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Welcome to the Million Dollar Sellers Podcast. I'm your host, Nick Shucet. Today we have Rohit on the call and Rohit's got a great background coming on the podcast today. He's an ex-Amazon seller.
The biggest brand was doing $30 million in revenue and you've had five successful exits. Now you founded this insurance company for e-commerce sellers called Assureful. Welcome to the show, Rohit.
We're excited to learn about how you accomplish these things and what you have going on now.
With that being said, I'm going to kick it to you and let you tell the audience a little bit about yourself.
Sure. Thanks for having me, Nick. My background again, like you said, five e-commerce brands started on Amazon in 2013, predominantly supplements, sold the first brand, which was doing 30 million a year on Amazon to private equity in 2020.
Then two other brands in 2021 to aggregator. Glad I caught that wave. Then another two in 2022. You said five successful exits. There are four successful exits and an exit. Which wasn't so successful, but keeping it real. No.
All right, keeping it real, I like it. Yeah, my fault on that one. Was that your first exit? Where in line did that fall?
That was the last exit. At the last exit, there was fatigue. Do you know when you just get fatigued with it? There was fatigue and I just wanted to get rid of it. Somebody else said that they would take it off me for pretty much nothing.
I said, yeah, sure, go with it. I don't count it as a successful exit because I didn't make much money or I may make it in the future, but today, yeah, four successful exits.
Okay, well, we'll have to try and dig into that a little later in the podcast. See what lessons you have to share.
Sure.
Now you've gone away from Amazon and you're the CEO and founder of Assureful. I got introduced to you guys at the MDS Connect event in Innovate. Mike and Keaton were there and they were telling me a little bit about how you guys do things.
It reminded me of some of the newer financing options like a Brex. These companies that hook up to your Amazon account, your Shopify store, they see your revenue and they say, hey, we'll give you X amount of money based on what we're seeing in there.
It changes month to month, maybe even day to day. It sounds like you guys have adopted something similar but in the insurance department.
Something similar. Let me just back up with the genesis. In 2018, with one of my brands, we were projecting 18 million in sales. Now, every single insurance company in the world asks you to project your sales.
I'm sure you bought insurance, and the MDS members have bought insurance, and the annoying brokers at the insurance company are saying, What do you project you're going to do in the next four months?
Well, I don't know. It could be really good and it could be really bad. I told the insurance company 18 million and. That year, we had a suspension event happen on Amazon for alleged review manipulation.
That's another story. The revenue for the year was nine million for that one brand. It messed with me. At this point, we were paying $75,000 annually in advance to the insurance company for insurance premiums.
I go to the insurer and I say, hey, guys, I haven't done 18 million in sales. I've done nine, can I get a refund, please? They said, well, it's not our fault you didn't hit your projections, no refund.
I said, well, what if I projected five million in sales and I did nine?
They said, well, beyond that, your projection, everything is uninsured. The industry was designed to essentially overcharge you and price gouge. Which just felt so unfair. Going back to 2018, I said, okay, this year I project I'll do 10 million in sales.
Roger, we did 26 million that year, but I said we're gonna do 10 million in sales. They said, okay, 75,000 in premium. I said, how does that make sense? It doesn't make sense. I said I'll tell you what, I'm going to do this better than you.
Fortunately, I had some exits that allowed me to bootstrap the company and it was a substantial learning curve because we didn't want to be insurance brokers. There are loads of insurance brokers out there, but we didn't want to be that.
We wanted to be the people deciding on insurance. How do you do that? Especially as an e-commerce guy, how do you get from here to there? I had to build a team of insurance experts.
Got a co-founder who was on the board of this big French insurance company. We said, let's take the hardest problem to do. Private label made in China, baby products sold in the US on Amazon.
That is the hardest thing to get insurance for. We said, let's take that as an example and try to build an insurance product around that. Everything else then is easy to do if you can get that done.
Then we said, we're not going to do this bogus project into the future nonsense that everybody else is doing. We created these connections into your Amazon account and we're the only people in the world looking at your actual sales in the last 30 days.
Here at Assureful, we look at the last 30 days of real sales. It could be Amazon, or Shopify, even if you're selling through wholesale channels, Target, Home Depot, etc., it doesn't matter where you're selling.
We'll cover 100% of your sales based on your actual sales. That was a huge learning curve, not just for us to break into the insurance industry and get validation, but also to explain how this product is going to work to our capacity providers at Lloyd’s in London.
We're a part of Lloyd’s in London. We're co-holders at Lloyd’s. Every policy that we issue even though it says a shortfall on the top, is backed 100% by Lloyd’s in London. Getting that understanding and explaining it to them took another two years.
It's really hard because insurance never looks at the past. It looks at the future, but we're looking at the past. That was a big differentiator. Also, there was a thing on underwriting where every insurer looked at about 40 different categories for consumer products.
Then they always price based on the highest, well, 80th percentile of risk within that category. Think of something like, you're selling motorcycle helmets, and somebody else is selling one of those plastic sheets that cover the motorcycle from the elements.
Both of those things insurers classify as automotive accessories. The plastic sheet, even though it's super low risk, is priced the same way as the motorcycle helmet is. Therefore, insurance becomes expensive for small businesses.
This is what we were trying to fix. Pricing was an issue, the stupid projection was an issue, and the brokers were lying. A lot of the brokers were lying. Amazon only requires a million dollars in insurance.
Brokers are saying, oh no, you need five, you need 10 million because they get tons of commission by upselling you on stuff. As e-commerce businesses, we just trust these third-party brokers saying that, oh, okay, they probably have my best interests at heart, which they don't.
A lot of the time, many of them are good, but a lot of the time, yeah. That's a quick background.
Nice. I like it, man. I think that's a great recipe for something that could take off if you guys are doing things differently and that results in a more fair pricing structure and better pricing because you're identifying the helmet versus the motorcycle coverup.
That's amazing, man. I'm excited that you guys are out here. It's always exciting to see a business and an industry doing things drastically different and just being like, hey, you guys are idiots that you're still doing it this way.
We have technology now and stuff, so we're going to do things differently. We're going to do it better.
Yeah, with all the technology, how do we accurately categorize consumer products? We're using a ton of Gen. AI. We're categorizing against 33,000 product categories, whereas other insurers are doing 30 or 40 categories.
This allows us then to cover 95% of products sold on Amazon, whereas everybody else, all the other insurers are doing maybe 30 to 40% of products because they don't want an imported product.
They're like, oh, it's made in China. Everything is made in China. I mean, come on. Then the other insurance, this is what we're trying to get past, the hegemony of the insurance companies bullying e-commerce businesses.
Awesome, man. I think it's great. I enjoyed meeting Mike and Keaton at the event. They seem like great guys and it just seemed like a great product to sell. That's what I thought when I was there.
I was like, man if I was working for this company, it would be such an easy sell for me because I would believe in it. It sounds just like a great thing to be doing.
It's mandatory. Amazon requires it. Walmart.com requires it. It's a mandatory product. You have to buy it when you cross $10,000 in one month. You have to buy it. Why buy a crappy product from someone who doesn't understand your business?
I just don't get it. A more expensive product.
Thanks for telling us a little bit about how Assureful came to be. Rohit, I'm interested in how you came to be who you are today. You've had all these exits, this $30 million business. Have you always been an entrepreneur?
Did you go to college and get a traditional education or a family of entrepreneurs? Let's learn a little bit about the backstory.
Sure. A family of entrepreneurs, converted entrepreneurs. My dad worked for somebody for 30 years and one day just left and started his own thing. That was in, I think, 1995 or something. I was still a kid.
Then he did his own thing. No, back then I was in Dubai.
You were in England?
We used to live in Dubai back then.
Dubai, was it like it is now?
No, it was just a pile of sand. In the early 90s, it was just a massive pile of sand. I was born and raised there right in Dubai. Going back to the mid-80s, I was in a pile of sand. It was a great place to grow up because it was close to the community back then.
It wasn't this global international metropolis. Then after that, I went off to boarding school when I was 11. I went to school in India. Then after that, I studied law. After studying law, I started my first business, which was a legal outsourcing company while I was at law school.
I've never actually had a real job. I always had businesses, ventures, and things that excited me, I would go and do it. Then there are some friends of mine, back in 2013, who said, Hey, we're doing this thing on Amazon.
Have you? I'm like, Oh, okay, that sounds interesting. Let's go for it. We started working on this thing together. Each of us put in barely anything, five grand or something. In a couple of years, we were doing 20 million and 30 million.
Wow.
Then, fortunately, I managed to sell that thing in 2020 to a private equity firm. That was their first exit.
Dude, that's so cool. Do you ever go back to Dubai and just flex on everyone? Man, y'all don't even know about this place. I've been here forever.
I left in ‘95. I was still a kid. Even though my family was there, I was in boarding school in India. I would just go back for holidays. I haven't had the opportunity to flex on anyone, but I'm one of the OGs.
My dad is one of the OGs. He's been there.
You got to hold that card, man. You got to hold that close to the chest, man. That's super cool.
He's been there from the 60s, my dad. He's a true OG. He used to sit down with the current Sheikh's dad and have tea on the side of the road, right? That was the thing that they used to do in the 60s and 70s.
Amazing. That's wild, man. That's a cool backstory. What was your thing in the business that you did well, like in the Amazon business? Did you do a lot of outsourcing? You said you had an outsourcing company.
I'm wondering, what was your focus in the business, your role?
My role in the business was predominantly tax, finance, all the money, and operations to a certain extent. I was the group CFO. My co-founder, Lucas, who I think was an MDS member at the time as well.
He was the CEO and I was the CFO. Then all the legal and selling of these things, contracts, taxes, all that cool stuff.
Nice. I'm thinking of some of the stuff we're going through now in our business because we've got a holdings company and a couple of other companies with their own Amazon accounts. People talk about using an ERP and then holy crap.
The first time you learn about an ERP, you're like, what is this? Did you use any of that stuff?
Yeah, we did a NetSuite implementation in 2018. Five years into the business, we did NetSuite, which was an extremely expensive thing. Extremely expensive. It depends, it's all relative. I think it was 180K plus implementation plus this plus, it was expensive according to me.
Then it helped a lot with demand planning and seasonality and figuring that out. These days you can just use open AI and write for a lot of this stuff. In 2018 we did the ERP system.
Dang, that's wild. Now you got me interested. Now I'm like, all right, how do I do this with ChatGPT? When you're looking at these ERPs, you've got some that are free. Oh, do they have a free plan?
You can just use it. Then you've got NetSuite, which is six figures. You're just like, how? There are not many people in the e-commerce circle with that experience to share either. What would you recommend for someone looking at that right now?
I think that today, there are a lot of tools that you can use using Google Sheets. You do a ChatGPT plugin on Google Sheets. I can't remember what it's called, but it was a cool thing, something.ai, which worked with Google Sheets, which you could do a lot with.
You download your report from Amazon and Shopify and other places, put it into this thing and it creates demand planning and you can just say, et cetera, what you wanted to do. I don't think you need that.
Unless you are doing excess as a group over say 30 million, 40 million in sales. Number one. Number two, you are unable to find talented low-cost people in the Philippines or wherever else you’re using these.
You're willing to throw bodies at a problem. You know, so because these things, that's who can start with super expensive. Or number three is that you're planning a non-traditional exit. You're planning a private equity exit or strategic buyer of some variety.
For example, if you're selling, sheets, are you going to sell to Bed Bath & Beyond, or are you going to sell to an Amazon aggregator? You don't need an ERP system for an aggregator, do you see what I'm saying?
That's the other thing that comes into play is an EDI solution. We're on Chewy and they want certain information only over EDI, but we're still doing fine with them.
We have that problem because we got them to Target and they want to fall through the EDI so I think we used SPS Commerce at the time. That was what we used for EDI. Again, this is vintage when I'm talking up to 2020, and 2021.
There's a lot that has changed in the last two years.
Okay, I've heard of that one.
I'm not giving any current advice if that makes sense.
That's a good point, man. I'm going to try because I've got an Open AI account and I've got my API token and Google Sheets. I haven't played around with it because you have to know the prompts and be specific and I just haven’t had a huge use case.
I just jump over to ChatGPT and do it over there.
I think a couple of days ago, Adam Runquist, had a video a few days ago about AI tools and stuff. He was not talking about demand planning, but demand planning you can do yourself with Google Sheets and three smart people, three smart VAs.
He was talking about demand planning?
You don't need that much. You don't need to buy a NetSuite for it. Even the integration of NetSuite takes six months. By then you've lost your demand planning.
I think we're getting wrapped up in it, this idea of having it, and we don't need it. I don't think we need it. We have a fractional CFO and he wants us to just use QuickBooks. He wants us to move over to QuickBooks.
He said that can do demand planning pretty well because you see your data very well.
Of course, you can take that out and do other stuff with it.
Not sure about demand planning on QuickBooks, but demand planning is a lot of it is gut feel, as to what did it perform last. You're not going to get a magic number come out of NetSuite that says, buy this on this date. It's just not that.
There are always external factors too. Things you can't plan for.
Suspensions, delistings, the whole nine yards getting losing your best seller tag coming back. You never know. There are so many. Lost the buy box, then got the buy box.
There's always something coming up, man. You guys ended up going to NetSuite. What did you guys use before that? Did you guys use any like Excel? Just Excel.
There's always something.
Just Excel, just lots of Excel, and not very smart people using Excel. Eventually, we had to hire a full-time guy, who is the NetSuite administrator. I think he was 120 or something. It wasn't cheap.
It wasn't cheap. He was supposed to lead the thing. That's one of the things that the private equity guys liked about it, which maybe gave us a better valuation as well. I'm not sure how much of a better valuation.
It probably taps it because they're probably using it. They're probably using it or something that can fit very nicely and easily into their system.
We were a minor business that they purchased, but then they were building a platform. They were buying a bunch of these $20, $30, $50 million brands, putting it into a platform, making it a $150, $200, $500 million company, and they'll flip it on in five years.
That's their model. They were using NetSuite so it was good for them as well.
That makes sense. I think eventually, yeah.
I think we got a better valuation. We got a much better valuation with the private equity guys than even the aggregators at the time. I think it helped.
That's good info, man. I think it's nice to hear from someone who's done it and been through it because we're on a similar path. We've acquired two brands recently, a smaller one. Well, one was bigger, but a smaller one and it's hectic to integrate a company.
We've got this terrible-looking spreadsheet with passwords on it and checklists and it's fricking messy, man.
I remember that. The password Excel sheet. Oh god, with all your POs on it, all the POs going back to when you first started the business. Imagine if that goes missing.
When I came into work with these guys, which I honestly think is even worse, they had a lot of their inventory data in third-party tools. They didn't even have a spreadsheet of all their inventory weights and dimensions and vendors and all that stuff and cost of goods.
When I came to work with who's my partner, I was like, man, guys, you got to start having a master file in a spreadsheet as a backup. I think that's super important to have your data, even if it's just sitting in Google Sheets somewhere or Excel.
Absolutely man. Excel on your computer and Google Sheets and in your OneDrive file, whatever. It needs to be a couple of places and it needs to be updated. It’s so important.
As you scale, that stuff gets important, man.
I've seen businesses that at a certain point in 2019 or so, I said, Oh, I'll go out and buy a few Amazon brands and try and do my own thing. Some of these brands, with two, to three million in annualized sales, don't understand their COGs, they don't know what anything costs.
They're like, Oh, I just have been doing averages.
It's just wild. You think of it when you were doing one, or two million in sales, you were probably just finger in the air guessing. There's an element of luck.
Definitely. I know for me, man, one day you look at your account and you're like, whoa, I did $10,000 in sales today! I don't know what to do with all this right now. That's how it was for me. I didn't have the education like you. I just went through my Amazon.
My education meant nothing. Honestly, I've never used it. It was something that I was forced into by my parents, but never actually used my education in the early days, I used to love receiving notifications that sales had been sales.
At a certain point, I was like, I gotta switch this off because it won't stop pinging. One of our things we were doing 2,000 units a day at $25 a pop.
It was a fun time. That's for sure. It's a very different marketplace today. You meet people who understand your business, and who've been there and who can help. It's not just people out to get you.
That's how I felt about it, where people are constantly trying to sell crap to me that I didn't need.
That just really was off-putting. I'm trying to build something that's the opposite of that. We're ensuring e-commerce, I've got it on my heart.
I think that was part of what I felt when I met Mike at the event too. Here's something people have to get. They're mandated to get it. Here are these guys being cool about it and doing it differently.
It just completely changes the whole experience.
Getting out of pocket upfront or getting premium financing, I saw a quote yesterday, 25% on top of your insurance premium for premium financing, just so you can pay it monthly. That's just wild.
We are natively monthly billed. We just send you an invoice, charge a card on file, your sales go up, your premium goes up marginally, your sales come down, whatever.
The container is stuck in the port of Long Beach, you don't have inventory, you're suspended, whatever, and your premium just drops down to nothing. That is what we're trying to do, build something that the community can get behind and appreciate.
That's nice, man. Well, I'm excited to see you guys navigate the e-commerce world more and get involved with some of the groups. I think you gotta come to an MDS event. You would fit in well there, and I think you'd have a great time. They're different, man.
I was there at the Barcelona event. That was cool. This year.
Oh, okay. Awesome. I was not there. I wasn't at that one. I'm usually always at the events, man, but I was not there. It was my daughter's first day of school. Yeah. It was great, man. She was so excited going in there.
She's been doing well with school. I'm glad I made it.
Fantastic. Well, that's more important than being at the MDS event in Barcelona. I was there. I can't remember the name of the bar in New York, around Innovate. That was a cool one as well.
This year? You were there? Oh man, I didn't meet you. I forget the name, was it Sunday or Monday night?
Sunday night.
The first night it was and then Monday night it was a little bigger.
The tiny bar on Sunday night. That place. That was so cool. There was a bathtub in the middle. That was so awesome. Bathtub Gin. That's what it was called. Yeah. That was a good place.
That place was cool. Bathtub Gin. Yes. Bathtub Gin. Oh, man. That's so good. I'm bummed I didn't see you there, man. I hope to see you guys out at the next one. We've got the Miami event coming up and then Inspire in Vegas.
I think that's early March and then the summit is in Denver this year. That's August, I think. We got some good stuff lined up, man. Hopefully, I'll see you out there.
I think we'll be there at all of them. Pleased. Thank you, Nick.
All right, man. You got it, man. It was great chatting with you. Maybe we'll bring you on again if there's ever some interest in some CFO-specific stuff. I think that would be a great way for you to add value.
I think that's a great way too, man, to try and get on a call inside of MDS. If you wanna come in there as a CFO, offer some value that way and then let them know that you're with Assureful.
Likewise.
I think it's just a great way to give and get value that way. That's a good idea in the group, because they do weekly mogul calls is what they call them inside of the group and always some good speakers on there and there are usually 30 to 50 members that hop on.
I think that would be good, man. Thanks. I learned a lot from you today. I did. We're dealing with this ERP situation and managing our own data and demand planning and all that stuff.
For some reason, I didn't even think about trying to do it with a spreadsheet and ChatGPT. I'm giving that a shot.
It works. If it works, why not do it? Awesome, huh? It was nice meeting you Nick and we'll speak soon.
All right. Good chatting.
Likewise, take care.
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