When you buy a company you never fully get what you think you’re buying so prepare yourself for surprises.

Many businesses calculate standard KPIs in weird and wonderful ways. You must have cost savings identified to offset the surprises.

An eCommerce profit and loss statement is a magnet for lots of third party margin stacks. Lots of eCommerce businesses struggle to be profitable because of it.

The eCommerce sector has had it fairly easy for a long time but now it’s a lot harder.

Discipline had gone and therefore the typical dynamic of the eCommerce landscape meant there were always several partners with their hands in your P&L, deteriorating profits but, worst of all, preventing you seeing and executing in real time, which is the true gift of eCommerce.

The combination of easy growth and fast capital creates a terrible environment for profits.

But times have changed: eCommerce businesses are not rewarded for just revenue growth, but revenue AND profit growth.

Meet the former THG execs shaking up private equity

The world has got a lot harder, which will produce higher quality businesses over the medium and long-term.

We invested (£50m) in CurrentBody in 2021. Although in the  beauty sector, CurrentBody has grown up in the toughest most competitive space in beauty, reselling third party beauty devices.

Discipline is essential for survival. There is a reason that we couldn’t find any other bespoke beauty device resellers, it’s hard!

Over the last few years CurrentBody’s own brand products have been in hyper growth vs beauty device market growth but their discipline on costs, product, manufacturing, brand and marketing spend has remained despite the immense shift towards own brand and the margins that come with it.

After our CurrentBody investment we are in really good shape. We are in exclusivity on a deal that we are very excited about, and hope to announce before the end of the year.

We generally look for businesses that demonstrate proof points of a UK leader in a category, segment or product, and aim to help turn it into a global leader.

The investment market is tough and may get tougher yet. It feels like people are paralysed with indecision but the beauty of eCommerce is that action gives you insight and insight gives you opportunity, you have to make things happen yourself.

Pricing adjustments on valuations are starting to be understood in the private markets, as they have been in the public markets for 18 months.

ChaChing – the new kid on the eCommerce block

I believe the world we are in today is here to stay for a while so people need to be committed to moving forwards, even if the environment isn’t as favourable as it was, waiting for things to go back to normal is a continuation of paralysis.