Ecommerce investor Roman Khan discusses navigating the post-Covid market, reviewing purchase candidates cautiously, sharing investment criteria and predictions for recovery. Topics include scaling D2C ventures, investment strategy, e-commerce trends analysis, and challenges in acquisitions.
Selling on Walmart.com can boost sales by accessing a large customer base.
Peak 21 focus on acquiring D2C brands with growth potential and strategic marketing.
Acquiring D2C companies requires careful evaluation of product fit, margins, and market trends.
Deep dives
Benefits of Selling on Walmart Marketplace for Online Merchants
Selling on the Walmart marketplace can address the challenge online merchants face in generating traffic and sales. By listing products on Walmart.com, merchants gain exposure to millions of potential customers. Additionally, Walmart currently offers promotional discounts, cutting referral and fulfillment fees by up to 50% for the initial 90 days, providing a cost-effective opportunity for sellers to reach a wider audience and increase sales.
Insights into D2C Brand Acquisition Strategy by Peak 21
Peak 21, a D2C holding company, focuses on acquiring and growing direct-to-consumer (D2C) brands. Their strategy involves purchasing existing brands, enhancing their performance, and possibly selling them at a profit. The company's founder shares their journey from starting with a $20,000 investment in their first brand, Lindhyr, to scaling up and selling brands like Raycon. Peak 21 leverages its expertise in D2C marketing and supply chain to nurture acquired brands and drive growth.
Criteria for Identifying Ideal D2C Businesses for Acquisition
When seeking D2C companies to acquire, Peak 21 looks for specific characteristics that indicate potential success. These include a strong product-market fit, repeat purchases, and a daily usage habit for consumable products. The company evaluates contribution margins, aiming for a minimum of 50%, while ensuring a compelling value proposition for customers. By focusing on trends, market dynamics, and financial metrics, Peak 21 strategically identifies viable brands for acquisition.
Challenges and Trends in the E-commerce Acquisition Landscape
The e-commerce acquisition landscape presents challenges such as deal fatigue, sophisticated sellers, and market fluctuations linked to past investment failures. Peak 21 navigates these challenges by conducting extensive due diligence, assessing market trends, and adapting their acquisition strategies. External factors like interest rates and market sentiment influence the timing and feasibility of acquisitions, suggesting a cautious approach towards future e-commerce deals.
Opportunities for Potential Sellers to Engage with Peak 21
Entrepreneurs looking to sell their D2C businesses can connect with Peak 21 through their website or personal contact. Peak 21 welcomes inquiries from potential sellers seeking to explore acquisition opportunities. By reaching out via the company website or direct communication channels, entrepreneurs can initiate discussions about selling their businesses and potentially benefit from Peak 21's acquisition and growth strategies.
The post-Covid ecommerce hangover has hit Roman Khan. He launched his first direct-to-consumer brand in 2013, acquired others, and in 2021 founded Peak 21, an aggregator with equity investors. The outlook was good.
Fast forward to 2024, and many ecommerce companies are struggling. Mergers and acquisitions have cratered. Yet Khan perseveres. His team reviews dozens of purchase candidates every month, albeit cautiously.
In this conversation, Khan shares his investment criteria, current market conditions, and predictions for a recovery.
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The mission of Practical Ecommerce is to help online merchants improve their businesses. We do this with expert articles, podcasts, and webinars. We are an independent publishing company founded in 2005 and unaffiliated with any ecommerce platform or provider. http://www.practicalecommerce.com
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