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The Rise of the Aggregator
Brad Wayland is a Business Advisor at Quiet Light, a brokerage firm that helps online business owners achieve amazing exits. As a successful entrepreneur, he has almost 20 years of experience marketing and operating online businesses.
Starting in 2003, Brad helped create an online custom t-shirt company that he later developed into a multimillion-dollar enterprise. In the years that followed, he started building other e-commerce businesses and investing in existing companies. Over the last 10 years, Brad has constructed, purchased, or sold more than 30 web properties.
Here’s a glimpse of what you’ll learn:
- Brad Wayland talks about the dramatic increase of FBA aggregators in recent years
- Brad predicts the future of aggregators
- How does the rise of aggregators impact Amazon sellers?
- The importance of calculating your Seller’s Discretionary Earnings (SDE)
- Brad shares some of his real-life experiences helping entrepreneurs sell to aggregators
- Are aggregators ultimately a positive or negative force in the FBA space?
In this episode…
Are you in the process of selling your Amazon business but don’t quite know where to start? Do you need help understanding your options so you can make the most profitable choice for your business?
Right now, aggregators are the most prominent sources of transferability in the FBA space. With their dramatic increase in recent years, they have boosted the value of Amazon businesses and made a positive impact on FBA sellers. However, there are a few things you should understand and anticipate before transferring your business to an aggregator. That’s where business advisors, such as Quiet Light’s Brad Wayland, come in: to help you assess your options, ensure fair treatment, and achieve the most lucrative exit possible while selling your business!
In this episode of the Quiet Light Podcast, co-host Mark Daoust sits down with Brad Wayland, an experienced Business Advisor at Quiet Light, to discuss the current role of aggregators in the Amazon space. Listen in as Mark and Brad explain how aggregators became so ubiquitous on Amazon, the various ways they have impacted FBA sellers, and what the future has in store for popular Amazon aggregators. Stay tuned!
Resources Mentioned in this episode
- Brad Wayland
- Brad Wayland on LinkedIn
- Quiet Light
- Mark Daoust
- Joe Valley
- Quiet Light Podcast email: [email protected]
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.
Mark Daoust 0:29
Hello, everyone. Welcome to this special edition of the Quiet Light Podcast. I’ve got my friend and associate Brad Wayland on the episode this week, we’re going to talk about the rise of aggregators. Now, within the past, I’d say maybe two months, I’ve personally been interviewed by quite a few large publications, Forbes, BuzzFeed, Bloomberg, Modern Retail, and many others. And I received calls from New funds that have been rising up, and they’ve raised 10 million 15 million 50 million, depending on the size of the organization, wanting to know about the space of doing FBA aggregators. I don’t think there’s anybody at the company, Brad, you know, maybe you know, I haven’t looked at this that has sold more to the aggregators then you have internally, I think you’ve done a number of deals with many of the aggregators, and many of the people that are making names in this industry. So for this episode, I want to cover and just kind of talk about who are these guys? Or what has been the the genesis of their rising up? And then really the heart of it, I want to talk about, you know, how do we work with them? How do you work with them? What to expect with that? And what what does that whole field look like? So let me just start off real quick. Have you sold more than anyone else do you think I think you have?
Brad Wayland 1:43
I think I have I’m not I’m not positive Mark, you’re the one that has all the data, right? You know what I think I think I might be getting close to maybe a dozen. And before we knew that these aggregators were going to be kind of this big wave of buying. I got in early with a few of them. And so I think I got some early experience that is kind of like, maybe give me a little bit of an edge with moving things to them. But I think that certainly everyone around is catching up quickly, because this is becoming a pretty prominent trend.
Mark Daoust 2:18
You know, one of the questions I’m asked by reporters pretty frequently. And this is really just my opportunity, Brad to ask you so I can answer more intelligently to these reporters when they talk to me. But, you know, they learn that that the companies that are out there now are not the first companies to really be in this space. So why do you think it is that the companies that are out there now grabbing all the headlines have been successful when we know I mean, we’ve worked with companies before them that had a similar strategy, or at least said they had a strategy to roll up FBA brands. And they didn’t, they didn’t make it or they, they made it but not to their goals? So what is it with this new crop of aggregators that you think is has worked out? Well?
Brad Wayland 3:00
Well, I tell my sellers all the time, that we’re in the honeymoon phase. So I want to I want to just kind of say that right now, what we’re seeing right now is a massive influx of capital into these firms. And hundreds of them, I think, I don’t know that we’re working with hundreds of them. But I know we’ve worked with many, I’ve probably personally talked to 20, or 30, that are kind of in that space. But you know, one of the things that I’ve noticed from at least a couple of them that I’ve worked with, is that their approach from the get go was pretty focused on exactly how they wanted to do it. So we have seen some past folks say, Hey, we’re going to do something really aspirational, build something really big. But one of the firm’s it’s pretty big now that I talked with told me from the get go, I had a call with them when they just under seed round, and they said, Hey, we’re hiring a whole team from MIT to crunch data for us. And we’re gonna focus pretty much solely on Amazon only, which in my mind, I was thinking, Wow, my sellers are always really concerned about being Amazon only. And that’s one of the reasons that they want to sell because they’re like, hey, if Amazon decides that I’m not, you know, who they want to work with anymore, they could shut me down without really any, you know, notice or anything, I wouldn’t have a lot of recourse. And so when these guys said, we want to go into that, I thought that’s really interesting. But one of the things I noticed is that they were using kind of superior data sets. And so I think they’ve got some intelligence, not all of them, but some of them have some intelligence, where they were able to see like, here’s where we want to be, here’s where we don’t want to be. And early on, I started to figure out that certain firms knew like, if I bring them a certain category of something, they’re like, Hey, we don’t want that. Like, you don’t even have to bother sending it to us. That’s a category we don’t want to be in. When I see that kind of calculation, then it makes me feel like okay, these people have have a have an approach. I don’t know if it’s right or not, but I know that it’s very calculated. They know where they want to be. They know how they want to attack it.
Mark Daoust 4:49
Yeah, I would agree that one of the interesting dynamics of the rise of the aggregator, as we might want to call it has been less sensitivity to the platform risk of Amazon I would say previously, this was a common demerit and downward pressure on somebody’s price with their businesses, if they were only on Amazon, a lot of buyers would look at that and say, it’s too risky, right? What if Amazon competes? And what happens if they changed the rules, etc, etc. Now, I would say it’s both the rise of the aggregator but also the maturation of the Amazon ecosystem, which have caused people to not worry so much about the platform risk. And frankly, even I wouldn’t say we’re at a premium feel free to correct me, I don’t think that we’re at a premium for Amazon businesses, but at least put them on par with, say, just a pure Shopify business where you own that customer.
Brad Wayland 5:38
Yeah. And one of the things that gives me pause in the space is that fact that you just said that they have kind of risen up to the value of others, it gives me a little bit of pause, because you aren’t in control of your own destiny. It’s just that’s just the facts. But you know, the other thing that gives me pause is I’ve actually had calls with folks where I have a business that has Amazon plus Shopify, and they’ve said, Hey, do you have anything that’s just Amazon, we want to focus on just Amazon. And I think, when people don’t want the diversification, I start to think this might be getting a little frothy? You know, it’s one of the things that I started thinking. And I, I definitely think that that comment I made a few minutes ago about, you know, we’re in the honeymoon phase, I think it’ll be interesting to see how this matures, once we have a glamorous fail. We saw some glamorous fails over the years, I’m not gonna name any names, we’ve seen it, you know. And so I just wonder if one of these firms that’s out there raising 100 million or a billion or whatever the numbers are, once we see the investors not get their money back, I think it could start to maybe mature the space a little bit, maybe bring the multiples down some, you know, some things like that. But right now, we’re kind of in a cycle of only it’s kind of like a stock market, it just goes up right now. Like, it’s just kind of like, there’s no bad news. And so it’s just kind of like everyone wants it. Yeah.
Mark Daoust 7:03
For context as far as the frothiness, because I completely agree with that it feels a little frothy. But at the same time, I actually spoke with a new fund yesterday. And on their thesis, they they recognize the competitiveness of the space, but in their words, and said, we think there’s also a lot of whitespace left to play here, which I would agree with, I think there is a lot of whitespace to play with. But just for anecdotal evidence, I have one to two calls per week, on average, probably for the past three months, with a new fund. And oftentimes an angle, you know, we want to buy just foreign assets or want to buy just all of these types of assets, or maybe we’re gonna have our heart our thesis be a little bit different than what’s already published out there. But these are all new funds, raising money, actual money in their bank accounts ready to get to deploy, for the purposes of acquisitions, and all starting to compete. I know, internally, we’ve developed our own list of these companies in these funds that we’re working with. And that’s grown substantially and grows on a weekly basis at this point. So it’s, it’s frothy, to some extent, but I wouldn’t say that it’s, it’s, it’s by any means to the point where it’s overvalued. That doesn’t mean people are gonna be making mistakes. I guess what I want to ask you on that would be consolidation in the future. And I’m asking you to do a little bit of crystal ball gazing right here. But looking at the runway of this space, and looking at what’s going to happen in the future, are we going to see all these aggregators in the future? Obviously not. But how is this going to play out down the road? Will we see consolidation or failure?
Brad Wayland 8:37
I mean, I think overall, we’re going to see consolidation, because if you think of it from Moses money that’s coming in as private equity. So if you think about what private equity is generally doing, they are jumping into deals, they’re having to learn an immense amount about a certain topic. And then they have to go in and operate and scale up and they’re usually doing it to sell it to someone else. One of the things that’s really attractive for an investor from this space, is that the skill sets kind of one note, once you understand Amazon, and its ecosystem, that operation is just a very simple operation, all of our sellers would tell us like even if they’re working 40-50 hours a week, they would say, well, it’s Amazon. It’s very simple things sell themselves, like I have a good listing. So they’re able to use the exact same metrics, the exact same philosophy across every single product range across every single team. everything that they do, there’s not like there’s like these new problems coming in every day they have to do they’re actually using the same streamline things to develop out the scale. And so when you start thinking about the economies of scale of that, I started thinking, Okay, this is going to get big. And so we are going to see consolidation. And so, you know, I don’t know how, how it all kind of comes to play. You know, we’re certainly going to see some of these guys go public in the next couple of years. And I think that once we see a public market, you know, public They’re not going to be, you know, you’re not going to see your Amazon stores go get sold out of a publicly traded company, they’re going to buy them, and they’re going to operate them. And so I think the consolidation will end up being, you know, I think first we’ll start with what players are going to be the big holders. And so there’ll be a list of so many that do it. And there’ll be other small people to try to get out. But once we get to publicly traded, you know, I think that at that point, the question will become, do they buy? Or do they just develop? And that’s one of the things I wonder, over time, because they might think their resources are better used to just say, Hey, we got these teams, why wouldn’t we just create every product under the sun out of our own head instead of buying them from other people? You know, it’s a great shortcut, when you’re trying to get to going public. But once you’re there, what’s going to create the most shareholder value? Is it going to be continue to acquire might be, but it might not be? Or it might be a mix, you know, but I do think consolidation is what we’re going to mostly see. But I do think, you know, I do think we’re in line for some fails, that will temper the market a little bit at some point.
Mark Daoust 11:03
Yeah, I think you’re right on that. And going going public will be a milestone marker, I think in this space as he’s growing. And there, I do know that there’s at least one fund that is public already. But they did not go public. Under this model, right? They they pivoted their model into into this. I want to pivot though. So this just kind of an overview on the marketplace of these aggregators, the rise of the aggregator and these funds, these private funds, I believe you like to call them just operator funds, or some variation,
Brad Wayland 11:32
I always call them I always call them, I always call them private equity backed operators until everyone QL started calling them aggregators. So I’ve just kind of jumped on the aggregator, you know, front now
Mark Daoust 11:43
that we’re gonna score and coined the phrase is that out there, we’ll coined the phrase, let’s talk, let’s pivot to what a lot of our clients and potential clients are now interested in, which is, how does this affect my Amazon business, and its potential exit value? One of the questions I get from the new funds all the time is, well, what’s what’s going on with the multiples? You know, I know some of these companies are advertising really low multiple acquisition rates that you know, are acquiring these businesses at you know, 2.5, on average, 2.8, we’ve never paid more than a fill in the blank, whatever multiple they want to quote. And the question is, are we seeing upward pressure? Is it is it this sort of, to the moon type of upward pressure on the multiple, and then the trickle down effect for the entire marketplace? And I’ll just start out by saying, I’ve been seeing upward pressure you deal more in the marketplace than I do? I haven’t seen that rapid growth, where we’re now at, you know, massively high multiples. But let’s, let’s comment on that a little bit, just the impact for sellers.
Brad Wayland 12:42
So yes, and just as a note, I mean, I I only work on large deals, for the most part. So I’m already kind of exposed a little bit to, you know, higher multiples, that maybe a business with 200,000 in SDE. So I’m probably I’m probably pulling my data from a pretty small set. I think there definitely is upward pressure. Right now, I don’t think it’s going to go crazy. We’re not talking about you know, it’s not 1999 in the stock market. Here, we’re, we are seeing like when I started brokering deals for Quiet Light three and a half years ago, I would routinely evaluate a really good Amazon business at about a 2.7, multiple, good growth, you know, good numbers, not not overly large, you know, maybe 234 $100,000 in St. Louis. And I am routinely getting valuations now in the threes and above. And like, you know, anecdotally, you know, last week I launched a business, I reached out directly to some people on a list of aggregators that we have, they were the sellers specifically wanted to sell into an aggregator, and we got multiple offers in the mid threes. And once you get through all the incentives and all that stuff, it’s likely they’ll get closer to five. So that is that is kind of what we’re seeing. So clearly, the multiples are rising there. But in that one of the things I’ve learned with the aggregators is they really value quality. And so if you have a listing that has super high quality, so like in this case, from last week, I had a listing that was, you know, nearly a five star average, across their top product at 20,000 reviews with a five star average, they were dominating not only their market, but internationally, all over the world for Amazon. So they had things that are not easy to find. And then also they had stayed very limited in their scope. And so you’re in this broad category. And they had stayed limited on, we just do these things here. And so it’s so easy to see, like, hey, if we were willing to put the time and energy in, we could really go wide on this. And they’re already in, you know, 20 countries selling for Amazon. And so, I think that one of the things that I’ve learned about aggregators is the news wants to say they pay very low multiples. And I will say that I think when they go direct if you’ve only got one buyer, we see that all the time, right? If I can only bring you one buyer Am I going to get you the best multiple no competition is what brings a good multiple. So what I’ve seen is when I have really high quality Amazon listings, those are usually the ones that aggregators are the most aggressive with people that have been really detail oriented and done, done a lot of work that can’t just be spun up overnight, they’ll pay much higher multiples for that. So I think the multiples are definitely on the rise. I think on average, it’s they’re really more like you’ve said earlier in the in the video here in the podcast here, but just they’re kind of on par with what we’ve seen from an e commerce business that’s to your own URL, or a Shopify business or, you know, however, you want to look at that they’re really just kind of have risen up to being on par with those, they’re no longer getting a discount, in my opinion,
Mark Daoust 15:55
this is going to be my episodic or daily episode reminder about multiples. Joe and I did one A while ago that we have to be careful because multiples are quoted from one company, the next one from one broker to the next. And they’re not the same multiple, but they’re different measures we don’t include inventory typically are working capital. So if you do that, that gives you a higher multiple. And in addition, we don’t know how some of these companies, these aggregators are measuring their multiples. And one point I’ll make is that I’ve had some people come to me that have received offers from some of these companies, because they’re doing a lot of active outreach to Amazon sellers to see if they want to sell and they get a quote, an offer price, which is a multiple of their earnings as that person represents their earnings to me, right, and in the multiple seems fairly competitive on, you know, just on the surface. When I look at the financials, I realized that if we were to be looking at that listing, we would probably have a higher amount of earnings by you know, just through the right financial work, you know, accurate financial work switching to accrual or proper levels of add backs, or, you know, doing some basic analysis analysis there, which effectively lowers with that offer price multiple is multiples are tricky thing, which is
Brad Wayland 17:09
they are And to your point, yes, thank you for bringing that up. Because we do like when I do private equity work, I always do have to include the inventory, because those most of you guys have walked out of the room if you try not to. But with the aggregators, they pretty much across the board, pay for inventory separate. And so once we include that, like the three five that I was quoting, that would have been more like for, you know, if you included inventory, but I think that, to your point about that multiples are tough, I think that one of the things that I really do want to kind of emphasize is that when people are going direct, those add backs and things. They don’t really bring them up or they don’t, you know, get into a long drawn out situation with it. But the other thing is, I’ve done maybe 11 or 12 of these. And I’ll take say two things about working with these folks that I’ve never seen before. One, I’m batting 1000. I’ve never had one pull out which two people listening that might sound like, oh, what’s the big deal? But Mark, you know, I mean, what we’re trying to do is figure out how to get our clients the most money, but we’re really trying to figure out what’s the probability of them getting it close, because deals are really fragile. And so that’s something I advise clients all the time. So, you know, one of the things that they’re that we’re seeing is, they’re not pulling out. But number two, I have only had one that got renegotiated. And it got renegotiated because of a specific inventory problem that my client acknowledged and said, I did that I did something wrong, and I need to fix it. And my client was not upset about it. They discovered a problem, but so they’re not renegotiating and I’m, I’m giving them an SDP that’s got ad backs included. Now I’m not I’m not I don’t just let any ad back, come through, I’ll tell my clients like, hey, I’ve marked them red, or green, you know, if it’s red, then they say, hey, I want to add this. And I say I don’t like I don’t think this is a good idea. Like, we don’t want your whole p&l to be questioned because you want to add back, you know, you know, your marketing failure, you know, that you had last year or whatever. So I think that that’s, that’s interesting, because there’s not very many industries where you could say, Hey, we’re batting 1000. On these. They’re closing at a super high rate, but I think your point is right, that when people go direct, they may not know what their real SDE is, they might be looking at their net income and not really calculating their seller discretionary earnings, which is what we’re gonna help them do.
Mark Daoust 19:43
Ya know, some of the the discretion earnings calculations or adjusted EBITDA earnings that we do require a little bit more work. I know Joe has done a decent amount of work here based off of some recent changes within somebody’s p&l and be able to work on on something or even forecasted number. And you know, this is tenuous territory. If you put together a bad argument there, you’re going to get crushed in the actual negotiations. So you have to have that right approach to be able to justify and know what’s going to be acceptable, what’s not going to be acceptable. You know, another aspect of this that I find interesting has been we already touched on this a little bit. And that’s just the impact on the industry as a whole. You know, I look through our list of closings over the past 12 months. And we certainly have a lot of these aggregators, these funds that are specifically targeting FBA businesses that are doing these acquisitions. But I would say about, I guess what 20% of our transactions all sudden told for these types of companies, which means there’s a bigger marketplace out there and this bigger marketplace seems to be much more comfortable with Amazon FBA businesses, this has definitely been a rising tide lifting all ships sort of scenario. And I know, you know, Joe, and some of the others within Quiet Light have talked about this, this phenomenon of, there’s a lot of competition, even outside of the aggregators, so they aggregators have been a net good for sellers. Even if somebody doesn’t sell directly to them, they’re the marketplace has really been turned on to the space. I want to ask you about it. Since you’ve worked a lot with these companies, or running up here, we have like seven minutes left in this episode here, want to just ask you, what is it like to work with these companies? What what are some of the expectations that you have? And then do you have experience like any any anecdotes or anything else, obviously, with confidentiality, of working with these aggregators for client, what the what the result has been?
Brad Wayland 21:40
Yeah, and and I’ll just say, I completely agree with you that this has been a good thing for the space, you know, we, the internet has been a space where, you know, I spent a lot of time in I invested my own money in it for many, many years. And it’s always come with a lot of latent risks. And I think that, you know, to see it kind of grow up, it’s been a good thing. And so I think that overall, they really are, they’re kind of helping to create the market, they’re, they’re helping people realize, like, Oh, this is a business I started actually might be worth something, I don’t just make the money from operating it, but I can actually sell it. And so we’ve been trying to tell people that for years, and we’ve made some mark, you know, doing that made our mark kind of doing that, but these guys are making their mark to and they’re all getting public relations, you know, posts and interviews and all kinds of stuff. And so they’re helping to create that market as well. But I’m so working with them, I would say this kind of what I advise my clients, I will tell them that what we’re seeing is that they close a lot faster. In general, I’m averaging something in like, a little over 30 days, with most of these guys, that’s really fast. Especially when you work on you know, larger size deals, that’s extremely fast, you know, I, I did a private equity deal at the end of last year that you know, traditional private equity for seller mind, fantastic business. And you know, that’s a, that’s a long process. No, we, we ended up the the ultimate sale of it we did in about 60 days. But when you start calculating and all the prep and all the time, it, it takes a long time. So these guys close quickly, they can close in 30 to 45 days, many times. Now, and the other thing I like about them is a very process driven. So a lot of times we get an individual buyer, you deal with a lot of emotion, I got a seller that feels emotional about selling, I got a buyer that feels emotional about buying. And when you get those two people together, we become like a counselor. And we are trying to hold this, these people together long enough to get the deal done and everybody to be happy. And it is not always an easy task to do that. One of the things I’ve really admired about the aggregators is they’re not emotional about it. And whenever, whenever the group that signs, the yelloweye gets done with it, and they pass it off many times to the department’s going to do the due diligence, that diligence department is not over, they’re thinking, let’s see if we can find a way to get out of this deal. They are thinking, Hey, we need to collect the records, we need to collect and see what’s the real story and what has happened. And so they start collecting an immense amount of data. I’ll tell anyone that’s listening. If you’re thinking about working with us to we can help you, you know, put these aggregators against each other and figure out who’s willing to pay the most and do the best, that’s what we’re doing. You’re going to go through the ringer for a couple weeks on the diligence, it’s going to be a lot of work because they want to see the entire picture of what’s happened. So I think the diligence is pretty heavy. But I think that the getting to lLoY and I think that the legal are really standardized. And so the diligence part is, what’s nice about it is I don’t think you’re working to find out if you’re going to be able to sell. I think all you’re doing is just verifying and setting the record straight about what have you done with this business since it started and they’re going to expect it to be really detailed. So and then you said anecdotally, you know, experiences that I’ve had with them. One of the things I’ve learned is that they’re pretty committed to closing I’ll tell you a specific example. From the month of May, I had a seller and everything was going fine. We’ve made it through, almost through the diligence period, we were looking to close with one of the aggregators. And he got shut down on one of his main products. It was an apparel category got shut down on one of his main products. And it was due to a trademark dispute with a major company. And what was crazy about it is that he called me in an absolute panic. And I thought, this deals done, like, there’s no way closes. And so there’s a call scheduled with their team. And he goes through the details, and tells them what he’s done, and what the response is, why he believes that he’s okay. And they went through that whole thing. They never mentioned it again. They closed it, they took his information, and they went and dealt with it. And I thought about them, I just thought, that is unbelievable, because my experience as an advisor has been when something like that happens at the ninth our deals done. And it’s like, we’re gonna have to pick the scraps up and figure it out. But this particular aggregator that we were working with, they took the information and they thought, No, we deal with this all the time. And so we’ll go navigate that for you. But we want to close the deal, because we think it’s a good business. And so they went ahead and did it. So, you know, anecdotally, I just have had really positive experiences, working with them. And, you know, and I don’t say this to try to be too sales, pitchy. I think they’re a little aggressive when they go direct. And that’s why, you know, I think there’s a reason why they want people to go direct to them. And so I really do think that this is an area where we add a lot of value, because we can kind of keep them all honest. Because we know them all. We know we’ve had experiences with lots of them. And we can say like, Hey, this is how these guys do it is how these guys do it. These guys that I just did the business for last week. And I don’t want to sound like I’m to my own horn too much because it hasn’t closed yet. So. But one of the things I really was excited about is when we got done inside the yelloweye when all these offers, they came back to me and they said, Hey, that went exactly like you said it would. And I and they said, like, we can’t believe that it went that well. Now I told them I was like, the reason why it’s exactly what I said it was because you guys built a great business. And everybody wanted it. And I thought that they would, but I wasn’t sure. But then the other thing is third party validation is always like the strongest form of flattery. And so as a seller that had referred them to me that I closed a big deal for in in December, sent me a note and said, Hey, they are they’re so happy that they’re working with you. Because they said it went just like you said exactly what you’ve coached him about how things were gonna go. That’s how it’s gone. And so I think it’s great to work with people that are predictable, you know, that you can say like, this is how it’s going to go. And so that’s where I really see the value, because one final point is take SBA, we have so many people talking about SBA on our businesses, and you want to talk about unpredictable.
Mark Daoust 28:01
Yep. All right.
Brad Wayland 28:03
I want them to be predictable. But how much power do we really have over those situations? So I think if you can get an SBA loan to buy a business, and if we can facilitate a transaction with an SBA loan, I think it’s fantastic. I want to do it. But at the same time, it’s tough, because in every SBA deal that I do, I get I learned something new, because they throw a new curveball that I’ve never seen before. And I’m like, Oh, I wasn’t expecting that. And that delayed it by 15 days. And then now I’m not feeling like I’m serving my client the way that I want to. So
Mark Daoust 28:35
yeah, I mean, the data kind of bears that out, too, right, we were down just a little bit in our SBA deals in terms of the percentage last year, that was the year before, still about a quarter of our deals, you know, so we’re still seeing a decent amount come through that way. But it’s definitely less than what we’ve seen in the past. So I think just kind of In summary, I mean, we agree that you know, the aggregators are good for the industry, in general, they’re helping push up the value of people’s Amazon businesses. Obviously, knowing what you’re dealing with, or who you’re dealing with, with these aggregators is important. And knowing how to prepare the business is important as well, to make sure that you’re getting the most value and closing at the right pace, I agree with you, I think an aggregator that is going directly you’re going direct to obviously they’re going to be aggressive, where they can be aggressive. And that’s, you know, sometimes in price, but oftentimes, it’s also in terms it’s also in maybe the asks along the way. And and maybe some things that, you know, you should have had prepared with your business as well. There’s a lot of different areas like that. But overall, it’s a good thing. It’s good opportunity.
Brad Wayland 29:34
It is landmark, but that’s the case, anytime we have one buyer, right, and we you know, before working with any client, and we can only bring them one buyer, then we have to tell our client like hey, I mean, we, in this case, we only have one buyer and so it’s tough because they’re going to get a lot of power. If that one buyer when you have the presence of two or three, you know, competition really keeps everybody honest. And you know, people people want and I’ve got One funny thing about that Mark is, I’ve got everybody scheduling calls from me that didn’t win our bid last week. Because, because they’re upset that they didn’t win. And so now they’re like, you tell us what we’d have to do to win it. And it’s, it’s tough because you know, there was, it gets competitive. And ultimately, you got to go through seller with the best deal that you think is going to close for them in the most painless way possible that gets in the best outcome.
Mark Daoust 30:24
Now, this is something that’s really interesting. I know we’re running a little bit long here. But all the new aggregators are trying to break in. And try a lot of these groups trying to get those first or those first five, or those first 10. It’s difficult to do for them, right, because a lot of these aggregators are looking at the same types of companies, right. And so they compete with each other for the same types of companies and trying to break through with those first ones can be difficult, and being able to have those conversations with them off the record after they’ve lost a deal. To help them get that next one. It’s a good position for us to be in and it’s the reverse of us having one buyer, right. It’s a highly leveraged position to be able to say, look, here’s, here’s the criteria, if you want to win a deal, and this is just where the market is right now, that’s a nice position to be in as
Brad Wayland 31:12
well, I think we are collecting an immense amount of data. So if you look at if you look at a traditional kind of m&a investment bank in place, one of the things you’ll learn pretty quickly is that a really established one ends up selling to the same groups over and over again, they’ll work with 10, or 20 different buyers, across lots and lots of deals that they do. And the reason for that is not because they’re not creative, it’s because they have gained trust with them. And so I think one of the things that I’m really enjoying about the private equity space right now is just that fact of like, I’m finding people that are really reputable work with reputable to work with, and it’s giving me experience, it’s allowing me to tell my clients, this is how it will go. And then my clients think I’ve done something special. But what’s really happened is, I’ve just been there. I’ve been there seen them operate, when they say, Hey, we got this problem, should it be a red flag, I can say, well, it is a red flag. So we should bring it up. But you know what I was doing with that firm on us an issue similar last year. And this is what happened to this I did it’s I don’t think it’s going to cause the deal to fall through. And so then we have the ability to just be like, hey, let’s just be really upfront about it. So we’re upfront. And then what happens? They say, yeah, we’re not worried about that. We’ll just want to do this, this and this, you know, so I think that I think that it is it is nice to have groups of people that you can trust and kind of know how they operate. And I really hope to see these guys kind of develop out. You know, several of them. I’d like to see there’ll be a dozen that are just really great to work with. That would be a great situation for our clients if we could get to that point.
Mark Daoust 32:43
That’s been awesome, Brad. I’m sending all the reporters your way, by the way. Brad, thanks for coming on. I appreciate you taking your time.
Brad Wayland 32:51
Thank you, Mark. I really appreciate it.
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.