We sat down with Daniel Westerheim, founder and former CEO of Tough Cover, to discuss his company’s sale to Forum Brands. His entrepreneurial upbringing, and the recent sale of his FBA brand to us, gives him a unique perspective to help e-commerce founders think about “what comes next.”
We discussed everything from his journey to becoming an entrepreneur, to Forum Brands’ unique acquisition process and expert team, to the advice he has for e-commerce brands looking to sell, and everything in between.
Tell us about what sparked your passion to become an entrepreneur and the steps you took to get there.
I come from a family of entrepreneurs. Pretty much everybody in my family has owned their own business. My dad worked for my grandfather and then started his own business from our garage, so I grew up watching him do that and learning from him. However, I never really grew up with the goal of becoming an entrepreneur. I came into it because I took an entrepreneurial approach to the companies I used to work for. I always tried to find ways to make these companies and their products better, trying to advance them and do more. That thought process led to getting my MBA in entrepreneurship then taking over a division at a company I was working for at the time. The company did not see the value in that division, but I did. I ended up buying that division, turning it around and eventually selling it. If you want your business to excel, you’re working all the time and then some. That’s what it takes to build something that grows and lasts a long time. I knew what it took going into entrepreneurship and starting Tough Cover because, well, it’s in my blood.
Tell us about how you got involved with your Amazon business and what made it successful.
After selling the division I took over at my previous company, I knew I wanted to start another business. My brother and I ended up going in on Tough Cover together; he ran operations and the day-to-day affairs, and I handled the business’s financial side. Tough Cover is an e-commerce company selling protective, weather-resistant covers on Amazon. From the very beginning of building the company, we focused on adding new products and growing our customer base. We really enjoyed growing the brand. We feel we were successful because we built a strong brand name and a reputation for great customer service and high quality products, rather than leaving our success to the whims of the buy box. That is how you build long-lasting success on Amazon
How did your path cross with Forum?
In December of last year, we listed our brand on Empire Flippers and received a huge level of interest right away. I did nothing but interviews for two weeks, usually 8 hours a day, talking to the top 15-20 Amazon FBA acquirers in the world who were interested in Tough Cover. As global leaders in the industry, each of these firms had a lot to offer. We ultimately chose Forum based on their efficient and systematic approach, which was evident even during the initial interviews. It was clear that Forum had a very defined set of things they needed to learn in order to move on through each stage. This gave me a lot of confidence. I'm a firm believer in developing efficient systems and processes for just about everything, and theirs was the best of all the potential acquirers we talked with. Because of this, I knew they had the capabilities to both close the deal within our tight timeline and grow the brand as I’d envisioned.
They did their due diligence even before handing me an offer letter, outlined a time frame and the stages of the deal, and followed it to the letter. And, of course, they made a very strong offer. It was important to me to close before the end of the year, and Forum was able to get the deal done two days before Christmas. I had the highest confidence in their ability to close on my rather aggressive timeline, and they followed through in an even faster timeline than I requested.
At the time, I could also see that Forum had assembled a strong team with extensive marketing and Amazon e-commerce experience. Since the sale, Forum has continued to build out an even stronger team. They have made a couple of really nice hires that will help Tough Cover and any other brand that will come under the umbrella. They have a great talent acquisition strategy.
What was different about Forum’s process that made them stand out?
I have worked with some of the savviest investment folks in the Amazon ecosystem, and Forum is the clearest, most straightforward, and most deliberate about their process. But, what really sets them apart is their transparency. They have very defined aspects they want to learn about each business -- things that only people who know the ins and outs of the industry would know to look for. It showed that Forum understood the uniqueness of our assets. In an aggressive timeframe like I had, I needed to feel secure that they could deliver. The Forum team continually gave me an extra level of confidence that they had a methodology in place to get it done quickly and correctly. The Forum team pulled it off in spades. And it didn’t stop there. This methodical approach continued even after the deal closed. There was very little need for follow-on support from me. Because Forum had done so much due diligence, information gathering, and was so organized from the start, Forum was able to take full ownership after we closed. The experience post-transaction matched the pre-transaction. Overall, the Forum team is very easy to work with.
What advice do you have for existing founders or aspiring entrepreneurs looking to build an ecommerce business?
Build and protect your own private label brand. If you are just selling someone else's stuff, there's not much you can control. With your own brand, you control the listing, the quality of the product, and the customer service experience. Most importantly, success takes time. You have to be willing to put in the effort, pay close attention to details, and always look for new opportunities. When a good one comes along, you take it. If you are really vigilant, you will spot the great opportunities easier and faster.
What should an e-commerce entrepreneur think about when deciding to sell?
There are a few things to consider here. What is the value of selling? Can you take that money and turn it into more income or more wealth or more stability? The bottom line is, you should have a reason for exiting and some potential ideas on what you will do with the money after you sell. And, definitely talk to Forum if you want to sell. They close quickly, and they do what they say they will do. They should absolutely be on everyone’s shortlist to discuss a deal with. They understand everything from start to finish and are quick to close, likely due to their well-defined systems and processes, as well as their high levels of experience with Amazon and e-commerce. I would certainly work with them again in the future.
What does this sale mean for you and your personal and professional future?
I purchased a house (and made a cash offer) that I probably wouldn't have without the Forum deal. It also freed up some of my time and obligations so that I could focus more on my personal life for a moment. Professionally, I enjoyed the process so much that I am looking forward to starting a few more brands. Hopefully, we will be working with Forum again as I launch more brands and gain some traction as Tough Cover did.
If you enjoyed learning more from this conversation, be sure to check out future Q&A series we’ll be publishing after candid conversations with our sellers.