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Getting the Best Deal From an Aggregator
Sumana Sanjeeva is a former banker turned serial entrepreneur and the Owner of Superlative, LLC. She recently worked with Quiet Light to sell her business for seven figures. Before this, Sumana was the Director and Owner of Eye Level Learning Center, a Phone Bank Supervisor at Wells Fargo, and an Assistant Branch Manager at The Milford National Bank and Trust Company.
Here’s a glimpse of what you’ll learn:
- [04:40] Sumana Sanjeeva discusses why — and how — she acquired an online business instead of a brick-and-mortar one
- [09:12] What did Sumana do differently to ensure the rapid growth of her business?
- [12:47] How a desire to learn helped Sumana catch issues in her business’ PPC campaign
- [17:50] Overcoming inventory challenges during the beginning of the pandemic
- [24:40] What made Sumana decide to exit her business?
- [26:03] Why Sumana questioned offers from the first two aggregators and ultimately chose to work with Quiet Light
- [41:11] The importance of finding the right buyer — not necessarily the highest offer
- [45:12] How Sumana still involves herself in the business as part-owner
- [49:41] Sumana’s advice for dealing with aggregator offers
- [55:39] How Sumana is juggling more acquisitions and planning for future exits
In this episode…
If you’re thinking of selling your business, you want to make sure you’re getting a fair offer from a trustworthy source. But what’s the best way to do so? And, how can you avoid falling for an aggregator’s tricks?
After Sumana Sanjeeva acquired a business and successfully grew it within a year, she decided to sell. She received offers from different aggregators, but something didn’t feel right. At first, these aggregators made Sumana feel great about her brand, but when it came time to prepare an offer, they made her feel like she didn’t know what she was doing and said that her brand was only worth a certain amount of money. Luckily, Sumana didn’t fall into their traps. She began working with Quiet Light, got seven offers for her business, and ended up selling for five times more than she paid for it.
In this episode of the Quiet Light Podcast, Joe Valley is joined by serial entrepreneur Sumana Sanjeeva to talk about the best practices for selling your business. Sumana details her story of acquiring, growing, and successfully exiting her business, her tips to avoid getting robbed by an aggregator, and why a good broker is vital for a successful negotiation.
Resources Mentioned in this episode
- Sumana Sanjeeva on LinkedIn
- Quiet Light
- Quiet Light on YouTube
- Joe Valley
- Mark Daoust
- Quiet Light Podcast email: [email protected]
- The EXITpreneur’s Playbook: How to Sell Your Online Business for Top Dollar by Reverse Engineering Your Pathway to Success by Joe Valley
Sponsor for this episode
This episode is brought to you by Quiet Light, a brokerage firm that wants to help you successfully sell your online business.
There is no wrong reason for selling your business. However, there is a right time and a right way. The team of leading entrepreneurs at Quiet Light wants to help you discover the right time and strategy for selling your business. By providing trustworthy advice, effective strategies, and honest valuations, your Quiet Light advisor isn’t your every-day broker—they’re your partner and friend through every phase of the exit planning process.
If you’re new to the prospect of buying and selling, Quiet Light is here to support you. Their plethora of top-notch resources will provide everything you need to know about when and how to buy or sell an online business. Quiet Light offers high-quality videos, articles, podcasts, and guides to help you make the best decision for your online business.
Not sure what your business is really worth? No worries. Quiet Light offers a free valuation and marketplace-ready assessment on their website. That’s right—this quick, easy, and free valuation has no strings attached. Knowing the true value of your business has never been easier!
What are you waiting for? Quiet Light is offering the best experience, strategies, and advice to make your exit successful. To learn more, go to quietlight.com, email [email protected], or call 800.746.5034 today.
Hi folks. It’s the Quiet Light Podcast where we share relentlessly honest insights, actionable tips, and entrepreneurial stories that will help founders identify and reach their goals.
Joe Valley 0:29
Hey folks, Joe Valley here. Thanks for joining us for another episode of the Quiet Light Podcast today, we have a very special guest joining us it’s the person that is in the latest episode of the Quiet Giants series where we highlight someone who’s got bought or sold an online business. And in this case, it’s a heck of a story. I’m going to jump right to the punch line so that you’re intrigued and stick around and listen. This is a person that was offered 2.2 million for their business from an aggregator and convincingly told that it was the best offer they’d ever get for a number of reasons. She said hell to the no, and went out and had some conversations, decided on Quiet Light and the adviser that she worked with Quiet Light ended up selling it for more than two times that amount. We won’t give it the exact amount. But it was more than two times an amount that amount. She is a former banker turned entrepreneur Sumana Sanjeeva. Welcome to the Quiet Light Podcast. Good to see you.
Sumana Sanjeeva 1:34
Good to see you, Joe. It’s really really nice to be on your show. I’ve been watching so many of your podcasts. I never thought I would be on one of these. So thank you.
Joe Valley 1:44
Now you get to watch it from home next time it airs. There you go. Alright, so let’s just get to your backstory a little bit. You have not always been an entrepreneur. I think the last time we chatted prior to buying the business that you ended up selling. You were a branch manager at a Bank of America located in North Carolina correct?
Sumana Sanjeeva 2:02
Well, bank manager at a walk cobia bank copia but I know Brett Yeah, prior to Wells Fargo acquiring a cobia. And then I worked for Wells Fargo for about a year then decided that I think I’m done with the corporate world and banking worlds. And that’s when I actually got into I actually started a math and English Learning Centre. It was a brick and mortar franchise model. And I started with one went on to starting three actually, I went on to three locations. I enjoyed it. For almost seven years I did a I really enjoyed, you know talking to parents, students, teachers working with them, it was all very fun. And you know it that’s how I started with my entrepreneurship.
Joe Valley 2:59
Did you end up selling that business?
Sumana Sanjeeva 3:01
I did, I actually sold that business. The plan was to first sell that, before I did anything else if the plan was to take a break. My daughter, my younger older one was going to college. You know, there was just a year left before I kind of, you know, send her off to college and I wanted to spend some time with her.
Joe Valley 3:27
Did she want to spend any time with you though? She’s a teenage girl. Right?
Sumana Sanjeeva 3:31
Well, at least she used to say that. So that, you know, she wants to spend more time and that whenever she got home from school I was I because it was a learning center. It was an after school program. So the business actually model was I was there from four in the evening till eight in the night. Schedule. Yeah, so when when I would come home, they will be kind of ready to go to bed. So I really didn’t see them much. You know, during those times, and that was, yeah, that’s kind of what her complaint was.
Joe Valley 4:08
Sounds like good, legitimate complaint. It’s funny, you know, I started a business in college called the wrong number of restaurant delivery service. Kind of a silly name, but it worked. But the problem was, it was from, you know, four o’clock in the afternoon until midnight, seven days a week. And what I learned early on was, it’s great to be an entrepreneur, but not with that kind of lifestyle. I was in school full time as well. So you got to choose your path. And you eventually chose an online business and you chose to acquire one. Why did you decide to go online versus the brick and mortar path again?
Sumana Sanjeeva 4:40
Well, again, I know like I said the plan was not to do anything at all and take a break. But I was actually online browsing and to kind of see how I can list my business for sale. That’s really when I came across the e-commerce listing Something in me said, Oh, that I can actually be doing something at home, I can stay home because she would be gone to school, you know, all day, it’s just an evenings, right? So it just felt like a right fit. As soon as I kind of read the description, I felt like, Okay, this is something I can do with the art school and still have something to have an income and have, you know, kind of continue on with my entrepreneurial, you know, career kind of thing. So that’s really why I thought about it, because I could stay home, I could do what I wanted to do. And, you know, it seemed like a one person job, I didn’t need to hire anybody, I didn’t need to do anything. You know, I didn’t even need to handle any inventory. So it just sounded like a good fit.
Joe Valley 5:54
Was this the 50th online business that you looked at? Or was this one of the first ones that you looked at that you decided to buy?
Sumana Sanjeeva 6:04
It was actually so there was the listing was for a different product, meaning same business model, but different product, but when I actually contacted the person who had listed that, they said, Oh, well, this is sold, but we have another business, which is the same business model, but it’s it’s a different product. And so really, this was, I should say, kind of like the first one I saw. And I said, this is what I want to do.
Joe Valley 6:33
That’s pretty amazing. So many people fight tooth and nail to find the right business to buy. And it seems like you as luck and timing would have it. And of course, the harder you work the luckier you get. But my baseball coach always used to tell me because I wasn’t very good. And I had to be lucky. And I had to work hard. But it’s it’s not the normal path that you would look at one or two and then find one. That was a very good fit for you. As I understand it, you purchased that business using an SBA loan, is that correct?
Sumana Sanjeeva 7:04
That is correct. So the investment was very hefty. It was this big seven figure investment. And this was my first ever e-commerce business that I was ever going to, you know, that I had ever worked on. So I again, because the investment was so happy we went the SBA route, that was a good two month process. But I learned a lot through that, that process of applying for the loan and you know, getting the approval, what documents they need, and all of that it was a good process.
Joe Valley 7:44
So let’s talk some ballpark numbers. It was a seven figure purchase. How many months did it take to turn around and sell it? I know it was at least 12 Maybe 18? How many months? Did you own the business before you sold it?
Sumana Sanjeeva 7:57
Before I before I started to list it for sale, or when I started, when I decided to list it for sale? It was actually 12 months,
Joe Valley 8:07
exactly 12 months, and by the time we close was maybe 15 or 16. Yeah, okay. And so in college 15 months from the time you bought the business to the time you sold it. How many times more Did you get your money back 234 times you bought for seven figures five times? Five times. That’s simply gross. So I say that folks without revealing exact numbers, but it was a seven figure exit and she got five times the investment are five times to purchase back. We’re not talking about the total purchase price. We’re not talking about your down payment. Right? Correct. Correct. Okay. Okay. And I know these numbers, I know what they are. And I know the process and I was there with you on on a good part of the ride.
Sumana Sanjeeva 8:50
Like just my downpayment, then we actually 35x 35
Joe Valley 8:57
That’s amazing. That’s amazing. Yeah. And you went out bought yourself a nice Mercedes after closing to I believe?
Sumana Sanjeeva 9:02
Absolutely. Yeah, my husband said I deserved it. I said, Okay, thank you.
Joe Valley 9:09
I think he’s right. I think he’s right. I think he’s right. So what did you do as you operated the business to have it grow at such a rapid pace during those 12 months? I know that I know that. You bought it just before a COVID head and there was, you know, somewhat of a COVID Bump. But it stayed on and rode after after it settled down a little bit. But what did you do differently than the previous owner of the business to ensure that the business would grow at the pace that it did?
Sumana Sanjeeva 9:36
Yeah, absolutely. It’s not just one something that I did that that it worked and you know, it kind of scaled up there. It was it was in a lot of small things and a few couple of big things. Right. So starting with when I first three weeks actually all I did was I clicked around Joe all I did was click Around the listing clicked on, you know, different products and listing something cool, how can I improve this? What can I do with the packaging, or it was just I was collecting all of the ideas that I wanted to implement, the first thing that came to mind was the pricing of the product itself. When I acquired it, the previous owner actually had it as at a price where they he wanted to stay competitive in the market, and but for me, when I put my consumer hat on, for me, when How do I shop on Amazon, right, I go there, I look at the picture, you know, the images, then I look at how many reviews does it have. And then I click on it, I go through the listing, if everything looks great, that’s the product I’m purchasing. i The pricing, actually the price of the product comes the last for me, so So if the product looks good, reviews are great, everything is good. That’s the one I’m buying. Yeah, there might be a product right next to it, which might be $10 less. But for me, the review mode, really, you know, kind of is important, I immediately raised the price by $5 on each unit. So we had different variations, you know, small, medium, large and things like that. So I just it for everything, I just increased $5. And I wanted to test and see. Okay, I’m going to test for about a week and see how much my sales drop. Based on that I was going to, you know, bring it back down if it was not working. To my surprise, we actually started selling a lot more units per day.
Joe Valley 11:48
Then with the price increase, that’s amazing.
Sumana Sanjeeva 11:51
Yeah. Because it’s kind of like also thinking about, you know, that consumer psychology, right, higher price must be better quality, you know, and and yes, the quality was great. That’s why we had great reviews. We were, you know, leading on first page, like we were on four different spots. So yeah, there was a lot of that, and it that automatically actually increased our revenue. And how
Joe Valley 12:16
big of a price increase is $5? Was it 10%? Or 5%? Or 50%? What was the, you know, was?
Sumana Sanjeeva 12:22
It was actually 15%? Okay,
Joe Valley 12:27
yeah, a lot of 15% price increase. All right, and your sales went up, which is great. Right? You said there were two or three things that you did, what else did you do?
Sumana Sanjeeva 12:35
Right? And so we had PPC campaigns. So after I kind of got through that process, I’m like, Oh, this was an easy fix. Now see, what else can we you know, work on PPC, you know, a cause tacos. All those were foreign words to me, I had never heard in my life. So I kind of been said, Let me focus on this a little bit. Let’s see what it’s doing. So the more I learned about how a cause works, and all those numbers, I realized, wait, we are actually at a good impasse, we were at 19% a cause. But we were running out of budget for that campaign. By the time it was two o’clock in the afternoon. And I was like, okay, that doesn’t make sense. We if it’s if it’s a good a cause we should be putting in more money. That means we are getting more sales. So we actually increased the budget for the campaign. We also started doing something called day parting, which is we were pausing the campaigns at 12am. And starting it back at 6am. Because during those times, all we were getting were clicks. We were just spending the budget, but we’re really not getting any mini orders or anything. So but if that were that budget were to be carried over to the rest of the day. It actually was giving us better results. So I actually didn’t know what day parting was I simply asked the PPC management company. I said, Do you have any way to pause at this time and start back because I see a lot of clicks. You know, when I wake up in the morning at nine o clock dog when I look at it, it’s just a bunch of clicks and no orders. But then, you know, can we do that? You’re like yeah, sure we can do that.
Joe Valley 14:26
Another so it wasn’t actually you that was managing the PPC you had you inherited an agency that was doing it correct. Yeah, fascinating, yet. They couldn’t figure this out themselves. Right. Their job is to lower your a cost as much as possible and spend as much money as possible, but they didn’t. I don’t we won’t mention their name in case you’re still using them and like them a lot. What’s wrong with them figuring this out themselves and advising you on that?
Sumana Sanjeeva 14:52
That? Well, I’ve actually realized it’s not just them. There are a lot of experience very well, you know, experienced Amazon PPC companies sellers that actually don’t look at it in that way of like, okay, when are we really being? You know, when is it being efficient? When is a campaign being efficient? When are we getting just clicks? When are we getting orders? For me? Because it was the I wanted to learn. So when your acquire something, you know, you just kind of like I just wanted to click around and I think me not knowing many things. I think I questioned it a lot more than people who have been doing it for a long time, right. So it’s kind of like, you kind of get used to it, we forget going to the basics, because I didn’t know what the basics were. I think that’s one of the reasons why I caught it where I was like, Wait, that doesn’t make sense. I understand spending $100 between 12am and, you know, 6am? Why can we take that $100 and put it towards later in the day. So I think it’s just kind of one of those things that where I went back to basics or went to the basic
Joe Valley 16:07
or to the basics, did you end up increasing your overall PPC budget as well? Or did you just shift that money and it didn’t run out during the
Sumana Sanjeeva 16:14
day? No, we actually increase it. So when I acquired it, the daily budget was about $200, I increased it to $400. Right away. And that actually what it did was it we brought our a cost down because we had enough money in the budget. For the peak times the peak, actually peak hours were 4pm to 10pm. And before what was happening was because the budget was low, we were running out of budget, by the time it was one or 2am, we were really not even taking advantage of the peak periods. So when we increase the budget, what happened was our sales went up, our a cost came down, the quality of clicks were better.
Joe Valley 17:01
Alright, so between the two things here, you raised the price by 15% or $5. And you ended up spending twice as much money and spending that in the peak times when there were much more eyeballs on and sales volume went up. Yeah, yeah, I’m guessing number three is got something to do with making sure you don’t run out of inventory.
Sumana Sanjeeva 17:20
All right, you got a job. So yeah, so inventory. So a lot of people ask me was this was this just luck? Was this COVID? What it was? What was this? How did you do this was
Joe Valley 17:33
pure brain power is what it was this was you just tell them? You’re brilliant. Just say I’m brilliant. And that’s the end of it. That’s the answer you give everybody from now on. But I’ll let you give a different one. No, go ahead.
Sumana Sanjeeva 17:46
Well, I have to be humble. So but you know, it is inventory really was one thing that saved this business and grew this business, if inventory was not there. That’s what happened with lot of the businesses, you know, in 2020 was when when inventory planning didn’t happen, everybody ran out of stock. So it’s kind of one of those things. I acquired this business in February of 2020. Right when China was shutting down. And when I was actually putting in the offer, and we were going through the SBA loan process. That was constantly in the back of my mind. I’m like, Okay, wait, this product is coming from China. China is shutting down. What if I can’t even get the product out of there? This? I mean, how am I going to make the loan payments, I mean, it’s a hefty amount. So, but somehow, you know, once I got into it, I was like, I had made up my mind that I’m going to make sure that you know, this is going to be a successful on March, mid March, we were actually acquired about $300,000 worth of inventory. And by mid March, we were actually we had already sold half of it.
Joe Valley 19:08
I mean, it was just because of everything shutting down in March of 2020.
Sumana Sanjeeva 19:13
Right, so this inventory that I acquired the 300,000 inventory that I acquired, was supposed to last me until October. That’s you know, that was a calculation by the previous owner with how the previous years have gone. And for me, it was kind of like a good, good thing that was happening. All of a sudden I had this increase in sales because it was a it was a product that everybody would enjoy and home with family. You know, and so people started buying because the shutdown started to happen and they realize Wait, we are going to be all aboard in the house and stuck in the house. So we started getting a lot of orders which was Great thing. We started getting that money into the account. Now, I was like, Wait, we were already out of half of the inventory. I only have this much. And China was also, you know, they were in the new year period. They were closed for that month. But somehow Luckily, I had already built up a good rapport with the, with the supplier, I had already had a few video calls with her, when when all of this was happening with COVID. You know, I made sure I asked how her family was in so many different things. So I actually asked her, I said, So when are you guys coming back? When is the production starting because I need to go ahead and place an order. And she said someone, I think we are going to be back sometime in April. But we we we are going to produce on a first come first basis. So if you place an order now, when we go back to the factory, we are going to start producing. I said okay, let me think about it. Because I was not mentally prepared to place an order, meaning that inventory was supposed to last me until October, I was not supposed to do anything until August. So it was like, you know it kind of I had to adjust my thought process. And I actually called her back and I said, I’m going to send you an Export Excel Spreadsheet with eight containers worth of orders.
Joe Valley 21:34
Wow, she must like that. Yes,
Sumana Sanjeeva 21:37
like that, because I kind of looked at how the sales were going. And I was like, Okay, if this is going to have codes, I in my mind code is going to be there for at least six months. At that time. That’s what I was thinking, right? So like in six months, how much would I need in plus the holiday season, we have to be prepared for it. So I just decided to go ahead and give her eight containers for hoarders, because we had the money funds coming in from the sales. And I knew that I would be able to fund those eight containers with the sales that were happening. And if I didn’t need it, I could you know, if it’s on if we were on the seventh or eighth container of production, I could always tell her I think you know what, slow down a little bit, spread that couple more months, or something. So that was the idea. So I went ahead and told her I want one can you want I want you to send one container. Every month, I told her on the 15th of each month, I want you to ship out a container, she was more than happy to take that order. Also, what it did was it was it actually eliminated my competitors from placing an order and getting it done through them. Because I had a they had to produce a container 845 foot containers not 20 foot containers for your five foot containers worth of orders. So they actually didn’t have any room to take any more orders from anybody else. But
Joe Valley 23:09
accidental brilliance. That’s what
Sumana Sanjeeva 23:14
logic to you know, in a great, great word, you know, a great person named Joe Valley said math and logic. So I actually from the time I you know, kind of heard that it kind of makes sense. This was math and logic too because if I were to bring the product in for me to store that you per unit in Threepio warehouse it would have costed 12 cents, right, but if I didn’t have that same product to sell, then my loss is $11 per unit. Wow. Yeah, so that was my calculation even if I had to store it for six months. My total cost was 72 cents.
Joe Valley 24:00
Yeah, and it’s a product that doesn’t go bad. So we’re expiring anyway. Yeah, okay, so let’s let’s jump to the fact that you actually sold the business did it did you at one point during the six to nine months after owning the business think you know what I’d like to sell this I’m gonna reach out to an advisor or like everybody else in the online world did you get hit you were an FBA primarily FBA seller Did you get hit with lots of emails from aggregators that led to you, you know, receiving an offer and interest in in actually exiting your business?
Sumana Sanjeeva 24:39
So I actually started I had not thought about exiting it. I had not I thought it because I was so busy making sure we were in stock. We were doing everything possible to you know, do good. I actually started getting emails sometime from the beginning of December. In 2020, asking, you know, if I wanted to sell, and I actually ignored that email two or three times, I, you know, they sent it three times, and I ignored all three times. The fourth time, I was like, You know what, let me explore this. By then it was January of 2021. And I said, You know what, let me explore this. Let’s see what what comes out of this because I, at that point had done, you know, with with what I had learned what my capacity was, in the e-commerce where I felt like, Okay, if I have to do more than I, I don’t know how to how I don’t know how to scale this.
Joe Valley 25:44
Already. The business was outgrowing you. So it makes sense. Did you the first second, third email, were they all from the same aggregator or different aggregators, two different aggregators, two different aggregators. Okay, by the time you got to the fourth one, you decided to hop on a call. Yeah, have conversations with them? Correct.
Sumana Sanjeeva 26:03
I actually decided to meet with with that person, because they happen to be in the same town. And, you know, it seemed very promising. I provided all the, you know, pianos and all that information. We took a couple of weeks and came back with a weary a number, which I was like, Wait, but I, I bought it for 3x. I’m not even going to get a 3x on this. And their reasoning was, you know, oh, it’s it’s COVID numbers, but I’m like, Wait, that’s not just it. I actually put in a lot of different. I made a lot of changes. I made switch, I switched warehouses from New Jersey to LA and cut down cost. So there were so many different things that I had done. So I felt like that was not a fair offer.
Joe Valley 27:00
Yeah, and folks, this this particular aggregator. We won’t name names here. But they’re not one of the top 10 aggregators, another aggregator ended up making an offer a better offer to Sumana that she ended up selling it for still more than two times what their offer was. But this particular aggregator is interesting because they originally started off making money by getting referrals. And this is the this is these are the as I heard on a podcast recently dirty tricks that aggregators play this particular aggregator will review your business, make an offer, if you don’t accept, it will then refer you out to another aggregator where they’ll get a referral fee from that aggregator. And now of all things I just read up on them, because it came up in conversation. Now they’re, I want to say, pretending that they’re m&a experts in the online space. And so essentially, they failed at being an aggregator. And so they’d refer out and except a referral fee, they feel that that too. So now, they’re trying to become an m&a advisor, as well. So it’s just some of the dirty tricks and cautious things you have to be aware of with the aggregators themselves.
Sumana Sanjeeva 28:12
That is actually Joe, something that I, I learned I learned much later, is that’s exactly what they were doing that they were pretending to be aggregators who were very interested in my product just to turn around and refer because I realized referrals actually get a hefty sum.
Joe Valley 28:34
Yeah, yeah. And that’s what they were doing. They’re down and down and down. And there’s more than one. So I’m not I’m not naming which one, but they’re down
Sumana Sanjeeva 28:41
pretty deep down because it felt really kind of not so good.
Joe Valley 28:46
Yeah. I fully understand as the second aggregator that you spoke to made you a better offer, they made you an offer of 2.2 million if I recall. With that one. I remember our initial conversations and some of the logic behind their offer and tell me if I’m going to summarize it and you tell me if this is about right and add to it. Basically, they said, here’s the offer. We’re very good at what we do. And these these other folks, one of the top 10 aggregators in the in the niche, we’re very good at what we do. We’re charming, we’re likeable, we’re well financed, you should believe us, your business is only worth x. And we know that because of everything that we see and you had a COVID bomb and you have the hero SKU so therefore it’s only worth X. is that generally how the conversation went at the end of the day to summarise it fairly.
Sumana Sanjeeva 29:42
That was actually exactly how the conversation went. And they actually made me feel like I didn’t know what I was doing somehow I by accident I got here so they were going to do me a favor and give me an offer. That’s kind of How in the conversation and it was it was more of like, we’ll do you a favor, and you’ll take off your hands.
Joe Valley 30:07
Yeah. And so, you know, I’m going to rant here for just a moment. And I’ll try to keep it brief. But you know, the aggregators play these dirty tricks. Because they are likeable, and charming and well funded and can come across as incredibly well informed, and they’re very well educated to, and they make you the business owner feel as though you’re not necessarily worthy. That that’s not how they initially make you feel, they’ve probably made you feel incredible about your brain and those initial emails and conversations. But then when it comes to the value of your business, they make you feel like you, this isn’t what you do, it’s what we do. And this is the value of your business. Keep in mind that when they’re buying these things, they’re they’re doing it in whose best interest monitor, there’s right, they’re not looking out for your best interests, they’re looking out for their best interest, which, which, you know, what, when it comes to half the sales pitches that you get via email, and I just got a slew of them, one of our advisors had a business listed. And during that time, the owner of that business just collected all the emails from aggregators that he got, and shared them with Chris. And, you know, in at least 40 of them, it says, you know, avoid the broker fee, when buyers and sellers work directly, you can avoid the broker fee. In this case, if you had done that, you would have lost out on several million dollars. Now, they, they were correct, that there was a COVID Bump, right COVID hit and your sales went up, you also increase the price by 15%. You also made sure that you never ran out of inventory, you also increased PPC spending, and you improved the timing of when it would air to peak times and you change the warehouse to reduce your landed cost of goods sold and all sorts of other things. So yeah, they were right. But you also did a lot of different things. They also said you had a Hero Skill, which is, you know, essentially one SKU with different variations that made up the majority of your revenue. And they were absolutely right about that. But they were dead wrong about what the business was worth. Because, you know, what, what, what was it inside you that made you say, hell? No, I’m going to get another opinion on this. What? Is there something in your upbringing that made you doubt them? Because a lot of people don’t? A lot of people say, All right, yeah, you guys are really smart and good looking and charming and well educated. And, you know, I don’t want to pay that broker fee. What was it in you, in your nature that made you question their offer?
Sumana Sanjeeva 32:39
So I? That’s a good question. So to put it in a way, I think I’ve always had situations where people have underestimated everything, you know, a lot of things that I have done or planning to do, or kind of basically downplaying. So I’ve always kind of been unused to saying, No, you’re not right, I can do it. I you know, this is not right. What you’re saying does not make sense kind of thing. And like I said, wait out when I acquired this business, I paid 3x. So today, why is it not even worth three except? Simple, common sense for a minute, right? Yes, I understand COVID numbers. But if you look at it, if I did not order those eight containers worth of inventory, we would not have the same success we had, if I had not switched the warehouse from New Jersey to LA, A, we saved a lot of money. B It helped us in in stock, because as soon as it was being sent, within two weeks, it was reaching la instead of taking eight weeks to get to New Jersey, that would have killed the business, right. So it would have taken forever to get there. Every time we would have been out of stock, the rankings would have gone down. So there was like, what you’re saying does not make sense. It was not just COVID numbers, there were a lot of things, the pricing, we can continue to have at that price at that price. Because the price change I did before COVID was an issue in the country. So it was not after. So yeah, after it was just going through, but the price change was not enough. So all of the things that they were saying. I’m like no, that is not right. It’s not just COVID. So for me, that was kind of a challenge. It felt like I needed to take that challenge and I knew that was not right. That’s really when I decided to talk to different brokerage companies to kind of see who’s going to be the right fit to actually get me what it worked.
Joe Valley 35:01
And you chose Quiet Light. Specifically, you chose to work with Chuck at Quiet Light. What was it about the combination there that made you most comfortable?
Sumana Sanjeeva 35:10
So just to kind of give you a quick background, I know you didn’t ask them for this. But
Joe Valley 35:16
would you give me a quick background first
Sumana Sanjeeva 35:18
thing, I actually entered three different companies. And the first one I actually approached was was somebody that I had already liked that that I had actually acquired. Right? So you know, I was like, Oh, well, he already knows the business. He has all the information from the previous, all the p&l and everything from the previous, you know, sale and all that. But unfortunately, somehow I felt from him as well that he didn’t believe in what I had put into this business what I had done, all the, you know, yes, it was a short period. But all of the differences that it made, what all the changes that I have made, I felt like he didn’t really backing me up on that. So you know, it’s sometimes you want somebody who understands, and and actually sees it for everything. So that’s really what I got from Chuck, when I talked to Chuck, I felt like he believed in the business, he believed in all of the changes that were made to it actually made a difference. That is why it’s scaled up to this this level. And not just because of, of code. And just just talking to chuck, it just made me feel very comfortable. I’m like, oh, you know, he’s going to do everything possible to make sure that I get a fair offer, I was not looking for the highest offer the best offer I want. So my my expectations were a fair offer. And, and you know, it was just a some kind of a comfort level, when I was talking to chuck it just felt really, like, I can talk to him, he I can relate, you know, when he say something, it was not like, he was challenging me or he was, you know, kind of like downplaying me, or, or kind of under estimating things. He felt like he was giving that level of respect, I would say that any individual would look for, you know, when when we have something in our mind, we have to move on to do something. It’s like when I go to sell my house, if I sell my house, you don’t want a realtor who will be like, Oh, this is Oh, this I don’t know who’s gonna buy it. You know, you don’t want people to downplay yes, they might be talking about it talking like that, to say, Okay, today, I’ll say this, but I’ll get them a great offer, and they’ll be happy about it. But right off the bat, if you put down my if you say my houses, not great. You’re not going to get many offers. I’m like, okay, then why should I even do it? Right? So, yeah, it’s kind of like that, but I checked, we have a good, I had that good vibe from him that he was gonna do what it was gonna take.
Joe Valley 38:14
And when you listed the business for sale, you listed it for a couple of million dollars more than the last offer that came in from one of those top 10 aggregators are close to it, right? Yep, yeah. Okay. And so you went through the process of getting it prepared to sell, which is quite a process we put people through. It’s a great educational process, because we get to learn a lot about the business and as to you your own business. It was not, for the record, folks, not just sent out to aggregators. And by the way, in 2021, only 30% of all of Quiet Lights transactions were sold to aggregators. Not everybody is an aggregator. In fact, most people are not. But Chuck didn’t just send it out to the aggregators, which we’re learning from the aggregators that most other brokerage firms are doing. They don’t like working with Quiet Light, because they don’t get first dibs on listings. They know that the general public’s gonna see it as well. And by the way, that creates competition amongst buyers and creating competition amongst buyers results in multiple offers. And that’s exactly what happened with you, if I recall you had maybe was a total of seven offers or am I inflating that?
Sumana Sanjeeva 39:34
Yeah, so we had a, we had actually 14 calls with 14 buyers in a period of two weeks, which was a lot of calls. And, yeah, we actually got seven offers. We were very close to accepting an offer. We actually were there. But before that loi came in someone else also placed in offer last minute. And actually, I remember getting on a call with with you, Chuck. And I actually because I was so confused, I know Chuck did a great job of like, you know, walking through all of those offers. And I said, You know what, we need a little bit more math and logic here. So let’s go to Joe, for a second opinion. So that’s I remember doing that we did not take the highest offer that was on the table, we actually took an offer from a company from who actually believed in this product, who really liked the product, who liked the business, who, you know, had a great team to take care of it, they had burnout and other other, you know, competence in there, which was great. For me, I also rolled in some equity, and all that, but But my point is we didn’t take after all, you know, that was a great advice I got from from both Chuck and you, the process was so good that I didn’t make the mistake of taking the highest. Because we, you know, normally, you know, that’s kind of what we do is we look at what’s the highest offer, because this is something that we would have earned outs and things like that it was great advice from both Chuck and you.
Joe Valley 41:38
Sometimes the sometimes the best offer is actually not the highest offer at closing. And in this particular case, just to clarify the offer that you had received, and we’re waiting on the LOI normally, normally the team at quiet light will draft the LOI and put it in the hands of the seller in your hands to review and accept and then off to the buyer. In this case, the buyer insisted on drafting the letter of intent. They just dragged their knuckles, and I had sold the business to them in the months prior I sold them something in December of 2020. And they’re good people. And we talked about them and said yeah, they’re good buyers. They’ve been trustworthy. And I think they’ll close. And that’s, that’s the key is what’s the experience we have with these buyers? And do we trust them? And will they get through due diligence? And will they close and these people checked all the boxes, but they just didn’t respect your time and submit a letter of intent in a timely fashion. And during that time, another offer came in. And that’s what we all jumped on the call for another offer. If I recall, it had all in value with earnout and equity roll and things of that nature. At least another million dollars involved there. Is that right? I remember that correctly. I can’t remember who I spoke to yesterday. But for some reason, all the points of this particular deal stand out pretty clear.
Sumana Sanjeeva 43:02
I’m just that special Joe? No, you’re right. And that offer really, it I actually really enjoyed that offer because it had our turnout, and it had equity rolling in a lot. I still get to be involved with that. And I’m learning from them as well as they’re making changes to that. I’m like, oh, okay, that I don’t I wouldn’t have thought about that and things like that. So definitely. That was a great offer. It was actually with all the turnouts and everything it was about asking price. So which was, you know, cherry on the top?
Joe Valley 43:45
Absolutely. Just for the purposes of the folks that are listening here, what can you define what an urn out is in this situation, and what percentage of your purchase price was an around?
Sumana Sanjeeva 44:00
So earn out is something it’s based on performance, if the business performed at a certain level after purchase, and at the end of one year, we would have a percentage of that. Come to me, the seller, the person stage was 10% 10% of the sale price. Right, but I mean dollar figure wise, it comes to 10% but it’s actually dollar figure is on the the agreement, and it
Joe Valley 44:38
hasn’t been a full year. But are you able to see how it’s tracking? Are you going to get paid out on that full 10%
Sumana Sanjeeva 44:44
Um, so the that’s something that I’ll have to kind of really know sit down and look at all of the conditions that were there and I I’m one of those people once it’s done once that paper was I’m like, Okay, I’m going to take it out at the end of the one year, when it comes time to sit down and look at it. I have not done that yet. Because that’s a conversation that’s a meeting to have with them. And I do actually talk to them very often, because I am still a part owner of that business. So and
Joe Valley 45:19
that’s, and that part’s an equity roll, meaning not Rola. But R O L. L, you, you know, kept ownership in some of the assets of the business, and it rolled into the new CO that they founded. And with the objective of having a second exit someday, but what percent, did you roll into the new CO in the situation? 7.5% 7.5? And what kind of work do you have to do in order to retain that seven and a half percent any at all?
Sumana Sanjeeva 45:53
Yeah, well, initially, you know, with the transition and everything there was, I would say, maybe I was spending about five hours a week. On that, then that’s
Joe Valley 46:06
pretty standard, this during the training transition period, that would happen, that would have happened without an equity.
Sumana Sanjeeva 46:12
Yeah. And then, after a couple months, it kind of came down two to three hours a week, then it was on basis and on need basis. And then recently, we kind of, you know, I helped them launch a another product. That was also one of the things that they really wanted to do was to launch more skews. So I helped them through that process. They actually launched it once the launch happen. Now, I kind of like they call me whenever they have a question or something. And we talk to it. If I don’t know, I kind of let them know that. I don’t know, I will find out about it. And I’ll let you know. And we kind of have I think maybe once a month, maybe for about half an hour, we talk about it. But I but they have that confidence that whenever they have questions, or they need me, I’m always here to help them through that process.
Joe Valley 47:17
And for your seven and a half percent. Are there distributions that are received? Or is the agreement to be no distributions until there’s an exit? How’s that worked out?
Sumana Sanjeeva 47:26
Now there’s, there’s distribution.
Joe Valley 47:29
So you’re getting that you get you get distribution. So if they decide to take out $100,000, in distributions, you’re gonna get the equivalent of seven and a half percent of your share of that current, is it done on a consistent monthly basis, quarterly basis, or just random? Yearly, on a yearly basis? So it’ll be at the end of the first calendar year, and so on and so forth? Excellent.
Sumana Sanjeeva 47:50
Okay. So and it goes the other way, too, if they if they have to put in some equity, if they have raised funds, or whatever, then, you know, kind of came up where they were stocking up on inventory and things like that. So they raised a little bit more and the option was given, do you want to kind of let go of some of the equity? Or do you want to put in a little bit more so that that choice is up to date?
Joe Valley 48:16
So your shares could have been diluted? Or if you decided to pitch in for the inventory, your shares wouldn’t be downloaded? Which one did you choose?
Sumana Sanjeeva 48:24
I actually chose to dilute but at the same time, that hasn’t that that conversation just happen after the conversation. I think at this point, I’m like, You know what, no, I think we are doing pretty good. So I think I’m gonna keep the ship.
Joe Valley 48:40
They’re doing well with a business. It’s growing. It’s a good investment. They’re getting good, positive return. Absolutely. Good. Good. Good. Good to hear. What advice I’m pausing here, because I’m choosing my words very carefully. And I don’t know why. Right, the aggregator say whatever the hell they want to say and disparage brokers all the time. Yet they love buying from us because we do such a good job putting packages together and make their job easier in terms of vetting the business. So it’s just a sales pitch. But for anybody in your shoes, and there’s lots of people that are listening that have e-commerce businesses, and some you know, Amazon FBA businesses as well, that are getting emails, phone calls, snail mails, knocks on the door from aggregators, in the US and overseas. What advice do you have for them when they’re fielding these offers? What advice or what kind of wisdom could you impart to them to make sure they don’t make a big mistake?
Sumana Sanjeeva 49:41
first advice I give is not to do it on their own, to be honest with you. I I made that mistake of you know, kind of going to somebody thinking that you know, I could do it all you know, by myself, but when I actually started this process, I learned so much about this process that I didn’t know at all. And if I had actually gone ahead and taken any of those offers, that I received from the aggregators directly, that would have been such a huge loss. I mean, so many millions of loss. And also, you know, it’s it’s just, it’s something that I’ve also seen when we were on calls with with buyers, other aggregators, when I was, you know, no one calls with chalk. There were a lot of times where I actually didn’t know the answer for and sometimes Chuck had to jump in to actually clarify what they were asking, because there were some times where I didn’t understand what it was, they were asking, I could have given them a wrong answer. And, and kind of had those offers come in at that level, and, and made a mistake of exactly one of those. That is the one thing that I would, I strongly, strongly actually suggest, as making sure you have a good broker on your side to negotiate. Also, when we are doing it ourselves, the negotiation, sometimes, we don’t even realize when we have kind of give given in. But even you know, I’ve had several times when I wanted something, but I didn’t know how to ask for it. There was no so I was like, Chuck, can you like get so he was he was a good, you know, buffer for both ends, I think. So that we didn’t kind of clash and burn kind of thing. And offers wise to keep an open mind for different kinds of offers. I received so many like straightforward cash, you know, somebody Why’d burnout only know, three years, down the line, so many different offers. And and it keeping an open mind really discussing it with Macek kind of helped me understand it. Otherwise, I would have taken a very bad offer, which was just thinking, Oh, it’s cash, I want to just take the cash and run right? You know, and I would have done a mistake. If I didn’t kind of keep an open mind about, there are many, many, many ways of making sure that you get the best value for your business.
Joe Valley 52:43
Yeah, most people think when they go into this, they just want an all cash offer. That’s what they’re looking for. It happens the majority of the time, but as the size of listings get larger, the more the more chances of having some variation of a seller note or an out equity role, etc, comes into play here. So you just have to get to know your 14 people that you interviewed and your seven offers, and then which ones you like the most, some of them, you’re not going to trust at all. And some of them you’re really going to trust and feel more comfortable doing what you did, which is an equity role, and essentially your business partner slash strategic advisor to them for very, very little work. And eventually they’ll have an exit of that business, I’m assuming that that particular aggregator is doing the same as all the others, they’re buying up these businesses and they’re buying them at certain multiple and immediately becomes worth a lot more because the size of their portfolio,
Sumana Sanjeeva 53:39
right? Absolutely. And so that that is also their plan as well. So, and I think other aggregators are so right now very focused on acquiring the company that I’m working with, they’re actually acquiring at the same time, they are they’re working hard to grow it, adding more skills, adding more different things, which I again, you know, this is with from my, some of my cold entrepreneurs that I talked to, you know, some of the peers they say, well, there’s actually had been acquired but they didn’t do anything with the business. I am glad because when I have the equity interest in there, I’m glad that they’re doing you know, growing it and their ultimate goal is to exit for a good sound, which is good,
Joe Valley 54:33
that’s very good. And you’ll become a second time exit printer. You’re also an acquire, acquire or have online businesses now as well. How many of you purchase since you sold the business you’ve bought? Did you take any time off? Did you rest did you enjoy life and the fruits of your labour?
Sumana Sanjeeva 54:54
Again, the plan was to do that, just like my other exit from my brick and mortar the place was to take a break. That didn’t happen. The same here I had a week and a half break, when the first listing, you know, came to my attention, and yeah, I fired it actually almost right away. Right after this exit, and I am enjoying that. So, yeah, two of them were checks listing, I acquired one of Brian’s listings. So I’m actually I just right before this, I had a call at another senator to acquire another one.
Joe Valley 55:38
How are you juggling all of this? Do you have a team of VAs now? Or is it still just you yourself? And I kind of thing?
Sumana Sanjeeva 55:46
Yeah, me, myself and I? Yeah, I’m actually enjoying it. Because all of the things that I learned, not just when I was running the business that I exhibit, but all of the things I learned from acquiring and scaling exhibiting everything. It’s all kind of, you know, coming into play, when I’m acquiring these new businesses. And keeping that in mind. I’m like, Okay, what did we do? What opportunities did I have with the previous business? So I’m kind of looking at those opportunities. And it’s kind of become like a, a playbook at this point where I know what works and what, what worked and what didn’t work. And if it didn’t work, can I still make it work with this one, it says, it’s kind of become very much of a learning process. I’m enjoying that process. And at the same time, it’s kind of like, I have this playbook that I can go back and look at it and say, What did I do with this here?
Joe Valley 56:52
And is your plan to exit these additional three brands? That you know?
Sumana Sanjeeva 56:58
Yes, the plan is said, so I have acquired these is these businesses with that in mind? Where, how much can I actually scale? What should be my timeline? what should be my goal? So I’ve kind of set some goals for it. And I’m working towards it once we need those numbers and everything. Yes,
Joe Valley 57:22
definitely. So many people will say I love my business that’s making plenty of money in my business, why would I ever sell your story exemplifies the fact that especially in a rapidly growing e-commerce business, that the majority of the money you’ll ever make from the business comes the day that you sell it? Do you think in clearly that’s the case in this one, because you bought it for seven figures? You got what 35 times your, your your down payment on the SBA loan back and over five times and what you purchased it for. For these other businesses? Do you envision that the majority of the money that you’ll make will be on the exit as well? Or are you profiting wildly along the way?
Sumana Sanjeeva 58:11
So we’ve started profiting so actually, it’s it’s one of those things that I’m not looking at profits right now. So that my my kind of thought process with with acquiring businesses and scaling it, when you scale it, we cannot be profit oriented. Right? Until, you know, a certain point. So right now that’s kind of how I’m looking at it the previous business to the one I exited, yes, we were actually making good bit of profits went well, but I was reinvesting a lot of that money into it. Definitely. That’s there. You know, so it’s, it’s, I’m sorry, I just lost my train of thought.
Joe Valley 59:02
Okay, that’s okay.
Sumana Sanjeeva 59:03
Yeah, but but exit exit is going to be one of those, you know, if I if we don’t have a good SDE, then we cannot have a great, great exit. So I am focused on a good SD as well meaning, you know, cost cutting and different things will actually have good SD. So, yes, everything. Everything that I’m done doing with these business is keeping an exit in mind.
Joe Valley 59:28
And it’s the right way to do it. I think obviously, you figured it out. You had your first incredible accident, you’re going to have several more and hopefully after the next I guess there’s three, there’s four that you’re going to buy. You’re going to take a break and take some time off and enjoy life a little bit as well. Folks, the impetus for this particular podcast is connecting with somebody that’s just had an incredible accent but also because we are launching the next quiet giants series It’s a short film on Sumana’s story, her background, a little bit more in depth about her life, and the process that she went through to get to where she is today. So we’ll share that in the in the show links and keep an eye out for your emails, if you subscribe to the quiet life, emails, Chris our CMO, we’ll be sending out lots of emails about the episode as it comes up. And I don’t recall how long it is, it’s probably somewhere in the 15 to 25 minutes length, period, but I’m sure it took a day and a half or two to shoot. And you’re probably very happy that shoot is over, correct? Sumana Yeah, it
Sumana Sanjeeva 1:00:36
was actually three days, three days, two hours each day. Which was a lot of fun, very exhausting, you know, Chris’s Chris’s, very, very fun to work with. He made every process of it. A lot of fun. My kids enjoyed it, they got to be in it. So it was definitely, I’m looking forward to it. And I was gonna say, knowing me I talk a lot. So I’m sure it’s in the, in the 2025. So but but it was, it was a great experience. You know, a lot, a lot of things when we talked about it, I actually got to think back from where I started. You know, where were we at 25 years back when we came here? How did we get here? What did we do? A lot of those things. I think, a lot of times we don’t sit and take the time to think about it. But this actually gave us the opportunity to, you know, give me the opportunity to kind of go back and think, you know, just kind of like Wow, really, we got here. This doesn’t 25 years swapping what we did, is all here.
Joe Valley 1:01:59
It’s an incredible journey that you’ve been on. I can’t wait to watch the full episode myself. Thank you for sharing your story today and in, you know, in the filming the three day filming as well. It’s going to help a lot of people inspire them and get them on the right track and sharing your story about this. Simple. Let me just check and see if there’s a better offer out there process when you got that offer from both aggregators, and you doubted it. And it turned out that you were right, your business was worth several million more than what they were offering. Yeah. So I appreciate you spending your time with us today. I’m looking forward to watching the episode. And I hope to see you soon we don’t live that far from each other. So one of these days we actually have to get together for coffee.
Sumana Sanjeeva 1:02:41
We definitely do that so that we’ll we’ll do that soon. And thank you so much for having me on the podcast. It’s it’s it’s an honor. My pleasure.
Today’s podcast was produced by Rise25 and the Quiet Light content team. If you have a suggestion for a future podcast, subject or guest, email us at [email protected] Be sure to follow us on YouTube, Facebook, LinkedIn, Twitter, and Instagram and subscribe to the show wherever you get your podcasts. Thanks for listening. We’ll see you next week.