EFP 61: Empire Building Series – Billy Murphy From ForeverJobless
How do you go about building an honest-to-goodness online empire?
Introducing Bill Murphy from Forever Jobless
That’s the question we aim to answer as part of our new “Empire Building” series on the podcast. First up, we’ve got Billy Murphy from ForeverJobless.com.
To be honest, I wasn’t entirely sure about this interview going into it. Sure, he’d been on Mixergy, had hundreds of comments on each of his first three blog posts, was hanging around A-listers on the interwebz, etc. But…just because you’re a good connector/marketer doesn’t mean you’ve got real business chops.
After a quick chat with Andrew Youderian and a few minutes into the call with Billy, I realized he was both a marketer AND knows his shit when it comes to building eCommerce sites, niche selection, branding, etc. He opened up about his successes and failures in getting started with eCommerce, his revenues from various profit streams, and how he’s leveraging his smaller eCommerce sites to build out a massive brand.
This is one you’ll want to listen to…check it out!
Check Out This Week’s Episode Here:
Direct Download – Right Click, Save As
Topics Discussed This Week Include:
- Connecting with a local dev shop and our Marketing Apprentice position
- Buying a “too good to be true” eCommerce site on Flippa
- Interesting ways to split equity in a limited partnership or joint venture
- An eCommerce disaster and lessons learned
- Niche selection tactics that work
- Why diversification may be the worst thing you can do with your new venture
- Leveraging business strengths and building a community
- iTunes Reviews
- Billy @ ForeverJobless.com
- John @ AuthorityWebsiteIncome.com – Ultimate guide to finding and exploiting expired domains.
So – what are your thoughts about building an eCommerce empire? What do you like/dislike about his approach to building out new profit streams? Let us know on Twitter, drop us a voice recording, or leave us a comment – we’d love to hear from you!
Speaker 1: Welcome to the Empire Flippers Podcast. Are you sick and tired of gurus who have plenty of ideas but are short on substance? Worried that eBook you bought for $17.95 won’t bring you the personal and financial freedom you long for? Hey, you’re not alone. Join thousands of others in their pursuit of niche profits, without the bullshit, straight from your hosts, Justin and Joe from Empire Flippers.
Justin: Welcome to episode 61 of the Empire Flippers Podcast. I’m your host Justin Cooke and I’m here with my business partner extraordinaire, Joseph William Magnotti. What’s going on [inaudible 00:00:37] money?
Joseph: Well, only my grandmother calls me that.
Justin: I’m going to start calling you Billy. Speaking of Billy, we’ve got Billy Murphy from Forever Jobless on the show today. We’re going to be starting the new Empire Builders series. Basically, we’re going to talk to entrepreneurs that are building empires. They have multiple profit streams. I sit down with Billy and we talk about eCommerce, because that’s what he’s built, an eCommerce empire. We’re going to get into revenue numbers. We’re going to get into his first eCommerce site. Everything. So it’s a great episode. Really excited to have you with us. Before we do that, let’s go over some updates, news and information. First thing up, we’ve got iTunes review from Brian K. In San Diego. It says rocket fuel for my business, five stars and he just bought himself a starter pack for his birthday.
Joseph: Nice Brian. I am missing sunny San Diego by the way.
Justin: Yeah, man. San Diego is so beautiful. I remember being in Point Loma and you’re looking over downtown, the skyline or whatever. It’s amazing. Aside from the planes flying overhead in Point Loma. But yeah, it’s a really nice place.
Joseph: August, a beer, a baseball game. That sounds like a great San Diego day.
Justin: Next up, we want to talk a little bit. We met some really cool guys here in Davao today. We go into their office. I was actually a judge in one of the startup weekend events that they had here recently and I got to meet these guys from Ingenuity.ph. Basically they’re a mobile app development, Python guys and I got to meet them because the event was being held right next to their office. Our lounge was in their office and it was sweet, Dude. It was like co-working space, very collaborative. They had the bean bags going and the-
Justin: Yeah, the Xbox in front in the lounge. It was awesome, so I got to chatting with him a little bit and so we wanted to talk to him to see what we could do. So, Joe and I got to meet up with them today. They’re mostly mobile guys, but we’re talking to them to see what we can do in WordPress and see if they can help us out with some projects we’ve been working on.
Joseph: Yeah, I’m not sure that they can help us with our existing projects. You never know, but we might have something in the can, in the works that would be right up their alley.
Justin: Yeah, and I really love the feel and the vibe and what they got going on over there. I know they work with some start ups in the mobile space, so I know they’re doing some cool projects on their own too.
Joseph: And I definitely have office envy.
Justin: Office envy, Dude. It was sweet right? Man, I was digging that. Last point we want to make is the marketing apprentice. There’s about one week left, so if you do want to apply for the position, make sure you do that. We’re getting some really good applications in. I just want to let everyone know that everyone who has applied, I really appreciate it and thanks to everyone who spread the word to help us get a great apprentice.
Joseph: How many applications so far?
Justin: We’ve got 14 applications so far, so I’m looking forward to it. A couple that aren’t so great, a couple that are great so we’ll see how it works out. But I think in the end, it’ll be pretty good. All right man, let’s get right into the heart of this week’s episode.
Speaker 1: This is the Empire Flippers Podcast.
Justin: All right. We are back at you. We’re talking to Billy Murphy today from foreverjobless.com. He is a wizard when it comes to eCommerce sites and building sites, eCommerce niche-type sites. It’s really exciting to have you on the program Billy. What is going on brother?
Billy: Hey, thanks a lot for having me on.
Justin: So, this is going to be part of our new Empire Builders series where we’re talking to and looking at people that are building an empire online through different profit streams. We want to talk to you a bit about your tactics and strategies. Really I want to talk to you a bit about what got you into eCommerce and buying and building sites in the first place.
Billy: In the beginning … I started in 2011 and I had another business that was running really passively. So, I had a buddy who was doing really well in eCommerce and he’d been doing it for four or five years. He said hey why don’t you look at eCommerce. He knew I was looking for something new to try. Why don’t you look at eCommerce stores and just try it out. Just throw up a site, try it out. So, I started looking around for a niche to get into, and ended up buying … I bought one on Flippa and started one pretty much the same week and so just kind of got a little bit addicted from there. Just kept buying and kept starting new ones and just grew it up to … I think by the end of the first year, I think I had about 20 of them.
Justin: I remember this Billy. You bought a site for $4000 that was making $1000 a month net and you wrote about this a bit. You talked about expected value. You said that’s a huge win for expected value and I get the poker reference. It’s cool. It sounds definitely too good to be true and that’s one of the points you brought up was that a lot of times deals may be too good to be true, and they may just be a great deal and that’s why you need to jump on them. I worry about that a little bit. What are your thoughts on that? There are some that are too good to be true that are obviously scams or rip offs.
Billy: Yeah. Most of them would in that spot probably be a little bit off. I thought for sure there was. The specific details of that one was it was listed for … I think they had a buy it now of maybe like $6000 and nobody was basically bidding. I think that was a buy it now and the auction still had a week or a month or whatever to run and lot of the comments in the Flippa auction were skeptical. Why is this listed so low? What’s wrong with it? What’s going on? So, while everybody was doing that, I called the seller, set up a call and basically said hey, why are you selling?
This lady needed money fast for something and I checked out … Everything looked legit. The analytics. Traffic was coming into the site. Through the keywords she said they were coming in from. Sales were coming in. So she showed me everything. Everything looked like it checked out. Keep in mind, this was my first site. I really didn’t know exactly what I was looking for. I thought maybe I could have been missing something, but everything really checked out and so I told her, I wanted to hedge my bets even more and I said hey, look if you lower the price, I’ll but it right now. I’ll wire you money. For her, she needed money quickly. The auction wasn’t going very well. It wasn’t being bid up very high so I think she was worried that it was just not going to sell and whatever it may be.
Long story short, I wired her the money. She either lowered the buy it now, or canceled the auction. I think she just lowered it and I bought it right after I got off the phone with her. And after the auction, I guess a lot of people emailed her saying hey we want to buy it. We’ll pay you more than you had it listed for and all that, and so it ended up working out but the actual EV behind it was if I was to buy it and lose my money, and I lost four grand, maybe that would have happened a very small percentage of the time. But the thing is, the times it works out is I have a site that makes over $10,000 a year pretty passively and I still have the asset. The EV was really simple for that one, just because the numbers were really good and because of the fact that I did the due diligence on it. If I didn’t look into it at all, then it’s just gambling. But just taking 20 minutes to talk to her on the phone helps hedge your bets a little bit.
Justin: Yeah, there’s a whole host of things that could happen, right? It’s making a thousand bucks a month net now. Even if it drops down or whatever, the worst case is you’re out $4000 and you have nothing to show for it, but that seems pretty unlikely. And you know what’s funny? You bring up talking to her on the phone. We do the same thing when we’re vetting all of our sellers. We want to talk to them. We want to make sure they have a real Facebook page with real friends. Talking to someone you can get a feel for whether they’re legit or not, whether they really know what they’re talking about, whether they have a legitimate site. So yeah I think that’s really helpful.
So after that $4000 purchase, I read another post where you were looking at with a buddy of yours that’s done really well in eCommerce, you were looking at doing a partnership on an eCommerce site and you were looking to spend $100,000. Now, you were like I don’t want to front that kind of cash. That’s pretty pricey. I’m going to go ahead and bring someone else in on this. Talk to me a little bit about that potential partnership that ended up not going through. But tell me about the breakdown, the split on that.
Billy: Sure. The particular deal was … this one I think was on Flippa and saw this deal. It was for a baseball supply store and the pricing was … I can’t remember if there was a buy it now at a hundred or if there was … I think the buy down was a little higher. The auction had just bid up to around 80 or 100 and it was a really good deal in terms of the multiple. I can’t remember what the multiple was. It was 18 months or less and for a deal like that, it’d be good to buy that and instantly buy into that type of cash flow. Actually now that I think about the numbers, I think it was making closer to eight a month. So maybe it was around 12X.
I had just gotten into eCommerce a couple months earlier and so to throw a hundred grand at something that I didn’t really understand that well. Didn’t make a lot of sense to me so I called my buddy, the same guy who convinced me to get into eCommerce and said hey do you want to go in on this deal. I’d hedged my bets by having him involved in the deal because he had a good eCommerce background and I told him I’d put up the work and half the money and so he thought about it, called me back five, ten minutes later and said yeah I’ll do it and I have another guy who’s going to put up some of the money too. So it was going to be a three way split.
We just had a friend who wanted to put money in some deals, so he was going to put money in, my buddy was going to put a little money in and I was going to put the other half in. So long story short, he was going to Peru in a couple days. So, we set a price at around a hundred that was the max we were going to spend. My buddy at the time … and this was where the blog post, “How to Buy a Ferrari for Twenty Grand” came from. So my buddy’s split was going to be 20 thousand that he was going to put in. I can’t remember the exact percentage that he was going to get for that, but it was going to be a little higher than his friend that was putting in 30 because he eCommerce expertise.
Justin: Yeah plus he was bringing him to the table. I remember this. So it was $50,000 invested on your part. You were going to get 60%. Your buddy was going to put in $20,000, get 25% and his friend was going to put in $30,000 and get 15%. I thought it was a pretty slick partnership split there and they were going to be less active. Your buddy was going to take a more active role in helping you work through, but he didn’t want to do any of the work. And the other guy was simply going to be a passive investor. We talk about partnerships a lot, so I thought it was interesting to see how your thoughts were on a breakdown for purchasing a site. You ended up not picking it up though. What was the reason for that?
Billy: The only reason was my buddy was out of the country and they overbid the price that we were going to bid. So, I could have either went and bid $120,000 or$130,000 and tried to get it, but then, we hadn’t agreed on that so I didn’t feel comfortable doing that unless I was going to front the money out of my own pocket. And then, they bid over and didn’t really have a way to get in touch with them to see if we wanted to bid higher. So, didn’t buy it but the good news on that one looking back, that ended up getting hit really bad by the Google updates and so we probably would have got hosed on that deal. So, it worked out for the better I guess that we didn’t get it.
Justin: Yeah. A lot of people got it. We have some eCommerce buddies and ads and sites were getting hit by the Google updates for sure. Tell me a little bit about your revenue breakdown now. You own a few sites I know. We’re going To talk about this in a bit how you’re trying to break down those sites into just a couple. But right now, how much do you make via eCommerce sites? How much do make via Forever Jobless or your internet marketing stuff. What’s the breakdown or the split?
Billy: So I don’t try to monetize Forever Jobless at all. Right now it’s just a personal blog. Maybe at some time … It’s funny all of my marketing buddies hate on me for not trying to monetize it but I really didn’t start the Forever Jobless to try to make money on it. I think in the future the money will be there if I want it to. The eCommerce store … So I was making … I think I got it up to in the forties per month. I was making low to mid 40 thousand range, but I’ve sold off … In the last I guess four to six months I’ve sold off a number of the sites to focus on EcomLab, which is new business I just launched. The eCommerce training site. And then I own BlueFirePoker, which is a poker training company. I don’t know exactly what range it’s in right now, but like five figures a month it makes.
So those are my main sources. I’ve looked into creating a brand, so I’ve been looking a lot, doing something in China. I haven’t started that up yet. I was going to document the whole process of actually scaling up a brand, but that’s a newer project I’m looking into, but that hasn’t started yet.
Justin: We’ve talked to a couple of guys out in China right now. They help people with sourcing and your man on the ground. Lots of people do this but you can check it out, the elevatorlife.com. Sharp guys out there. Americans that went out there and said we’re going to make our way in China and so it’s been fun following their journey over the last couple of years. Have you ever been to China and checked out any of the warehouses and factories they got going on out there?
Billy: I really want to go. I meant to go the Canton Fair earlier this year. Just didn’t have enough time. Probably going to be busy when they have it later this year, so I’m probably going to aim at going next April.
Justin: Cool man. So we got your revenue breakdown. That’s pretty interesting. Your first site … Was that $4000 site actually the first site you ever purchased or built?
Billy: Yup. That was the first one. I started another store from scratch probably within that week or two, but that was the first one I ever bought yeah.
Justin: So do you normally recommend to people on Forever Jobless or elsewhere … Do you recommend they build the site from scratch or do you recommend they buy their way into eCommerce sites?
Billy: It depends. I guess it depends what you’re looking for. For me, I viewed it as almost like a micro fund, the eCommerce stores to me, so I wasn’t necessarily buying each store to build it up and do a big company by itself. I was kind of doing it pretty passively. I outsourced everything with my store. So I wasn’t running the day-to-day or anything like that. So, for me it was like, if there was a good deal for sale, I would just buy it and put it in the collection of stores. I did for the income.
People don’t understand. I think that eCommerce is so untapped in terms of … You look at buying a house. A lot of people buy real estate for passive income and they’ll put down a $30,000 down payment and get like $200 bucks a month cashflow and it’s kind of crazy because you look at some of these stores and I put down $4000 bucks a month on the first one and got close to $1000 bucks a month passive income and so it was kind of crazy how cheap these are. So, I think it depends what you’re looking for.
Me personally right now, if I was to go into and say start from 100% from scratch, what would I do? I’d probably either start a store from scratch and probably create my own brand or the other thing I’d do is I would buy a site big enough to where it makes sense that any changes that I make to the site that can improve it, it ends up making a substantial difference. So in other words, if I buy a $4000 site, and I doubled the site, now it’s only an $8000 site. So it’s probably not worth the time if you’re doing one store. But if I bought a $500,000 site, the improvement … you double it, now it’s a million dollar site. So, I think I’d probably, if I was to start over I wouldn’t have gone so many small stores. I started at really tiny stuff … I would have tried to either buy into a big business or start one up and build it into a big business.
Justin: It’s funny. A couple of years ago, if you’d have asked me if someone should get into eCommerce, personally I would have thought there’s absolutely no way. Amazon’s got that locked down. Why do you want to get into eCommerce? But the more I talk to people about eCommerce and look at some of these eCommerce sites, some of them are really bad man, really bad right? They’re 2003 sites and it’s amazing to me they’re selling at all but they’re actually making money and selling quite a few products and it’s shocking to me but we have a couple of friends that do quite a bit of several eCommerce stores and they have been looking to sell off pieces of their businesses that at least for them, they don’t want to devote the time to really continue building out. Their time is better spent on some of their other sites where they’re more committed or they have more into it.
You just recently went through a process where you sold off a lot of smaller sites and I was wondering. You said you were splitting your time. Let’s say that one site equals, I don’t know 10% of your net, but it’s less than 10% of your time, isn’t that a site that would be worth keeping based on time expenditure? Do you know what I mean?
Billy: I think in a lot of ways yeah, and that was my theory going in is that since I had someone running the stores and wasn’t taking a lot of my time I could just forget about it and not worry about it. But what I learned is I always had that mind space taken up where I didn’t know what was happening with a lot of the stores. I’d want to check in, see what’s going on. So even though I didn’t take a lot of my time specifically, if I wasn’t involved in some degree I felt like they either weren’t growing or could potentially lose some income if I wasn’t paying attention to them, so felt better selling a lot of them off and focusing more on … My goal is to sell of most of them, if not all of them and start one up, and build it into a big company because then the focus is just specifically on one thing.
It’s really hard. When we had 20 sites, you really can’t pay attention to the majority of them. I never knew what was going on with most of them. I’d get a financial report at the end of the month and that was as much as I looked at a lot of the stores. There was a couple main ones that we had stuff going on with, but it takes a mind space up that you wonder what’s going on. Some of the sites you bought losing value because you’re not paying attention to them and I didn’t have an experienced eCommerce veteran running the day to day. The people I had running the day to day were new to eCommerce and self taught.
Justin: It’s a brain drain having all those different sites. We recently just combined all of our outsourcing company, our niche sites, everything under one roof, Empire Flippers because we didn’t want to be checking stats over here and worrying about this business. Just the brain power that’s put into worrying about multiple brands is a bit of a pain, so I get where you’re coming from there, for sure. So, they’re never totally passive. We had a site, twitart.com that was doing well. It was making quite a bit of money and we neglected it, and that was a mistake we made. We probably should have sold it off before we let it dwindle down. We would have got more value out of it rather than just sitting on it passively and not do anything with it. That was a mistake we made with one of our sites for sure, instead of selling it off, which is what we should have done. Tell me about an eCommerce site that didn’t work out so well for you that you learned a lesson from that you’d do differently today.
Billy: Well one specific I think about, I bought a site for $15,000 and literally … Obviously you can’t plan for this but within two, three months, got hit by one of the google update and it went from making … I think it was making close to $1500, $2000 a month and it basically went to almost nothing overnight. Maybe it was making a few hundred bucks a month. That was really frustrating and it had definitely been built up with spammy links and I just basically bought it for the cash flow and was on a roll buying stuff and so just kept buying good deals. Good deals based on the cash flow they were putting out.
I think of things like … when Warren Buffet talks about … I can’t remember the exact quote but he’d rather buy a very good company at a decent price then buy an okay company at a cheap price. Basically what I was doing was buying really cheap companies over and over and over. So, all these little small sites that I was buying were just cheap. A $15,000 site that was making whatever it was making, $1500 or two grand a month, that’s really cheap. So, you can pay yourself back in less than a year on those sites, but unless something happens where now you can’t, because it wasn’t an authority business. It wasn’t an established credible business. It was just a small site, like throwing off some money, but obviously that type of stuff can happen.
Justin: So you’re looking to build one overriding or branded eCommerce site now. Tell me a little bit about your approach there. How will it be different than your $15,000 eCommerce sites? What are you going to do differently for this site?
Billy: Well, one way specifically that I think a lot of people … Drop shipping is great. It’s a very easy business. It’s probably one of the easier businesses to get into, but the problem is your margins are so low that … Most of the margins I was looking at were in the 20-30% range, so if you get hit by a Google update, there’s not much you can do to buy your way back in with traffic. If you create your own brand … If I go over to China and get my products made, maybe I’m getting 50, 60 70% margins where I can now buy my own traffic, so you have a lot more control over … essentially I’m buying customers because I have the profit margins to do so. With a drop ship store, I can’t compete in ad words for example because I’m competing against suppliers or manufacturers that have double the margins that I do. So I can never compete there.
So that’s one area where I think a lot of people don’t think about when they get into hey should I do drop ship or create my own brand. Well, to create your own brand from day one, you can scale up pretty quick. I’ve basically depended on Google, the organic traffic for all my stores and so I didn’t have a lot of other sources of revenue. Obviously we had some sales on eBay and Amazon but even there, on eBay and Amazon, you’re selling someone else’s product so there’s other people selling the same thing. You don’t have much control, so that’s one reason that I really wanted to go towards … If I started one from scratch right now, I’d definitely create my own brand.
Justin: Well, paid traffic is fantastic because you can scale that up, scale that down as you need. There are multiple places you can go to pick up that traffic and as you said, you have the margins to be able to afford the traffic that you need to get the site rolling. Let’s talk a little bit about niche selection tactics. Do you normally start with a product first? Do you look at keywords? Your chance at ranking? What do you look for in a niche?
Billy: When I started i would basically scour the internet for potential niches. Lots of times I would go to a site like … I’m sure you’re familiar with Hayneedle. They had like 500,000 stores or whatever. They probably had over 1000 stores and I think they’re now combined into one site, but basically any niche you can think of, they sell it. So I would basically just go through stores like that and look for potential niches. And then, what I would do is I would go into the Google keyword tool and I would calculate out … I’m a big math guy with a lot of this stuff.
I’d calculate out the estimated traffic coming in for a couple of the main keywords for a niche and I would multiply that times an estimated 1% conversion rate. I’d multiply the traffic times the spot in Google that I thought that I could get the ranking to. Obviously, you’re familiar with the click-through, so if you’re number one, maybe you get 35-40% of the traffic. If you’re number 10, maybe you’re getting 1% of the traffic. Multiply that number by the estimated margins on the product and in a 1% conversion rate, and so I’d have a rough idea when I went into a niche. I’d go in and say okay I think I can make two grand a month in this niche.
And obviously it’s being super, super broad because there’s potentially hundreds of keywords you can get, so I’m only taking like the top handful. So that’s the way [inaudible 00:22:13] into it with most of them and I would just compare. If I was looking at 10 niches, I would compare okay this one is clearly on the low end, and these ones are on the high end, so I’ll pick one of the high end ones. And I’ll jump into that one.
Justin: I love that. We were talking, Joe and I, my business partner. We’re talking to Andrew Youderian a little bit about niche selection. And he [inaudible 00:22:31] thinks … We were talking about Amazon. Try not to get things that are Amazon. So, he looks at things where he can a ton of value that might be confusing or kind of those barriers of entry. With your approach … The thing I like about it, it’s very well known to us, our listeners, our audience. We’re keyword, research and niche selection Nazis. We’re hardcore about making sure you know your numbers and making sure this is a good niche for you to be in, and I get that. So your problem then on the back end or next step, I guess, would be to make sure that you can source that product. So, you find the right keyword, it has the right numbers, you say okay I know I have a fairly good chance to get on the first page of this, I’m probably going to be somewhere in that number two, number three, number four spot. That looks relatively easy. How do I find the product?
Billy: That’s a big thing people ask and I never had an issue with finding the suppliers. All we did, we basically just googled the main keywords in the niche and we would go to the top couple stores and anybody products they were selling, we’d just contact that supplier and we’d say, hey we went to sell your product and pretty much almost every time they’d say yes. They’d send us an application, we’d send it back and we’d get approved. So, we never had an issue getting approved. I don’t know if a lot of people who haven’t found a niche yet, that’s a big worry. How are we going to convince the suppliers to work with us. But, we never had an issue. There was one or two that wanted to make sure we were going to move a certain amount, whatever it may be. But, a lot of times we got around those by saying hey look, we’ve got all these other stores, we do this a lot. We got approved pretty much 100% of the time I think.
Justin: So I’ve had this question before and I’d actually looked it up. I’ve talked to a lot of people about it to figure it out, but what’s your answer to … Let’s say that you find a source and you’re able to source that product and you’re selling it for, let’s just say $299. What’s to keep someone else from coming along and selling it for $279 and cutting you out basically?
Billy: Most of the suppliers, not all of them, but most of them they have a MAP pricing, which is the minimum price you can list for. That keeps people from undercutting everybody else. Most of the time, we’ll just list at MAP, because obviously we don’t want people to be able to price under us, but we’ve never had an issue. That’s another thing that … I think the majority of suppliers had it, that we had. Once in a while … There was one specifically that they had MAP pricing but everybody was going to eBay and undercutting, which is … They’re not supposed to do that. They were supposed to lose their deals, so we had some issues with that because we had put a lot of time and money into one site. We were moving a ton of the product and then people were undercutting us on eBay. But other than that, we really didn’t have any issues with that.
Justin: I remember reading a little bit about your barriers to entry and we talked about barriers to entry a bit with Andrew Youderian. You talked about making sure you have a built in mini moat around your eCommerce business. So talk to me a little bit about that. How do you ensure that there is a barrier to entry? Is that important to you when getting into a niche?
Billy: Well that’s something that’s very important to me and that’s something I didn’t do with the way that I was doing to stores. And that’s something that if I was to start over I would have done. And again, that was mainly because I viewed this business as this mini fund of stores, but that’s something I’m a big proponent of … is basically creating some sort of a moat where competition just can’t come in and … For example, for pricing, you don’t want to compete on price, and as a drop shipper, a lot of times that’s one of your only options. Hey, maybe we can offer them some sort of a deal. We couldn’t undercut people on price, but one thing for example on … We had a heater business and so we’d include some sort of hand warmers and things like that with your heater purchase and so we couldn’t compete on the pricing, but we’d add things like that in there, but it’s tough.
As a drop shipper it’s really hard to find ways to give yourself a moat. The only way that we could think of was the education side where if we could tell more about our products, if we just seem like the authority on the subject, that helped and that takes time to create that contact. But, it’s a lot easier to create some sort of a moat if you own the rights to the product.
Justin: Let me ask you Billy. So how important that you understand … have detailed knowledge about the niche? Is it something that you have to really dig into and know over the next couple of years, or do some of the products you sell you don’t know them that well, but you just are still able to deliver and get ranked? How important is that to you?
Billy: I think it’s important. I didn’t do that with this business. With this one, it was basically, we didn’t know many of our products at all. The guy who handled customer service, he knew them enough to be able to answer questions if someone called or emailed. And a lot of times he’d have a cheat sheet, so this is actually a lot of people think we have to know every aspect of the product but when we started, he would basically write himself a cheat sheet. So everyone that called, every question he’d get would be new. He didn’t know the answer. So a lot of times, he’d say let me put you on hold and talk to that department or something. So he’d put them on hold and on another line, he’d call the supplier and get the answer, and then he’d write that down and then he’d get back on the phone with the customer and say hey I talked with that department and here’s the answer. And they’d place the order.
So, a lot of times in the beginning you really just got to … People talk about bootstrapping with money, you got to bootstrap with knowledge sometimes too. You don’t have to know all the answers, if you can figure out as you go, I think … We didn’t know much at all about the products. We just learned as we went.
Justin: I love that, man. I love the hustle. Hold on real quick. Let me talk to that department. Oh shit. Let me call them real quick and get the info. So let’s talk a little bit about your team. When you started off, you bought a site. You were testing through it, saying let’s see if this works and oh my God I’m actually making money. When did you start to add people to your team and how did you get from a one man band to having other people help you?
Billy: Pretty quickly. Those first two that … the one that I bought on Flippa and the other one I started from scratch, probably within a month or two I brought somebody on with the purpose of not just handling the orders for those stores, because there weren’t many orders, but their job was basically to create more stores as I found good niches and just handling the transfer of new stores when I would just buy a new store. That’s how I scaled up so quickly is because I basically just hired someone and outsourced with them. So I had one employee that basically handled a lot. So as we grew from, I guess in early 2011, March or so, I guess from two stores to 20 stores at the end of the year, was an eight or nine month period with one employee.
Justin: How did you find your employee?
Billy: Craigslist. I was just on Craigslist.
Justin: Really? That’s cool. So you put a Craigslist ad out. You get a guy … How many people responded? One, two, a few?
Billy: It’s amazing how many people respond to Craigslist. It was a lot. It was a lot people.
Justin: Before we started an outsourcing company, the first VA we got to work with us was in the Philippines and it was via Craigslist. We put a post out. We were amazed at the response. So, you get a response from this guy and you’re kind of handing over the keys. Do you still work with this person on Craigslist?
Billy: No I don’t work with that person specifically. They left probably a year ago to pursue a new opportunity, but I would say in general it worked out pretty well. I think they were a pretty motivated person. I brought them on knowing that they really wanted to learn this. Didn’t know it at the time, but really were anxious to get involved in starting up a business like that and scaling it up, so I’d say it worked out pretty well for bringing on someone without any eCommerce experience. You have to talk to a lot of people who you figure out you don’t want to hire, but this guy specifically, he was pretty motivated. He liked the idea. I’d say it worked out pretty well.
Justin: Tell me about your team today. Do you have customer support staff? Do you have Vas? Do you have an editor for Forever Jobless? What does your team look like today?
Billy: There’s one guy who runs the day to day for the poker company. One guy’s starting today that is going to be handling a lot Of the day to day for EcomLab, and I have some interns. Other than that, some work as it comes up, we hire contractors like building EcomLab, I hired developers, just as contractors. We don’t have guys in house. If we want to do SEO, we’ll hire contractors. We don’t have people in house for that. I keep it really lean. I tried to scale up through employers. I hired one or two more people for the eCommerce stores. It was a headache. I didn’t want to manage people, so I wanted to keep it very lean.
Before I was bringing people on with the goal that okay if I bring people on, hopefully they’ll be able to help scale it up and they’ll figure out a lot of stuff on their own. But, what I was finding is I had to get really involved and just lead people by the hand too much and we weren’t in the position where we needed the people to do that so now I’m trying to do it where I don’t hire anyone until we actually need them. I was making the mistake before of just hiring more people than I needed, hoping that just by pure numbers of people that it’d scaled the business up and they’d kind of figure it out, but it didn’t happen as well as I hoped it would.
Justin: Plus you were working on so many different sites. Have you ever been a manager in a corporation before. Is that new to you? You’re saying okay well if I have less people, that’s easier for me to manage.
Billy: I’ve never been a manager and I don’t have any aspirations to do it. I’d rather just work on business strategy and [inaudible 00:31:31] and stuff like that. Management is just a drain on me. It’s definitely not my skill set.
Justin: Well, a way around that obviously is to put some automation tools in place that can help and I’m sure that you’ve done some of that, but let me ask you about … because you had a post that was pretty interesting. It talked about diversification and you were talking about how your understanding is a singular focus is much better than diversification. How did you come to that conclusion?
Billy: I think a lot of people, myself included, I’ve definitely made this mistake on the stores. I guess you’d consider that diversifying the way I did the stores. The thing is, a lot of people … and especially you see this a lot with aspiring entrepreneurs, people who haven’t started a business yet. They’ll want to start with 30 different ads in sites or 30 different whatever type of sites and it’s very hard. If they haven’t created one successful one yet, it’s hard to … They don’t have a successful model they can pattern yet.
What I see happening with a lot of people is they’ll start … Some people have 50 or 100 sites and they don’t know how to do one successfully yet so what happens is they just start a lot of stuff that doesn’t work and they’re calling it diversification, but they don’t have anything to diversify yet. It’s a flawed theory that a lot of people do too early. Diversification makes some sense when people have built something up and they know how to do it and maybe they have a big enough nest egg where it’s like okay, let’s spread the money around a little bit so if something happens on this business, I don’t necessarily have all my eggs in one basket.
But there’s a lot of flawed thinking I think around that you need to spread your money around and diversify it because if you’re very good at one thing, and you can focus all your energy on one thing, there’s a substantially higher chance that you’re going to grow that exponentially compared to your other options. What happens with a lot of people … let’s say they start 10 sites. If you have 10 sites, and you improve one of your businesses, if you double one of your businesses, you didn’t really affect your overall business very much. However, if you had one site and you doubled your business, you affected it a lot. And I think a lot of people just never get to the point …
The real money is made too where you get over a certain threshold where you can become a dominant player in the niche, as authority figure, and everybody makes a middle level income for whatever niche they’re in and there’s only a couple guys making all the money. Those are the guys that spend the time making authority business and basically there’s only a couple of them in each space. Most people never get to that point.
Justin: The spoils go to number one, number two. Seth Godin talks about it “The Dip” and trying to determine whether or not you can actually get to number one, number two. If you can’t get to one of those positions, you probably shouldn’t do it. You should go to something else. I think it’s interesting you talk about people trying to diversify, especially aspiring entrepreneurs. We get that a lot where we hear someone … They’re making $2500 bucks a month online. They’re finally okay. They’re independent. They can actually make enough to survive with the money they make online. They go oh I need to diversify now. I need to get into this other thing that’s totally unrelated. We go whoa, whoa, whoa, no. Hold on. You’re making $2500 bucks a month. That’s great, but how can you duplicate that? How can you replicate? How can you scale it? How can you add people to it to pull yourself out so you can start to create new profit streams? I think that’s really the key.
I want to talk really quick Billy about something you talk about, building a bunch of sites. I’ll tell you, we built hundreds of sites. We’ve built thousands of niche sites, but I think the difference here is that we don’t care about any individual site. So, our one thing is the team that builds those sites. We focus singularly on building those sites and then selling those sites off and our team that is the engine that does that. Very little of our time goes into that. If I was having to sit there and knock out niche sites all day myself, I’d probably go crazy. I think the singular interest is interesting and that’s one of the things that we really point out is that you should double down on what’s working. Whatever’s profitable, double down on that and scale the shit out of it because that’s your money maker. That’s what’s working for you.
Justin: Let’s talk about foreverjobless.com a little bit. You’d been doing eCommerce sites for a bit, you’d made some money, you definitely have some friends in this space that have made quite a bit of money before that and you were starting to do well. Why start Forever Jobless? Why blog about it? Why talk about it?
Billy: I guess the main things that I wanted to accomplish was one is I wanted to do a better job networking. I pretty much never really networked much. I’d go to a sporadic event here or there, but other than that, just had a network of friends in business that I know and talked to them about business, but there’s a lot of people that I figured I’d probably want to meet that are interesting entrepreneurs that I wouldn’t know otherwise, and vice versa. Maybe there’s people that would want to talk to me about some stuff I’m doing.
That was one big thing. The other thing I really enjoyed is teaching about business. I didn’t feel like there was a lot of content out there that … I know for me personally, there wasn’t a lot of content that I read. I didn’t find a lot of the entrepreneurial stuff interesting online. In the make money space there’s a lot of people teaching to make money who haven’t been there yet and I thought-
Justin: Charlatans man. Scammers. Sketchy. Oh yeah. The eBooks. I’ll tell you 20% of that and then you can buy the rest for $19.97. I mean, yeah. For sure.
Billy: Right. I think one of the first posts that I read on warrior forum when I was over there was the guy selling eBooks to people on how to sell eBooks to people and I was like what. It didn’t make any sense. I couldn’t find anyone making money. It was only people selling information products about how you could sell information products and that type of stuff.
Justin: It’s pretty incestuous man. Yeah, for sure.
Billy: So I thought there was a huge gap in the market. So I said hey, I enjoy teaching that stuff. I’d written some random articles and presented on some things at a small conference I go to and I really enjoy it. The feedback I got and people want to talk about the stuff that I was talking about and so, I said hey maybe it’ll be fun. I’ll put up a blog. I thought about it for a long time. I wanted to make it good, if I end up making a blog so I didn’t put it out for a long time, so I said okay fine, I’m going to do it and started putting out content last year.
It’s been good. Obviously, as we were joking about, before we started recording, I don’t post a lot. There was at one point just three posts up there for a long time, and then now I think there’s probably … There might be eight or nine of them up, but when I do get a chance to do it, the feedback’s been great. Met a lot of cool people that I wouldn’t have met if I hadn’t posted the blog.
Another thing too, and this is something in the back of my mind, I think. Sometime in the future I’d want to write a book. I’d think it’d be interesting to share a lot of ideas and things like that. It’d be impossible to sell a book if nobody had ever read anything on me yet. I had an audience of zero basically, so I think it’s a good thing to start putting out some content and if people end up liking it, maybe a couple of years from now, I’ll end up writing a book. Maybe I’ll have a big audience that would want to see it.
Justin: It’s absolutely worth building a tribe. Similarly, we started off because we were looking to network and we said okay well, we’re going to share what we’re doing. We started the podcast thinking that we’ll be able meet interesting people and ask them cool questions and it really blew up. It’s amazing the feedback we get from people who are saying oh, thank you so much. You’ve inspired me to do this. Do you get a lot of that? Do you get a ton of email?
Billy: Yeah. I get a lot of email. I don’t even have time to respond to a lot of it. I’m trying to figure out an option where I can respond to more people, but it’s very hard, trying to run up a lot of businesses, travel, and then blog and respond to all the questions. I’m thinking of starting some Q&As just to answer more questions and stuff like that. There’s a lot of emails. It’s tough, you know? I’m sure you get it a lot where a lot of people who email are not interested in taking action. They want you to do a lot of their work and that’s frustrating and I guess to me … because I love helping people and there’s some people that they’ll email and I’ll even hop on a call with them and just help them out with something. But it gets frustrating seeing a lot of people … I’ll write up a big email, I’ll tell them exactly what they need to do and then a couple of months later they’ll write me back with the same type of question and you can tell they didn’t take action.
Justin: Yeah, I know. Plus, when you reply to an eight point email and you reply to each individual point, and they get back to you and they say, yeah and then heres ten more questions. You’re like well I’m helping just this one person. I’m not helping a bunch of people. It’s almost seems better when you get those questions to just answer with a blog post so that everyone can get the benefit of those answers, rather than just do it for that one person. But I totally know where you’re coming from. I actually wrote a blog post called “I Want Your Monies” and it’s about people that email you in a round about way and say, you have monies. I’d like some of those monies. Can I get some? How do I do the same thing.
People are just looking for help, but they’re not willing to do the work to make that happen. That’s unfortunate. A lot them make money online is taking advantage of that by selling the magic bullet, the blue pill that will make you money and it won’t and they know that, and sell it anyway.
Billy: Right, and I felt like I was like okay I’m going to be different. I’m going to put a blog out, and not try and monetize it, but I totally understand now why people want to sell people stuff because they’re getting paid for their time to do that where it’s tough to put out … A lot of those blog posts I’m spending 20, 30 hours on and then that’s kind of my way of giving back. Here’s some free information that can just help you out, but the problem is all those free blog posts essentially act as lead gen, not for an order to something, but lead gen for more questions. And it’s been kind of tough. Actually there’s one funny story of EcomLab.
A lot times now my email is if I get an email on something that I could answer in the forum, I tell most people hey, if you can leave a comment in the blog post or if it’s a question about eCommerce, they can leave post in the forums on EcomLab now because then, like you mentioned, if I’m helping people one on one, it’s not that helpful, but somebody else’s questions … 100 people probably have the same question, it can help a lot of people.
There was one guy specifically on EcomLab. He PM’d all the time. He PM’d every day … I was getting Pm’d from him. I was like hey if you could just leave these in the forums because I can help everybody that way and he just kept emailing, Pming and stuff like that and it’s really frustrating because people don’t know we’re trying to help through blogs and forums like that, but it’s tough doing the one on ones all the time.
Justin: It can be. Let’s get back to your empire bit. So you have the poker site, you have your eCommerce sites, which you’ve been selling some off and you’re looking to kind of focus that on one, two, maybe three eCommerce sites. And then you’ve got Forever Jobless and EcomLab. So, those are your babies. Those are the ones you’re working on, but my guess is you’re spending more time on Forever Jobless and EcomLab because you see that being a long term, tribe-building thing. What are your plans in the future for Forever Jobless and EcomLab? Where are you taking those?
Billy: Forever Jobless, no specific plan. I want to keep putting out good content and just seeing where it goes. I have probably 50 ideas that I want to post on, I just haven’t had time to write them. Or I have a lot of half written posts. So I’ll be putting a lot more content on there over the next year or so. And then EcomLab … A lot of content we’re creating is based on our members, what they’re wanting to see. They request videos and so we’ll make those type of videos where we’re trying to figure out is this the best monetization model for the project or is there other ways that we could change the model around and do it differently. Right now it’s a paid membership site. The forums are free and all that, but the video section is paid, so-
Justin: How much is it?
Billy: It’s $30 bucks a month and there’s a hundred dollar sign up to get in and get access to everything. So, debating if that’s the best method or … It’s kind of tough because a lot of people just want everything possible up front, which makes sense with this model, right? If you’re starting a store, you want a lot of the information up front, so we’re trying to think of potentially creating some sort of a hybrid where we give a lot of the people kind of the starter package of videos where they can do all the beginner stuff and then kind of give them the monthly trainings and things like that, so still trying to figure that out.
Justin: I read this criticism on Forever Jobless and they were saying, oh I see what you’re doing now. Forever Jobless was just legion for your eCom membership site. I see what you’re doing. What’s your answer to that criticism? What do you say to that?
Billy: It definitely wouldn’t have been worth my time to blog for a year or so, just to launch a business off of it and I think … at least the way I was doing it. If I was to do that, I would’ve been blogging all the time. Like I mentioned, I think I only have 8 or nine posts up so, if that was the goal, I would’ve been blogging every week. I think a lot of people … Any time you sell something in general to people, I think a lot of people, they want everything for free and there’s going to be that amount of people that they don’t want to pay for anything and that’s understandable. I think some people don’t want to pay for information and that’s why blogs are really good. But, to launch a product off of a blog like that.
The post in general was a post that was requested around the businesses I get into. So I posted on Facebook I think a couple weeks ago and asked if people wanted to hear the story about how I get into and how I picked the niche and stuff like that, so I just documented some of that on the blog and just mentioned the business. I got one or two guys who said, did you start Forever Jobless just to sell this, but definitely not the reason.
Justin: You’re so sneaky Billy. No man. Look, so many people do this. If you look at Chris Tucker, right? He has a full on call center business. It’s hard core, ton of people, bunch of big clients, but he still does the online thing. You have the lifestyle business podcast guys, the tropical NBA guys. They have legit, full on eCommerce businesses, but they still do the membership site and the meet ups.
We do a very similar thing. Part of the reason we do that is because it’s higher margin stuff too. Your drop shipping stuff, obviously it’s going to be lower margins and that’s one of the reasons you’re looking to get into sourcing because that’s going to bump your margin and you’re going to get a lot of paid traffic, but some of the online stuff is higher margin stuff, like our [inaudible 00:45:11] we sell. That’s really high margin right because we had our initial development cost and some ongoing support costs, but every license we sell is profit for the most part.
There are some reasons obviously to get into it from a helping your overall business margins, but it is. It’s really cool to be able to build a tribe. It’s really helpful to be able to help other and build their businesses. And we found a ton of value. When you’re providing value to other people and helping them grow and helping them make more money, it comes back to you ten-fold. I totally get that. Tell me, Billy. One more question for you. We always do this with our guests and we like to ask, for a niche business idea, basically, something you’ve been sitting on for weeks or months that you just haven’t implemented, you haven’t put into practice yet, but you’ve been meaning to and you wish somebody would, but it just hasn’t been done yet, what would be your niche business idea you’d like to share with the listeners.
Billy: This business … I may start it at some point, but just haven’t had the time and won’t have the time for a while. I was actually going to write a post about this was I feel lik there’s a funding gap in terms of startups. What I mean by that is most of the people who get startup funding and startup advising and things like that are … you think like Silicon Valley and you think million dollar rounds and things like that. But the thing is most entrepreneurs who are trying to get started in business don’t need a lot of money. Maybe they need five grand or 20 grand or something like that. Very small amounts of money, but maybe they just got out of high school or just got out of college or don’t have funds yet, but they have a business idea and they’re willing to work on it.
Those type of businesses, the majority, like a drop ship eCommerce store for example. No, you’re not going to get funding in Silicon Valley for stuff like that but there’s a huge, huge amount of people that need funding for stuff. Don’t necessarily need it. There’s ways around it. There’s creative ways to … either creative financing or creative ways to do deals but there’s a lot of businesses that could use funding in the 10 to 50K range and that are going to be lifestyle businesses. Maybe they’ll make 10 grand a month or 20 grand a month. Those businesses are just … There’s so many opportunities out there and nobody’s helping fund those opportunities. And so I think there’s a big opportunity for someone to come along and essentially offer this micro fund and micro advising on lifestyle businesses.
Basically I had an idea to bring in 10 people or 20 people and give them all like 10 or 20 grand and essentially get them into a lifestyle business, so not trying to build up a million dollar company but hey let’s figure out a way for your business to make 10 grand a month or 20 grand a month. And they don’t take a lot of funding and I’m surprised nobody’s filled that gap because that’s where the majority of entrepreneurs want funding at, but the real money is obviously on a much higher scale. They want people to build million dollar businesses so it’s not worth the time with most people but those and the businesses that I enjoy and so I feel like there’s a huge gap in the market there.
Justin: Its funny you talk about that. Of course, you have Kickstarter if you’re actually delivering a product. You’re going to develop and deliver a product, but for a drop shipping site or more like a lifestyle business site, there isn’t a lot of that. So, we talked to friends about this and we were actually considering setting up a fund with some investors like us and them and some other or our friends, and basically fund lifestyle businesses, even going to the point of maybe having six of them come out to the Philippines or Bali or whatever. Putting them in a house and having them build their businesses together in kind of a work, live situation. We thought that might be interesting. And then taking a piece of that business as an acceleratOr sort of.
Some of the problems that we thought of about or that we came up with were the fact that it’s problematic for a lifestyle business to give up a piece of their business for the long term, for the little bit of help that you put up upfront. We struggled with that a bit. Why would they give me, I’ll make it up, 20% over the next five years when all I did was help in the very beginning to get them started? Will there be some resentment there? Yeah, I don’t know, but it’s interesting. It’s a really interesting space and there are a ton of people that are starting down their own entrepreneurial journey that could use the cash. I definitely think it’s something that needs to be figured out.
Billy: The point you mentioned that’s probably the biggest concern I had too is because a lot of people … because the point of it would be that you essentially jump start their start so that they skip maybe a year or two of learning stuff on their own and you just kind of get them going the first three, six months, where they would have spent a lot of time turning their wheels, but a lot of people won’t remember that two years down the road and they won’t remember the funding in the beginning.
So it’s very hard to … You mentioned the resentment, like if a guy’s two years in or three years in and the business is making 20K a month but he’s giving five of it or 10 of it to you, you’re not doing anything because you’re passive at that point. Are they going to hold resentment or are they going to remember it like hey we wouldn’t be in this spot without Justin in this spot.
Justin: It’s a tough one. You could do a loan, but then what kind of-
Billy: And it’s worth the time.
Justin: Yeah, yeah. You’d rather invest in your own businesses. No, I totally get what you’re saying, but it is something that needs to be looked at. If someone could figure that out I think that would make some sense. Billy, we’re getting toward the end of the interview buddy. It’s been great having you on. It’s really interesting talking about the empire that you’re building. Tell me real quick, someone wants to get in touch with you, get ahold of you on Twitter, Facebook, where do they go?
Billy: I guess the easiest way is to … Right now, the easiest way is just in the forums of EcomLab. That’s where I am, in the forums every day, just answering questions and stuff. I think Twitter is BillyMurph. It’s without the Y and Facebook page is just Billy Murphy.
Justin: Sweet man. Well thanks for being on the program. I’m sure our listeners got some value out of this and we’ll talk to you again soon.
Billy: Cool. Thanks again Justin.
Speaker 1: You’re listening to the Empire Flippers Podcast with Justin and Joe.
Justin: So we’ve got a great tip for you this week. You might have heard us talking about what we did with an expired domain. Basically, a site that had a PR or two, we took all of our old niche site content, started dumping it on to this site to see if we can get some earnings out of it and it started to take off, I mean through August or whatever. And this is the first month we’ve done it. We’re already at like $40 bucks or something. I see that just continuing to rise.
Joseph: Sixty bucks. We had a good day.
Joseph: Yeah, so and I also think that the other part of this is not just the expired domain that we have it on, but the two other expired domains that John from Authority Website Income helped me find that I 301 redirected to that site. So I think that that had a significant impact, along with the quality content that we put together. We have all this good, 100% original quality content, so that definitely is helping that to be a successful venture.
Justin: So anyway, John Haver … You got some of this information about the expired domains from him and he just came out with a stunner of a post, like 8000 words, the exact process to go through to find expired domains. And he walks you through it, step by step.
Joseph: Unbelievable. Really he should have made it like a three part series I think.
Justin: This is one of those things where eBook you could have charged for or whatever. Instead, he gave it away for free.
Joseph: And I love that, that he gave it away for free, and he gave away the software tools and everything.
Justin: It’s sick, sick. Here’s the link. We’re going to link to it in the show notes. I definitely suggest you check it out. The other thing is, is if you sign up for hosting through his affiliate link, he’s also going to have his team dig through and find you one of those domains for free, because he gets paid on the affiliate deal or whatever. He’ll go ahead and do that for you if you sign up for his hosting package. That’s pretty awesome. That’s a cool offer.
Joseph: Yeah, definitely take advantage of that before he turns it into a paid service because it is pretty valuable.
Justin: Well that’s it for episode 61 of the Empire Flippers Podcast. Thanks for being with us this week. Make sure to check us out on Twitter at Empire Flippers and we’ll see you around.
Joseph: Bye-bye everybody.
Speaker 1: You’ve been listening to the Empire Flippers Podcast with Justin and Joe. Be sure to hit up empireflippers.com for more. That’s empireflippers.com. Thanks for listening.