Prioritizing Profit, and the Scrappy Path to Ecommerce Success, with Alex Bieker

Alex Bieker has successfully grown several businesses, such as Spiral Bible and Lume Cube, by emphasizing profitability, lean operations, and effective return on investment.

Today, Alex shares actionable strategies for building scalable, sellable, and profitable e-commerce businesses, highlighting the importance of understanding financial metrics, maintaining a strategic approach to marketing, and continuously learning and adapting to the evolving digital marketplace.

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This episode of Deal Closers is hosted by Izach Porter, brought to you by WebsiteClosers.com, and is produced by Earfluence.

Transcript

Alex Bieker – 00:00:05:

 

I always took the approach, and this is where I truly believe I’ve been successful longer, is I always focus on profit first. It’s kind of been my mentality since the beginning. And just to get super scrappy, stay super lean on your team and your expenses. And every dollar that you spend has to have ROI attached to it. So honestly, in that first year I did everything.

 

VO – 00:00:42:

 

You’re listening to Deal Closers brought to you by WebsiteClosers.com, a show about how to build your e-commerce business to be profitable, scalable, and one day even sellable. Today, we’re doing something a little different as Website Closers’ Eric Pittman has a chance to talk with a client, serial entrepreneur, Alex Bieker. Alex is the Founder of BV Capital, and he’s invested in and or founded e-commerce ventures such as Spiral Bible and a company that exploded to eight figures, Lume Cube. He’ll talk about his successes and his mission, as well as tips he can give to aspiring entrepreneurs or anyone who wants to grow their businesses. Without further ado, here’s Website Closers’ Eric Pittman.

 

Eric Pittman – 00:01:22:

 

Alex, so glad to see you here today. We got to know each other when you acquired one of my listings earlier this year. As a broker, I really get to know people through the deal process. And what I learned about you is that you’ve got an amazing talent for operating an e-commerce business and in the e-com space. And so I appreciate you joining us here today on the Deal Closers podcast and for sharing your thoughts and insights and things that have made you so successful. But most importantly, I feel like your willingness to share here with us today is going to be very meaningful to the listeners. So to kick us off, I’d like to start. Tell us about your companies and where they’re at today in their current state, so listeners understand what it is that you built. And then tell us about the companies, the services they’re providing, the scale. Once listeners have an understanding of the current state, then I want to circle back to talk about how you got here. But if you will, please tell us about today. What’s going on today?

 

Alex – 00:02:20:

 

Yeah, thanks for having me, guys. Appreciate it. This is my first podcast, so excited to be here and participate. I’ve been in e-commerce for 10 years now, both buying and starting businesses. So I feel like I have a master’s degree in digital marketing by now. What I’m involved in today is two businesses. One is called Lume Cube. It’s a personal lighting company. I got involved in that. We bought that company about eight years ago. I was doing about a million bucks when we bought it. Now it’s doing low eight figures in revenue. But think ring lights, think video conferencing lights, think lighting for influencers and photography. And that is one of the businesses. I don’t have an active role in that today, but we have an operator in place. But what a ride that’s been. And the second business is the one you just mentioned. It’s a new acquisition called Spiral Bible. It’s a spiral bound Bible company that we sell these really cool Bible notebooks, direct to consumer. And that company is doing low seven figures annually, and just super excited about where that’s headed.

 

Eric – 00:03:34:

 

Amazing. So next, let’s talk about how you got started. If I recall correctly, you went to college in Boulder, and then you started working for a company in the medical space in California. And it wasn’t long after that, you flexed your entrepreneurial wings for the first time, buying an electric-powered skateboard business out of some guy’s garage. I’ve been working with a lot of buyers who are right on the verge of taking that first step, doing their first acquisition, entering the e-com space. And it’s a real gut check to make that commitment. Share with us what it was like for you taking that first step. How did you feel? And just kind of walk us through that experience.

 

Alex – 00:04:15:

 

Yeah, sure. So, like you said, I was living in San Diego at the time. I was working for a company called Striker. It was a great company. I was climbing the ranks. And it was definitely like the safer route. But I grew up, my dad was an entrepreneur, owned his own business, and I knew I always had that bug. But I did have this nice cushy job and it was, you know, so when the opportunity came up to get involved in this company, it was called Evolve Skateboards. And it was, like you said, out of a garage back home where I was from in Michigan. It was scary to think about owning a business that was totally a totally new product. It wasn’t like this is a totally new category. So that was a little scary. And then leaving the kind of cushy corporate job that I had worked my way into. It was scary.

 

Eric – 00:05:11:

 

So then tell us about how that business wrapped up and about your exit process there.

 

Alex – 00:05:18:

 

Yeah. So 2015, bought the company for, I mean, something crazy. Like, I think we bought just the inventory off this guy. He just wanted to be done with it. It was a very small business. I think we paid $20,000 or $30,000 for the business. It was doing probably $10,000 or $20,000 a month in revenue. But again, there was no operations in place. There was no team. I flew or I drove a truck with all the inventory from Michigan out to San Diego where I was living, where that company probably belonged, an electric skateboard company. And it started with just me. I was the marketing guy, sales guy, finance guy. It’s really where I got my feet wet in digital marketing, learning about Facebook ads, Google ads. Grew that company from 2015 to 2020. Like I said, I think we did $100,000 in our first year. And then I exited when it was doing about $12 million in top line revenue five years later. And it ended up getting acquired in 2020, right when COVID was happening. So it was a wild experience. I learned a million things. Just honestly, a lot of it was timing. I think it was right when e-mobility was getting really big. But, I mean, I grew, that’s where I learned all about an income statement, a balance sheet, working with retail and digital marketing. So it was a wild ride, but, you know, fortunate one.

 

Eric – 00:06:56:

 

I love it. And then to how did you enter into Lume Cube? Like what was the process and how did you find Lume Cube and what led you in that direction?

 

Alex – 00:07:08:

 

Yeah. So Lume Cube came my way while I was at Evolve, actually through a friend in our community in San Diego. He was doing consulting work for him. So it wasn’t a marketed deal. They were a very small brand that did a Kickstarter campaign and not really sure if they were going to make it or not. They were looking for money. And I got involved in. I was doing, like I said, about a million bucks when we got involved in annual revenue. And it just happened that we met a family friend at church and got involved that way. Within, I think, three or four months, a deal was struck. The owner left, and we had taken Lume Cube and moved it into Evolve’s warehouse and ran both companies underneath the same roof and just kept rolling.

 

Eric – 00:07:58:

 

Your first step into that new business was very different from your first step into the skateboarding business.

 

Alex – 00:08:05:

 

Yeah. So getting involved with Lume Cube was a totally different experience. There was a small team in place. There was an accountant. There was somebody that was running the content side and creating marketing material. It was already had kind of a customer base, had a product line. So that was kind of a benefit that that business had that we didn’t have with Evolve.

 

Eric – 00:08:29:

 

So when you look back. Now you’ve got a couple of year one experiences and you’re kind of in the startup phase. Even though Lume Cube was established, it was still very much in the startup phase. What were the top two or three things that you did or that you recall that were kind of keys to making it work and being successful and getting through that first year?

 

Alex – 00:08:52:

 

Yeah. So for us, I mean, in those years, like 2015 to 2020, there was a lot of venture capital money coming into e-commerce brands and growing at these crazy rates. And I always took the approach, and this is where I truly believe I’ve been successful longer, is I’ve always focused on profit first. It’s kind of been my mentality since the beginning. And just to get super scrappy, stay super lean on your team and your expenses. And every dollar that you spend has to have ROI attached to it. So honestly, in that first year. I did everything, you know, and I think that that was a big reason why we were able to be successful in the long term is just keeping costs low, focusing on profit and investing everything back into the business for future growth.

 

Eric – 00:09:49:

 

Yeah, cash flow is the lifeblood of a company. And one of the things that I see over and over again in deals is owners don’t understand whether or not their digital marketing is profitable or they aren’t predicting and projecting inventory correctly. And they may overbuy or underbuy inventory. Both cause different problems. Sometimes I see people use very high interest debt credit cards and stuff like that to leverage up and get to get inventory. And that has its own set of problems. And so I think that there’s a fine line and balance. But at the core of it all is awareness, right? Is what I’m doing today producing the results I need? And am I being profitable along the way in doing it? Because you’re in a burn rate situation, right? You’re going to run out of capital before you get there. And so if that happens, it doesn’t matter that you’ve got inventory. You’ve run out of cash. You become a liquid and then you go under. And so these are things that I’m seeing in a lot of deals in the e-com space. And so sometimes when I talk to sellers, I look at the financials. We do the valuation and I coach them on that. And it may not be time for them to go to market. It may be that they need to make some changes and tweaks. I had a conversation just yesterday with a business owner who was talking about the changes they’re making and how they’re now much more closely monitoring ROAS, right? Internal Ad Spend. And they’ve gotten some help with that. And my feedback to them was this is exactly what you need to be doing because while you may have decided that you’re ready to exit, Never stop running your business the right way and properly, because if you do, it’s just going to come out during the diligence period. And then you’re putting yourself at risk. And by the way, you’ve lost your your your profitability and the valuation of your company along the way. So. Never stop focusing on improving the business, looking for ways to maximize the capital dollars that you are spending and then awareness along the way. Right. So these are things that I’m seeing in deals that, you know, and advice I’m giving to owners. You have to operate on a profitable basis. So now let’s circle back to present day. So you’ve survived the startup phase. You’ve gotten through the year one. Do you ever recall having a moment after you’ve made this commitment where you thought, wow, I did it. This thing is really going to make it and it’s working the way I want it to.

 

Alex – 00:12:21:

 

Yeah, I think the thing with e-commerce is it’s always evolving. It’s always changing. So you have to be ready to handle the ups and downs. Sometimes Facebook breaks and you have to deal with that. But yeah, I think we definitely have reached a scale with our businesses now where we have an established customer base. We know people are going to buy. It’s somewhat consistent and we can count on and forecast what the rest of the year is going to look like. Like I said, there could be bumps along the way. But yeah, we definitely have gotten to a place now where we feel like we know where we’re going. We can count on what’s going to happen and take a little bit of breath. But at the same time, I’m just the type of person that’s very frugal and cautious and counting every penny that comes in and every penny that goes out. So it’s just my personality. So I’ve kind of always lived this fear. But yeah, I mean, if I’m honest with myself, we’re probably in a place where I can breathe a little bit better.

 

Eric – 00:13:26:

 

I love it. I love it. So Spiral Bible created a completely new revenue stream for you. The product’s very different from Lume Cube. So from an operational perspective, you’re managing very different brands and very different types of products. So in a typical week, how do you juggle this and how are you managing these businesses and what ways are they similar and what ways are they different?

 

Alex – 00:13:47:

 

Yeah, I mean, as far as compartmentalizing everything, we have an operator in place with Lume Cube. So I’m really just a strategic partner there now where I don’t have to get involved in the day-to-day. I’m probably like I have thought about the idea of owning 10 different brands and trying to find efficiencies within all of them. And I’ve kind of found that that’s probably not the route that I’m going to go. I’d like to keep things separate and really just focus on one or two things. I’ve just chosen to get somebody that can run the day-to-day with Lume Cube and that I focus more on the Spiral Bible side. But there is a lot of similarities as far as sales channels, marketing tactics, and what the team kind of looks like. So there is this kind of like strategy that we can use for both businesses that’s been nice.

 

Eric – 00:14:44:

 

That’s great. So you talked about the importance of really watching your expenses and counting every penny. When you think about the day-to-day steady state, what would you say are a couple of the most important things that you do to keep it going and to maintain the success of these businesses?

 

Alex – 00:15:04:

 

Yeah, I think just I’m super analytical. So I’m constantly in the back end of our website, making sure that the marketing is working, that we’re acquiring customers profitably, making sure that the customer service is handled, making sure that we have the inventory. And then I’m just looking for future opportunity, right? Because I want to continue to grow these businesses. So how can I expand the product line? How can I reach more people? What different marketing channels? And constantly learning, right? So now I feel like I have the team in place to kind of manage the day-to-day. My job as the CEO is to think about how do we grow this business? Should we be bringing out more products? Should we be selling into new markets? Should we be selling in different sales channels? Should we be doing retail? Those are the kind of things that I’m thinking about on a weekly basis.

 

Eric – 00:15:55:

 

So earlier this year, you expanded your portfolio with the acquisition of Spiral Bible through Website Closers. From a buyer’s perspective, what was it like working with us?

 

Alex – 00:16:07:

 

It was awesome. I spent, I don’t know, almost two years looking for a business. And I was looking at everything from service-based businesses to, I looked at a cemetery, which is kind of crazy. But then I came full circle back to e-commerce. And once I found Website Closers, I was basically living on the site because I’ve looked at a lot of the different business marketplaces. And I just felt like the deals that were coming on Website Closers were… Legitimate. And every time I worked with a broker, whether it was you, Eric, or one of the other ones, I felt like it was like working with professional people that know what they’re doing. They know e-commerce, they’re knowledgeable, they’re kind. And it was a great experience from start to finish.

 

Eric – 00:16:53:

 

We do go through a vetting process with our listings. And if we’re going to take on a client from the sell side perspective, we want to know that it is a legitimate business. And we perform that valuation and the business has to pass the vetting. And if it does, then we’ll move forward. But I would say that it also helps to work with professional buyers like yourself and people who handle themselves in a very professional way. And that makes it all so much easier. So I appreciate that feedback. And certainly we’re very excited about Spiral Bible and having that as a listing. Even more excited to find a great buyer for it. I mean, that’s like the magic, right? When you’ve got a great business, you’ve got a great buyer. The people are all good people. They’re all easy to work with, smart and intelligent and challenging, yet still easy to work with. So as we come to a close here, Alex. And let’s think about the people listening are going to be first time buyers of e-commerce companies or they’re going to be operators who might be struggling. Generally speaking, what advice would you have and what would you want to share with them today as we close out?

 

Alex – 00:18:01:

 

Yeah, I was thinking about this before the call, but the reason I love e-commerce is because it’s highly scalable. You think about a service business, it requires people, it requires equipment. There’s very little overhead besides the inventory that you’re selling. You’re not geographically constrained. You can sell all over the country. You’re selling 24-7. I think that’s my favorite thing is that even when I’m sleeping, my website’s running and creating orders. So I love that about e-commerce. And then my tips for looking at businesses, like I said, I looked for two years. I looked at probably a couple hundred different businesses. And it’s specifically for e-commerce. Look for products or industries that aren’t necessarily a fad. Look at things that you think are going to stand the test of time. When you’re diving into a business, when you talk to the operator, look for operators that are good people because you’re definitely going to have to work with that person post-close and through the process. It always makes the whole process easier when it’s a good person. Look for opportunity. I think once you look at enough of these, look at a lot of deals. That’s what I would encourage listeners to do. Because when the right one comes, if you’ve done your homework and looked at enough, you’ll know when a good one comes. Yeah, I think those are the kind of tips that I would recommend.

 

Eric – 00:19:32:

 

And you want to be prepared to act. And to the extent that we can, we get people, buyers pre-qualified for SBA financing, and then they’re able to come into a deal and make an offer from a position of strength. I think that’s another one that I would say is very important for buyers. If you’re out there and you’re operating a business today and you’re struggling, what would you say to those people?

 

Alex – 00:19:55:

 

If you’re out there and you’re struggling today, go figure out your numbers, the unit economics, and start there. The numbers have to work first. And then there’s a ton of things you can try. Like, you can get creative with the marketing. You can change up. There’s so many things you can test with e-commerce. In a minute you can change things on a moment’s notice to see and see if you get different results. So keep testing and keep learning, keep reading. There’s so much information online to get better. And so that’s what I would recommend.

 

Eric – 00:20:31:

 

And then I would add to that, know where you’re at before, measure the change and know what the results were. So you’ve got data to back up the decision that you made and to support your decision as to whether or not to continue down a path of change.

 

Alex – 00:20:45:

 

100%.

 

Eric – 00:20:46:

 

So, Alex, thanks for sharing your time here on the Deal Closers podcast today. We really appreciate you being here. You’ve always been an amazing professional. You’re doing amazing things. It’s been a pleasure to get to know you. And thank you for sharing your story. So before we close out, tell the listeners again how they can reach you, the name of your companies, and where they can find you online.

 

Alex – 00:21:08:

 

You can find me on Twitter or LinkedIn at Alex Bieker. Businesses, if you want to check out, if you need a new ring light or video conferencing light, check out lumecube.com. If you want to grow deeper in your faith and get a new Bible, check out spiralbible.com.

 

VO – 00:21:29:

 

All right, that was Eric Pittman with Eric Bieker. For more on Alex’s businesses, head on over to spiralbible.com and lumecube.com. Thanks everyone for listening to this episode of The Deal Closers Podcast, brought to you by websiteclosers.com. If you like the show, be sure to rate us, write a review, press the follow button, or share with your network. And of course, if you’re looking for help selling your e-commerce business, be sure to visit websiteclosers.com. This episode was edited and produced by Earfluence. Thanks again for listening, and we’ll see you soon on The Deal Closers podcast.