🛠️
Solutions To Check Out
Before we get into this week’s send, I wanted to give a shout-out to our partners over at RJM Tax Exemption. If you’re tired of dealing with confusing US sales tax regulations and paperwork, look no further. We would use nobody else at Vanquish for tax filing, exemption, LLC formation and US banking requirements. I’d also like to call out HelloTax on the European side. Think all of the above plus a ton more to help with your EU expansion compliance nightmare!
🔥
How To 10X Revenue & Exit Multiple Online Through4 Evolutionary Stages
There really are only 4 ways a consumer brand or physical product company, can expand and scale. It isn’t rocket science, but once identified it does take careful planning, precise strategy and diligent implementation.
That said, let’s go:
First of all, let’s understand the lingo. What we’re talking about here is “New Market Expansion”. It’s the only sensible route to growth there is beyond flogging the same old horse and pushing risky brand-new SKUs through the old funnels.
So what are the Big 4?
1. Go Online
If you haven’t done it yet, welcome to the 21st century and we sure are glad you could join us. In my view, it’s not clever to be a wholesaler or trade-only middleman in 2023. It worked up until around 2015, then it became archaic. You want to support your resellers, I get it, but they’re eating all the margin and you’re reliant on them to reach the consumer. In today’s climate, it will definitely come back to bite you.
You should be looking at building a route into D2C, even if that starts with a differentiated product/ brand into a well-known marketplace.
Not only will this diversify your risk and opportunity, but having ‘eCommerce’ in your SIC Code will take your EBITDA multiple from 1-3X to 3-6X almost overnight.
2. Go MultiChannel
You may well still be dedicated to one channel, oh I don’t know, let’s say Amazon for want of a little creativity. Here’s the issue, not only are all your eggs in one basket and seriously exposed to the mercy of that exclusive channel, but you’re also not actually a serious consumer brand. You’re a marketplace seller.
The biggest companies in the world don't serve just one market, and they certainly don't dominate just one sales channel. Neither should you.
The next part of the evolution is to diversify sales channels. Options are B2B, B2C, B2B2C, Niche Markets, Subscription Model, Marketplace, D2C Site etc. I’m going to be visualising online sales channels however, as I write.
You’ve gone online, you’ve diversified that supply chain risk, so now you’re going to diversify channels. Only (only! only! only!) 50% of search starts out on Amazon, so you’ll capture some of the rest… you won’t cannibalise it if you know what you’re doing.
3. Go Global
Your home market may well be saturated, or at the least extremely competitive, particularly since the pandemic. Advertising is more expensive, shipping is up, margins are thinner, and maybe revenue is declining. It stinks.
But here’s the good news, Blue Ocean markets still exist, and the opportunity to expand into new countries is bigger than ever.
For example, the EU market is 60% less competitive than the US/ UK markets. Inversely, the US market has 10X (literally to the £) more in eCommerce spend annually than the UK. If you haven’t got the courage to go where the brave dare not go, then you’re leaving an unfathomable amount of business on the table.
But… you’re right. It’s tough. How do you pick the right route to growth, and then navigate the operational, regulatory & in-market complexities too numerous to list here? You need to find the right solution, provider or partner to make it happen. Trial & Error isn’t a lot of fun.
Expanding Overseas opens up the potential to 10X or more every SKU or ASIN you currently hold. Really? You’re not excited by that notion?
4. Grow & Scale
At this point, you’re a global, multichannel consumer brand and there’s nowhere left to expand to. Well done, you’re sitting atop eCommerce Nirvana…but you still need to scale right?
All that’s left to do is continue to apply fuel to the fire. You can do that through emerging channels/ markets to conquer new frontiers, better/ new marketing distribution and better in-market eCommerce management.
For those of you who think you get to a point where you must in-house everything, think again. The biggest companies in the world outsource to world-class partners and providers because they understand that no company can specialise in everything, especially in such a rapidly changing space, and they don’t have the next 25 years spare to build it out.
Be like Coca-Cola, outsource your non-core competencies to get there faster.
That’s your lot. We’ve just seen the vision for taking a humble wholesaler through its evolution to becoming a multichannel, multinational consumer brand. We’ve increased its EBITDA exit multiple from 1X to over 10X, and we’ve beaten market saturation.
It’s far-fetched, isn’t it? Maybe, but I know it’s possible because I’ve done it several times myself using this exact formula.
📰
Relevant E-commerce News
No store, not MLM: Taiwan supplement brand Jerôsse to expand in Singapore, Malaysia with novel distributor model
Jerôsse , a supplement and skincare brand from Taiwan firm Biotech Lab Inc, has embarked on an expansion mission in Singapore and Malaysia which heavily relies on social media platforms operated by individual distributors to retail its products.
Read the article here and find out how Jerôsse are going global!
If you want more, there are a few ways I can help you:
I share as much valuable content as I can, wherever I can. My goal is to help physical products companies to avoid the rollercoaster that I endured on my own 20-year journey, a journey that I’m still on. My expertise was born out of experience, not preaching. Follow me on LinkedIn for daily insights!
If you’re ready to enter & scale new global markets, I would recommend getting some help:
→The GTM Gameplan™: A holistic, bespoke eCommerce expansion framework to help forward-thinking brands build and implement a tried and tested plan to help you grow on your terms and go where the opportunity is. Implemented together with key deliverables and timelines.
→EcomAlliance™: You’ve got the plan, we’ve got you to market, now what? Partner with us and let us do the heavy lifting to manage and accelerate your brand on all channels & marketplaces in your target market/s. Our shared success pricing model means that we only win when you do.
3. Promote yourself to 12,500+ subscribers focussed on eCommerce growth & expansion, by sponsoring this newsletter