Ep 490 Exit Story: How a Middleman Built and Sold a $19M Distribution Business

**Colin Morgan** (0:07)
Hi there, and welcome back to another edition of Built to Sell Radio, the podcast designed to help you punch above your weight in a negotiation to sell your company. I'm the executive producer, Colin Morgan, and this week, you're gonna meet Sean McAuliffe, a former house painter who built a $19 million distribution company supplying replacement car keys to locksmiths across the country. He never thought anyone would wanna buy his business until a private equity firm offered him millions. Here's Sean to tell you how it all went down.

**John Warrillow** (0:43)
Sean McAuliffe, welcome to Built to Sell Radio.

**Sean McAuliffe** (0:45)
Thanks, Sean. I'm really excited to be here. I've been a long time listener, and excited I got the opportunity to actually be on the show.

**John Warrillow** (0:53)
Long time listener, first time caller. Well, we're grateful for your long term listenership, and I'd love to get into the business that you started and ultimately sold. I understand it was in the key fob world. Explain this, how did you get started?

**Sean McAuliffe** (1:09)
Yeah, I mean, I certainly didn't plan to end up in this industry. It just kind of happened.
So, honestly, I never finished college, and I was working as a painter for a while, and I enjoyed that. But I wanted to get into a more office job, and I was always kind of a do-it-yourself, do-it-yourselfer in terms of fixing things on my car, doing car audio work, modifying my cars. And back then, there was the Penny Saver still. And I found an ad in the Penny Saver for a wholesale distributor of car stereo equipment. So they would supply the car stereo install shops, and they were looking for a salesperson. So I applied for the job, and there's only one other salesperson there. It was a very small mom-and-pop distributor. And I hit it off with the guy, and he hired me. So I did that for... And learned all about phone sales. I had no experience in this guy. I still keep in touch with him. He's probably the best phone salesperson I've ever met. And it really taught me so much. And I'm not a natural salesperson. But anyway, did that for four years. I was there for two years. Moved to another distributor, another mom-and-pop, same industry, just kind of down the road two years later. And I've been doing these cold calls and B2B sales and developing relationships. And there was this one account that I've been talking to for many years. And we sold everything from car alarms to window tint to butt connectors and cable ties that cost less than a penny. And these guys, they were big. They were bigger as a dealer than us as a distributor. But I would call them every quarter or whatever it was and have a good half-hour conversation, and they were barely buying anything from me. So finally, one day, I'm talking with my contact, and I'm just like, dude, we talk all the time. We have great conversations. You don't buy anything from me. What can I sell you? He's like, I don't know. He's like, we buy these keys from this company and we don't really like them. So if you give me the keys, I buy them from you. And along these 4 years, I got into sourcing and getting creative. Sourcing product in China, Alibaba at the time was still a secret. So I hang up with them whenever I go home that night and I look on Alibaba for keys. He called me a specific key, this Ford key, because when you install the remote start back in the day, you would hide a key in a special little module. So I saw the keys for maybe it was like 3, I want to say it was like 343 actually on Alibaba. I think he mentioned that he bought them for around like 7 or 750 Then I searched around the Internet, I saw on eBay for like 1450
So then I did some back of the napkin math, what's going to cost to ship, what's going to cost to get it in, how much is a mailer. And I said, okay, there's a few bucks of margin here. So at the time, I was broke. I think I had like a five something credit score, 500 something credit score. I had negative money. I had a credit card with like a $300 limit or something like that. But I bought like $100 worth of these keys with a credit card from Alibaba.

**John Warrillow** (4:24)
Okay, you lost me a little bit because I think of a key fob as this like highly proprietary thing. I remember my wife had a Volvo years ago and we lost this key fob. And I'm like, well, we got to go to the dealership. And it was like, I'm going back maybe a decade. I think it was like 300 bucks to replace this key. I'm like, are you kidding me? $300?