January 22, 2016
Plenty of people have been getting into the Amazon FBA business model in the last couple of years, but none of them have taken as unique an approach as our buddy Jon Haver over at Authoritywebsiteincome.com.
He’s been documenting his journey in leveraging Amazon affiliate sites to multiply the profits of his Amazon FBA business over the last couple of months and **spoiler** he’s crushing it.
We decided to get him on the show this week to dig into some of his successes and failures with the model and see what he has in store next.
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“The purpose of the business beyond adding value to the world is measured by how much money is made.” – Jon – Tweet This!
“Gross revenue can be misleading and is a bit of a vanity number compared to profit.” – Jon – Tweet This!
“You can maximize your affiliate tier and get to 8.5% through more product sales.” – Justin – Tweet This!
What do you think about Jon’s model? Any upside or risk that we didn’t cover in the show? Want to get started yourself? Let us know in the comments!
Justin: We talk a little bit about the Amazon FBA business model on this program but today, we’re sitting down with Jon Haver from authoritywebsiteincome.com to hear more about his interesting spin on fast tracking your FBA business. You can find the show notes and all links in this episode at empireflippers.com/fba. All right, let’s do this.
Speaker 2: Sick of listening to entrepreneurial advice from guys with day jobs? Want to hear about the real successes and failures that come with building an online empire? You are not alone. From San Diego to Tokyo, New York to Bangkok, join thousands of entrepreneurs and investors who are prioritizing wealth and personal freedom over the oppression of an office cubicle. Check out the Empire podcast. Now your host, Justin and Joe.
Justin: One of the scary things about getting started with Amazon FBA, Joe, is that the model has a really high outlay of cash. There’s a risk there, right? You put this money up, buy this product, ship them to Amazon and hope they’re going to sell but what if you’re wrong, what if the products don’t sell, what if they’re not as big of a hit as you thought they’ll be.
Joe: Yeah. I think this is one of the biggest negatives of Amazon FBA and it’s always definitely been one of my fears.
Justin: I mean, there are a ton of reasons you might not do well, right? You might have done a bad niche selection, you could have a defective product shipped to you from China and you could have poor early reviews, you know, one of your competitors go in there and just start hammering you. That’s one of the things that is frightening with FBA for someone just starting out, a lot of people don’t realize the cash out front that is involved. That’s one of the reasons I was kind of turned on to Jon Haver’s approach to setting up an FBA business and how he leverages Amazon affiliate sites to get that started. We talk about this on the show before and I said, “You know what? This is the guy that came up with it, this is the guy that’s talking about it, why don’t we just have him on the program to lay into it?”
Joe: Yeah. I love Jon, I love his stuff, going back to his expired domain guide and a lot of the other stuff that he’s done. Very smart, sharp guy and I wish him the best of success with this model because I think it’s so cool, it’s a good idea.
Justin: One of the things I think this ties into is our recent post on multichannel e-commerce selling. You know, there’s some real benefit, if you want to set up a nice asset, a larger, longer term asset is looking at the different various channels you can sell with e-commerce. I think this kind of bleeds into that so you might have an affiliate site that’s making money but if you’re going to expand your e-commerce horizon and start selling the same products through multiple channels, you’re going to have a more sustainable business.
Joe: Yeah. I mean, anytime you can have a mixture of that organic sort of repeat customers coming to you, direct customers and then another platform that you’re doing well on, you’re just distributed and your risk is diversified.
Justin: Yeah. This FBA model, I mean, people were talking about it for a couple of years, it turned out that a couple of people started selling some courses on it and those did really really well and a lot of people start getting into it over the last couple of years. We’re starting to see now was that these people that have been running these FBA businesses are looking to sell them, I mean, just this year alone and we’re only two weeks, three weeks into the beginning of the year 2016 and we’ve already published four FBA businesses. We have some of these people that we’ve been talking to that are like, “Look, I didn’t even think about selling my FBA business,” and we’re saying, “Look, I think there’s an opportunity for you, let’s get them listed and see if the buyers respond.”
Joe: Yeah. There’s a variety of FBA businesses available out there from ones with very short histories to ones that have been around for a while, ones that the product is very interesting and very niche to accounts that have a broader base of customers ordering different types of products available. It’s pretty amazing what these people have done with FBA in the time that it’s been popular, I mean, FBA has been around for a very long time but in the time that’s been popular, a lot of these businesses have cropped up that are doing quite well in a diversified fashion.
Justin: Yeah, man. I’m going to get into this a bunch with Jon in the interview. In the meantime though, we do have our featured listing of the week which is also an FBA business so won’t you get into that a bit, Joe.
Joe: Yeah. What a surprise, FBA business. We’re talking about listing 40394. It’s an FBA business in the sports niche, started way back in January 2014 so it is about two years old. It does have a long track record of success and it’s pretty diversified and features a number of different products in the sports niche. It’s making a monthly net profit of just over $4,000 a month and we have it priced at a little over $101,000. It’s seen consistent, good net numbers, it does have a little bit of a seasonality to it which to be expected in the sports niche but overall has seen a trend upwards over its two years of success. I think it’s a very good business in terms of work required. Obviously, there’s going to be a little bit there as with any FBA business but if you’re looking to get into the FBA market and want to jump-start, this is a good business to get started with.
Justin: Yeah, it’s interesting. This company was actually created in 2005 when they’re selling books on Amazon and Facebook and Twitter, that kind of thing. It’s kind of gone through iterations, at one point it was selling on eBay and now it’s doing Amazon FBA so it’s been around quite a while, I mean, it’s always been around for a very long time. If you were buying this, Joe, what would really interest you? What would you try to expand with this business?
Joe: Yeah. I think what the great thing about this business is is it comes loaded with some of the inventory already so most of the order is going to be done for the next year, that’s a good place to start from. I really like that, it’s pre-loaded and ready to go. I probably would look to expand the other types of products and look at expanding my account success to using those other things, I think that that will be a good use of your time.
Justin: Cool, man. That’s it for the featured listing. Let’s dig into the heart of this week’s episode.
Speaker 2: Now, for the heart of this week’s episode.
Justin: Whenever there’s a business model that everyone is talking about, it freaks me out a little bit. When I see everyone talking about a particular business model and saying, “Oh, this is the way things are going to be, this is what I want to get into,” and that shiny new object pops up, I always have my doubts in terms of how successful that model is going to be. On the flip side, we got Jon Haver on the show today who saw the shiny business model, dug into it and he’s been crushing it. Jon, welcome to the show, man.
Jon Haver: Hey. Thanks, Justin. Well, thanks for having me. I’ve been a longtime listener. I mean, I didn’t give you the heads up here but I got to give you a little bit of shit for the introduction that would have preceded this, in this spiel here, they don’t listen to anybody that’s got day jobs spiel.
Justin: They don’t listen to anyone who’s got a day job, you don’t like that, man.
Jon Haver: Just kidding, just busting your balls here.
Justin: You got the [inaudible 00:06:48] beating you up, I’m going to beat you up for having a day job. What do you do? I see your income reports over there at authoritywebsiteincome.com. Man, I’ve seen it, I know what you’re doing, I know you’re making good money, what are you doing with the day job, buddy? You need to quit that and move out to Asia and hang out with us.
Jon Haver: That sounds good, I mean, a couple of kids and I enjoy the day job, I enjoy the online job and they make me better at each other. I mean, when that slows down, we’ll see.
Justin: Well, you can quit the day job without quitting the kids, man. [inaudible 00:07:16] take care of you out here, bud. No, man, that’s cool, I get it. Let’s talk a little bit about your background and your start of authoritywebsiteincome.com, what’s the deal, why did you start a blog, why do you start talking on what you’re doing, why don’t you just cash in and who gives a shit about the marketing side.
Jon Haver: Yeah. I mean, it comes back to what we just talked about there with the day job. In my “real world”, very very few people know what I do online and so I had been working away, toiling away online. Then when I started Authority Website Income, the model was that I was just going to document the creation of an authority site. I did that, that was back in 2012, and that site still makes a lot of money in the student loan niche and it’s all there. The purpose of the site was really to just share some of the strategies that I was doing and connect with like-minded people so that was the idea behind it. You know, I’ve been working online to some extent since 2008 and then I didn’t really, you know, throwing everything I’ve got at it here over the last couple of years.
Justin: You got the day job, you created, basically, a niche site, turned into an authority site in the student loan niche. It started doing well, started making a few thousand dollars a month, you said, “Hey, I’m going to create a blog, I’m going to talk about what I’ve done with the site and I’m going to connect with other people, kind of put my name and face out there, get me connected and see how it goes.” You created your blog Authority Website Income, start talking about it. You started to get traction to the point where you started offering products and services, one thing you do is you help people set up PBNs, you give people links from PBNs, that kind of thing. You’ve made some money off of Authority Website Income even though you’re not making it directly from the site, kind of make your marketing arm, kind of your connector and then you have businesses off the site, basically, that are making the money, is that about right?
Jon Haver: It’s accurate. Both Authority Website Income and my student loan site that I shared the niche publicly on the site there but they were starting to register in both on the exact same day just to show that it’s kind of a case study from zero.
Justin: Cool. Okay. We talked a little bit about it before the show about how you don’t really make any money on Authority Website Income instead it’s kind of your marketing arm. You said the reason you do that is because you don’t want to give up any good will by linking to affiliate stuff, making it look like you’re making money on the affiliate stuff, you instead offer products and services around that which is very similar to what Joe and I have done over at Empire Flippers, rather than bothering with many affiliate links, we’d rather just share the information, not show any bias in terms of affiliates and then sell our products and services in our website basically around that. I can appreciate that approach.
Jon Haver: Yeah, I know exactly what you mean. Everything, I’m sharing stuff that I’m doing and there’s no bias towards an affiliate payout because that’s such a small portion of the total money that the site makes, there’s no reason to do that.
Justin: All right, man. Let’s get into what this show is actually about which is Amazon FBA and this is what I hinted at at the top. Everyone is talking about Amazon FBA, oh, I’m switching over to FBA, I should do Amazon affiliates or AdSense or there’s regular affiliate stuff and I’m going to the FBA model. In fact, I was at a drop shipping conference a little earlier this year and … but a good half of them or so are talking about Amazon FBA in terms of that being the new model. I think a lot of this started with the Amazing Selling Machine or the amazing … What is it? The Amazing Selling Machine or something.
Jon Haver: Yes, the $4,000 info product.
Justin: [inaudible 00:10:48] but a bunch of people either bought it or ripped it on torrents or something because there’s a lot of people talking about it. I know a ton of other courses have popped up around Amazon FBA. Let’s break down the model for anyone that isn’t familiar with this. We talked about this quite a bit, we talked about your strategy in our podcast episode, episode 147 in the Empire Flippers podcast if anyone wants to go back and listen to that. Basically, Amazon FBA is a business model where you buy the products, you source them yourself, let’s say, in China, typically, and then you’ll ship them over in a plane or in a boat and then you’ll ship them to the warehouses of Amazon and so Amazon will hold the product, you will list the product for sale on Amazon and then Amazon will handle the customer service, they will do the shipping for you, they will handle all of that for a fee. Is that pretty accurate?
Jon Haver: That’s exactly it, I mean, it’s basically the products that you see on Amazon, you just sort of make it your own product and import it and put a label on it and, I mean, there’s plenty of different ways to play with customization and no customization. Yeah, find something on Alibaba and ship it to Amazon and they drive some sales once you get the promotions up and running.
Justin: It actually sounds way too easy and we’re going to dig into this. That’s Amazon FBA overall. Now, you have a very, I think, specific, kind of unique way of going at it. Before we get into that, are your products like do you slap jonhaver.com in there? Are they labeled under a particular brand or are they just kind of the same as all the other products? Does it have a specific product page or is it just the same products that everyone else is listing?
Jon Haver: It’s specific product page with a brand on it so definitely not a Jon Haver brand but a brand that is consistent with the product and then setting up a full brand around it.
Justin: There’ll be brand around it and that’s a brand that you might be able to add other products to or that kind of thing as well. Okay. Now, what’s your unique spin on this? Tell me a little bit more about that.
Jon Haver: Sure. It’s relevant to your audience and I in a niche site space is that, you know, like you heard about FBA, you heard about FBA and it’s like, “That sounds pretty cool and I’d love to jump into it. Time limited so until I have a unique advantage or angle or information advantage or something, that I’m not going to put any time into it.” The unique strategy is I had a website that was driving pretty good sales, $1,600 a month in affiliate income for one very specific product and I thought that by changing out the product that it was primarily promoting and then putting in my own product into that recommended place, that I will be able to drive my own sales and that increase the marginal every sale that occurred through the website. It’s bolting on my affiliate sites and my authority sites with FBA so now I have two websites, one that I purchased through Empire Flippers and then the site that I built up that are now pushing these products.
Justin: Okay. Basically, it’s a way for you to take an Amazon affiliate site which is already sending customers over to Amazon to buy very specific products and then someone else, basically, is getting the value of selling those products in Amazon either Amazon directly or some other FBA person so you said, “Hey, why don’t I just swap out some of the links on my Amazon affiliate site to my product page where I’m selling FBA stuff on Amazon and I get to double-dip so not only am I going to earn the earnings from the Amazon affiliate site but I’m also going to earn the earnings from when the product actually sells in Amazon.” Basically, you’re sucking down organic traffic and driving it toward your Amazon FBA page, your product page, also, you’re getting the added benefit of just the random people that are searching on Amazon for your product that are buying as well so you’re getting both the product profits and the affiliate profits in the deal.
Jon Haver: Yeah, that’s exactly right.
Justin: One of the questions I have is, you know, a lot of times companies aren’t cool with you double-dipping like that, is there anything in Amazon’s rules or terms of service that limit you from doing that? I mean, of course, you can set up separate corporations and one corporation could be the affiliate site and one corporation could be the Amazon FBA business but is there anything limiting you from doing it on both ends.
Jon Haver: I mean, I certainly probably talk through the preference between speed versus control, that always balancing act, I’ve been very heavy on the speed side. I definitely research this topic, I believe I have the correct answer that you can promote your own product because what difference is it to Amazon. Whether I’m promoting my own product or promoting a different product, they’re making the same amount of money because it’s still coming through an affiliate link. My understanding is that it’s fine to do both, the double-dip but I’ve been wrong before.
Justin: It’s interesting and [inaudible 00:15:45] podcast on the internet.
Jon Haver: Exactly.
Justin: They could check that out. I love this idea of double-dipping, by the way. In my podcast with Joe, he is like, “I don’t know about double-dipping,” I was like, “What’s wrong with you? You could double-dip and make money on both ends, that’s an amazing deal, I’ll definitely do that.” In fact, I used to talk about what I thought was an interesting model of taking Amazon affiliate sites and turning them into drop shipping sites. That’s a little problematic though in that Amazon converts at a certain rate and if you try to compete with like an e-commerce business and cart abandonment and all the other things that come with that, you know, making sure people are actually checking out and paying the money and all the problems that come there, you may not get nearly the same conversions and your margin may only be 15% anyway so not 40%, 50%, 60% that you might get through FBA at times. I actually think that Amazon affiliate site converted to or working in congress with an FBA business model seems to be a much better option.
Jon Haver: For sure, I mean, the site could definitely … save some money potentially but, I mean, the number of headaches that will come, I mean, there’s enough headaches with this model, I couldn’t imagine even drop shipping, the dealing with customer service, dealing with broken orders or whatever. Amazon, they’re the world’s best at this. I’m happy and they bring customers, I mean, basically, a third of the sales price goes to Amazon for what they do and I’m thrilled with that.
Justin: Is there any plan from your perspective to ever actually create the e-commerce brand and set up your own e-commerce site or at this point you’re just like, “Nope, I’ll do it all through Amazon”?
Jon Haver: I’m setting up a branded site and right now all the links go through the cart you end up at Amazon. Where that will play out, I don’t know yet. The nice thing about it with the niche site or authority website or any website portfolio world, we’re sort of dependent on single source of traffic, you know, whatever that source of traffic is whether it’s Google or Pinterest or [inaudible 00:17:53] we’ve been chatting about. That same fear exist but it’s even more so with FBA businesses, that Amazon could just snap their fingers and you’re gone. At least with this model, I would certainly lose a bunch but I could easily save some of that by just flipping the switch to a drop ship model.
Justin: Got you, okay. You’re looking at that as more of a longer term play, that is something that you’re adding. Just to mention to this, you’re going to post, actually, a series now of posts on your site that kind of talk about, in a very detailed way, your walking through this process so in terms of having the site, finding the right product, ordering a product, buying a site from us that’s in the exact same niche and your success and failures in terms of how much you spent and how much you made, you’re really laying into that. I’m actually going to share links to both of the posts you have so far in the show notes here so our listeners can go take a listen.
Your latest follow-up post and, again, the link is in the show notes, you said you invested $53,000 and have created $115,000 in value in two months so you’ve, basically, doubled your money on that investment. Can you break that down for me? Can you explain how you got those numbers?
Jon Haver: Absolutely. It’ll be a bunch of numbers here but, I mean, basically, that initial capital involves the site that I own so I actually didn’t spend the money to buy that site, I built that site up but that site had a value to it of $30,000.
Justin: Yeah. You put time in the site, you built it up and if you were to sell it today or, let’s say, two, three months ago, you could have sold it for $30,000 so you’re assuming that you put $30,000 into that, that’s part of $53,000 you’ve invested.
Jon Haver: Yup, exactly.
Jon Haver: Then purchased the website for $12,000 from Empire Flippers, from you guys and then the other 10K has been in product so that kind of brings me up to my $53,000 that I’m in this business for.
Justin: Yup. What’s the $115,000 value? Where does that come from?
Jon Haver: For the month of November so the first half of the month extrapolated over the whole month, they grow sales, the income is being driven by the affiliate sites combined with the income that’s being driven by the FBA business brings my total net profit for FBA plus affiliate. This one, I was predicting the middle of the month to be $5,700 and then put a 20X multiple on that and then I got $115,000 business.
Justin: Cool. Well, I got some good news for you is that this affiliate FBA model, the business you have right now and making $5,700 a month in profit is likely worth more than 20X so you’re probably closer to 23X to 27X so that actually gives you a better multiple and that may or may not be true with the individual affiliate sites on their own. With the full business and you got multiple sources of income, you’re going to get a better multiple for that so you’re already looking at a better multiple overall and the site is larger so your business is larger, business making over $5,000 a month is going to command a higher multiple than the business making $6, $700 a month. There’s some added value there just by growing, just the fact that you’ve grown the income across the board so I think that’s kind of interesting.
Jon Haver: That’s kind of what I was hoping for and I think we’ll get into that kind of where I’m hoping to take this thing. Yeah, absolutely, that’s good news. Then the other good news is that, you know, we’ll refer back to the numbers from the middle of the month but probably because it’s Cyber Monday today and Black Friday a couple of days ago as of this recording and those numbers have been pretty fun to watch.
Justin: Nice, man. It’s good to hear that you’re crushing. It’ll be interesting to see on your next update where you’re at. Let’s talk a little bit about your post here. Now you’ve done what I think is an excellent side by side analysis or comparison on what you expected in the first post. You had a bunch of assumptions you made, getting into, I think, I’m going to convert at this rate, I think that X amount of my sales are going to come from Amazon, X amount will come from my affiliate site and you had all these assumptions. Then you actually went to work and tested those assumptions and you found some of them to be somewhat true and some of them to not be true. There were three things you mention that you’re off on, let’s talk about those. The first one is you assume that about 50% of your conversions or you converted about 50% from your affiliate site and only about 26% are from your affiliate site, what does that mean, how did that work out?
Jon Haver: Sure. I mean, for simple numbers, assume that my affiliate sites are driving $1,000 sales of this product. If I heavily promoted on my website as the number one product, I assume that I’ll be able to drive 500 units through my affiliate sites. What I’m actually finding is that I can drive 260 units and those aren’t the actual numbers but just to keep the math easy, that I was thinking that I’ll be able to drive … of all the products that I sell as affiliate sales, I’ll be able to drive 50% of them to my own branded product and in fact, it’s actually been more like 26% so substantial cut. The good news is that that has been gradually increasing, this was, again, right when I first launched. I’ve been getting more reviews, improving my sales page conversions, that number has been creeping up.
Justin: Your Amazon affiliate sites drove less of the total sales than you thought they would but you see that creep up as your reviews have gotten better, I mean, is that an important number though? Does that mean that a ton of your sales are coming from Amazon FBA, that you wouldn’t have had anyways? I mean, isn’t that valuable anyway? I’m not sure that that matters.
Jon Haver: It matters in that my ability to put money into a website and turn that money into more money but if every website I purchase, that there is a close match, if that number was 100%, then that means that for every time that I promote my own product, I make an additional $10 and not just the $3 affiliate commission.
Justin: Okay. Yeah. You’re trying to determine whether the affiliates actually have worth but if they weren’t, if it were 5% of sales, you say, “To hell with the affiliate sites, they don’t really matter to me, I’ll just do the Amazon FBA.”
Jon Haver: Exactly.
Justin: If they’re a significant driver to your sales, then you know that not only are you getting the money on the affiliate side, you’re also making money on the FBA side due to the affiliate sites.
Jon Haver: Yeah.
Justin: Okay, great. The second thing you said you were off on is that you thought Amazon driven sales will be 100%, you’re actually finding that’s 58%, what does that mean?
Jon Haver: Yeah. I thought that it was going to be a substantial increase. The bottom line was I was thinking that Amazon will be driving more sales than they actually were, again, within the first 12 days of solid sales members. Now that I’m 30 days in, that number, again, has creeped up substantially, that I’m driving substantially more sales through my … it’s been split kind of half and half and now Amazon is … Data might be off again because it’s the Black Friday, Cyber Monday weekend but Amazon itself is driving more sales than my affiliate sites.
Justin: Got you, okay. The third thing is that you initially, in your first post, you set aside about $100,000 to get this machine up and running and you realize you’ve only invested about $53,000 and that’s counting the $30,000 from the site that you already had, you didn’t actually invest but you already had that site, you just threw that in. You really put in $23, $25,000 or so, that’s a lot less than $100,000 you thought you had to put in, what’s the reason for the difference there?
Jon Haver: Yeah. I was hoping I will be able to buy in more sites, I mean, if there were other sites out there that I could buy that were a good match, I would have done that. Amazon FBA is a money pit, not a money pit but a money hog, it is a machine that just needs money to continue to run more inventory and more inventory and more inventory. Even still I’m getting some of those numbers but the business is still substantially negative between the purchase and the inventory I have right now in the warehouse. I knew that going in but the thing that’s been really nice is that with this product is that the turnaround rate can be as little as two weeks from order to Amazon warehouse and so with being that short period of time, my ability to recycle cash is pretty good.
Justin: That’s interesting. Let’s talk a little bit about the product. Now, you’re not going to mention an exact product because it’s all secret secret for you guys but give me the price range and the general niche that’s in.
Jon Haver: Yeah. It’s a clothing niche, it’s $30, kind of a fitness type attire.
Justin: Okay. About $30, it’s in the clothing fitness niche, that’s a pretty low price point. You actually broken down where the money goes in that, [inaudible 00:27:01] 10% profit, 33% Amazon, 33% profit, 33% cost of goods and shipping, is that about right?
Jon Haver: Yup, that’s right.
Justin: You’re saying you cut that down by putting it on a boat and waiting for like a seven, eight-week lag time before you get the products there but there’s a problem with that and I thought it was interesting to talk about that in the post and how valuable it is to get it there quicker, can you break that down for us?
Jon Haver: Yeah. I mean, every time that I can get a $1 of inventory into the warehouse, it turns around and comes out as $3 basically or, I mean, it comes out with a $1.33, I guess, in reality. Every time I can do that, it requires less total capital and my ROCE or return on capital employed for the finance [inaudible 00:27:49] will be higher. I could tie at my capital but it would actually end up hurting my returns.
Justin: Yeah. Basically, you’re saying that you’ll be in the hole more because you have to buy more product if you’re looking at an eight-week turn time between a door to door from China to Amazon. Then the other problem is that if you can ship it there in two weeks, whatever, by air, you can then make the cash, turn around or more from China, bring it out again, you’re just making a better return of your money by being faster than shipping on a boat, I thought that was an interesting point especially for looking at returns and stuff.
Jon Haver: Yeah, exactly.
Justin: Cool. Okay. We’ve gone through the three things you were a little off on, what’s your main goal with this business like where do you want to get it in the next 18 to 24 months?
Jon Haver: Yeah. The very short-term goal was to hit 50 sales in a day and I did that last Friday, I don’t know, happy Friday so I was excited about that and we’re on track again here today so that’s exciting. Long-term, kind of hit a pretty big stretch goal of turning it into a $50,000 per month net profit business and then selling it for … I believe if we can really put a brand around it, selling it for 30X which turns it into a pretty astonishing large number of 1.5 million. That will be ideal but that’s probably a pretty big stretch.
Justin: I don’t know how big of a stretch it is. Within 24 months, that is aggressive, I think, but I think it’s doable. I’ll tell you why, I know a guy that is [inaudible 00:29:21] about eight figures, just barely in the eight figures this year in Amazon FBA. Now, I don’t think he’s taking much profit out because he’s just dumping money into getting that scale. I think if he took his foot off the pedal a little bit and actually saw some of those returns in terms of profits, I think he’ll be in a position to where he could absolutely do that like he’ll be in that spot but he hasn’t able to because he keeps dumping money in.
This is actually interesting, I don’t know if you listen to it, Jon, or you know anything about this guy but Mike Michalowicz wrote a book called Profit First. He talks about even at a very small level, you should look at taking profit out of business and he goes to the reason for that. I disagree with that a bit, I’m like, “Look, when you’re small, you should keep doubling down, keep doubling down and get it to a point where it matters.” I call him on that in a recent podcast and he says no and he explains his reasoning on why you should take the profit off first, it’s kind of interesting.
Jon Haver: Yeah. I listen to that podcast and actually had listened his other book The Pumpkin Plan. I really like that book so I actually have it in my Audible queue now, the Profit book. I’m in full agreement with him. I mean, I just share that in my income numbers and I think gross revenue is a vanity number to a lot of business, that we can be really misled by our gross revenue numbers when the purpose of a business beyond adding value to the world is measured by how much money it makes, that’s certainly my take. There’s businesses that if they’re looking to sell and they’re a tech company or some kind of technology at all, it makes more sense to just get big so you get a bigger multiple in your sale. For most of us and certainly on my business because I think the gross revenue is very misleading bit of a vanity number versus net profit.
Justin: Yeah, it’s interesting. I was telling you before we get on here, you know, one of our goals next year is to do 10 million in sales and that’s bit of a vanity number when you think about it because we’re doing a sale but we’re getting a small margin on that, we’re only getting generally 15%. Why are we trying to do that? I mean, I think that it’s very doable, I think it makes sense but we’re thinking at least internally what the bottom line is for us with that number. Even though we talk about gross, we understand what that means to us now, at least we do.
I really like the idea of taking profit first out of business even at a smaller level. I think it’s really important to remember when you’re doing these FBA businesses which are generally very cash intensive. Yeah, but I think your $50,000 a month within two years is doable. I think worst case, not worst case but one of the possible solutions is it takes three to four years but you hit that $50,000 a month, I don’t think you’ll be so disappointed with that, you probably will be pretty happy.
Jon Haver: Exactly.
Justin: Let’s talk about your weak points with this business, what do you see is your points of failure here?
Jon Haver: Yeah. I’ll definitely get into the weak points but the downside, I mean, I think a lot of people track when they’re reporting these numbers, report the money that they burn like, “I’ve sold 500 units in November, I make $10 a unit, I got a $5,000 business on my hands.” Well, that’s great but the downside is even without the purchase of my $30,000 a month site because I’m already on it, I’m still in the hole right now with $26,000 between the re-up and my inventory. Until it’s a very big money hog, I hope until maybe a month from now, I’ll be able to start pulling that [inaudible 00:32:52]. To answer your question on what are the weak points in the business, the big thing for me is Amazon’s ability to decide they don’t like you and you’re gone, I mean, we’re way more at risk with Amazon in this business than a portfolio of sites and Google.
Justin: If you had a portfolio of sites [inaudible 00:33:12] e-commerce sites in there, you got some service base sites, you got some AdSense sites and Amazon sites, you’re pretty well-diversified. If AdSense shut you off, you lose 15%, 20% in socks but it’s not the end of the world whereas if Amazon shut you off with this business, you’re screwed, it’s really bad. There are other cases of people that are operating out of a particular state and then their state is no longer on the rise, you know, they can’t work with Amazon anymore because they got tax issues, whatever, and people getting shut down, that’s pretty painful, there’s people getting shut down there, having their affiliate sites shut down and Amazon shutting them out which could be really painful. With this business, it will be critical, crucial. Okay, so that’s a big point of failure but I’d say it’s not the likeliest scenario either especially if you’re doing everything above board.
Jon Haver: I mean, I guess I’m always concerned that I’m not dedicating enough of my time that I’m certain I’m doing everything above board and I’m not a big enough fish that I’m certainly intended to do everything above board and I’m not a big enough fish that will they give me enough of a luck for me to be able to plead my case that I was doing something out of ignorance and not out of ill will. I agree, I mean, it’s a risk that’s certainly worth taking, it’s worth it with Amazon and then I always have the backup option of just driving the sales through one of my branded site but it won’t be the same business.
Justin: Joe and I went through this business model and, actually, when I first read this on your first post about this, I remember telling a bunch of people … I think I mention it in a podcast but then I was telling people in person. I went to that drop ship lifestyle event and I was telling a bunch of people, “Oh, you should this check out.” There’s an FBA guy there that was one of the presenters, one of the speakers. I talk to him after the fact, kind of mention it to him, he’s like, “Oh, that’s a really interesting model.” He came back to me later and told me, “You know, now you told me about that, I can’t get it out of my head.” There’s definitely people that are interested in your model here.
Then we talked about some of the downsides and you mention just now … I mean, obviously, Amazon could shut you, squash you like a bug, it’s very cashflow intensive so as you’re doing better, you’re pumping more and more money into inventory which kind of sucks up your profits.
There’s another thing too though, I think, that could be problematic. It’s not Amazon shutting you off, it’s Amazon coming in and ripping you off, right? Amazon could say, “Hey, you know what? These are doing really really well,” once it gets to this particular product, gets to a point of scale that is interesting to them, then they just start selling it directly and competing with you and crushing you like a bug that way too.
Jon Haver: They would still be needing to buy it through me because I’m the brand on the product so my take is that if my products are to sell well enough that they want to source it directly, then they would still source that branded product through me.
Justin: Yeah, but they could go there working at a much better deal so you’re paying $10 with cost of goods and shipping, they could spend millions of dollars and get that price on $5 or $4 or something and undercut you like crazy, right? Amazon has no problem doing that, they already shown that [inaudible 00:36:15]. Now, I don’t know they’re going to do it with your product or whatever but it’s definitely a possibility.
Jon Haver: Yeah. I’m certainly not afraid of that with my product in the size of the market. I don’t see how they would ever venture into that space, it’s somewhat unique enough that it’s not even within their core competency to do that, kind of turn it into a house brand of that product. Because after my post, there’ve been a bunch of people that have been like, “This is obviously very interesting, I like how these numbers are playing it, how do I get started?” the biggest challenge to this model is that starting point of having a site, that’s the big big problem to this model.
Justin: Let’s talk about the site, we talked about your product generally, are there any products or niches this would not work for, I mean, could you do this for a $3,000 product, could you do it for large, heavy, bulky products? Is there anything that you wouldn’t go after here?
Jon Haver: The big one will be an Amazon affiliate site that sells TVs, you know, we’re not about to ship TVs from China, slap our label on them and think that we got a product that can compete with Sony so it’s got to be an FBA friendly product that your label brand can compete with the other brands that are on there.
Justin: Is there any price range or does that don’t matter? If I was doing chandeliers or if I was doing something like that … It’s funny, when I start mentioning these niches, I think about sites we have for sale. I think about sites we previously sold, I don’t want to give away a particular product, chandelier is kind of my go-to, I don’t think we sold any chandelier sites. Something like that, is that workable? Would a $2,000 product work?
Jon Haver: I think so. The downside to it will be that to push the sales, it will be a challenge because you need to have a very expensive affiliate site if they’re making the percent commission on. I think one of the popular product in the FBA discussion world is foosball tables for some reason or get brought up a lot as an example. If you got an affiliate site that is pushing daily sales on a foosball table site, that site is going to be a pretty expensive site to buy, to test it in the model.
Justin: The reason you’re looking at daily sales is you want to see those regular sales. If there’s an affiliate site selling three items a month, even if they’re $5,000 items or $10,000 items, the problem is you’re not getting feedback. You could have dry periods, you go month and a half to two months and don’t have any sales and so you don’t know if things are going well, if things are going badly because it just doesn’t sell enough product for you to know.
Jon Haver: Yeah, exactly. More data in this business is better and the more small iterations that we can test through, the better. If there’s ever been a decision with this business between speed and any other measure, I’ve been heavily focused on the speed, from decision to pursue this, September 27th, to now, getting fully up and running has been, I guess, couple of months basically.
Justin: There’s an interesting side note here too is that if you’re doing the affiliate/FBA model, you want to maximize your affiliate earnings and the way to do that is by number of product sold so if you’re only doing even 10, 15 products a month, you’re going to be in a much lower tier. You want to maximize that affiliate tier and get yourself to the 8 and a half percent so that you’re maximizing your affiliate earnings and the way to do that is with more product sales. What percent are you at, actually, with your Amazon affiliate account?
Jon Haver: It was 8.25 so I had to hit 50 more units sold in the last couple of days which I did yesterday to kind of get into the 8.25.
Justin: Yeah. It’s an interesting hack for other people that are selling 10, 15 units a day through the Amazon affiliate account is buy yourself a site that’s doing 1,000 sales a month at $3 or whatever, buy yourself a site so you can get a lot more earnings out of your larger product site and you can automatically have a strategic purchase that gets you more money in both sites so that’s kind of interesting.
Jon Haver: Yeah.
Justin: Okay. Cool. I think we’ve covered the types of products that would work. For anyone listening to this right now that wants to get started with this, let’s give them your rundown on how you think they get started. I mean, number one, I would say is go and read your part one and part two of your blog post which I’ve linked to in the show notes and I’d say come back and then relisten to this podcast episode so they get some details from you. What’s next? How do they select a product?
Jon Haver: Yeah. I would say the next thing to do, the hardest part of the process is that first part of having a site that would work for an FBA business so that’s building, buying or however you get your hands on a site that you think will be able to produce an FBA product. With my model, that’s certainly the pinch point to the whole thing working. I think if I were to start with I want to go after this product next and then try and find a site, that will be a difficult search so I would start with getting a site.
Justin: Find a site.
Jon Haver: Yeah.
Justin: Yeah, that makes sense. Basically, dig through the sites available for sale, find one that’s a pretty good match. If you’re more open to products, then you don’t care, I think it helps your search because now you’re just looking for any Amazon affiliate site that’s selling a product that’s FBA friendly, that kind of opens up your search rather than being stuck on a particular product.
Jon Haver: Yeah. Most people seem to fail that … not that I’m anywhere near an expert in the space but a lot of the challenges that people have when they’re starting out is that they struggle to select a product and then they also don’t know whether or not that product is going to sell. They kind of go together, by having that site first, you know the product that you’re going to buy and you remove the guess work, you’re guaranteed to have some sales.
Justin: Yeah. Let’s say you see an Amazon affiliate site that’s making 4,000 a month, right? It’s for sale somewhere between $80 to $110,000. That site is probably doing $50,000 a month in sales and products because at 8%, you’re making your 4,000 a month from Amazon. Of that $50,000, maybe 40% to 50% of those sales are actually the product that you’re recommending and the rest might be, whatever, books or movies or whatever that people are buying online so you may have baked in buying customers to your FBA business. I think that’s one of the real values in finding one of these sites, buying it and then slapping on an FBA business is that there’s no question in terms of are people buying this product. They are and you can see it in the back end of your Amazon account, you know exactly which products they’re buying, you can see which products they prefer over what other products, I think that’s really interesting.
Jon Haver: Yeah, exactly.
Justin: All right. Are there any minimums or maximums for site purchases or it just depend on budget and ROI in your time?
Jon Haver: Yeah. I think the beauty of the model is that you can size the business to whatever the size of the site is. I would say, for a rule of thumb, if you’ve got 10K to invest in the business, buy a site for 5K. If you’ve got 100K to invest, spend 50K of that in the purchasing of the site or sites that will drive the FBA business. I think that cutting whatever your investment in half is and then putting half of it towards the site and half towards the rest of the FBA model.
Justin: Cost of goods and shipping it all in, you know, testing through it and improvements and that kind of thing.
Jon Haver: Yeah, exactly.
Justin: Okay, cool. Half the money is spent on buying the sites, half for cost of goods and everything else. Let’s say someone gets started and they’re a month or two months in or three months, what are some signs that’s working versus signs that it’s not working?
Jon Haver: Yes, I’m learning that here as I go here in the first full month, wrapping up today. I would say that the metrics that I’ve seen moving which were … we talk about being initially off was the conversion rate on the site so the number of the increasing number of sales that I’ve been able to drive has been increasing and I think I’m really optimistic about that and then the increasing number of sales that Amazon is driving internally. The traditional model of promoting an Amazon FBA product is get a bunch of inventory in, give a bunch of it away initially, drive up your seller rank and then Amazon organic sales take over.
Justin: What do you mean by seller rank?
Jon Haver: Where you rank in sales in Amazon for your specific products. For clothing, for example, if you’re in the top 1,000, you’re selling, call it, 100 units a day and I just made up those numbers so I don’t know if those are accurate or not. The higher the seller rank, the better that that listing will perform in Amazon.
Justin: When people search for those products so the higher your seller rank in your particular niche and then a little more general category is, the better you’re going to perform in terms of searches because Amazon is promoting you or moving you up in their search engine because, clearly, people are buying your stuff and they like it.
Jon Haver: Yeah, exactly. Like all search engine, there’s opportunity to optimize them. In the Google world, it’s links and whatever other tactics people want to deploy. In the Amazon world, it’s mimicking what Amazon wants which is sales and so by giving units away, you’re mimicking sales and helping to drive up your rank.
Justin: Mimicking sales, getting positive reviews.
Jon Haver: Yeah.
Justin: Any signs that it isn’t working? Let’s say you get some bad review or what are some signs that you think that it’s failing.
Jon Haver: Every time that you’re pushing sales, that Amazon organic sales were not on an upward trend, that will be very concerning. I mean, this business, if all I had done was double the value of my niche sites, the amount of effort it took to get my Amazon FBA business up and running wouldn’t have been worth it.
Justin: Yeah, got you. The other value, I think, that we mention briefly is that the multiple is going to go up. Let’s say you’re able to double your affiliate business, that’s great, you’re able to bolt on your FBA earnings, I think that’s doubly great but the fact you’re able to get a larger, multiple kind of business because it’s now diversified, you’ve got Amazon FBA sales, you’ve got affiliate income, you’ve got both some synergies going on between the two, I think it’s just going to make the business more valuable. I think your 30X multiple two years from now when you get it up to 50,000 a month profit is not unreasonable. Tell me about your plans. You got a 24-month plan, you want to get to 50,000 a month, you want to sell for 1.5 million, what are your three to six-month plans to getting there?
Jon Haver: Yes. The big one is I’m not going to get 30X and I believe I’m not going to hit 30X or 1.5 million without a legitimate brand. I mean, if I’m not thinking about this as a small business but this is a business that is just being run by a small team, then what does that look like? That looks like a branded website that has presence on all social media whether those are [inaudible 00:47:28], that presence is going to … I’m working to increase that multiple and so I need to keep driving the sales through Amazon and pushing the crap out of that business but at the same time I need to build up that presence around the brand. My hope is that if I’m looking to sell this thing, that I’m not just selling websites that are making X money but I’m selling a brand that is doing X revenue and that’s what they’re looking for.
Justin: A branded business, diversified traffic, diversified income, yeah, you’re much more likely to get a better multiple and to have just a solid business overall anyway, right? You’re building a full on business here, not a website that has earnings.
Jon Haver: That’s right, that’s exactly right. I’m working with one of the people that help me build one of the sites and we’re building up a pretty sweet branded site and then doing all of the stuff that I do to help drive affiliate sale, also building some more niche sites and then building up a niche specific PBN to help drive up my affiliate sites and just get all the wheels that I have, all the levers that I can pull in motion to build up as big a monster as I can in 24 months.
Justin: Awesome, Jon. Is there anything else that I should have asked you about it or you want to mention to our audience?
Jon Haver: If I had to listen to this, I would hear all of the positives. I mean, other than the capital, there’s a lot of headaches with an FBA business that I wasn’t aware of so I should, for full transparency, share some of those. The first shipment, I made a bunch of errors. I’ve been at a parking lot, pouring rain with a massive headache, having to label everything so I can get it all shipped out so that …
Justin: That was you, you’re in a parking lot with a bunch of products trying to fix it?
Jon Haver: Yeah.
Justin: Oh god.
Jon Haver: I was going through my hourly rate to do that and that was a probably pretty stupid use of my time. I mean, part of it is problems equals progress so it was all good.
Then the other one is as passive as it is, my wife had to be on top of it quite frequently with hijackers. I think we’re at five hijackers now that have tried to come in to sell … Ultimately, what they do is they say, “I have the same product,” and then try and sell it and every time we have to go in and the next [inaudible 00:49:48] same procedure of matching the price and then sending out escalating emails. She’s turned it into a bit of a game to see how fast she can get them kicked off the listing.
Justin: What does that mean? They’re sourcing the same product and then putting your brand or your label on it and selling it the same as you?
Jon Haver: That’s what they say they are doing to Amazon but in reality they’re selling a cheaper knockoff version of it with no branding on it. Then it doubly sucks because they sell that product to steal a sale away from you and the buyer who doesn’t know the difference has received a product that generally gets shipped from China as an individual item with no labeling on it and it’s usually a cheaper quality and so they’ll be leaving a bad review. It’s a big problem to have hijackers and it’s a constant battle.
Justin: Here’s something interesting I got a bit of information from you. I know a guy who knows a guy, of course, we all know that guy. I know a guy who knows a guy who talks about the Amazon FBA model except he talks about it in China. On a regular basis, he’s doing talks all around China on how to do Amazon FBA and I guess the Chinese show up to these things in droves. They’ll have speakers come in, even American speakers or whatever, they’ll have translators and they go through the Amazon FBA model.
I think that’s one of the concerns that we didn’t really mention is that the Chinese … It used to be that they’ve got manufacturers and huge warehouses and stuff and they’re in China, they don’t care, they don’t want to retail, they want to wholesale, they want to sell in bulk to people that don’t handle and deal with the retail side, they don’t want to deal with that. They’re starting to realize, you know, they’re missing out quite a margin and if they can find a way to market themselves or they have a company like Amazon willing to market for them, they’re going to ship the products in bulk to Amazon and if they could learn the FBA model, they could do it themselves. I think that’s another side of the house you’re going to have to deal with Amazon FBA. I think drop shippers struggle with this too is that they’re now dealing with their manufacturers trying to sell direct through Amazon and stuff so I think that’s a bit of a concern. As more Chinese manufacturers are doing that, it becomes more of a problem for FBA-ers.
Jon Haver: That makes complete sense. That’s all very logical so I’ll be surprised that didn’t occur. I mean, hopefully, we’re at the end stage in the marketing side of things and, hopefully, what the advantage of the model that I’m bringing has the … I can’t [inaudible 00:52:15] artificially but inflate my sales rank regularly by driving my own sales to compete with them on the marketing side of things.
Justin: Yeah. I think if you can keep your brand up and you have a strong brand and maybe add another couple product lines or whatever, that’s going to help segment you further from anyone else that’s going to join and all the other competitors, all the other FBA people. Everyone is talking about it so a lot of those niches are getting swallowed up and you have new competition coming in. With FBA, you’re a little late to the game, there’s a whole bunch of other people who have done it and they will listen to this probably at the game as well. It doesn’t mean you can’t compete though, you just need to get in there and set a brand for yourselves and blow the other people away that aren’t willing to do that hard work in setting up a brand because it’s not easy, man, it’s not like you can just whip it together and have a popular, successful brand out there, right?
Jon Haver: No, no. Certainly, I’m no expert in the space. I’ve been on it for a couple of months with intensity and … A couple of resources that have been really good is the Amazing Seller, it has a podcast [inaudible 00:53:17] units, it’s a great resource and there’s a bunch of other people that are out there now sharing some pretty good information.
Justin: Awesome, man. Well, Jon, thank you so much for coming. If anyone wants to check you out, I would say they can go over to authoritywebsiteincome.com. Where else do you hang out in your webs?
Jon Haver: Authority Website Income is my main spot. What I like doing online is systematizing whatever model that I’m working on, I got a pretty decent size team that I like to work with. The services that we offer are at lightningrank.com so that’s the place. Authority Website Income is where all the information is shared.
Justin: Awesome, man. Jon, again, thanks so much and I appreciate it.
Jon Haver: Yeah, no problem at all. Thanks, Justin.
Speaker 2: You’ve been listening to the Empire podcast. Now, some news and updates.
Justin: All right, Joe, let’s get into some news and updates. First up, there’s been a rush of sellers looking to exit their FBA businesses. I think a lot of this has to do with the fact that we’ve been talking about it, we’ve been talking about FBA businesses and there’s just so many people out there doing this right now, I mean, it’s kind of a hot market for FBA and there are a ton of them. As we said at the top of this show, we got four new FBA listings that went up this last week, we got another couple in the pipeline so FBA businesses I see is being pretty popular in terms of people looking to sell them in 2016.
The question is are people looking to buy them. Now, people have told us, yes, I’d love to buy an FBA business especially if it had synergies with other things I’m doing, I’d love to. That’s always a question, right? They say that, yes, I want to do it. When it come time to put the money down, do they actually do it?
Joe: Yeah. It is going to be interesting. I mean, I definitely think that there are some negatives to the FBA businesses but there are some very huge positives especially for people that have any sort of experience or are looking to get their feet wet in the FBA business and we have some smaller FBA businesses available as well so there’s some huge positives there. I think probably one of the places we start is our own FBA mastermind forum.
Justin: Yeah, exactly, right? We actually got an offer already on one of the FBA businesses so we’ll see if that comes to fruition. I’m sure that as time goes on, we’re going to get more and more into it to potentially buying these businesses so it remain to be seen how quickly and how easily this sell but so far it’s freaking good.
One of the concerns we had was that you can’t just give away the whole form to anyone who puts down a deposit so we’ve been pretty careful in terms of releasing the information. Paying a deposit will give you more details but we still, basically, need to set up a phone call between the depositor and the seller so they can get a bit more comfortable with each other and understand each other before they move forward on sharing all the details about the business.
Joe: Yeah, I appreciate everyone’s patience here. I know some of the depositors who are a little frustrated that they didn’t get everything upfront but I can hope you begin to understand why. We do have to make sure there is a little extra protection here.
Justin: Yup. All right, man. Let’s do some listener shouts also known as the indulging, ego boosting social proof segment. We got a couple of tweets, Shane Labs on Twitter said, “Everyone I talk to about Ampedsense says [inaudible 00:56:27] Empire Flippers would love so I thought I’ll reach out to you guys personally. Any interest in the chat, I’m the creator.” A little self-promotion there, Shane, but I took a look at Ampedsense.
Here’s the deal, Joe, it’s kind of like … when we created IntelliTheme, the idea was we want to create a WordPress theme that automatically rotates between different ads for AdSense and Amazon and then over time would lean towards the winner. Basically, it does just split testing for you but not just in placement of the ads but also themes and we thought that will be a cool thing. We didn’t roll that out, we launched it but we didn’t roll it out much after that. This guy has created something where it’s basically plug-in rather than a theme so it will test different ad rotations on your site itself and then, basically, to get you more money on AdSense. I think it’s pretty smart, I like the idea, that’s a plug-in that you can work around any theme, I think that’s helpful.
Joe: Yeah, it looks pretty cool. I’m looking it over right now and it’s definitely very interesting. He’s done a nice job on his marketing, that’s for sure, much better than we did on our site. We’ll have to check this out, I definitely have some sites that we could probably test it on, it will be interesting to see how far we take it.
Justin: That’s a good idea. Yeah, yeah, some of the investor sites or something.
Justin: Another tweet I got is Andrew Ruse, said, “Just start listening to your podcast, doing Ho Chi Minh workshops for a Newbie Norm anytime soon. Funny you mention that, Andrew, we will likely be in Ho Chi Minh. I’m going to be there middle of February and I’ll probably be there for a couple of months and then our team might be there in March or April for a manager’s monthly meetup and will be working in most likely Saigon. Yeah, we’re going to be there soon. In terms of doing a workshop, I didn’t really have a plan to do that but I’d love to meet up with you and we might actually throw a workshop just depending on where you’re at, Joe. Are you going to come over in February or are you’re just waiting until our monthly meetup?
Joe: I probably will wait to the monthly meetup but a little traveled out right now. I think that a workshop will be great. I really enjoy them, I think it is a lot of time and effort and energy but I love spending the time with people one-on-one, getting questions and feedback and kind of understanding where their heads at.
Justin: Yeah. We looked at it from a business perspective, trying to get an ROI on those workshops and we’re like, “Eh,” kind of mix but we really liked it and we thought that the people that attended the workshops really got some value out of it, they really appreciate it. I’d like to do more, it’s just it hasn’t been a major priority for us this year but we’ll try and squeeze a few in.
TaxJar on Twitter gave us a mention, said, “Great article by Reed Thompson at Empire Flippers. Following you guys for more valuable multichannel insight.” That Reed is the guy that did a guest post on Empire Flippers about multichannel e-commerce, it was really interesting. I’m going to put the link to that in the show notes if anyone wants to check it out but I think it gives a ton of value for the e-commerce peeps in our audience.
Got a mention on a blog from Nadya on livingoffcloud.com. She had a great write-up about buying a site with us and she went into some detail about the buying process and the success she has with the site post-purchase, I thought that was great. I just want to thank you, Nadya, and glad you’re having a great experience with your purchase.
Joe: Yeah. I appreciate it, Nadya, thank you so much.
Justin: We had a not so great selling experience with a guy named DJ over at mymoneydesign.com. He talked a little bit about he submitted a site to list with us and he have an initial question of our team, you know, whether or not he could compete with the site post-purchase so someone buys a site, can they create a site that’s in the exact same niche. Our team is like, “Sure, as long as we’re upfront with the buyers. Yeah, no problem.” From there, it was just all downhill. Everything else, you know, we [inaudible 01:00:02] you can’t compete or whatever but we initially told him that and got him all the way through the process only to tell him … The site is sold within a day of being up there, it’s ready to sell, someone sent the money and then we go back to him and say, “No, you can’t actually compete.” Basically, a miscommunication on our part led to a bunch of hassle on his part so we weren’t able to sell the site.
The real deal is is that if a seller is planning on creating a bunch of competing sites in the exact same niche, targeting the exact same keywords, that’s unacceptable, they just can’t sell it to us, for reasons that it’s really problematic for the buyers if you’re doing that. If you’re doing that and you want to keep all the sites yourself, hey, more power to you but if you’re looking to sell with us, that’s not acceptable.
Joe: Yeah. Thank you for bringing that to our attention, DJ. Definitely, we’ll make sure that that discrepancy never happens again but to be absolutely clear, we don’t and will never sell sites where the seller intends to compete directly in the same keywords or niche.
Justin: Yeah. Just to be clear too, DJ didn’t do anything wrong, he was totally straight up from the beginning, saying that that’s what he’s going to do, he had that plan, is it okay and one of our team members said, “Yeah, sure, it’s fine,” and not so fine so I just want to make that clear.
All right, man. That’s it for episode 150 of the Empire podcast. Thanks for sticking with us. We’ll be back next week with another show. You can find the show notes for this episode and more at empireflippers.com/fba and make sure to follow us on Twitter @EmpireFlippers. See you next week.
Joe: Bye-bye, everybody.
Speaker 2: Hope you enjoyed this episode of the Empire podcast with Justin and Joe, [inaudible 01:01:37] empireflippers.com for more, that’s empireflippers.com. Thanks for listening.