Until very recently, there was a certain consensus on the definition of marketing as a set of techniques and studies aimed at promoting the commercialization of a product or service. However, the emergence of the Internet over the past two decades, and specifically the consolidation of e-commerce during the pandemic, they have given this discipline a much more strategic take-off and closer to the heart of companies.
This is how growth marketing took shape, an evolving concept from traditional marketing. It is a precision approach, based on scientific data, which makes it possible to measure and optimize in a very agile way all of the communication processes of brands, as well as the purchasing behavior of customers and prospects.
Among other important contributions, growth marketing solved an old concern: how to measure the return on investment of marketing strategies? Today, we can see the consumer’s lifecycle through their data footprint and know their click journey in detail.
Like a Trojan horse, growth marketing is silently branching out into all the sales processes of brands across their multiple digital platforms (websites, social networks, online stores, etc.). Current marketing provides very useful tools to measure investment and its return in real time, at all stages of campaigns: segmented advertising strategies, SEO and SEM positioning, audience measurement on social networks and websites, among others. .
The Importance of Precision Tools in Campaigns
According to IDC, an IT consulting firm, 65% of global GDP will be digitized by 2022 and the rate of business investment in its digital strategies will increase annually by 15.5% to reach $6.8 trillion in 2023. The data reveals the importance of applying precision tools in promotional and sales campaigns.
On another side, I like to think of growth marketing as a discipline that will bridge the online and offline worlds.. This line is becoming more and more blurred, and there are already mechanisms that integrate the two worlds, correlate them and make them work in a complementary way, with very precise measures (importing offline conversions to optimize online campaigns, for example). I believe that one of the great challenges of marketing is to understand the characteristics of the two ecosystems, and to use their opportunities in a coherent way so that the user has the feeling of living the same experience.
In this context, the new business model of growth marketing is here to stay and those who fail to implement it will lose ground to their competitors, in a digital tide characterized by a huge supply that competes for the attention of consumers. dispersed users. Adapt or die, that seems to be the dilemma.
Marketers are probably facing an unprecedented era. These times require us to be flexible in the face of challenges. And at the same time, we must be a trusted answer for those who bet on strategic marketing and want to evolve with it, no longer as a peripheral business need, but as a central bet for the survival of the organization.
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It’s one of Charlie Munger’s most popular topics, partner to 94-year-old Warren Buffet. Common sense. The least common of the senses.
Once in a while, I like to watch a YouTube ad almost to the end. They are the ones who are really good. If a post manages to get someone after so much saturation to get rich in 24 hours to stay, then you have to admit that has its merit.
In my case, in the advertisement that I saw this morning, appears a coach who is aimed at the self-employed with the promise of helping them to increase their turnover. At the end of the video, he promises to give you an Excel sheet where he explains his method in detail free of charge. The funnel is not surprising. Common sense. I leave an email that I never use for anything to see the spreadsheet.
I receive an email and I arrive on another video where, apart from the spreadsheet, the coach explains to me again how it works. Again nothing from the other world. All common sense. That yes, everything is very well structured and explained.
Maybe my case is different. While it’s impossible not to sound a bit arrogant while saying this, I might already have this freelance thing a little more optimized than average. I’m not saying that I can’t learn anything from this coach. Surely if I do a session with him he will be able to tell me things and/or give me ideas to charge more. The target audience are people in the digital sector in Germany who charge very little and/or charge little per hour. They are not aware that they have such a high demand profile and that they practically only have to charge more for the same services. If you are offering something that is in high demand, you should charge more because there is not as much supply. Common sense. We agree. It seems that their public, perhaps for lack of confidence, did not dare to take the plunge and that all it took was a coach to tell them that they could do it.
This led me to the conclusion that good consultants confidently sell common sense. This combination is the winning combination. This is what helped me multiply my monthly income as a freelancer by 5 times in three years. It’s also what helped a friend find her first job in the digital world (she’s already on her second, charging double). On second thought, I think I should become a coach… 😉
When you’ve spent time with a blog like me, you repeat themes. It is inevitable and sometimes logical. Interestingly in this case not so long ago. Six months ago, I answered the question by doing a first calculation with what our Amazon business could be worth.
Important Nuances About Selling an Amazon Business
Six months ago, based on the numbers we had at the time, I came up with an estimated value of 140,000. Here are some nuances and additional information to the first post.
- A business is worth as much as the buyer is willing to pay. It’s always a different situation if they want to buy from you or if you want to sell. The first scenario obviously puts you in a better situation.
- A private label business with its own products is worth more than a resale business. Our own products are already charging more now than six months ago, but we are still at a very low level.
Adapted calculation of the sale value of our Amazon account at the end of 2022
Today we are going to look ahead assuming that we are going to be able to achieve the goal of reaching 1 million euros in sales on Amazon. This could be achieved with more aggressive pricing reaching a lower margin of say 20%. The profit we could get, also subtracting the increased business costs, would be 100k. Six months ago I applied a 2-3 multiplier. Knowing what I know today, I would lower it to 1.5-2.5.
Company value (pessimistic scenario)
In a pessimistic scenario, I would apply the lower multiplier. The Amazon business could be worth 150k. In this case, the buyer would only value what the account generates in a year. We would also be in an active search scenario for a buyer. If you think about it, this sale price would be a bargain because in less than 2 years a buyer could have recovered the investment. For that price, finding an Amazon account with those measurements, I would be interested in buying, but I think that’s a realistic number for a business based on reselling and selling third-party products like ours.
Business value (optimistic scenario)
In a scenario as the name suggests, the multiplier could possibly be higher. In this case, we would have a buyer contacting us with an interest in buying the business. Here the multiplier could be 2.5 and in an optimal case even 3. If we apply 2.5 we would be talking about 250k. If you ask me, that doesn’t drive me crazy either. This is too low a figure for a company that generates 100,000 profits per year. In our case, the profits will increase since we continue to invest and our own products will have an increasingly important weight.
In summary: an Amazon account must have a very high turnover to reach relevant figures. It can also be seen as an opportunity to act as a buyer. Today, I am not adding the potential sale value to the equity. I will add it at some point. We’ll see.