B2B Dev Buys D2C Brand, Part 1: Acquiring the Biz

Lori McDonald is the founder and CEO of Brilliance Business Solutions, a prominent B2B ecommerce development firm. As of February 2024, she’s also the owner of a specialty food manufacturer called Norsland Lefse.

Why would a busy web development executive acquire a direct-to-consumer producer? I asked her that question and more in our recent conversation. The entire audio is embedded below. The transcript is edited for clarity and length.

Kerry Murdock: You’re the CEO of a leading ecommerce development company. Why acquire a food manufacturer?

Lori McDonald: We specialize in working with mid-market manufacturers and distributors. We purchased a small manufacturing company to diversify how we make money and to understand our customers better.

It’s been a great learning experience for me and the Brilliance team. We’re just getting started.

The business is called Norsland Lefse. It’s smaller than our target development customers, but it still provides insight and empathy into what our clients experience daily. We closed on the deal in February 2024.

Murdock: Tell us about Norsland.

McDonald: Norsland Lefse is a 40-year-old specialty food manufacturer and distributor in Rushford, Minnesota. Our main product is Lefse, a Norwegian flatbread similar to a potato-based tortilla.

We also make Uffda! Chips, which is a crisp and fried byproduct of Lefse. We also resell other Norwegian and Scandinavian products.

Norsland has about 20 employees. Most are part-time. We’re a little more than $1 million in annual revenue across 270 SKUs. The majority of our sales are on Amazon. We also have a direct-to-consumer ecommerce site, NorslandLefse.com.

The company was small enough that we could afford it, with revenue from ecommerce.

Murdock: Shipping food sounds complicated.

McDonald: It’s been another learning experience! Most of our products are perishable. Lefse is perishable — we don’t add preservatives — as are other items. We store them in freezers and refrigerators. We ship FedEx 2Day with ice packs on most orders. Shipping speed and operational efficiency are critical.

Murdock: You’re an expert in ecommerce platforms and backend systems. What is Norsland’s setup?

McDonald: We don’t have much technology in place, but it’s coming. We manually sync inventory and orders on Amazon. We use XPS Ship to manage shipping; it integrates with Amazon.

We moved our ecommerce site from Wix to BigCommerce, a Brilliance partner. We completed the migration in just three months. It has given us many new capabilities. We also redesigned the site and made it mobile-friendly.

The Brilliance team handled the replatform and design work. I was on the client side, which was fun and educational. I was the customer.

We’re making progress, but we still have a big to-do list.

Murdock: What are the surprises thus far?

McDonald: Right away we did a profitability review of the products on Amazon. We were losing money on some items. I learned how easy it is to lose money on Amazon without realizing it.

We have a lot more orders coming from Amazon than our own site. Growing sales directly on NorslandLefse.com has been a goal from day one. The margins are better, but implementation is challenging. That’s been an eye-opener too.

Our clients at Brilliance could have thousands of SKUs. We have just 270 at Norsland. I now appreciate the complexity of managing margins for many items across different channels.

I’m also more aware of merchants’ daily operational tasks and components. We might have equipment breaking, staff turnover, inventory glitches, supplier price increases — so many things are happening. At Brilliance, working with clients, we perceive our work to be important. But I see now how our clients have much more to worry about.