Alex Michael·May 29, 2023

How to Buy an Ecommerce Business to Gain Freedom | Alex Michael Interview

Alex Michael is a former corporate professional (consulting, energy trading, tech sales) who bought Wallaroo, an Amazon FBA ecommerce business, in February 2022 for an undisclosed price using an SBA loan. The business's hero product is a genuine leather stick-on phone wallet priced at $13-$20, which was generating ~$650k in revenue and ~$180k SDE at acquisition. This is a return interview recorded 15 months post-close. By year one, Alex had grown top-line revenue to ~$875k without launching new products, primarily through increased Amazon advertising and optimization, though heavy ad spend experimentation temporarily squeezed margins before he brought them back to ~18-19% cost of sale. His attempt to diversify onto Shopify was a costly, half-hearted lesson, and he now recognizes that off-Amazon channel buildout requires serious dedicated capital and focus. Rising interest rates pushed his SBA payment from $7,300 to $9,200/month, and inventory cash flow remains a work in progress. New product launches — a magnetic wallet variant and a women's wrist-strap card holder — are in progress. Beyond the financials, Alex describes the acquisition as delivering profound personal freedom, allowing him to leave his W-2, write essays, pursue firefighter training, and operate on his own terms.

Deal facts

sde ebitda: SDE ~$180k at acquisition
revenue: $650k at acquisition; $875k in year one post-acquisition
financing structure: SBA loan (monthly payment ~$7,300 at acquisition, increased to ~$9,200 due to rising rates)
notes: This is a return interview (guest previously appeared ~15 months prior). Business is Amazon FBA; hero product is a leather stick-on phone wallet (Wallaroo). Product price point $13-$20. Inventory now handled via 3PL in Connecticut. SDE at time of recording was unclear due to heavy reinvestment; contribution margins described as healthy and roughly in line with acquisition.

Why this business

Alex was a 'reformed corporate drone' who had worked in consulting, energy trading, ticketing, and tech sales for about eight years. He discovered acquisition entrepreneurship and decided buying a business was his 'ticket out.' He found Wallaroo through Quiet Light Brokerage, used the large volume of positive Amazon reviews (3,500+) as a proxy for product quality, and was attracted to the business because it had a genuinely good product with a loyal customer base and room to grow.

What's working

Top-line revenue grew from ~$650k to ~$875k in the first year without launching any new products
Core Amazon FBA channel continues to perform well; Amazon advertising cost of sale brought back down to ~18-19% from a high of 26-27%
Product quality validated by strong reviews and continued repeat demand
New product launches underway: a magnetic version of the phone wallet and a minimalist card holder with wrist strap targeted at women ('Wallaroo Wheats')
Moved from in-house inventory to a 3PL in Connecticut, improving logistics
Hired an Amazon PPC agency (~$2,000/month) to handle advertising, freeing up operator time
Business has generated genuine personal freedom — Alex left his W-2 and has been fully self-employed since acquisition
Experimenting with new Amazon ad placements (Sponsored Brands, Sponsored Display) and a revamped Amazon storefront to drive future growth

What's hard

Shopify / off-Amazon channel diversification proved far harder than expected; a half-hearted attempt (Facebook ads, website redesign) was a costly lesson with little return
Amazon advertising experimentation was expensive: ad spend as a percentage of revenue climbed to 26-27% at its peak before being brought back down
SBA loan payment increased from ~$7,300 to ~$9,200/month due to rising interest rates, a meaningful cash flow impact
Inventory cash flow management and ordering cadence still not fully figured out
SDE at time of recording is difficult to state because of heavy reinvestment into brand guide revamp, new listings, product launches, etc.
Amazon is stingy with consumer contact data, making it hard to build a direct relationship with customers or redirect them off-platform
Doing Amazon PPC himself was complicated and time-consuming; tried an automated software (Perpetual) with mixed results before hiring an agency

Notable quotes

In buying the business I essentially gave myself permission to start living life on my own terms and so that decision that move was a message to myself that said you don't have to operate within the cultural constructs within the narratives that you've accepted from other people from society from whatever.

I have freedom over my time and my schedule and that's awesome but also in a deeper sense of I feel more like existentially free to pursue things that I feel interesting and put stupid taglines on my LinkedIn and not really give a shit about what the response is going to be.

I spent a lot of money in a decent amount of time in a half-assed attempt to try to do that and so I dipped my toe into the waters of spinning up some Facebook ads and redoing the website and it was just a money suck.

A lot of the stuff that we read about when we read about productivity like all this Pomodoro techniques and time boxing and all this crap that people do like it's just an emotional coping mechanism because really I think a lot of the time we're not productive because we're scared.