E374:🎓NO EXCUSES - HOW TO BUILD YOUR ECOMMERCE BUSINESS FAST & MAKE IT ATTRACTIVE FOR ACQUISITION!

No Excuses: How to Build and Scale an eCommerce Business for Acquisition Success

If you've been wondering how to grow your eCommerce business into something acquisition-worthy, you're not alone. Many brand owners dream of building a business that's not only profitable but also attractive to investors and buyers. Neil Twa, founder and CEO of Voltage Holdings, has spent nearly two decades doing just that—building, accelerating and selling direct-to-consumer brands. He shared his playbook for doing it right, avoiding common pitfalls and thinking beyond the basics.

Let’s break down the game plan - What Makes a Brand Acquisition-Ready?

When investors like Voltage Holdings evaluate businesses for purchase, they look for clear signs of growth and operational soundness. But not all growth is created equal.

* Strong Organic Growth: A brand showing consistent organic growth of 10-30% annually is more appealing than one growing at 3-5%. Anything close to inflation rates doesn’t scream scalability.

* Off-Amazon Channels: Diversification matters. A brand achieving at least 10-20% of its revenue beyond Amazon (think Shopify, direct-to-consumer, or wholesale) often has untapped potential.

* Operator Savvy: If business owners don’t know basic numbers like gross margins and net profits, it's a red flag. Brands succeed when operators understand not just the product but the operations.

The goal? Build something resilient, scalable, and set up to thrive even if handed over to someone else.

Build a Brand, Not Just a Product

Too many entrepreneurs focus on single products. But as Neil points out, winning in eCommerce means thinking bigger. You need a brand.

* Test Products, Don’t Marry Them: Launch and test 4-5 products at once. Keep the winners, drop the losers.

* Think Long-Term: Great brands go beyond trends like fidget spinners. They solve customer problems and cater to specific lifestyles or interests. Take homesteading. If someone's preserving food, they likely need canning equipment. Brands catering to related needs gain repeat customers.

* Expand Horizontally: Once you find a product that works, add complementary products to create a "circle of confidence" around your target customer. Sell entire solutions, not single items.

This kind of planning shifts you from a "guess-and-hope" business model to one built for sustainable success.

Common Mistakes That Kill Profitability

It’s not just about what you sell—it’s also how you sell. Neil shared common areas where businesses fall short:

* Logistics Chaos: Nearly all brands can improve logistics. Moving to better 3PLs or adjusting warehousing systems can tap into big cost savings.

* Channel Overdependence: Amazon-only businesses are risky. Relying on one platform means you're at the mercy of its changing rules and fees. Build a presence on multiple platforms.

* Operational Blind Spots: Owners who confuse operational metrics or fail to optimize supply chains leave money on the table.

Neil’s team focuses on dialing in these problem areas immediately after acquiring a business.

The Changing Game of Amazon

Amazon has shifted gears in the last few years. It’s no longer a "get rich quick" opportunity—it’s now a more complex, competitive marketplace. New fees, stricter compliance rules, and rising advertising costs have changed the game. If you’re not prepared for this, you’ll struggle.

To stand out on Amazon today:

* Defend Your Brand: Build IP protection through utility patents or trademarks. Generic, unprotected products are easier to copy, making them less defensible.

* Elevate Pricing: Consumers value premium offerings. Always consider how you can develop a higher-priced, better version of your product line.

* Leverage Data: Use Amazon’s data to identify where your customers are and optimize inventory placement to minimize logistics costs.

The businesses thriving on Amazon today are those playing smart, not just playing.

Expanding Beyond Amazon

While Amazon dominates, other channels can fuel growth and reduce your risk. Think about marketplaces like TikTok Shop or wholesale options.

* TikTok Shop Gains Ground: TikTok is evolving into a legitimate shopping platform. Its growing 40+ demographic mirrors much of Amazon’s audience. Bonus: TikTok’s affiliate commissions are higher than Amazon's influencer commissions, making it an attractive channel for brand discovery.

* Wholesale Diversification: Strategic wholesale helps brands reach audiences they wouldn’t find otherwise. Even if direct-to-consumer (DTC) drives your sales, a strong wholesale partner can stabilize your revenue streams.

The key? Don’t spread yourself too thin. Focus on channels where your audience already exists.

The Role of Technology

Running a scalable business without tight systems is nearly impossible. However, many businesses neglect their technology stacks.

* Operational Independence: Brands weighed down by internal logistics or warehouse teams are difficult to scale. A 3PL solution is often more efficient.

* Incorporate Data Analytics: From inventory tracking to customer insights, tools like inventory management platforms and PPC dashboards pay off big time.

* Easy Integrations: Connect your Shopify store to Amazon logistics or tap into systems like TikTok fulfillment. The simpler your setup, the faster you can scale.

Poor backend infrastructure is one of the quickest ways to kill potential growth—or lose investor interest.

Should You Go International?

Expanding into international markets like Canada, Mexico, or Europe sounds exciting. And yes, Amazon’s global marketplace is booming. But without a localized strategy, you could waste tons of time and money.

* Localization Wins: Selling in Mexico requires understanding Mexican customers. The same applies to Germany, Japan, or Canada. Simply copying your approach from the U.S. won't work.

* Beware of IP Risks: If you’re serious about international expansion, register your trademarks in those markets. Otherwise, unethical sellers could hijack your brand.

Roll out international sales only when your domestic market is solid.

Rising Amazon Fees: What It Means for You

Amazon’s new fee structure has rattled sellers. From increased advertising costs to logistics charges, every step seems pricier. But these market shifts also level the playing field.

* Expect Price Inflation: Rising costs mean higher product pricing across the board.

* Shift Your Logistics Strategy: Use data to optimize shipment plans and reduce transit fees.

* Build a Brand, Not a Product: Commodity sellers are feeling the squeeze most. Building a brand gives you wiggle room to absorb rising costs.

Businesses adapting to the new landscape will find opportunities others miss.

Final Thoughts

Building an eCommerce business that’s attractive for acquisition isn't about luck or trendy products. It’s about strategy, systems, and execution. Whether it’s creating defensible intellectual property, expanding into complementary channels, or tightening up operations, success stems from thoughtful planning.

Don't aim to just “get by.” Build a business worth buying.

To learn more, check out the related THE eCommerce EDGE Podcast episode below: