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Whether you are a new seller launching a brand or a seasoned eCommerce entrepreneur building a brand to exit, investing in the right tools and tech is key to growing revenue year-on-year, and maintaining healthy margins – both are essential to attracting a buyer for your business in the future.
Review articles boasting long lists of current tools and tech offer a quick snapshot of what’s available, but fail to:
- Derisk the product: Does the reviewer have firsthand experience with the tool, or did they just look up other online reviews and paraphrase?
- Save you time: Trawling through a list of 100 of the best Amazon seller tools is overwhelming and time intensive.
To help eCommerce business owners choose the right tool – one that solves the problem and is a good return on investment – we invited four CTOs from some of the leading operators (Boosted Commerce, unybrands, Swiftline, Forum Brands) in the aggregator space to share their process and some of the tools they use.
Watch the full one hour webinar: “Tools, Tech and Data for Profitable FBA Brands.”
In this post, we will look at four things you should consider before investing in new tools. Then we’ll review 5 tools (with alternatives) recommended by our CTO panel. Firstly, let’s discuss why upward trending revenue growth and healthy margins are essential when you go to sell your business.
Have you already been contacted by buyers for your business but do not know the first step to take toward getting the best offer? The first step is to know how much your business is worth: Contact our team today for a free valuation.
Preparing Your Ecommerce Brand For a Profitable Exit | The Fortia Group
If you are growing your ecommerce business specifically to sell it, any investment – tools and technology included – should contribute to building a business marked by three things:
- Strong brand: eCommerce businesses with a strong brand are difficult to replicate because they have fostered a valuable perception (emotional bond) with the consumer beyond the product itself.
- Growing revenue: Upward trending revenue year-on-year (YoY) shows there is opportunity in the category to grow the asset.
- Healthy margins: Consistent profit margins signal a good return on investment (ROI) for the buyer.
At The Fortia Group, we have >130 buyers in our trusted network. While preferred categories and regions vary, all of them are looking to buy eCommerce businesses with a strong brand, healthy margins, and increasing revenue.
Going forward, it’s important to benchmark every business decision against growing brand, margins and revenue.
Four Things to Consider Before Investing in New Tools and Tech
In every season, your business will encounter barriers to growth, inevitably as owner/operator you will look for a solution.
Before investing in technology and tools, leading CTOs recommend you consider these four things:
#1 Always Work Backwards From Your Business Needs
This is an old adage, and one of the central tenets of Amazon – and for good reason.
It is very important to identify the business need behind every barrier, then work backwards to a solution. This will incorporate the stage of the business, market research, your timeline for an exit and more.
Investing in a tool with a ton of features that you will never use is a poor return on investment, not only for your cash flow, but also the time it takes to learn the tool.
Let’s say you are in the early stages of growing your business and you need a more efficient way to track your data and glean insights. Investing in an analytic database like Amazon Redshift would solve the problem but might be too heavy-handed and expensive for a smaller business (approximately $1K per month, per node). Amazon Aurora, a transactional database could be a natural fit, at a tenth the price. As both are part of the AMZ ecosystem, if or when you need a higher capability, the learning curve will not be that steep to upgrade.
#2 Continually Reassess Your Seller Software
While using tools can become an unconscious part of the day-to-day running of the business, it is important to reassess your needs and be ruthless with your techstack.
You can have too many tools. It’s very common to buy or sign up for ten different versions of the same thing – especially in a busy season with less oversight. Aside from increased costs, more tools can lead to slower processes, confusion and less productivity. Agility has always been important in eCommerce, but with some of the volatility we are seeing in the market today, being able to assess and pivot is key to maintaining growth.
Note: Take a long term view of your techstack and invest in tools that integrate easily – one of the reasons many use AWS.
#3 Don’t Build Tools That You Can Buy
This only applies to large businesses with the in-house capabilities to develop their own tools, in the first place. But, just because you have the developers doesn’t mean you should build your own tools. It’s really easy to start developing new digital solutions without a clear understanding of why.
For this reason, it is important to create detailed processes and parameters for development that keeps the vision clear. This can slow down development considerably, but as a result it will eliminate the need to constantly pivot in the future.
Furthermore, having clear processes in place, and the development of current tools well documented will allow new team members to onboard and get up to speed quickly.
Note: Github is a great tool to document all development in your techstack.
That said, technology is really expensive. “Tech-debt is really easy to build up and hard to pay down.” Elvis Dieguez, CTO, unybrands
Where possible, you should buy new tools rather than build them. Entire companies dedicated to building a tool are probably going to do a better job than a company developing it on the side, outside their core expertise.
Note: As building technology is always more expensive and time consuming than one thinks, a good rule of thumb is to only consider building something internally, when you outgrow the market capabilities.
#4 More Data Does NOT Mean Valuable Insights
Data science is very expensive and complicated. If used correctly in the context of other capabilities, data can be the life blood of your real time decision making. However, without a measured approach it can bury insight in a bunch of noise.
Alex Kopco, Co-Founder & COO of Forum Brands explains the limitations of data in the context of demand forecasting:
“Forecasting is not a replacement for market research. The forecast is a starting point and it’s meant to be updated regularly. Forecast is a point at which you can say, hey, this is what is a relatively good representation of what I think will probably happen in the future. But, what it can’t know is you’re going to be on Good Morning America one day. What you can’t know is that your TikTok influencer is suddenly going to go viral and you’re going to sell tens of thousands of products. Forecast is a starting point. And what’s so important is that you not turn off your brain. Instead use it to layer on all of the things that you, as experts, know and understand about your business: your goals, your market, your risk tolerance, and your cash flow.”
So, how can small to medium businesses leverage data without a huge budget?
Juan Paul Ramirez, CTO of Boosted Commerce makes the point that entrepreneurs without the budget to invest in expensive tools can still build out a competitive advantage with a suite of free tools by investing time. To move beyond the commoditization of free tools (where everyone has access to them) you need to pull the data from each platform into a singular view – even an Excel sheet – and analyze from there. This is possible and effective, but it is time intensive.
CTO Recommended Tools for DTC and Amazon FBA Sellers
Here are some of the tools our four CTOs use and like. Many of them you will be familiar with, and potentially use already. This is not an exhaustive list, but with regards to leading operators, it is a certified list.
Helium 10 is a data visualization tool that helps sellers identify market trends, conversation rate across social media, and analyze product success rates. Key features include profitability calculator, ASIN grabber, inventory protector – and users rave about how effective the keyword research function is to listing optimization.
The Blackbox feature is said to be difficult to learn, requiring an investment of time – difficult for solopreneurs.
Helium 10 is sold in packages with some of the more useful features locked in more expensive tiers. This can force smaller eCommerce businesses to upgrade beyond their budget too quickly. However, there is a lot of functionality in the free version. We recommend the paid version for medium to large online stores.
Helium 10 alternative: Bindwise is good free option with less functionality than the paid version of Helium 10, but enough to pack a punch.
An all-in-one platform with a powerful feature set that can resource an entire Amazon agency, Jungle Scout launched in 2015, and has been adding tools to its offering ever since. Key tools include SEO, PPC manager, FBA fees calculator and automated review requests.
Clients enjoy how easily complex datasets are visualized around product listings and market analysis. And, while the interface is clean and uncluttered, Jungle Scout continues to add features which require you to upskill on a regular basis which can be difficult for owner\operators.
It is one of the more pricey management tools for online arbitrage, and without a free version, it can be a bit much for small to medium businesses. That said, it is a favorite among those who sell on Amazon, provided you have the budget and capacity.
Jungle Scout alternative: AMZScout, with some similar features, comes with a Chrome extension for easy integration.
Charm.io is a data analytic and market intelligence platform primarily for direct-to-consumer brands (DTC). Charm allows users to combine on and off platform data with search engine rankings and conversation rates to quantify how a brand is performing, and monitor competitors. It does this by scraping 4 million DTC brands.
Users rave about its prospecting features – sourcing new products and leveraging up-and-coming categories. And, while reviews state the reporting can be a little glitchy, Charm.io is considered a market leader in data analysis for DTC with a middling price tag that makes it accessible to small and medium size eCommerce businesses too.
Charm.io alternative: Zoominfo SalesOS is a little pricier but comes with a bigger feature set and thousands of positive reviews.
Datahawk is an analytic and optimization tool for sellers operating particularly on marketplaces like Amazon and Walmart. Key features include market intelligence, sales reporting and ad analytics.
Users rave about the keyword rank tracker as a great tool to monitor competitor listings and see the direct impact of your SEO on rankings over time. However, reporting can be a little glitchy, taking longer to complete than expected (sometimes up to 30 minutes, per reviews).
With a small business plan, Datahawk is designed for small to medium businesses in the initial stages of selling products and growing their online presence.
Datahawk Alternative: Sellics is a more expansive tool, with a greater feature set, but also a higher price tag.
Crystal is a free demand forecast tool launched by Forum Brands this year. Leveraging machine learning Crystal enables sellers in any size eCommerce business to better manage cash flow, supply chain and eliminate seasons of being out of stock. This is achieved by forecasting out three probabilistic scenarios of your inventory.
While other tools on the market offer this feature, it’s hard to argue with Crystal’s price tag, and ease of setup and functionality.
Crystal alternative: Cogsy is pricier and more feature-heavy demand forecasting tool for DTC brands.
Partner with The Fortia Group for a Profitable Exit
If you are thinking of selling your FBA or DTC business in 2022, we differentiate from brokers and get you the offer you deserve by:
- Preparing your eCommerce business to sell (Exit ready). Our exit team runs its own due diligence, working with you to get every aspect of your business presentable.
- Running a professional auction for your brand. We have >130 potential aggregators, PE firms and family owned strategics that are looking to acquire eCommerce assets. We aim to achieve multiple offers for your business. This gives the owner better options with regards to payout, deal structure, and deferred components.
Is it time to sell your eCommerce business? The first step to a lucrative offer is understanding how much your business is worth. Schedule a free valuation today.