Acquisitions Anonymous - #1 for business buying, selling and operating - How a Water Bottle Company Turned Into a $17M Empire

Episode Date: November 14, 2025

In this episode, the hosts dissect a $17.5M electrolyte powder Amazon FBA brand with 86% margins and 20K subscribers—debating whether it’s a goldmine or a marketing death spiral in disguise.Business Listing – https://quietlight.com/listings/16065383/Welcome to Acquisitions Anonymous – the #1 podcast for small business M&A. Every week, we break down businesses for sale and talk about buying, operating, and growing them.💰 Sponsored by:Go High Level – The all-in-one sales and marketing platform built for agencies and entrepreneurs. Automate, manage, and grow your business at https://www.gohighlevel.comCapital Pad – A platform connecting accredited investors with vetted small business acquisition deals. Discover exclusive opportunities at https://capitalpad.comThe team breaks down a high-flying $17.5 million revenue, $2.5 million SDE electrolyte supplement business listed on Quiet Light. The company pivoted from motivational water bottles to consumable electrolyte powders in 2021, riding the hydration craze straight to 65% YoY growth. But despite 86% gross margins and 20,000+ Amazon Subscribe & Save customers, the hosts raise red flags.Key Highlights:- $17.5M revenue, $2.5M SDE, 86% gross margins- 99% of revenue from Amazon, ~20,000 active Subscribe & Save users- Pivoted from motivational water bottles to consumables in 2021- Faces high CAC, thin net margin (~15%) despite massive top-line- Hosts warn: DTC/shopify expansion is not a “free” growth lever—may backfire on Amazon rankingsSubscribe to weekly our Newsletter and get curated deals in your inboxAdvertise with us by clicking here Do you love Acquanon and want to see our smiling faces? Subscribe to our Youtube channel. Do you enjoy our content? Rate our show! Follow us on Twitter @acquanon Learnings about small business acquisitions and operations. For inquiries or suggestions, email us at [e-mail]

Welcome back, everybody, to another episode of Acquisitions Anonymous, the internet's number one podcast for Small Business M&A. We talk about a really interesting e-commerce business today. It is a hydration additive business. You've probably seen these on the shelf at the pharmacy and at the checkout line. It's a 99% Amazon FBA business. And between Bill and Travis from CapitalPad, they have so much experience on this. If you've ever looked at anything e-commerce-related,

One of the first questions you ask is how much of it is FBA. This business just owns it. It's almost all FBA. And it makes for a really interesting discussion. We talk about their gross margins, their net margins. What does that actually mean about what's happening inside the business? The business made a pivot from selling motivational water bottles. Like there's a lot that we cover in this episode.

Really interesting discussion. Really fascinating business. And you'll find who likes it, who doesn't? What do we like and not like? I think you'll really enjoy the episode. Stick around after. quick word from our sponsors. It's another Friday episode, and this is the second episode of the day, so Heather's a little bit more awake for this one.

I've broken, I had coffee, it's good. The coffee's kicked in. We've also got my good buddy, Travis Jamison from CapoPad with us here today. We've got a fun deal. When I have Travis, Travis is one of my favorite e-commerce people, so I always love to pull a fun e-com deal for Travis. So we have a good one today that I found. So this is from our buddies over at Kwai Light Brokridge, who I think, just personally, they're not paying me to say this. I think they're the kind of most prestigious slash best run e-com brokerage out there for e-commerce businesses.

So if you want to buy an e-commerce business, I'd be sure to be on their list. This is an electrolyte brand, so hot right now. U.S.-based manufacturing, 65% year-over-year growth, 20,000 subscribers, 17.5 million of revenue, and 2.5 million of SDE. So it says multiple NA asking price, not disclosed, quite like getting savvy. Not with an asking price. So 17.5 million of revenue, two and a half of net. Here's a little bit more about it. This hydration and wellness brand offers a line of electrolyte powder supplements designed to support hydration, energy, and overall wellness.

The brand features a portfolio of 40 skews, including low sugar, sugar-free, immunity support, caffeinated energy formulations. Initially gaining popularity through motivational water bottles in 2019, the business strategically pivoted in 2021 to consumable subscription-based electrolyte products, recognizing the long-term sustainability of recurring revenue. All right, so these guys weren't born yesterday. The brand generates approximately 99% of its revenue from Amazon, achieving robust growth with a 65% year-over-year increase in revenue. With over 20,000 active subscriber on Amazon,

subscription and repeat customers constitute 37% of total revenue as of early 2025. Gross margins average approximately 86% reflecting highly efficient operations supported by U.S.-based manufacturing, automated PPC advertising, and strategic inventory management through Amazon's warehousing and distribution AWD program. Key growth opportunities include expanding direct consumer sales via the recently redesigned Shopify website, which is 1% of sales, let me note. launching new flavors that have already been fully formulated, entering brick and mortar retail,

and tapping international markets such as Canada, the EU, and Brazil. The business's primary manufacturer has existing capacity to immediately support a one and a half to two X increase in production, with additional capacity to scale production up 4X within two to three months, ensuring rapid growth potential. With streamlined operations requiring about 10 hours per week from each founder, the business is primed for smooth ownership transition and significant scalable growth.

Again, 17.5 million in sales, 2 and a half of SDE. Travis, what do you think? Well, first of all, the founders see this. Great job. You knocked it out of the park with this one. That growth rate is insane. This is a very, very competitive niche on Amazon. So I'm really impressed.

Yeah. I mean, the electrolytes, the area dive at does. So, like, first of all, Travis, what is this? Do you know what this is? this is an Amazon FBA brand. That's all it is. They sell electrolyte packets, I assume, maybe some, like, powders you can scoop in there. Not much to it, but this industry has been on fire lately.

I think, what was it, Element. Elemente. Yeah. I mean, they kind of, like, set the stage. I don't know how they just ignited this electrolyte push even more, but sometimes they did. Because it's been around for, you know, decades and decades. But, wow, yeah, everyone's consuming it now. Yeah, so these guys sell.

powders that you put into water and they have supplement type benefits. I think, Travis, the reason this is suddenly caught fire, I think this is downstream of the water bottle craze. Over the last 10 years, everyone bought a freaking water bottle. And now everybody's convinced they've got to be permanently hydrated all the time. And they're carrying around water bottles and it's very easy to sell them, hey, you're not really hydrated unless you put an electrolyte powder in there. And also it tastes delicious. So this. This is a lot of it. So this. This is totally downstream of that. And I think you see it, and again, kudos to the founders here.

They started this business with motivational water bottles. So I assume water bottles inscribed with fun sayings and realized that that was also a red ocean. And they pivoted to at least a different red ocean that has recurring revenue. So kudos to that. Sounds like it might have been like accidental thing. Like, oh, we're already selling these. Maybe we can try to sell the electrolytes along with it. Like, oh, this is a way better product.

Let's just go here. Yeah. And 37% is that a pretty good subscription level? I felt like it would be to me. Especially if some of that revenue is still water bottles. I would think, yes, right? Which you're not going to subscribe with water bottles. I assume the water bottle revenue is like 1% at this point.

I'm just guessing. I don't know. I have no idea. Yeah, you're right. Those skews could be completely dead. I mean, that's so competitive at this point. The 86% gross margins, that's electrolytes for you. It's salt flavor powder.

basically. I love that. It's been interesting seeing a lot of the older brands kind of get their butt handed to them the last little bit for like, I think one big reason. All the new brands have quite a lot of sodium and salt and the old brands don't because salt is bad used to be, right? And now the new brands are putting it in there and everybody just soaking it up like crazy. It seems like the old brands are learning very slowly for some reason. Yeah. Well, and also like the old brands are just not good at the TikTok marketing, just like the way you have to sell consumer products, especially impulse purchase consumer products, which I think this is, you know, food, taste-based, relatively low price point. Like, you've got to be a really good digital market

to play here. Yeah. With that, I would really love to know how they're getting the sales growth. Because the rank on Amazon, which is, you know, basically I assume all this is, like, you don't just throw it up there. You have to be very, very active in marketing, especially in this industry to make a splash. So I'd love to know their strategies for doing that. The net market makes it seem like they're obviously paying for customer acquisition

in a hefty amount. Because if the gross margins are so good and net margin. But again, Bill, like you always talk about this, depends on where they're booking their customer acquisition costs. So they've, I mean, I know, so they've got an 86% gross margin.

That's product cost. I don't think there's anything else above that. So I'm going to round that to call it 85. and they've got roughly a 15% net margin, which means you've got 70% in the middle, right? And I'm telling you this is an FDA business. You don't have a lot of employees.

So you're spending easily 50% of revenue on ads. And the rest is just Amazon fees, right? Is 20,000 active Amazon subscribe and save? I mean, that sounds impressive to me, and I don't know anything. Is it impressive? Yeah. I mean, I think so. Right, Travis? I think so. I don't know it as well, but it sounds it to me. Bill, do you haven't the stickiness of subscribing save?

It depends a lot byproduct. I mean, so Amazon, they used to, they used to tell you nothing, and they would just tell you how many subscriber you had and you couldn't see churn or LTV. They are starting to roll out some more brand dashboards for that. So that is one of the things I would dig into pretty quickly on this business, is how sticky they are, what the lifetime value of a customer is. I would assume, I mean, if these guys are paying through the nose for marketing, which they are, obviously just based on our back-of-the-knap and P-N-L, and the fact that if you weren't, they wouldn't be competitive in the niche, you are probably losing money on first order here on Amazon or darn close, right? Or, you know, breaking even

or losing money on first order, which I'll tell you what, is a sphincter-puckering way to go through life. It just did. I mean, and I've sold supplements on Amazon for a long time, and we have to live that way. Because when it's an auction-based business model for ads, right? So when you and all your competitors know that you have really good lifetime values, pretty quickly, people start going, I can lose money on the first order, and we'll make it back over time. And so if you're not willing to also play that game, you can't pay the ad prices to win the auction. So all All of these kind of LTV-based businesses are almost always going to converge to a very white-knuckle level of ad spend. And so you've got to be really dialed in on your retention and your lifetime values.

Yeah. And on that, it probably means there's not a lot of ability to change pricing much. You know, Amazon Subscribe and Save hates it if you change prices at all. But also in this industry, highly competitive. There's tons of other companies selling basically the exact same thing. You've got to kind of like stay in this range of everybody else. Yeah. On the plus side, I mean, on the plus side, we've got 86% gross margins.

So I don't think we have a pricing issue, at least not right now. Hopefully, we're not importing all this stuff from China and that we get 500. No, they say like American manufactured or something like that, which I don't think this is a highly manufactured process. 99% of supplements, import from China, test it, and then manufacture it in the U.S. That's just how it's like. going to say that, Travis. Let's say vitamin C is one of their main ingredients. We're not making vitamin C here in the States. They're buying it

from China and blending it here in the States. So you are probably, that's something I would really want to also look through indiligence. I want to look through their contract manufacturer to the actual end markets or rather original markets where all the actual ingredients are coming from and I understand

my tariff exposure. I'd be super curious to hear their pivot story. I mean, to pivot from motivational water bottles, Like it makes me wonder if there's a like a influencer, you know, or a person behind this brand and they had some distribution and they're like, what can we sell? Like we're a fitness influencer. What can we sell? Motivational water bottles.

The motivational term really stands out, right? Yeah. Yeah. Did you all oversee those big water bottles that like had the measurements on the side and then there were like funny kind of sayings along the rest of the day where it's like, you know, 7 a.m. like you're starting off great and then like at the middle of the day it's like you know you go girl keep going like stuff like that yeah and then at 2 p.m it's like time to go pee yeah you know like 5 p.m you're almost there 215 25 right but i think that pivot is kind of is interesting and impressive that i mean they clearly made it it's been successful i don't they don't say how much they did in revenue

selling water bottles but i have a hard time believing it was 17 million you guys have talked about before, aren't there like some really strict terms and conditions that people sometimes flirt with the line with Amazon on like, you can't like put stuff in the packaging to try and like migrate them to your own, you know, e-com subscription? Yes, very. So, yeah, Amazon calls that redirecting the sale and they really hate that. So like you can't put inserts inside the bag of your electrolytes or the box of your electrolytes to say, hey, next time, 20% off on our Shopify website.

which leads me to the other comment, I'm glad you raised Mills. They talk in here about your growth area of scaling up the Shopify website. I have beat the table on this a thousand times. Taking a brand that is 100% Amazon and building a meaningful Shopify business, in my opinion, is one of the hardest things to do in e-commerce, period. I would even argue it is easier to get into retail stores from 100% Amazon business than it is to build a Shopify business. It's just so brutal.

And do you agree, Travis? Quite honestly, all of their growth levers that they mentioned, I discount all of them. I don't give them international. Okay, that's all for hard. Yeah. I mean, you can go international Amazon fine, but like international otherwise, no. And even international Amazon, it's a coin flip. Getting into stores, I mean, Bill, you know better than anybody.

Pretty impossible for most brands. And even if it is, it's not necessarily going to be meaningful for most brands. And definitely expanding to Shopify, like that one. I mean, I've done it myself. had an Amazon brand, tried to go to Shopify. Maybe it was like 3% of sales. And we just, we left the Shopify up, but we just abandoned all working on that.

It didn't make sense. It's brutal. I mean, you have to be, to do it right, you have to, it's a totally different skill set to be good at shop. You need this whole meta ads, content creation funnel in order to make it work.

With the small caveat that if you get into this business, you discover that the reason, the way they're growing on Amazon is a ton of, off Amazon traffic, like, and they're already doing a ton of UGC, ton of influencer, ton of TikTok shop, ton of neta ads directing to Amazon, then I will give you, you could probably siphon some of that over to the Shopify store and build a Shopify store. But it's going to be likely a little bit cannibalistic to your Amazon. And the really scary part about that is rank on Amazon is entirely, but largely based on velocities. So if you cannibalize

20% of your, call it artificial velocity and move it over to Shopify, you're going to get punished in rank and you're starting to lose some of your organic velocity, which is what's so diabolical about Amazon. So this is a tough business. It is. I mean, I've had a ton of success, but this is a brutal business. On your point, Bill, I haven't been involved in this long time, but when we had an Amazon brand, we would eat, when we're launching a new product, we would run Google ads directly to the Amazon brand, ourselves, like not through Amazon, just to be. build up that sales velocity, so you rank higher in Amazon. But you have no data on where those cells were going, where the traffic's going. You just hope that enough of it boost it up.

So yeah, if you start siphing it off to a website, it could have materially, very, very big impacts on it. Hey, everyone, it's Bill. And I want to tell you about maybe the most exciting sponsor we've had in a long time on the pod. It's called CapitalPad. And it is the thing that I wish existed when I started my journey of operating and investing in small businesses. So CapitalPad is a marketplace for acquisition entrepreneurs that is people who want to buy a business and need capital to list their deals and solicit capital from other people who want to invest in acquisition deals. So if you want to back somebody buying a small business, CapitalPad is a place to do it. And if you want to buy a business and need capital, you can go on CapitalPad to be introduced to investors.

So the really great thing, too, from the investor side is that CapitalPad takes care of all of the details that can get hairy with small business acquisitions. They handle standardized terms, standardized governance, standardized distributions all up front in black and white. Basically, CapitalPad professionalizes investing in small businesses, and the returns can be really, really good. I'm so stoked that they exist. It's founded by my friend Travis, who is a phenomenal entrepreneur in his own right.

So if this sounds like something that's appealing to you, if you want to buy a small business and need capital, or if you want to invest in small businesses, go check out Capitalpad.com and tell them that Acquisitions Anonymous sent you. I would not buy this business unless you really know what you're doing in Amazon. I mean, first of all, there's a big business. It's two and a half million of EBITDA. And to quiet, I think, has gotten wise that this is probably not a 4x deal. Well, they didn't list the asking price, right? That's what I mean. Yeah. I think seller here is going to be looking for a little bit higher multiple,

just given the size and the growth rate. The buyer here is clearly not an SBA buyer. I mean, this is going for north of $10 million, I would think. So is private capital, private equity. If you're a searcher, I would be real careful unless you really know what you're doing in e-com. You have an econ background. You've got to be an Amazon shark 100%. And I look at this is probably like basically an Amazon SEO business.

They've got 40 skews, all these different flavors. And they've added what was it? Like immunity support, caffeinated. I think they're just going after these little long tail Amazon keywords and trying to gather up as much for each product as they can. Heather, are there boxes that the SBA would need checked for e-commerce? Like take the size of this one out. I feel like you've already got the deck stacked against you with e-commerce and

SBA. Yeah. But like, what are the like, okay, recurring revenue would almost be a must, do you think? Well, it's got 37% subscription and that would maybe overcome some of it. But I think most SBA lenders are sort of trained to be very wary of anything that's 100% Amazon. They feel like it just does not give the borrower, their borrower, enough control of the business.

And, and frankly, lenders aren't experts in e-commerce, just don't do it enough because they are reluctant to do it. And so it's just kind of, it's kind of an area that most lenders have, take a lot of caution with. I think it would be a tough one. They watch the ratio. They know it's up. Right. Yeah, a lot of people lost a lot of money and in all FBA buyouts. Yeah. This is a fascinating one and I got the email, but I'm, thumbs down on it, but I would love to hear the story and I would love to know which brand it is because at this size, like, it's likely that we've never heard of it because there's so many. you know. Yes. Like I don't think this is, you know, liquid IV or one that's got massive distribution.

No, definitely not. It's, I'm thumbs down on it just because I don't want to live on this, I don't want to live this world anymore. Selling supplements at a loss in the first purchase, 100% Amazon. Like, that's just too scary. Someone will, someone will buy this. I'm 100% confident, probably for five plus times. But it's not going to be me. Yeah, if I see an FBA brand, I say no, it's just that easy for me. Yeah, 100% easy. Yeah, yeah, agree. And Heather, you're not lending to this one because it's all. Thumbs down.

Thumbs down. I don't need that much hydration. We never did before. Why do we drink so much water? It's just crazy. I agree. I don't get it. I am fascinated by the business.

Huge kudos to the founders for building something super awesome. I just think this is really challenging to lever up and buy. especially if you're not really confident in your Amazon abilities. A good business to build, maybe not a great one to buy. Totally. Yeah, yeah, I agree. All right. Thank you to Travis for being here. Go check out CapitalPad. If you want to invest in other small business deals, it's really awesome. He curates the deals. It's like how many? Like one per month, one or two per month? Roughly, that's the cadence we're aiming for.

Yeah, so the really high quality is not like a deluge of deals, but they're really vetted a lot of good information. For credit investors only. For credit investors only, if you're a credit investor or qualified purchaser, go check out CapitalPad.com. And also, if you like this episode, there are 400 more like it on ACQU Anon.com. Some of them with Travis as a regularly recurring co-guests or frequent guests, which we love having it. So go look at those, a bunch of e-com ones, bunch of quiet light ones, et cetera. And thank you for joining us on this episode of Apposition's Anonymous.