The Amazon "family business"

Case Study 1: Ferrero Rocher Ever had a Ferrero Rocher chocolate at a holiday party?

How about TicTac?

A Kinder Surprise egg?

They all come from one company:

The Ferrero Group.

Here's how their website describes them:

"Ferrero began its journey in the small town of Alba in Piedmont, Italy, in 1946. Today, it is one of the world’s largest sweet-packaged food companies, with over 35 iconic brands sold in more than 170 countries. The Ferrero Group brings joy to people around the world with much-loved treats and snacks, including Nutella®, Kinder®, Tic Tac® and Ferrero Rocher®. More than 47,000 employees are passionate about helping people celebrate life's special moments. The Ferrero Group’s family culture, now in its third generation, is based on dedication to quality and excellence, heritage, and a commitment to the planet and communities in which we operate."

A strong-willed founder passed the business on to his kids.

Who passed it onto his kids. And here we are.

The result after 3 generations?

• 100% family-owned to this day

• pioneered many pro-worker benefits. Really took care of their people

• a $40 billion dollar valuation (so they say; it's not a public company so... who really knows)

• millions of dollars paid in dividends over time (reminds me of the founders of Red Bull Energy Drink. The founders paid themselves €550 million in dividends in 2020 alone!)

• they put their customer avatar "Ms Valeria" at the center of the company and aim to please her always, calling her the "real CEO" of the company. Reminds me of Amazon's "customer obsession" principle. It never fails.

Where I'm going with this:

It's what your Amazon business can, one day, grow into.

You can imagine the headlines:

"He started the company as a private label brand, selling XYZ on Amazon. Over the years, the company branched out to many platforms, going on to pioneer the PQR, an innovative line of X. The company is now led by the eldest son of the founder, with an estimated company value of $50 million dollars."

This Amazon "family business" concept is also an invitation to a longer (perhaps more appropriate) time horizon. To think in generations, not quarters and years.

Did Ferrero or Red Bull have down years? I'm sure they did.

Did they stop? No. (there wasn't a board of directors to make them!)

And in the fullness of time, were they rewarded? Yes, handsomely.

They also served employees and customers in great, new ways.

"If you don't come from a rich family, a rich family must come from you."

Another 3-generation private family product biz? Case Study 2: Chik-fil-A

Who are Amazon business owners competing with?

- Chinese companies producing 100s of cheap offerings, and/or

- faceless corporations with heavy funding

And frankly... It's hard to beat them at their own game: - hard to beat China on price, and

- hard to beat big corps with money

What's the answer? I'd look at what Chick-fil-A is doing. They're a restaurant. Notoriously competitive! And yet... They make $6.7-9.4m per location. Versus McDonald's, which makes $3-4m per location. And it's because they counterposition themselves. They say: - we're about service - we're a family business - we care about people - we have principles And they talk about them in their marketing and material like this: From their website: "A people business and a family business. Truett always maintained he was in the people business, prioritizing customer service and dedication to his community. When traveling one day, he thanked the employee of a high-end hotel and the man responded, "my pleasure." Struck by that response, Truett encouraged his employees to add that phrase to their daily interactions, something they do to this day. Chick-fil-A is still a family business, with Truett's grandson, Andrew, serving as the CEO. The Cathy family has been working together for over 70 years. Today, several second and third generation Cathy family members carry on the company tradition." Hard to win on price (and unprofitable to try).

Hard to win on dollars spent.

But we can win by telling a different story.

This idea is inspired by the idea of "counterpositioning" from Hamilton Helmer's book 7 Powers.