Bill D’Alessandro has been running e-commerce businesses for 14 years. Natural Dog Company, an omnichannel seller of dog health products, is his eighth brand. “My specialty is entrepreneurship by acquisition,” he says. “I buy small brands, grow them, improve them, and eventually sell them.”
Along the way, he learned lessons like focus, industry choice, and product pricing.
He and I recently spoke about those experiences and more. The full audio of our conversation is embedded below. The transcript has been edited for length and clarity.
Eric Bandholz: Tell our listeners what you do.
Bill D’Alessandro: I’m the CEO of The Natural Dog Company. We sell dog supplements, fish oils, and topicals on Amazon, our website, and in about 6,000 retail stores. I’ve been in e-commerce for 14 years. This is my eighth brand. My specialty is entrepreneurship by acquisition: buying small brands, growing them, improving them, and eventually selling them. I’ve done this seven times now, and The Natural Dog Company is the one I’m currently working on.
At our peak, we had eight brands at a time. We had 62 employees in the company, and it just wasn’t enough. Owners who own one brand often think about acquiring another brand. They might own all the employees, the third-party fulfillment provider, the infrastructure. This seems like a no-brainer, but they underestimate how scattered it is. You go from two to three to eight, and before you know it, it’s all surface level and you can’t dig deep.
It’s 2024 and ecommerce is hard. It’s data and keyword intensive. Ranking on Amazon is tough. The competition is fierce. If you spend time on multiple brands, you will lose. 1 + 1 does not equal 2. It equals 1.5. It took me years to realize that.
Running one business is hard. Something goes catastrophically wrong at least once a year and you have to fix it. If you own eight businesses, something goes catastrophically wrong every six weeks. If you’re trying to be the CEO of all your businesses, you’re constantly putting out fires and reacting.
You need to appoint a very competent, well-paid management team. You can’t have eight CEOs. You need a CEO for each company. They’ll get paid $150,000, $200,000 a year, maybe more. You have to have a business large enough to cover that expense.
Bandholz: How do you choose the right industry?
D’Alessandro: It’s easy if you have a big business, but you need a bigger market. That’s what I realized. We had eight brands, seven of them were making 25% of our total revenue, one was making 75%.
In the real world, the 80-20 Pareto principle applied. Other brands were selling natural sunscreens, sports detergents, etc. I didn’t realize the potential. But a lot of people own dogs. That market is growing. So I said, “If I’m going to spend my time here, my precious life here, I want to focus on the areas that have the most room for growth.”
There are factors beyond just your industry. We’ve had businesses where the average order value is $14. That’s hard to make work well. By the time you ship the product and pay Amazon’s fees, you have very little wiggle room left. But if you’re in the $100, $200, or $800 price range, it’s much easier. For me, the ideal price range is $70 to $170. That’s low enough to convince people to buy right away, but high enough to cover shipping and customer acquisition costs.
Bandholz: We have achieved omnichannel by combining digital and face-to-face sales.
D’Alessandro: A few years ago, it was clear that e-commerce was getting harder. In-person selling was gaining more interest. It’s not like selling on Amazon, where you hustle for a week, set up a listing and you’re done.
Retailers and chains do line reviews once a year, probably in October, in preparation for shelf placement in April. If you wait until October, you’ll miss the review for a year, and you can’t expect to get approval on your first proposal.
Big retailers like Walmart want proof that it works. They only have a few feet of shelf space for their product line. Every inch of shelf space can generate millions of dollars in sales per year. The best way to convince them is to show them results from other retailers. We started in the most accessible place: independent pet stores.
We looked up Google Maps and started calling pet stores, saying, “We’re a natural dog food company. We’ll send you samples.”
We built an entire funnel that way: making calls, sending samples, following up. We refined it over the years, and eventually we were selling to thousands of independent locations. It was hard work. Once we got to around 2,000, we started collecting data. We learned about average monthly sales, number of units sold, etc. Then we approached smaller chains.
Smaller chains typically don’t have as rigorous a review cycle, so we negotiated with them individually. Then, using the data from our smaller stores, we approached the larger regional chains with 300 or 400 stores. Then we approached the national chains.
We’ve climbed the ladder, our products work and they sell, that’s how we do it.
Bandholz: Where can people go to learn more from you?
D’Alessandro: Our site is NaturalDog.com, I host a podcast twice a week called Acquisitions Anonymous, which is about buying and selling businesses, my website is Billda.com, and X is @BillDA.
