A Family Affair: Elevating Brands to new heights ⎜ Olsam Group ⎜ EP 132

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This is a podcast episode titled, A Family Affair: Elevating Brands to new heights ⎜ Olsam Group ⎜ EP 132. The summary for this episode is: <p>Ryan Cramer of Crossover Commerce talks with Sam Horbye of Olsam Group about elevating brands to new heights.</p><p>---</p><p>Crossover Commerce is Presented by PingPong Payments. PingPong transfers more than 150 million dollars a day for eCommerce sellers just like you. Helping over 1 million customers now, PingPong has processed over 90 BILLION dollars in cross-border payments. Save with a PingPong account <a href="https://usa.pingpongx.com/us/index?inviteCode=ccpodcast" rel="noopener noreferrer" target="_blank">today</a>! </p><p>---</p><p><strong>Stay connected with Crossover Commerce and PingPong Payments:</strong></p><p>✅ Crossover Commerce @ <a href="https://www.facebook.com/CrossoverCommerce" rel="noopener noreferrer" target="_blank">https://www.facebook.com/CrossoverCommerce</a></p><p>✅ YouTube @ <a href="https://www.youtube.com/c/PingPongPayments" rel="noopener noreferrer" target="_blank">https://www.youtube.com/c/PingPongPayments</a></p><p>✅ LinkedIn @ <a href="https://www.linkedin.com/company/pingpongglobal/" rel="noopener noreferrer" target="_blank">https://www.linkedin.com/company/pingpongglobal/</a></p>

Ryan Cramer: What's up everyone. Welcome to my corner of the internet. I'm your host, Ryan Cramer and this is Crossover Commerce presented by PingPong payments, the leading global payments provider, helping sellers keep more of their hard earned money. What's up everyone. Thanks for tuning in I'm Ryan Cramer, the host of Crossover Commerce. You've made it. You've made it to the right destination. You're here. I appreciate you tuning in to us live on LinkedIn, Facebook, YouTube, or Twitter, or if you're listening to us later on, thanks for tuning in and subscribing to your favorite podcast destination and making us one of those great podcasts that you listen to on a daily basis I appreciate that. But like I said, I'm Ryan Cramer, the host of Crossover Commerce. This is my corner of the internet, where I bring you the best and brightest of the Amazon and e- commerce community. I bring it all in one to make sure that you, the listener who are going to be listening or watching to us today are going to get something out of this. You want to learn and grow your business, your mindset, your philosophy, just your education. This is the place to be. And my focus is on the Amazon and e- commerce space, but we're also going to be diving into some of the outside factors that apply to the space. Yesterday we talked about social media ads and just Facebook ads in general, how to build a brand and today I'm really excited to be talking about taking that brand to the next level. It's not just companies out there who are doing this. This is family. This is the, " aggregator space". We're going to be diving right into this and again, a lot of people know there are so many out there, but we're going to dive into this family run operations Awesome Group. If you've never heard of them, they're actually based out of England. So they're focused on European expansion, but also brands in the United States, which I really find fascinating the European growth of businesses in brands, but then also what that looks like on a global scale, how to build that internationally. I know a lot of brands are focusing in United States, but what's does that look like on an international scale so we can dive into that today. But before we do we want to give a shout out to always Crossover Commerce is presented by PingPong payments. Who's PingPong payments you might ask? Well, let me tell you PingPong payments helps brands all over the world to send or receive money at a low rate helping you send money to VAs, suppliers, manufacturers, even employees at a low cost rate in their own currency. And you could do that with a PingPong account. Don't go to a different country and fly there and open a bank account. That's a huge mess. It's a time waste. Don't do that, use PingPong payments, helping you save time, money, and effort, which everyone wants to do. And if you're selling an international market places like Sam and his team are doing who is our guest today, you're going to be needing a solution like PingPong payments. Go and check that out later on and sign up for a PingPong account today. It's free to do. You can go ahead and click on that link in the show notes below, click and go ahead and mention Crossover Commerce when you talk to one of our lovely people over in our offices. Thank you PingPong payments for sponsoring Crossover Commerce. That being said this show is about not myself, but it's about my guest. I want to bring on one of the foremost experts in the Amazon space. He actually used to work for Amazon in that space, has the playbook that knows how to grow brands, how to grow international businesses quickly and scale them profitably as well. And he's also doing this with his brother. So it's a family affair. That's why I titled this episode A Family Affair Elevating Brands To New Heights, welcome to Crossover Commerce hobby of I'm going to say it's Awesome group, Sam is going to correct me if I'm wrong. If I butchered that Sam, you got to let me know that.

Sam: Very inaudible you did a great job.

Ryan Cramer: Look at that. Well, I appreciate you hopping on today. Thanks for joining Crossover Commerce, man.

Sam: Well, thanks for having me, Ryan, as I said in my posts, I've seen a lot of your podcast and your previous guests and yourself have amazing backgrounds. I'm in our office in one of our busy rooms. It's a very sort of plain white walls so I should have worked hard and had a really cool sort of background behind, but I don't have that unfortunately, but inaudible

Ryan Cramer: This is the trick Sam, I have to keep people on their toes. I don't like people getting complacent and I've only done 130 something of these episodes. So people need to see something different, some flashy, I might have a different background and a lot of people in my space they get, I mean I like to be visually appealing and I like to throw up some of the things that excite about me and drive me on a day- to- day basis. And it's a nice constant reminder of that but I appreciate the kind words like you said in your posts. I like it when people reach out to me, which is what you did, you reached out and we had a conversation about this, about your philosophy of building brands. And I find that so fascinating especially in this space, it's the hot topic if you will, you and I both know you just got an email you were saying that you couldn't go to Prosper show this morning which is so unfortunate because it was last week. But that being said, you and I were not there but that seemed to have been from what I felt the buzzy, everyone was talking about it I know the minds of throw SEO, Elevate brands, Perch, lots of money being raised happened to be announced then, but that's not all sunshine and rainbows. Obviously there's other companies like yourself that are just doing different things that you're kind of going maybe against the grain, I would say. So I'm curious your philosophy, who you are, why you decided to get in this crazy fast moving pace and what drives you and your team kind of to innovate and grow and move forward

Sam: Yeah. Cool. So I think first of all it's a bit of background to myself and Ali. So we are brothers, Ali and I he's the much taller brother I have to say, if you meet him in person he's funny. Our team is mostly remote so when Ali joins me, wow, this guy's huge. But anyway we're both brothers, essentially we have very different skillsets. He used to work in private equity, investment banking. He's very much on the kind of the finance side. I'm not a finance guy at all and what kind of blew me away throughout the fundraising process of getting Awesome going and also meeting all the other founders in this space. They are incredible entrepreneurs, the other founders we started companies like ours, but the thing they come from a private equity finance background. I don't have that and so I used to work for Amazon for a couple of years in their marketplace team, helping basically UK, European sellers sell online. Covered a variety of Casper has had an amazing time doing so as a result, I had the privilege of seeing literally thousands of FBA businesses. Was the product of my own private label brand walls to Amazon so kind of went through a lot of the processes I'll say as we speak, you go through then she sold that. And look let me set the scene, I was in a shoebox apartment in New York having a great time and then Coronavirus hits New York quite badly and I then found myself sort of confined to my bedroom and not having a great time at all. And it kind of made me really reevaluate kind of what I wanted to do and kind of where I saw my strengths, anyway. So I was going in the US or saw the companies that you know too well. Progressing this was really interesting. Spoke with Ali. We had a lot of back and forth over email, spoke with lots of investors, had thousands of nos just by the fact those was clearly doing extremely well in the US, they just didn't like the idea at all. This was kind of more February time of 2020, anyway fast forward we met an amazing group of investors, I've had an awesome team and here we are, as you said based in London with a team across investments, supply chain, operations, creative, and we acquire brands all over the world and grow them. And so yes, it's been an amazing journey. It's been an absolute roller coaster. I tell you this, I'm a first time founder so this is all for me telling you supersizing experience, made thousands of errors, but also I had a ton of success as well. So it's been a great journey.

Ryan Cramer: Well, thanks for telling us that. And that's kind of curious too, is you getting into the space, you recognize the opportunity but this is just over a year ago, this is what? 16 months or so that you and your brother Ali were throwing around this idea, from the outside perspective can seem both this is not a negative thing concerning, but also crazy to think that all of this happens in such a condensed timeframe. What's it been like to kind of put together the skeleton, if you will, the basis of this company and scale so quickly at the rate of what you guys are trying to do and what you have to do to be honest and successful and to stand out from the crowd?

Sam: Yeah. It's super challenging. The trouble is what frustrates me, there are all these massive fundraisers you see, and the reality is raising capsule is so difficult, it's so, so challenging. There's a ton of work that goes on behind the scenes, working with lawyers, with investors, with different team members is to be tough. I think for me the challenge of growing Awesome why I highly respect other operates in the space we've been able to do this is, is building a great operations team. That's not to say the other teams are not important but running Amazon brands are really, really difficult, at first I told our investors, this is not easy and a lot of people were getting involved because they think it looks very easy. It's not, it's super challenging. So for me, I found the biggest challenge hiring an amazing sort of operations team to run the brands across supply chain, across PPC, across branding, but knowing Amazon really well I think the problem is, is that there's talents and hot demand plus people in Amazon. So you're fighting for talent and so I think the biggest challenge to me it's been building our team, but what I think we've really done very fortunate is that as you said, I used to work for Amazon in the marketplace team. So I've managed to hire a couple of my fellow colleagues who were crazy enough to join us on this journey. And as a result we've got just such, and our understanding of FBA around is so deep now.

Ryan Cramer: So you said you work on, I'm going to cut you off there Sam real quick, you said you worked on the marketplace team. Amazon has all these different little, I call them pods. I like to think Amazons they don't talk to each other and probably they do. This is my interpretation. They have all these different segments in markets that you're going to be working in. What's a marketplace team? Describe for our listener who might be like, what's a marketplace team and Amazon's view? Is that cultivating and bringing brands onto Amazon? Is that just making sure that the experience is gray? What's does that look like on that side of things?

Sam: In general Amazon has their consumer business. You've got the retail business and you've got the marketplace business, and I can't speak for North America but in the UK the team is around 130 people when I was there anyways, now it's probably even bigger. And they sit across various functions, but broadly speaking they're split by category. So consumables, hard lines, DIY tools, basically the product category of selling. And then within that, you've got teams that recruit brand new sellers and bring them to Amazon and you also got another team who basically nurture and grow existing sellers. And the aim of them is to then push those onto new products, FBA, SFP, things like this. So it's actually a very, very small team for the size of the UK marketplace.

Ryan Cramer: Great. I mean, UK marketplace's what we've touted on this podcast the data represents maybe but half of what the United States represents in terms of volume and opportunity, but that continues to grow and develop. It was on pace so I would say it was definitely two maybe to 2A, or 2B right now behind Germany, if that makes sense I think that would be a fair assessment just based upon Brexit and all the changes around that and people have kind of figured out if they want to continue to grow in the UK or not. We're talking about international expansion now in different marketplaces, that to me sounds like that's your ticket into understanding above and beyond what these other companies might be looking at in terms of if I'm a brand and I want to know that, and this is pretty prevalent in your website. I like how it's our responsibility to take your brain, cultivate it and grow it and make you happy behind it. And I think that's a really cool concept of trust us with something that you grow, you put your sweat equity in, and then we're going to take it and make it something that maybe you don't have the time, the money or the effort to do. And we're going to make you pleased with that outcome, take your vision and grow. Is that kind of the philosophy at the end of the day?

Sam: It is. It is. I mean, I think, look the thing is that because I've done this before, I have my own brand and I've scaled as well to a point. So I understand what sellers are going through when it comes to this exit process and it is so difficult to take a brand to a million and turnover. I think people under appreciate how tough that is. And so when it comes to the exit, this always so stressful, it's so personal. And the truth is the only thing in your mind is, all these people are going to mess it up. Do they actually know what they're doing? And can they truly execute and grow in the business as I want them to. So what we always try and say is, we've been through the process so we get it and second to that, we really, really care because one of the things I think Ali has blown me away by the space is, word of mouth is everything. People speak a lot. It's a lot of conversation internally. And the reality is if you are unpleasant to a seller or completely bomber brand it makes for a challenging conversation, I'm sure down the line with sellers who obviously will know the business owner you spoke to, I feel.

Ryan Cramer: Great. That's an interesting concept too as well because I know that there's lots of brands so there's just always this internal struggle. We've had brokers, we have had private equity, we've had small boutique SNBs in terms of they will operate and they will just purchase outright, not just brands on Amazon but also SaaS solutions. Also just any sort of other tech solution that they could be selling as well. This just seems to be really the hot topic if you will. I say a hot topic, it's been going on for a year and a half but a lot of people maybe now have a new goal in mind as they know that there's that capability of taking it and turning that into something of their biggest asset into a paycheck now and trying it all over again. The news is catching up with that. There's so much more buzz around it in terms of that regards. So what's kind of the positives in this space right now? Because a lot of people might think, oh, this is great because a lot of people can reward small SNBs basically for their hard work. They can just take that and duplicate it on a higher level. Where are the pros to working with, I would call it an aggregator or a business entity that is acquiring brands like yours?

Sam: I think just taking a step back from the aggregator point, I think what's cool about what's happened in the last year or say 18 months is that actually, I think we're seeing almost professionalization of the marketplace. You're seeing sellers get really sophisticated and the tools they use, the insights they can gather. And this is less a proliferation of kind of service agencies are offerings, I think they didn't exist in the past. So actually I think now despite massive macro problems that headwinds the businesses are facing, actually there's quite an interesting supportive ecosystem that sits above this, be it around payments, Awesome, returns handling, customer service, offshoring, incredible infrastructure that wasn't there before. So I think actually it's easier now, I'm not saying it's super easy but it's easier to really, if you want to scale your business effectively. The benefit I think of working with an aggregator, as a seller it depends on what you want in the next of your business and an aggregator they may not be inaudible.

Ryan Cramer: True.

Sam: I think for me what I love is that I have specialists in my team with 20 years experience in supply chain, in 3PL forecasting, demand planning, cross border logistics. That's pretty cool. I was so bad on that when I was doing my brand so to have someone tell me, Sam, we're going to buy your brand and by the way, he was head of supply chain has worked in Shenzhen for a couple of years. He's worked with DHL for many years. He knows supply chain. It's pretty awesome in the same way that, it's the same for creative. It's the same for PBC. It gives me a reassurance. I would say that downsides, and there are always downsides, let's be honest about it. I think sellers might think that the brand kind of might be a very small fish in a big pond and they kind of would rather have their brand give it to one owner, I totally appreciate that as well. So I think it depends on what you're after, but in my view I just love that. I have full confidence that I have specialist functions in my company that essentially are purely focused on growing up secret part of the business.

Ryan Cramer: So what's kind of you guy is this, I say your guys. You and Ali when you came together you probably had an end goal in mind, there's probably we start from nothing. We have to start acquiring brands from day one. What was that conversation like with your first brand that you acquired? Was it exciting? Was it nerve- wracking, we're you amused, did they go smoothly?

Sam: No, it was cool. I think that he was an awesome seller I think. We're pretty honest about one, I knew how to run brands. We were honest about how early we were on our journey and it was very fortuitous that actually he quite liked the fact that essentially his business would literally be our pure passion or focus to get us going. And then it was an amazing learning experience through the process. And they're a great team. No, to be completely honest, there's a ton that goes into the migration of an Amazon brand, I think that should be emphasized. It's quite complicated, if you get it wrong it can be disastrous. And then there were tons of learnings about handing over TPC cuppings, supply chains all the complexity involved. So it was to be honest, pretty well journey but I think if you speak to any aggregator and you ask them how was your first five? I think that everyone would say it was a pretty steep learning curve.

Ryan Cramer: They had a bag in the corner, they were hyperventilating in the corner or something like that. So it is probably something similar concept. I know I would be, well, the thing is you're a salesperson at this point, you're actually trying to acquire a business maybe competing with 10, 20, 30 different offers. I've heard a lot of different brands that have really high expectations and that will offer in various capacities of global, how you pay out. What would that look like and how they're selling that journey it sounds like the marketplace and all those conversations you're having is just almost a salesperson. You're trying to sell what you can do with that business but at the end of the day there's a paycheck tied to it. What's it like knowing that, I'm assuming this has happened to you since you're still handling day- to- day acquisition, talking to brands and when that final agreement comes in. What's it like knowing that your offer isn't strong enough, you see someone coming in and they offer double than what you guys and your team is doing, and you're walking away when you see that brand on Amazon now. Is there a sense of remorse or guilt or is it like I can't do that to our investors or I couldn't believe that's what they offered and congratulations to the brand, but is there that sense of self worth or, I'm trying to go on the philosophical side of things. Is it hard on you when you see somebody win over your offer in that regards? Did I miss something?

Sam: Yeah, no, no. I think the first thing to say is I'm not so much on the investment side, I'm more other side, but we both always try and join seller calls. It matters so much to us when we speak with sellers to understand the why, why they sell to them and why they're exiting. It's also important because for us, and I think for sellers as well, it's just such a personal journey that if you don't get on I sense it's could be a tricky experience of both parties and I think we kind of need to reevaluate for sure. But I think in general in terms of the deal structure, I mean, we had it in the past where an office come in and it is way above our offer. I mean not even close and we have a great investments teammate, who do a ton of modeling both on deal structuring, way more about essentially the forward looking view of these brands. And I've got to be honest Ryan, sometimes they can't quite understand the mechanics behind the deal. But we always think that our offers are fair and if we really, really love a brand and we think we are the right acquirers to take that brand even further, better than other acquirers, then we're happy to pay above and beyond. It really depends but all I hope is that if we don't win the deal, the best seller has chosen the right buyer. I just hope that's the case because we don't want us to choose the wrong one and then ended up due diligence and it's just a nightmare, everyone's still happy.

Ryan Cramer: Great. At the end of the day I know everyone really needs somebody that needs, they need the capacity in terms of they need to still be profitable. And I like the concept when I hear from an aggregator that says, hey, maybe we didn't raise as much as some of these other companies but you know what? We're going to work hard that they'll come, the brands and the businesses that we do acquire. And we're going to all of a sudden establish and make sure that they're profitable and that they're scalable in that capacity. Is there a mythology behind how much to acquire once instead of having this, hey, there's an offer being made and an acquisition being made every five days, every week. I think the stats are so misleading because that seems like a quantity play in almost throwing spaghetti at a wall and seeing what actually sticks and then letting statistics kind of work themselves out. Like, hey, we can make it work if it's not actually profitable, it's just a line item on our balance sheet that says that's a net loss, we'll either sell it off to another aggregator, which I'm assuming is potentially happening behind the scenes, or it's even they iterate that brain into something even further and you're just kind of treading at that point.

Sam: Yeah, no. I mean, look our perspective is it's not a volume play where I have to be on and we're not acquiring the volume I think the others are doing, but we are acquiring I guess, more brands that we think within our quality criteria purely because I think some acquires, not all but some might face operational challenges perhaps in 86 months down the line a year when they have all these brands, they're super challenging to run. And we'd rather essentially acquire slower and choose very carefully the assets we have under management. That's just our own perspective, but no, you're right for sure. The numbers for some of these are incredible. I read the sort of two, three a week which is amazing but that's not how we work.

Ryan Cramer: So with that being said, is it safe to say that with the sheer velocity, and I think that this is such a cool and unique space. I always want to learn more about the mindset behind because I don't think this is different than the business world. It would be as if I am a mom and pop store and I have a competitor and they're actually acquiring me because of the market that I'm building. They're growing my customer base or they're acquiring my customer base. They're acquiring my marketing, wherewithal, my brand assets, and then my inventory and just supply chain operation, that just happens to transition over into a purely digital play. So in that context, what's kind of the growth mindset of also men in your group, because I know that a lot of people like to say international growth is number one, we're going to make sure that this brand is in every marketplace. Marginable where it makes sense and it's profitable to then be either retail or wholesale, and then kind of building that out. And then even that could be a factor, but then also it almost makes sense to me that some of these companies like yours would make sense and develop your own product launches and skillsets because you're bringing such amazing minds together almost makes sense for you to develop your own product where you see a hole in the marketplace and kind of go after it in that regard. Is that a fair assumption or is that something that you have talked internally?

Sam: Yeah. I think what's super interesting is again every acquirer has almost, I would say different strengths, some natural background is supply chain and I've read some incredible stories of the supply chain operations experience. Some are more PPC, some are more branding. For us, the things that we focus on is localizing brands in Europe could be one of the things we see is translating bullet points from the US and having the water translated through to the Germany often is actually very complicated. You have to localize the keywords. So for us, it's around localization and marketing is a huge play, on backend keywords, front- end bullet points, as well as just general marketing. Second to that is then localized PPC. Again, it's a whole new way, a whole when you're after a PPC and keyword and campaign structures in Germany, France, Italy, and Spain. And again how these campaigns are structured will vary because German customers browse a lot more so your ad spend it could be way, way higher than say in France or Italy. So for us, a big player is localizing brands in Europe and we can do that just purely because we've got a team who speak the language. So that's the first step. I think in terms of the additional plays we love certainly new product development, so in our team we've got a guy who's a triple Amazon FBA seller, incredible entrepreneur he's come in and he's helping us basically with new product launch and development. Again, super hard to execute, I can't stress that enough. It's like sourcing the right product, getting the PO and marketing correctly, launching a product. It's super challenging. So again, for this role we brought in a guy three times to basically lead this business for us. And again, yes we love adding new selection. What I'm super excited about and this is one we're looking at further down the line is, incubating our own brands and really finding the issues where we think we see perhaps a business that wasn't right for us, but actually that's a really cool niche. And we should look more broadly into that. So tons of areas, there are the obvious ones you said, there is obviously international expansion but again, it's actually quite hard to do effectively. It's not easy. So I hope that answers your question. I'm rambling.

Ryan Cramer: You're not rambling. I think there's a lot of components in the mixture. It's not as simple as throwing them into different international marketplaces. It's a little bit tough to figure out each marketplace like you said, localizing, making sure the listings is seen and optimized depending on where you're selling. One of my favorite episodes was talking through Japan and the PPC where with all of selling in Japan knowing that there's four campaigns for every single one product is somewhat mind boggling to me to know that you have to speak four different languages just for one marketplace and hit all those different components that make sense to that look like audience, but you're talking to a billion plus people in Japan and in Asia. Other component I think is fascinating in the space too, is you said that all this talent is being acquired or this coming together and saying, hey, we actually have the wherewithal to build our own brands and kind of scale our own companies to a seller who's maybe by themselves, that might be a scary thing because they're saying, hey, all of a sudden there's all these major corporations that have the money, the power and the wherewithal to maybe take over a certain category or space. It's not as simple as just, there's only going to be 10 companies are running Amazon marketplace. What do you say to a seller who's saying there's still opportunity, you can do it yourself where you just have to do be doing that scale and there's opportunity amassed throughout the world?

Sam: Yeah. I think the common challenge we had when we were trying to raise funding for this business was, but is Amazon really that big? Is it actually that big opportunity sort of. So then we built this map of where Amazon was actually operating and then also the emerging marketplace they were going to launch or had launch. So if you look at Europe and I say to a European seller, oh sorry to the US seller and you're looking to come to Europe, what are you thinking about? And often that is Germany. Germany is an obvious one. And you might think trying Europeans, Germany, France, Italy, and Spain, but then now there's Poland, there's Sweden, there are a few others that I know that I'm not going to say because they shouldn't know, but they are coming on. There's Turkey. There are many, many marketplaces. We don't even sell to some of them like Turkey, none of our brands are in Turkey. I'd love to get them on there. But I think just taking Amazon by itself, I think the market opportunity is huge and undoubtedly feel it's complicated and it's not easy as you're saying, so I can launch a brand in Turkey. But I think there's a huge opportunity on the Amazon marketplace. I would say the feedback I've had Ryan from the guys inaudible prosper who was, it's such an exciting opportunity of Amazon and particularly on Walmart and kind of on your own panel. And obviously we all know about this kind of brand referral programs just trying to push traffic back onto Amazon. So I think I'm super part of the hearing what the guys are saying about Amazon opportunity and for us it's fast, it's a whole new realm. And again, some of those we can't wait to explore. So Amazon's huge but again, the Awesome is on puzzle so equally exciting.

Ryan Cramer: So what's a marketplace that Amazon might be missing right now, is there one in the world that is just a glaring gap right now in terms of where they should be and where there could be a potential crazy opportunity, whether it be because there's a mountain people or it's just the logistics don't match up yet, or it's still emerging. Is there anything outside of Europe that you think Amazon might be missing currently?

Sam: Well, I couldn't speak of them, I'm sure the marketplace growth theme is looking very closely at opportunities to launch in aside from regulatory barriers or lockers to scale and the logistics business. I think Poland is a really interesting one and I'm really excited to see how Amazon and Poland takes off because Allegro is, I've been reading the stats about their largest marketplace and it's absolutely amazing. And I think we are looking very closely at our brands there and we're bustle wars on that, so I think for families in Poland, it's a super exciting opportunity. I'm following Amazon in Australia quite closely. Some of my old colleagues they moved to Australia and help watch the FBA business there a couple of years ago. And initially there was a lot of fanfare around what are these guys doing, it's an actually flop, first prime day it was not a success. But again, I'm following that market really closely and we get contacted by quite a lot of Australian sellers who are selling internationally, but now selling in amazon. edu. So again, really, really intrigued by that one. Look, tons of opportunity. I'm super intrigued by the emerging marketplaces, Singapore is a really interesting one. I know in SouthEast Asia there are lots of aggregators cropping out there, but the challenge for these guys is that these sellers trade across multiple marketplaces. The Shopee, Lazada, there are many, it's a very fragmented ecosystem and Amazon is really quite not the main one. So I'm fascinated to see how that plays out.

Ryan Cramer: Do you ever think that the aggregator space will, I mean, we wouldn't call it aggregator that would be focused off of Amazon. Do you think that would ever emerge, you mentioned a lot of these are on different marketplaces, whether it be on eBay, still very successful around Europe as well as Australia or SouthEast Pacific Asia countries. Do you ever think that one will be just establishing dominance of, we want a brand that will be off of Amazon therefore we can grow, potentially even nominee Amazon. Is that almost a reverse path if you will, for a lot of the business models that we're seeing now?

Sam: So I had a really interesting conversation with someone on exactly this question, the very end of the DTC space. The thing about acquiring direct consumer brands, and I know there are companies out there trying to become the next acts of acquiring DTC brands. The challenge of acquiring DTC brands is that there's a ton of IT and backend operational complexity that goes along with this, that the more you move into the DTC space, you realize just how much of the heavy lifting Amazon does. So let me just take one example, let's say we acquire German DTC brand that trades across Europe and they trade in France, Germany and in Spain. For us then that one DTC side we have to then take care of essentially five different returns languages, five returns cross border transaction problems with dealing with, again, probably having different three piles in the five different jurisdictions and then five different VAT requirements. There's just so much complexity, without having to obviously then own these customers in the different geographies and therefore there are different customer acquisition and retention campaigns. It's really complicated. So I think it's awesome and I think if you are focusing only in say one country, my understanding is that from an IT and operations perspective it's a bit simpler, but I ahead of IT but we spoke about it as a team. When are we moving to DTC as a focus and the pushback was in Europe. It's just so much operational complexity of running that and Europe it's just better to kind of focus on. Focus on the Amazon so to speak we're talking.

Ryan Cramer: Since you worked for Amazon, is it scary to rely on a majority of knowing that Amazon could potentially change the marketplace or the terms quite rapidly? And you've probably seen this firsthand. I know that's a frustration for lots of sellers trying to navigate the field. I know it's, hey, play ball with the big boys it's just part of business. It's part of just ebbing and flowing with these businesses. But at scale is it difficult to kind of no doubt lots of your revenue is coming from a platform if you will, that can change almost without any sort of notification and you have to all of a sudden switch out either inventory levels out of fast paced. Trying to figure out if your listing is shut down and there's no continuity, which seems that you can predict or plan for as well as one may want to?

Sam: Yeah. Yes. I think when I was working there Ryan, I had it-

Ryan Cramer: I heard it in your voice, man. I heard it.

Sam: It's Affair. Again I sort of went into this. I told Ali, I was like, my biggest worry here is actually what could happen with our brands that we acquire and somewhere they can just get shot down. I manage businesses Ryan, and some of these were pretty large and there were tough times overnight. And I spoke with sellers sometimes who were literally crying to me on the phone and it was our job internally to understand what was the reason, why did it happen, how you meant to basically resolve it. And I've seen the really ugly side of this, and it's super challenging. So yes, going into this business you should be completely aware that it is a beast you're dealing with, and it is black and white. There is no gray. And sometimes they might perceive your white as black, and then suddenly you find yourself penalized for something that you didn't even think was wrong. So internally we have Wiki and Awesome has all the things essentially that could happen and if they do happen, why does it happen and what to do, we just know from experience. Yes, your point, I've seen the ugly side of it, and I'm acutely aware of it and to be honest it hasn't happened yet, but it will happen when something really, really bad happens and we have to deal with that. So it makes me even more keen to focus on the Awesome as an opportunity as quickly as possible for the brands where it's relevant. So as I said to you, I'm super excited by the warm opportunity and all founders and opportunity because the reality here is if you are fully dependent on this marketplace you are exposed and it's quite risky. So totally agree.

Ryan Cramer: Well, I've heard even in the aggregator space are out looking at solely dependent on Amazon, which I find fascinating, but the other concept and I like to think of this in economics and general, how long are you expecting a product or brand to be relevant in a marketplace like Amazon? Because let's say for example, you see the fidget spinner, you see it's iterated, it's this wave of great revenue and growth that lasts maybe a year or two, then you'll see Peter out. It's not really as big or as dominant or isn't trendy as it might once be. What's kind of the expectation for you or your internal team to think like, hey, this product has a shelf life of, maybe if it's in this category, it's a shelf life of three years. Maybe we need to iterate it or change it up or bring another or, is there an expectation for that or is that just kind of business as general?

Sam: I think this is a really interesting, really interesting question. The cyclicality of brands on Amazon is one that we watch very closely. And in some categories, typically the categories we wouldn't really invest in there is a life cycle of a brand. And typically this is because the barrier to entry for that particular sub- niche is very low. So you'll have fierce competition to basically launch and rank a product. So when we look at brands we've acquired, we look at how sustainable is that position long term and there are various ways we can quantify that. But I totally agree, I think where you make the wrong acquisitions is where you suddenly find a brand that was once top of the BSR rank, is suddenly finding market share erosion month on month, day on day, they're just losing sales because it's just how fierce competition is in Amazon. So I think that is probably the biggest risk with this business model. And I think you need to be very careful about what submissions you targets, because the most popular ones, I'm going to say one for example, consumer electronics, it's so fiercely intense and it's really hard to maintain the Caspian position for, I mean, we've seen brands go for a month, three months, a year and then they just piss off. So I think Anchor, Anchor is an exception and it's extremely hard to sort of build a brand like that. So that's a really interesting topic, we talk a lot about that.

Ryan Cramer: So is there another sort of conversation to be heard around maybe not just off Amazon, but in general what you're acquiring and just the iterations that could potentially come from that brand, what it represents. You can have a home, I'm not sure all the brands that you guys acquire, and I'm not sure if that's public knowledge, but is that maybe why you're starting to see the emerging markets for intrinsic for example, that's a name that specifically is focusing on they're an aggregator company, as you may know, they're only focusing on health and wellness and that's because they've worked with other sorts of products out there in the retail space, that's their bread and butter. We know for a fact that as different come to market, we can actually put our hat on that and say this is who we represent for your health and wellness. Come talk to us because we know how to grow those and iterate those. Is that maybe where you're going to start to see lots of different companies move towards either a specific niche focus or to say, hey, we're good at taking a brand, putting into Walmart retail or just growing it on Amazon or are you going to see, we'll take everyone approach and that's kind of iterate and grow from there and that's where they live. I won't say there's a right way to do it, is there a way that you kind of forecast this space going maybe?

Sam: Yeah. I think the space will evolve depending on what sellers value and my long- term view is that as this ecosystem develops, as CPCs and advertising continue to increase, I think sellers long term will place a higher value on the off Amazon expertise and the off Amazon potential of the business for a couple of reasons. One is longterm sustainability of revenues, but two really, it's often an area that's more complex and perhaps an area that sellers haven't really managed to explore. And my personal view is this is just one for us is that, that's an area we're going to invest in because I think that's a highly valuable position to tell a seller, we have deep expertise in Walmart, deep expertise in retail with Togen and a few other large retailers in the US. It's very hard to build that skill set I house. If you have it, it's very valuable, the idea of targeting sub- niche is I think it's an interesting one. And to be honest, do I think sellers value that? Probably, I think some probably will. I think to be honest, as long as an acquirer is operationally very capable of the supply chain at branding, I think right now there's no urgent demand for that. However, again, as I said, I think the acquirers and the specialists that acquires markets are going to be very much driven by sellers, other things would be so interesting to see prosper next year. What are sellers talking about as being the key value driver and I think it's going to be, off Amazon is where I think the big focus will be. And so that for us is a big focus.

Ryan Cramer: How important is it for partnerships for a company like yours to not just have to build it from scratch, but having to rely on expertise of other businesses out there whether it's translations or any sort of localization or copywriting. Is it easier to rely on partnerships or would you rather have all that in house? And I know your team is all on the same page in that regards.

Sam: Yeah. Good question. We've had some fantastic experiences working with third parties and as I said at the beginning of the call, this proliferation of aggregators there's been almost a professionalization of service offerings. And I think there are some great third parties out there. We had not to part of experiences in the past with some but I think for some areas for example returns handling and refunds and things like this and kind of reimbursements, amazing services out there. That's not something we do in- house but fantastic. Again, usually any areas with the customer, we like to keep in house, the customer service, we like to internalize it. Anyone who communicates with our customers, we like to own that relationship where possible. But for sure, some areas we have some great type policies. But I think there's a long way to go. I think there are still opportunities to plug into. What I've heard from Prosper is there's a service for pretty much every sort of possible problem you face. I know David, from our team, he came back with a huge list of amazing tools and people he spoke to, we should be connecting with. So I'm all for it, I mean partnerships are fantastic. And I think in this industry, they're so important because people talk a lot about to network, about to share ideas and to be honest, we're all for that. We love speaking with specialists.

Ryan Cramer: What's your pitch to an entrepreneur to start on Amazon even nowadays? Do you still talk to people who you have a day to day conversation with, maybe that says, I don't know if Amazon's the right place for us to grow. What's that conversation like for you and how are you selling the Amazon experience still even to this day as prices to enter are going up for brands, is there a conversation? What are you telling people?

Sam: I'll put up my hat for my Amazon you're a seller no, I think the reality is that the marketplace is so big, it's constantly expanding, all the numbers and we're going to sort of go too deeper. There's always a sub- niche that you can plug. And the customer base is so broad and so vast that there's always an opportunity customer for you. I would say that, and it's quite funny because our team, they look at so many interesting opportunities, but sometimes we chat after work where they're like, oh, what would I do if I was a seller, what product would I sell? And we've got tons of ideas. I would say as a seller joining now list down the things that you're great at and list down the things you're really bad at and you don't joy. And I would say for all the ones that you're not very good at outsource to someone who's a professional. And I think principally for me anyway, that was supply chain. So supply chain, have a VA or someone who's fantastic at supply chain to help you with that function. And then I would say find a really niche and a sub- niche and there are lots and then come up with a brand you see typically in DTC or in retail and essentially try and emulate that. That's what I did with my brand. But I think, think about as a seller and as a first time entrepreneur entering this space is longer term, you ultimately want to exit this business. So think about what you need to do in order to build that and there are lots of podcasts on what to do in that respect, but do think about the long term success of the brand and how you can make it defensible in the long term.

Ryan Cramer: Since you spoke about Bernie, I've asked this a couple times to people but I don't know if I've asked a person who's in charge of aggregation in general. How important is a brand that puts a lot of emotion or puts the face of individual as part of that brand? Is that valuable to a brand in your eyes or is that something that you can't replicate internally? So if you were to purchase that brand, if I'm a seller and I know for a fact if I'm Ryan's hardware store or something like that, and I have a really good selection of products but they know that my name's tied to it, my face is on the brand or logo or whatever that might be. It would be a terrible idea for example purposes, what would be kind of your thought around that? Is that something that sellers should maybe separate themselves from or should they more... is that valuable to even a business like yours?

Sam: I have very strong views on this because, my personal opinion is customers aside from reviews which is obviously a key driver. Customers buy the why of your product, not the what. So if you are a seller, you are Ryan's spatula and I'm all Sam spatula, there is no why behind my story, but your why is you are a budding chef, who came up with this amazing brand, deal with a problem you face and you grind it really hard. And then you launch in restaurant and these are the products you created with your own restaurant. That story speaks so much more than mine and so I think with sellers, build a brand about you and why you, so for example we came across a business that they made loo roll for all these and it was literally paper towel, but the story behind the why and who they were, husband and wife, kids, traveling, digital, no meds. I was like, this is sick. I love this story. I told audience I want this brand. These guys are awesome entrepreneurs. Customers love them because whilst there was just loo roll, a toilet roll customers were like, great story, I love the founders, amazing soft paper. Was it any soft? I mean, it was soft but I don't know if it was any softer. So the why is so important and we work with entrepreneurs where they've slightly gone no, I think it's more about the quality of the product and it's more about, just telling the customer what it is, which is true but never underestimate the story of who you are and how you got the brand to where it is because it's seriously hard and customers really value it. So my personal opinion is yes, it matters so much.

Ryan Cramer: So how do you put a price point on that? Because they're no longer in operating, it would be you. How do you quantify something as difficult as maybe a feeling that you get when you purchase a product. Because a story it's unquantifiable, there's no metric that says it does better than Charmin or any other sort of name brand out there. Like you said, all these loo roll or whatever that might be, not slight to brother but just how do you quantify that in terms of measuring how that's going to factor in your payout or your terms or just your growth to your board or anything like that? You're like, hey, I really felt that this has a quantifiable metric. I don't know what that is but trust us in that regards. Does that make sense?

Sam: I think just a couple of points to unpack there, my first point around the value of a defensible story and narrative can't be on the value. So for us that value would probably place in the longer term of where we can take this product. What new markets can we take this products to. Where else will customers connect with this brand. So yes, it would attract to high multiple and to be honest, we did it very highly on this brand but someone else loved it even more than us so they took it for us, but it's doing well. It was great to see. The other question I would love to get your view on this is, and a common challenge we get is if you take these passionate owners, these founders out of a brand does it take away the soul, the heart of the of the business? Can you actually execute and grow the business without them? Well, Ryan What do you think?

Ryan Cramer: If you're asking my thoughts. Well, I think it depends on how involved the founders are or how maybe involved they are afterwards. I'm trying to think of some exciting because when you think of certain brands, you might think of individuals and that's a good thing. If they're selling the likeness of their story, I think a lot of people like the story behind the founders and what it represents. At the core I think a lot of people don't think like, hey, this person's going to order to sell these products but I think the basis of, if you can at the heart of everything you do honor that thought process behind it. I don't know. I guess it depends on the company and growth because let's say worst case scenario, this brand gets put on the desk of somebody out of college or a new account manager and they're going to be running the growth. Is that person going to care as much as that individual, when they were growing from nothing all the way to something, probably not. It's not much, but if you're cultivating an environment where everyone's on the same page and it's your due diligence to represent them moving forward I think you can to a degree. I don't think it would be a 100% but I think if that is at the mindset of what you're doing, I know people have stayed away from those brands because it is difficult to do. But if you understand where they're coming from and you know the story and how that can grow, I think you could potentially do that as long as you keep that forefront of what you're doing, whether it's all eco- friendly products or hey, our daughter had cancer and now this portion of these proceeds go to cancer research or something like that. I've seen a lot of brands put money back into what makes them passionate and why they do these products. So I think if you can cultivate that growing forward or going forward I should say, I think that could be replicated to a degree and still build on that brand if that answers your question, that would be my personal opinion.

Sam: Yeah, no. I mean it depends on the category of them. I think some require such a niche understanding specialism that I just couldn't possibly tell the seller that our team could take that one and manage it within three months. I just don't think it's possible. But I think some, and especially in our team we're doing other acquirers structure you can if you build the right mentality and you make the brand managers almost CEOs of these brands and you reward them incentivize in the right way. I do think it's possible. And I tell you, we have the sellers come in here and the sellers tell these brand managers their story. We have face- to- face meetings here and these brand managers meet these owners and you see the passion they have, it's infectious. And actually they work very closely for a period, half of period. And then obviously depending on how the structure it might be they step back. But that's what we found works really well, bringing the two parties together and just saying inaudible I've got this idea, this idea, you need to do this. It is possible.

Ryan Cramer: Well, sometimes I think too maybe Amazon's not the place that you build that brand. You're talking about the exciting natures of building a directed consumer brand, whether it's off their own website or even just telling that story into different marketplaces. Branding on Amazon has been fascinating to me because if I'm a consumer and I'm just looking for a solution, am I going to search for that brand? Probably not. But the awareness comes after the fact they know that once you buy that product, that's where brand recognition really kicks in. I think if you're driving lots of people like Anchor for example, that's a name brand that lots of people obviously know that, they don't know it's stemmed from Amazon but they know what that represents and know where they can go and purchase it. They built that off of on their own websites now. All kind of just ties to the title but branding is hard on Amazon. I think it's very difficult. I've heard people like Kevin King, for example who's fantastic at branding and growing fantastic businesses on Amazon. And he touts, once you get to certain functionality and search volume for your brand, then you know you've actually made it in terms of your brand has been successful on Amazon. So I think that there's a component of that instead of toilet paper, you're looking at all these toilet paper roll or something like that. I think that's very fascinating in terms of what that metric actually means to people searching for that specific one on Amazon versus what it represents in terms of the feeling and wherewithal and what the company represents.

Sam: I completely agree with you. I do.

Ryan Cramer: So with that being said Sam, what's kind of the next part of this year. I know we've already talked to hour and I told you inaudible. I would talk to you all day about philosophical nature of Amazon and building brands, but what's kind of the next part of the year look like for you and your team. Is it more acquisitions? Is just focusing on what we have here going forward? What's kind of the core focus on what you guys want to do and achieve for the rest of 2021?

Sam: Yeah. Look, this year's a really exciting one. I think we have some really exciting news we're going to be sharing very soon.

Ryan Cramer: Anything you can drop today?

Sam: No, no I can't share today. But then in terms of, we've got a couple more acquisitions we're looking at doing, some more sizable transactions, but to be honest, Ryan I think Amazon sales are facing cost pressures at every single angle. You've got container ships, the containers are out of control now. You've got the infantry performance index score that to be honest make it's so difficult to grow brands. We're dealing with raw material price increases. We're dealing with Q4 surcharge rates and storage. There's tons of cost pressure. So our focus is executing on an amazing Q4 and finally honing in on our platform that we're building to make running this seamlessly, super important for us. So tons going on but super exciting. And I've loved talking with you and hope it's been an informative fun session.

Ryan Cramer: It's been fantastic man. I guess my final question for you is how did Ali get the first part of the name Awesome. How did he negotiate that with you?

Sam: We were back and forth. It was literally, I sort of thought actually, did that, Sama was taken unfortunately, so I had to go to Awesome but he's very happy. He's got it. I could take that free.

Ryan Cramer: I was going to say, yeah. For a family that works together to put both of your names on it, that looks pretty awesome. So that we're talking about personal branding and there we go you even put your stamp of approval on it, but put your name literally and figuratively into the business. So that's awesome, Sam.

Sam: It's a family business.

Ryan Cramer: So I was going to say, is it just you two or is there another brother or a sister that we're leaving out of this business that's not inaudible

Sam: Actually I'm one of five brothers. So that there's a couple of other who-

Ryan Cramer: Really?

Sam: Yeah. Who are looking to get involved. I tell them there's enough risk as it is. Don't come in. But no, we've got many brothers in our family so they're all eagerly trying to see how they can get in.

Ryan Cramer: Throw them in a warehouse, do some manual labor.

Sam: Yeah. Exactly.

Ryan Cramer: Or talk to suppliers or whatnot. So, hey man, thanks so much for hopping on day and it's been fantastic. I'm excited to see, like you said, a lot of news in this space in terms of acquisitions and money being raised. I think that's just the beginning if you will of what's to be seen and I think innovation is super key in this space. I know you guys are working on that and you found kind of this nice little sweet spot working in Europe and then obviously brands in United States. So I'm excited to see where you and the team kind of move forward from here.

Sam: Definitely I can't wait, I can't wait.

Ryan Cramer: Awesome. Thanks so much, Sam for hopping on today and we'll catch you next time on Crossover Commerce.

Sam: Thanks guys.

Ryan Cramer: Yep. No problem. And then everyone, thank you so much for hopping in. I'm going to get rid of that. There you go. I always do this every time when I want to move on to the next graphic, if you will. Hey, it's hard to produce and to intervene all in one, but we're going to get there. You think I would have a done by episode 132, but sometimes my trigger is just not, or my finger is not quick enough to select next graphic. But what do you think everyone? What's kind of your expertise and your, I should say thoughts on the aggregator space? What do you think it's going to be in the next six months year or so? If you had a conversations at Prosper, any of these events, what was those conversations like? Are you more apt to sell your business to any aggregator or work with a broker? What's kind of your thoughts? I would love to hear what you think in the common section whether it's on the audio side with downloads or if you're on the video side, you can put those in the common section. So go ahead and drop those in there. I'll love to hear your thoughts. And of course, I forgot to ask Sam directly, but you can go ahead and check out Awesome in their group @ awesomegroup. com. So make sure you check them out. That's going to be the comments and the show notes as well. So if you ever check them out, look at their background, who's working with them, what kind of opportunities that might exist with them. Go ahead and check that as well. So with that being said, this is Crossover Commerce. This is episode 132, A Family Affair Building Brands and Taking Them To The Next Level. Thank you so much Sam and his team for hopping on Crossover Commerce and we'll go ahead and catch you guys next time on another episode of Crossover Commerce, take care.


Ryan Cramer of Crossover Commerce talks with Sam Horbye of Olsam Group about elevating brands to new heights.


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Today's Host

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🎙 Ryan Cramer - Host

|Partnership & Influencer Marketing Manager

Today's Guests

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Sam Horbye

|Co-Founder of Olsam