The Amazon Agency With Dream Clients Falling From The Sky

0:00Hello, ladies and gentlemen, and welcome back to another episode of Acquisitions anonymous. This is the internet's number one podcast on buying, selling, and operating small businesses. Today, we have a really cool episode. This is an Amazon agency for sale with 66 % net margins. But the fun part about the episode is we actually have Brad Whelan with us today, who is a broker at Quiet Light Brokerage. And he gets into it with Heather about SBA pre-qualification. He also gets into what he sees buyers do that really differentiate themselves in a competitive auction and what he sees buyers do to blow themselves out of a competitive auction and kind of convey that they're not serious.

0:43So if you are a buyer using an SBA loan, participated in a broker deal, this is a must listen episode for you to hear Brad's perspective on how to distinguish yourself. We also talk about the dynamics of the agency business model and Brad drops a couple nuggets about what he's seeing in the evolving e-commerce space from the brokerage side. So a really fun episode today. I hope you enjoy this one from Acquisitions Anonymous.

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2:45Hey, Brad and Heather, how are you guys doing? Good. Enjoying summer. i know it's so great i'm going uh mills is not here but i'm going camping next week on mills's farm in south carolina i'm pumped no way that's awesome uh and brad you're gonna where are you based brad i'm north of nashville about 50 miles bowling green kentucky okay it's probably maybe a little far to drive to south carolina to mills's farm but i know that you have the whole the whole course on regenerative farming and everything mills is like down the rabbit hole man i love that stuff that's so cool yeah he's planning cover crops uh like millet and some other things and then he's gonna mow them all down and then they decompose in the soil he just bought a skid steer like mills is way over the waterfall on this stuff i'm loving it we only do animals but he is down the rabbit hole for sure he's been messaging me okay awesome well tune in the next episode of acquisitions and honest with mills where he will tell you a bunch about that that kind of stuff but this will be a fun episode because we have brad wayland here brad is from quiet light so brad is a former entrepreneur uh having run his own businesses but now probably among a few other things is a business broker at quiet light uh quiet light my personal go-to brokerage especially in the e-commerce space.

4:06So we asked if Brad would join us for a couple episodes and help us break down some e-com deals. So this is one of them. This is actually a QuietLight deal, but not Brad's deal. So he promised that he would not hold back whosever deal at QuietLight it is. We will get to it in a minute. Might not appreciate it, but I'm sure he will be fair and balanced. So you guys ready for this one? This is, Heather, your favorite. I want to hear later in the episode what you think about this. an SBA pre-qualified Amazon CPG agency. It has$150 ,000 a month of monthly recurring revenue. It has 95 % monthly dollar retention.

4:45It has untouched growth levers that you can pull. It has systematized operations and it's fully remote. The revenue is 1.5 million and the net income is nearly 1.1 million. So how's that for margins? And they are asking 3.4 times or$3.7 million for this Amazon CPG agency. It says, this fast growing Amazon CPG agency is built on a solid foundation of over 150K of MRR. All the clients are under contract, no whale clients, while being systematically built, utilizing SOPs, proprietary tool sets, and a delivery team capable of running the business at 70 % capacity, leaving a new owner to focus almost entirely on growth.

5:31The agency acts as a full-service growth partner exclusively focused on CPG, consumer packaged goods, brands in the better-for-you space. This enables brands that are already performing well in retail or direct consumer to build Amazon into their highest margin, most scalable revenue channel. So it sounds like their ideal consumer archetype is a CPG brand that is selling in retail or on their own website and not yet on Amazon. I'm not sure how many of those are left in the world in 2026. But yes, I imagine it's quite easy if you take a brand that's crushing it in the hard channels, DTC and retail and pop it on Amazon.

6:08It's quite easy to crush. So it says the current growth is entirely through referrals and organic content and almost no paid marketing spend. Dollar retention holds at about 95 % month over month and the delivery team has room for 20 or more additional brands before any meaningful head count investment is required. That's impressive considering they've only got$500 ,000 of total OPEX on 1.5 of revenue. So how many people can they really have? It says with clients paying by the 7th of the month and payroll going out by the 15th, the business requires essentially no new working capital to operate.

6:45Let's talk about that also later. The business has been deliberately built to run without the founder. A director of ops manages all account manager cadences, client escalations, and team training. An SOP library and a proprietary software suite give any new owner a fully documented tech-enabled platform or operation from day one. The growth levels available are concrete and largely untested. The agency has hardly invested in paid acquisition campaigns. It's never employed a dedicated salesperson. Multiple existing clients are actively requesting walmart.com and TikTok shop management services that the agency doesn't offer.

7:19A buyer who installs even a basic sales function acquires a business where organic demand has already proven the model, and the only variable left to optimize is how much qualified pipeline gets generated and closed. This business is SBA pre-qualified, offered by our friend Ethan Alexander at Quiet Light. So, Brad, tell me, what does this business really do, kind of nuts and bolts day to day? Well, it sounds to me like this business is taking non-technical people or non-marketing people and bringing them to the wonderful world of the web and putting them online. I think it on the surface sounds pretty brilliant.

8:05Expectations are probably quite low being that these people don't have access to those channels already or don't understand what they're doing. And I imagine that almost every one of them came to this company. He says they didn't spend much on paid. So I imagine almost every one of them came to this company because they were searching for, can someone do this for me because I'm overwhelmed would be my guess. Yes. So the idea is if you've got a successful brand, but you've somehow not ever heard of amazon.com or don't know how to sell on Amazon, you've got a better four UCPG brand. These guys will set you up on Amazon, build out all your listings, maybe take pictures of your products, write all the bullet points, set up some basic ad campaigns.

8:48Who knows how far they go as far as generating external traffic or a number of other things on the scale of white hat to gray hat to black hat. But in theory, they will stand you up on Amazon and get you selling. The thing that is just curious to me is, yeah, this basically describes like the holy grail client for an agency where you have to do almost nothing hard. You just create the listings, but the products are already so popular on D2C and in retail that consumers are just beating down your door for them. And so they just go on Amazon, search, find, buy, and bada bing, you're done. My question is, Brad, how many businesses do you come across regularly that that describes how many CPG brands are like crushing it, but are also not on Amazon at all.

9:31Yeah. I mean, obviously fewer and fewer nowadays. I think that, you know, one thing that we do run into is we have the perception that everything has gone online, but we do a lot of valuations. We get about 5 ,000 leads a year for people selling their businesses. So each advisor at is doing several hundred valuations a year or at least looking into those opportunities and maybe doing maybe officially 100 to 200 valuations a year i will tell you that i'm sometimes kind of surprised whenever people come through they have something that's brick and mortar or that they've built through other channels and seeing the holes still in the marketplaces and things like that that still exist.

10:17You kind of need to get down to the specific products to see it. You know, if I think like GoPros, of course, I can get every model of GoPro that's ever been created on Amazon. You know, I can get, you know, any product, an iPhone case, all the like popular things that we think of. But when you get into, you know, some kind of, you know, plumbing part brand or something really popular among plumbers around the country, are those all on there? Well, what we find is that a lot of times they're not. We'll find other kind of knockoff brands, brands that are kind of Amazon, kind of homegrown, things like that.

10:54And so I have a feeling that this business is doing quite well because the people are finding them that need the help. I don't know how you would go find these people unless you were just basically trying to get lists of products and have an AI go out and just say like what's on and what's not and then trying to get to the higher ups to say, hey, can we get this listing? So that's the thing that jumped out at me because that's, I don't know how you target them. I mean, as a brand owner, I get inundated by agencies. I mean, multiple spam emails a day. Like, hey, we would love to build out your Amazon listings.

11:32So what's curious to me is that they have self-proclaimed no outbound marketing, and yet they seem inundated with the ideal client profile for every Amazon brand, which makes me wonder, how are they doing it? they say that it's entirely referral, which also makes me wonder, is the founder of this thing prominent in the industry somehow? Or does he or she own a different agency that is sharing leads with this one? Do they have a podcast? That to me feels like the only or the most likely story. Would you guys agree? Yes. And what good would it do if your clients aren't already online? What good would it do to do outbound online type marketing anyway?

12:16So they have to have some other sales channel to reach this ideal type of client. I think there's a little clue there, fast growing, because the price multiple seems pretty fair based on the million dollars of net income that they're telling us about, 3.43, but it says fast growing. So I have a question, how fast is it? How long has this been around? Is this 2025's numbers and 2024's were a lot smaller, you know, and how sticky long-term are these types of clients once you get them set up and running on their Amazon shop? Do they need you anymore? Is it kind of like a one-year sort of churn or something, you know, somewhat long, but not super long-term with the customers?

13:02That's my guess, is that it's grown pretty fast and they're selling on, you know, their best year, 2025. But But it is curious, how are they finding these customers? Really interesting. I do think maybe in this space where they stay in a certain lane, one of the things we see out of a lot of agencies is they just try to go really broad. And I think that sometimes that might be a mistake. They might actually be able to make a little bit of a name for themselves on referral if they really are in the better for you space. There's a lot of things that are in the better for you space. but I think when you have brand recognition with some, probably can get some pretty quick credibility if you say, hey, I'm doing XYZ brand.

13:49We've got these four or five different companies that work with us and someone sees a name, they're like, oh, well, if that's good enough for so-and-so, then it's good enough for me. Oh man, that is like the classic agency growth hack. It seems as though they all walk around wearing shirts all day with the logos like NASCAR drivers of the brands who are their clients. Or work with them. Yeah. And interestingly also, let's just say there's some significant stretching of the truth or exaggeration. I mean, I have personally worked with an agency for two months, fired them, and then the next year they're parading my logo all over the internet as though I'm a client.

14:29they never let them go in fact I was in the t-shirt business for a very long time we have a very large screen printing business and an SEO firm that we worked with for a long time and then my former business partner said we fired them after our search traffic dropped by 90 something percent I was actually visiting with them and saw the logo of our company former company on their website still and I was like okay so they're still showcasing it, even though the end of that relationship was pretty angry. Yep. Always call the logos. When you're hiring a new agency, always call the logos. Call the logos, yeah.

15:09Agencies generally, though, Heather, I want Heather's take and then I want Brad's take. So Heather, first your take as a lender. It says this is SBA pre-approved. It seems like the margins are awesome. 66 % net margin. It seems like they're, they uses no working capital because their clients pay by the seventh and they pay payroll on the 15th. This seems like a great business. Are you going to finance it for us? Well, okay. I love the working capital and the lenders will love the working capital. I think the, these margins, although very impressive, will tend to make lenders think this is a buy a job scenario.

15:48Although the description makes it seem like it's really not. Like maybe they have an offshore team and they have this director of operations running it. But those kinds of margins usually tell a lender, this is a buy a job scenario. And lenders are really cautious about marketing agencies in general lately because they're concerned that what they do can be replaced by AI. This is kind of on their list. They've got, you know, every lender sort of got their list of small businesses to watch out for that are potentially more vulnerable to AI disruption. And whether right or wrong, agencies is on that list.

16:23And so they're going to be pretty cautious about whether this can really be sustained. So they're going to want to look back historically. Again, they're going to be worried if this was just recent growth. They're going to look back how far, how long has this business been performing at this level? And they're going to look forward thinking how much of what this business does can be replaced by AI. So I think a lender might go for it with a little bit lower leverage than normal. And especially with a buyer that's got an agency background or some kind of marketing background. I don't think they'd feel comfortable in many cases with a buyer that just doesn't have a resume fit here.

17:05What's also interesting is it seems as though the strength of this agency is that they've really SOP'd everything out. And I got to assume they're using almost entirely overseas labor. here for this, to have margins like this. I almost wonder if this agency can eat itself with AI and have the AI run, agents run the SOPs instead of humans over time. I don't think a bank will get excited about that, but I think an owner might get excited about that. Well, and that would be sort of stage one. Like stage one is they use their own AI and get even more cost efficient. But I think the concern is these are SBA loans or 10-year loans.

17:45And so when you think about the, you know, how quickly people, small business owners might be able to have those tools in their own hands and do this, you know, DIY. I think that's where the banks are concerned. You know, how, how much are you going to outsource of this when you can just log into Claude or Chat and get it done directly? So I think that's the long-term view. And I think that makes 10-year SBA loans trickier and trickier these days for business acquisitions, because there's a lot of businesses where you just can't quite imagine what it's going to be like in five years in that industry.

18:20Yeah, we've done a lot of deals in the last several years with First Internet Bank, and they've pulled the plug on all agencies. You know, what's interesting, though, is that we don't have access to anyone important over there, so I don't know. But they actually gave us a different reason than AI when they say that they weren't going to do them anymore. And it was He-Man risk. But they felt that in the agency models that the founder, when they were gone, was really difficult to replace with a new person. And I think that could be sort of anecdotal, like, hey, we did a couple of deals that went south.

19:03Wouldn't surprise me if it was AI. It's just that they had kind of mentioned that particular issue. Interestingly enough, on the flip side of that, um agencies that are sba eligible are very popular for our buyers for one like one of the big jokes at quiet light and like when i launch a listing and it's not sba qualified i get emails from my fellow brokers that says hey man could you explain to me why this isn't sba pre-qualified and actually a couple of weeks ago um it's a joke they're sending it because i get that email like a hundred times like every you can you can scream this we're not going to be able to lend on this at all please don't ask and people still say hey can you talk to me about why this is not sba pre-qualified um so i actually did a joke a couple weeks ago a guy on my team sent me things saying like hey this looks great love to buy with an sba loan because he was kind of making the point that i had screamed too loudly that there wasn't going to be any sba financing available and so i just basically went into chat and said, hey, give me like a three-page response and I want you to make it very thoughtful that includes these reasons.

20:13And so I sent it back to him and it was like, you know, 4 ,000 words and he got about two paragraphs and I was like, okay, you didn't have this. I get it. I get it. I get it. But it is interesting from a buyer standpoint, we have a lot of people that come in for SBA deals that don't understand the risk of web-based businesses. and they look at their savings and the SBA loan is sort of a lottery ticket. It's like a debt lottery where they're like, hey, I've got$300 ,000. I talked to a guy this morning. I've got$300 ,000 saved. I want to go buy a$3 million business, and I want that business to be making$1 million a year, and I'll cover my debt service with$500 ,000, and I'll make$500 ,000, and everybody will be happy.

20:59And that's a very common profile for us to come through. People that are looking to escape their nine to five that has spent years kind of in the rat race and they want out and seeking escape. They think that leverage is kind of the key. And so all these influencers pushing that really get them excited about the idea of like, hey, I'll put down maybe 10 percent and then maybe I'll get an SBA loan and then I'll make twice as much as I make now. And I'll own a business that's worth millions of dollars. And I spend a lot of time sort of crushing those dreams and telling people like, hey, just so you know, like, if you don't have any experience on the web, I would not use any leverage at all.

21:42I'd go find, you got$300 ,000, go find a business that's for$300 ,000, that's for sale for$300 ,000. And then the good news is almost every business that we list, I see a path to great scale. And so if you dig into it, you can generally find an opportunity for great scale. But don't convince yourself that this is some low risk play. Like if you go leverage this, and you get a 30 % correction after close, now you're paying an SBA loan and you have no free cash flow. And so you're going to be basically having sleepless nights, worried about whether or not you can pay this bill. Yeah, the influencerization of the buy a business space over the last five years has been dramatic, I would say.

22:29I mean, dramatic. And you can easily name plenty of names who are all over Instagram pitching kind of the contrarian idea of buying a business and making money. That word shows it on purpose. um but and yes it is mathematically true right you can buy a business with 10 down and you know cash flow it and make a ton of money right away with the huge asterisk of the business needs to be stable or up after you close which is a huge asterisk because the transition is a non-zero risk it's a material risk especially if you are not an experienced business owner but even if you are. It's still a material risk.

23:12I have so much I could say because I agree with both of you. I think what happens to a lot of people is their experience, the closest experience they have to buying a business with debt is buying real estate, even investment real estate. And they come and they bring to this space a lot of assumptions that don't work here, that do work in real estate. and some of them are based on income. They look at the income that they're buying and they think that's the income every year. They don't understand that we have to project what kind of revenue visibility do we have? You know, what are all the things that can go wrong?

23:50Shouldn't we set the leverage to the worst case scenario rather than the base case or the best case scenario? And so our job at Viso anyway is to help our clients see all of those other aspects of a business and try to make decisions based on that and not some kind of mathematical formula that sort of pretends like the income you're looking at on a teaser is like a rent roll on a property. It's not. And you have to be very careful with how you look at businesses and how you come to this space. I will say this. I've worked with a lot of people who didn't have the perfect resume for the deal that they bought, and they've been very successful.

24:32And I think those people, it comes down to how quickly they learn, you know, that they take it all in, they absorb it all, and they do learn. Some do and some don't. But the ones that learn, they can overcome to some degree their lack of experience. I'd like to hit briefly on a couple other things on this particular SBA situation. One is a problem that we've run into in the last couple of years is that many of the banks that we're working with do have a relevant experience requirement. that that takes several people out of the game now i don't know that it's impossible to work around you know could someone go pick up a 15 000 site on flippa and say hey i bought an amazon store and um and i'm operating one now and then check that box maybe they could but the relevant experience requirement is a requirement and we've had deals fall apart because that was not met the other one is just want to unpack SBA prequalification for a second because, um, you know, I need to, I've kind of always wanted to say this on this show and I just, I'm going to take the liberty now to do it, but SBA prequalification is not anything.

25:47There is no, there is no slip of paper we're getting from the SBA. So at quiet light, as an example, and we've looked at bringing this in house and we might do that in the next year or so. But at Quiet Light, we work with broker lenders. So we have brokers that are kind of like us and they interface with different banks. And we have over time matriculated towards people that have just built a reputation with us for getting deals done. And we're pretty strict about it. When we have someone who fails several times, people are like, hey, I don't want to work with you anymore. And we've had some names like that.

26:24But we generally work people that are good at getting the deals done. What the prequalification is, is it's us sending the SIM, the confidential information memorandum and the tax returns to a broker lender and saying, hey, what do you think about this as a potential SBA deal? And then they look at it and they say, hey, these financials look pretty good. From what I can see here, this business looks like it has enough cash flow. It'll depend on the buyer. But hey, I want to write a prequalification letter for this and you can put it in your folder. And what they're basically saying is, if we find a candidate that has a relevant experience, that has enough liquidity, then we think we would be able to get the deal done.

27:06And it would be under these terms. So maybe it says 10 % down, maybe it says 10 % down plus a 10 % seller note. It can say different things. It could say 25 % down. So that letter, I said, it doesn't mean anything. It doesn't mean anything from the stance of the SBA knows nothing about it. But it does mean something that, hey, we are paid on success. So since we're paid on success, we really don't want to just say something is SBA-able if it's not, because then we're going to get caught up in a deal for 90 or 120 or 150 days. And then if it fails, we're going to be left with nothing. We're not going to generate any fees.

27:44That means our seller is not going to get what they want. We're not going to get what we want. So when we put a prequalification and what it's telling you as a buyer is that, hey, we've taken this to a broker lender. They've looked at it and they've said, hey, I've done a lot of deals. This looks like a deal that we could get through the SBA process. And then they've provided a letter for us to furnish in the folder to allow people to see like, hey, this is what one broker lender that we work with says about it. Does it mean you have to work with that broker lender? Not necessarily. It's just how we do it at Quiet Light to kind of let people know, hey, this thing might be SPA-able.

28:18So my guess is Ethan Alexander, who's a very good advisor, you know, Ethan probably has a letter in the folder from some broker lender that says, hey, this business is going to be financeable. I don't think it's going to be financeable by First Internet Bank because they told us they're not doing agencies anymore, but it might be another bank. Brad, you know you're talking to like one of the largest SBA loan brokers in the world. That's what we do all day every day. I do, but to be fair, one time on one of my listings, Heather said, maybe Brad just slapped this SBA prequalification on. And so since she said that, I thought, hey, I would like to defend that sometime and just let people know like, hey, I don't want to slap it on because I don't get paid anything if I don't close the deal.