands. Some of them are multi brand.
Mike: I see.
Richard: But there is a lot of opportunity out there, and so some of the advice that I can give your audience if they start thinking about packaging or positioning themselves for sale. Yeah, you do have to be buttoned up. It is like a job interview. And a couple of other tips I would give is that it is like a job interview, make sure you present yourself well. You’re going to want to get not audited financials, but you’re going to want to have real financials. It’s worth hiring a bookkeeper to kind of put your books together for at least 12 months, preferably at least two years back. Stuff like that really makes a big difference.
And then the other thing I always like to remind people is that it’s a two sided conversation and everybody wants to deal with people that they like and they trust. And I think you hear that a lot from some of the brokers in some of their podcasts as well, but I can’t even stress how important it is just to be honest. And sometimes the oversell and I like to remind people it’s like, we know that there’s words, so it’s better if you tell us what the words are than if we find them in diligence. So I really love it when we’re talking with a potential partner where they’re going, well here’s all the good things about my business. But let me tell you about the bad things too and here’s the times I’ve stubbed my toe or got a bloody nose and here’s what we did to fix them. Or here are the things that I wasn’t able to fix; maybe you know how to fix them.
I really like hearing that when we’re sitting down with somebody. So I think honesty is without question, something that always has to be in the conversation. But a real objective like almost a consultative honesty about how you would advise the person to run the business after they take it over. And that’s really going through like all your words and pimples, and things like that. How would you do with those things, it’s really, really helpful. It engenders a lot of trust from the buyer. So, I highly recommend taking those steps.
Mike: Yeah, I mean it’s just good life advice. I mean it’s always treat people like you like to be treated, think about how, I mean you know what’s going to come up anyway. I mean essentially most likely it’s either going to crop from one of three ways. Either you’re going to disclose it up front and tell them, they’re going to find it in due diligence, or they’re going to find it after they closed. And if you tell someone upfront and again treating them like you like to be treated and just tell them, they’re going to take it a lot differently than if they find it in due diligence where they’re going to like, wait a second, what else is this guy hiding? Or they’re going to take it significantly different than they find it after closing and they think that you’re a bastard for pulling one over on them.
And like your name is your reputation and probably either potentially produce a lawsuit afterwards or certainly it’s a small world and you never know when you might want that person’s help again, or someone that they know is asking about you, and it doesn’t take long before no one wants to deal with you again. So I mean, and again, for me it’s always thinking about how would I feel if the situation were reversed? I mean, I’ve been on the buy side before and I’ve certainly have purchased something where afterwards I’m like, man, I cannot believe that this exists, or they didn’t tell me this, what a shyster for not disclosing this. And I probably went about the business anyway but it’s better if someone discloses it and at least tells you. So, I think that’s just great advice in general.
Richard: Well, I think the other thing too about being up front with stuff, even if you’re working with a broker, they’re going to create a sales memory, but if you’re not working with a broker, it’s kind of a direct transaction. As long as you kind of disclose those things up front, those don’t scare people if you’re transparent. And what usually happens is they get priced into the deal. Whereas if you’re already kind of been in a letter of intent with somebody and then all of a sudden they discover a bomb that you knew about but didn’t talk about, they’re probably going to run. It’s not going to get re-priced, it’s not going to re-trade, they’re just going to run because there is so much choice out there.
Mike: Yeah no doubt, excellent. So while we were talking here, I looked up your website, it’s 101-commerce.com, and that’s where you can find the form if you guys are interested in reaching out to 101 Commerce as a potential buyer, if you meet the criteria that Rich was talking about. Don’t just send an email or fill out the form if you know in your heart that it’s going to just be a waste of time for him because obviously they have a lot that’s on their plate. But if you have a great business that you think might fit within their future 101 companies, reach out to them, and give them a shout. And Rich, I can’t thank you enough for coming on doing this. And hopefully we’ll get a chance to meet in person here shortly.
Richard: Yeah, and I’m looking forward to that.
Mike: And that’s a wrap folks. I hope you guys enjoyed this conversation with Richard here on the 207th episode of EcomCrew. As always, if you got any comments, questions, concerns, thoughts, anything you want us to know about, go to EcomCrew.com/207. I’d love to hear from you. You can go to Facebook.com/EcomCrew, hit the like button, and when we do new videos that are exclusive to Facebook; you’ll get notified of those. We’re going to be doing a lot more of those in 2019. So you’ll definitely want to head over to Facebook.com/EcomCrew and hit the like button so you get notified of that stuff.
And also take a moment to leave a review for us on iTunes. We love reading those even the one star ones. It’s fun to read reviews and see what people’s comments are, always helps the podcast get better. So, with that guys, I want to thank you for supporting the EcomCrew Podcast. And we’re going to be done for today but we’ll be back with another one in just a couple of days. And until then, happy selling, and we’ll talk to you soon.