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RMRB 13- Many Sources of Revenue

RMRB 13: Many Sources of Revenue

JakeDavis September 26, 2018

This affiliate and ecommerce business in the survival niche was created in January 2017. The WordPress site is monetized using Clickbank products (80%), and a variety of other monetizations. With a large email list of 35k+ and a large social media following of 110k+, this business surprisingly doesn’t take a lot of time to run, as Mike has systems in place to take make the business passive. 

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Jake Davis:          What if you could cut through the noise in the online business world and learn from someone who has built a real business? We verified the numbers and combed through the P&L. This is not only a real business, but a real asset that people want to buy. We’re going to pull the curtain back and give you the insights this entrepreneur has discovered that you can use to level up your knowledge, whether you’re looking to buy a business or looking for inspiration to take your current business to the next level.

                                Hey, listeners. Welcome back to the Real Money, Real Business podcast. Today, we’re going to be looking at a primarily affiliate and e-commerce business created in January 2017 in survival niche. And something that’s really interesting about this business is, in addition to being affiliate and e-commerce based, it also makes money from drop shipping, subscription, AdSense, advertising and Amazon Associates so it has all of these different revenue models, revenue streams coming together to make about $3500 every single month. And I was fortunate enough to be able to sit down with the owner of this business to figure out how it all came together.

                                Mike, thank you for coming on here today. How are you doing?

Mike:                    Thanks for having me Jake.

Jake Davis:          Yeah, it’s my pleasure and I’m really looking forward to learning from you about how you built this six figure business here.

Mike:                    Yeah, it’s quite the success we’ve had here for the past about 15, 16 months and I’m looking forward to sharing that with you.

Jake Davis:          Awesome. And before we dive into the questions that I have for you, I want to go ahead and run through a little quick summary of the business. Again the business was built in January of 2017, has a monthly revenue of $22,964, expenses of $18,925 to make for a net profit of $4,039, which is generated on a 12 month average. Included in the sale of this business are the primary domain and all site content and files, email list, Facebook page, Facebook VIP group, Facebook pixel, two Instagram accounts, YouTube channel, Shopify account, eBay account, all advertising information and data, supplier contacts and all funnels associated with this business. Please note that you must currently have an approved Adsense account before purchasing this business to ensure a successful migration.

                                Mike, can you tell us a little bit about your background and building and running online businesses?

Mike:                    Sure, yeah, this was my first experience in building an online business, as far as the whole spectrum of it. Prior to this, I dabbled in some Amazon FBA. And one of the main reasons for me to build an e-commerce store with multiple streams of income was the fact that I wasn’t too thrilled that on Amazon, it was a one sale, kind of business model where you don’t keep customer information, which means that you can’t continuously sell to this particular customer or audience.

                                So after dabbling in that for about six to nine months, I wasn’t very comfortable with, like I said, Amazon, so I decided to look into other opportunities for me to be able to reach the customer on a more consistent basis and be able to sell them more often.

                                Thus I came across Shopify, e-commerce, and that’s how I began my journey into this business.

Jake Davis:          And I want to touch on a little more about why specifically you’ve chosen this monetization method in a second, but before we get to that, I want to ask you, why have you decided to sell this business today?

Mike:                    This business is a passion project, I kind of just started it on the side as my kind of like third business to be honest with you, and I just don’t have the time to run it anymore, to grow it right now. It’s basically just FBA doing most of the work as far as the order fulfillment, posting on social media, taking care of any customer concerns. I’m really limited to the number of hours that I put into the business on a weekly basis. And in order for this business to grow by skill, it needs somebody that can add a little bit of their creative juices to the business and come up with a plan to grow it, and I don’t have that time right now and that’s why I’m trying to sell.

Jake Davis:          There are a lot of different monetization channels for this business, for example we’ve already mentioned affiliate and e-commerce, but there’s also AdSense, advertising, Amazon Associates, a lot of different funnels here. So my question to you is first, can you go ahead and go into a little more detail about which funnels exactly you’re using? And also, why have you chosen these specific monetization methods?

Mike:                    I didn’t want to rely on one method of monetization so, little by little, I’ve been trying to build out different ways to generate revenue.

                                When I first started out, the first thing we did was just Amazon affiliates and basically what we did was just post links to our social media channels, to products that would be of interest to the customers or the audience. So it wasn’t technically a means of monetization, it was just for us to understand what our ideal customer was purchasing.

                                And one of the effects of that was that we were making revenue on it. The same thing applied to the AdSense that was started about a month and a half ago, it was basically just thrown on the site to see if we can gain revenue from the traffic that was coming through, but it wasn’t really one of our main primary funnels or ways to generate revenue for the business, it was just something that we had on there in case the new buyers would be interested in that monetization.

                                But the main focus for us was some advertising on Facebook and trying to build our lists. That was what we were expecting to do along the road as far as like being able to generate consistent revenue, was the list building, and of course running advertising to specific products that our audience was interested in.

Jake Davis:          When you look back over the last year and a half since this business has built, did you run into any bumps in the road that has shaped you as an entrepreneur?

Mike:                    Oh, absolutely. Yeah, absolutely. When I first started, within about two months, we found a winning product that I thought was going to be our signature product for the business. And Facebook can be very finicky as far as what kind of advertising they allow. So we had a product running for about a month, doing well, really well. And just overnight they shut off our, ads they told us that the product couldn’t be advertised on Facebook. We appealed it, and it ran again for a few weeks, and then they shut it down again. And we’re going back and forth constantly with support, and basically, the answer we got would just depend on the particular rep that interpreted our products as okay to advertise or not.

                                So we realized that we couldn’t keep going back and forth and appealing every time somebody would shut off our ads, so what we did was we decided to keep the product as a secondary product that we could sell through funnels, through emails, but we had to start focusing on other products that would help generate revenue. And that’s when I realized that I couldn’t focus on one particular stream of revenue because if that gets shut off then you have no business.

                                Thus, we started to gradually incorporate other revenue streams which are not our main focus, but it’s something that we have that if the right buyer comes in and they don’t have a skill that they could definitely just scale it to whatever they want it to be. So yeah, I learned that you couldn’t focus on one particular source of revenue or one product in order to build the business.

Jake Davis:          Yeah, I mean it’s the old saying, “Don’t put all your eggs in one basket”.

Mike:                    Exactly.

Jake Davis:          So that’s just really unfortunate that they kept shutting down your ads on that one product and they never gave you a straight answer?

Mike:                    Yes they gave me an answer but again it could be interpreted differently by every rep. We are in the survival niche so sometimes some of these products can be considered as weapons. It wasn’t a weapon technically, but if you looked at it as a weapon, you would shut off my ads, if Com Rep number B said it wasn’t a weapon, then they would turn the ads back on and they will let it run. But every time there was a review or every time we would start new ads, they would disapprove them.

                                So it was one of those things that I had to either keep going through that process and spend all that energy, and trying to win the battle against Facebook or try to take a different route. So yeah, that’s what we had to do, we just decided it was too much energy to continue to push the envelope with that product.

Jake Davis:          The sales for the business or at least the profit level for the business has remained pretty constant over the last year, excluding a few months, mainly in January of this year, it was a bit higher and then June and July of last year it was a lot higher. So can you talk a little bit about why there is a difference in the numbers for the last 12 months?

Mike:                    Sure. So, last summer, we found a product that was seasonal, and it did really well for about three months. At first we thought it was going to be an evergreen product that would go year round but after looking back at our data and thinking about the product itself, we realized that it was a seasonal product. It’s a product that we plan on advertising again in the next few months to take advantage of the season. That’s why there was such a significant increase in the volume of the revenue, as well as the profits for those months.

                                And as far as January is concerned, we just happen to post an affiliate product on our Facebook page, and I don’t want to say that went viral but it got a lot of attention. And we kind of just started promoting it a little bit on Facebook, with ordering some and before you knew it, a month down the line and we had done extremely well with that affiliate product, as far as sales were concerned and that’s why there was a significant spike in January for that product.

                                The product still sells on occasion. We’re not advertising it right now because again we run into a similar problem with Facebook as far as the definition of the product, and we just want to make sure that we’re being compliant as far as  Facebook is concerned. So that’s why you see the spikes for those months.

Jake Davis:          And you anticipate a similar increase this coming summer?

Mike:                    Absolutely. Yeah, absolutely. As long as we can advertise a product, have no issues with any kind of order fulfillment which we haven’t in the past, I’m just putting it out, we should be fine and we should be able to scale, as we did last year.

Jake Davis:          So, when talking about marketing then after this whole deal with Facebook and the controversy you’ve had with them, do you still utilize Facebook marketing a lot? As I was reading through the assets that the business had, I mentioned Facebook a few times, you have a Facebook page with over 80,000 followers, Facebook VIP group with almost 5000 followers, and then Facebook pixels, so clearly you still use it right?

Mike:                    Yeah the extent of our Facebook advertising is very limited these days, and it’s because of the lack of time that I have. Now, what we’re doing right now is just basic posting on the page. Whereas in the past, we’re actively and aggressively advertising, but again, the time restraints has really limited what I can do.

                                Yeah, so that means that everything is pretty much just organic as far as like what we’re getting on Facebook. There is one ad that runs constantly and it’s basically a lead magnet that we get new email subscribers. But other than that, we haven’t actively run any campaigns to increase revenue. So yeah, so while we are very active with Facebook, as far as paid advertising, that’s very limited. And that’s why there’s been a little bit of a decrease in the revenue numbers because of the advertising limitations right now.

Jake Davis:          And with the email list that you have, you have over 35,000 email subscribers. Can you tell me how you use that list?

Mike:                    Yeah. So for starters, were around 38,000 right now. And we use that list for content. What we do is I’ve set up an automation, which is about, I would say about 18 weeks, right now. And basically what that does is it drip feeds content to the actual subscribers, it could be daily, it could be weekly, it just depends on where they are in the automation. It could be a few days.

                                And basically what that does is just kind of, send them weekly newsletters, survival topics, some affiliate sales. Yeah, so that’s what we do with that as far as the email list’s concerned. The great thing about it is that it’s been scrubbed on a monthly basis, which means most of the people on the list are very active and they’re engaged with our content.

Jake Davis:          So you see high open rates and click through rates on your emails?

Mike:                    I don’t know the standard or the industry average for click through to be honest with you. I’m fairly new to all this. And what I’ve seen was, we’ve had some decent open rates. We’ve been hovering around 50% I think for some time. We’ve decreased a little bit on that. I think that the main component for the new buyer is being able to come in here and being able to set it up so that they can get a higher open rate and they can do a better job of getting in front of the customer because it’s not something that I have experience with, it’s something that I’ve thrown out there, and I’ve set up. But if somebody came in and really knew what they were doing, they could really monetize the list and generate income from it.

Jake Davis:          When talking about the specific products are the products that you’re selling through your e-commerce platform private labeled or trademarked?

Mike:                    No they’re not. These are products that can be easily outsourced overseas for we have some suppliers that are within the US, technically you could make some changes to them to make them private labels, but right now, they’re products that can be purchased overseas or they can be purchased here within the states.

Jake Davis:          Hey listeners. Do you want to find a business that is just right for you? Head on over to Empire Flippers and have a look at our marketplace where you can see real businesses making real money, just like the one we’re looking at today. In fact, don’t miss out. Head over now, shoot your email address and we’ll send you hot, fresh new listings of successful businesses every week to your inbox. Now back to the interview.

Jake Davis:          What are some of the major opportunities for growth that you would focus on, if you were to keep the business?

Mike:                    I think that the person that would purchase this business if they had any kind of experience with email marketing could immediately [inaudible 00:15:27] revenue with the business. The reason why I say that is because, again I haven’t put too much focus on understanding click through rates, understanding open rates, and what I do know is, I’ve done a little research. And as far as the host we have right now which is Active Campaign is not the greatest for email marketing. So if somebody came in and put their little touch to it, they could definitely, definitely increase revenue with an email list, I mean significantly.

                                I’ve seen other stores that have similar sizes in they’re doing a lot better. I just, again, limited time, limited experience is the reason why I haven’t been able to do it. The other thing is through social media, there’s opportunity to generate more sales, especially through Instagram. We just crossed I think 30,000 followers. That could be monetized, as well as, Facebook can be monetized but primarily I would say the email list is the number one factor for increasing sales.

Jake Davis:          You mentioned before that you have a VA who helps you run the business, correct?

Mike:                    Yes.

Jake Davis:          Can you talk about what the VA does on a weekly basis and what that leaves for you? What do you need to do to run the business on a weekly basis?

Mike:                    She pretty much does everything to be honest with you, like she’s been trained so her main focus is customer service, she answers, replies to any emails that customers have any complaints. She fulfills orders, which could be automated if there was an increase. But right now, since all the orders that are coming in are organic, she basically just manually fulfills them. She also does all the content for us on Instagram and Facebook. She does everything. I’ve taught her where to find the content. I’ve taught her what kind of content we’re looking for. And she basically has set up about 30 posts at any one location on Instagram, and maybe two months of posts on Facebook, which keeps the organic visibility of the business in front of our customers.

                                As far as my task are concerned, the only thing I’m worried about is just maybe once a week, just talk to her, make sure everything’s going okay. We have access to each other on a daily basis via Skype, but we don’t talk as often, unless there’s an issue. And basically what I do is just try to generate content for maybe like an article or two a week. And that takes me a few hours, even if I’m playing around, just reading about the niche itself because it was something that I was interested in learning about, I guess you could consider it, so that time spent for the business but overall, there’s only a few hours and basically what I do is just look for content that I can get in front of my customers, maybe write a couple of posts on our website on a weekly basis. That’s about it, that’s all I have time for.

Jake Davis:          And you write the posts yourself you said?

Mike:                    Yeah, most of the posts, I written myself. Yes, yes.

Jake Davis:          Do you know if the VA is interested in continuing to work with the business when a new owner takes over?

Mike:                    We’ve had that discussion and absolutely. She said she’ll stay on board. She will be happy to continue to do her job.

Jake Davis:          Are there any significant risks that you see a new owner encountering when they run the business?

Mike:                    This is my first business in e-commerce. I can’t see anything off the top of my mind that would be a significant risk, like everything else, as long as they continue to coast so they continue to test products in the niche, they should continue to grow. But off the top of my head I can’t think of any significant risk. No.

Jake Davis:          Would you commit to a non compete?

Mike:                    Absolutely.

Jake Davis:          How much support are you willing to offer a buyer during the transition period?

Mike:                    I think when we initially spoke before I put the business up for sale, I think that I’d be open to communication via Skype. And I guess you could say, meetings or conferences as needed for a month just to make sure that transition goes smoothly, pretty flexible to that as long as we can sit down and commit to a certain number of hours needed, I could definitely help out with that.

Jake Davis:          Are you willing to negotiate on something like an earn out?

Mike:                    Yes.

Jake Davis:          Awesome. Mike, thank you so much for the time here today. Before we wrap up here, I want to ask you a little more about your experience when growing the business, and start by asking, is there anyone who inspired you while building this business, who are listeners might like as well?

Mike:                    Yeah, I think that somebody to really follow and has really changed my mindset and has helped me understand the whole business model of e-commerce and funnels would be Trey Lewellen. I mean he’s a very, very well respected e-commerce business owner in this space and online marketing. He’s also an online marketer and he’s one of the ones that I’ve been following, and has really given me ideas as to how to implement different strategies in order to grow the business.

Jake Davis:          What advice would you give to our listeners that you wish had been given to you when you were starting this business?

Mike:                    That’s a great question. I think that the one thing that I continuously run into, and I haven’t done a good job of course because of limited time, is to always keep testing. Always keep testing, always keep trying new ways to find sources, I guess you could say, of revenue, but to understand what your customers want in order to grow the business. So test, test, test.

Jake Davis:          It’s funny, we’re sitting here talking to you, I’m having just a pleasant conversation with someone who built a six figure business. Is that not just the most insane thing to you that you accomplished this?

Mike:                    Yeah, I mean I still can’t believe it to be honest with you like … it happened so fast, and it’s been a great ride, it’s been a great learning experience. I mean I have so much more to learn, hopefully I can get back to doing more of this. But I can tell you for the last 16 months, I mean it’s been wow, it’s been such an amazing experience. I mean, I talked to people now, and I tell them what I’ve done, and they’re like, “Yeah you’re talking to me in a different language, like I have no idea what the heck you’re talking about”, so it’s been pretty cool to be honest.

Jake Davis:          Is there anything else you want to mention about the business that we’ve missed today?

Mike:                    Yeah. The one thing I would say for anybody who’s interested in this business while it would be ideal to have an Adsense account, it’s not really, I guess you could say mandatory. Because of the fact that we just recently started advertising or using AdSense in our website, so it’s not a significant portion of the revenue that’s made. So if that was a concern, I wouldn’t be concerned for that.

                                And secondly I mean, I think that I honestly think that whoever comes in here and uses that email list to their advantage will, I mean, they will knock it out of the park and they’ll be making their money back within no time.

Jake Davis:          And another thing to note on the Adsense account. If anyone listening is wondering about that, we do have more information on setting up an Adsense account available for you on the listing page so you can go ahead and check that out on, if you are looking for more information about that.

                                Now Mike, before I let you go here today, I do have one more question for you but before we get to that, I want to go ahead and run through that little quick summary of the business again.

                                The business was built in January of 2017, has a monthly revenue of $22,964, expenses of $18,925 to make for net profit, $4,039, which is generated on a 12 month average. Included in the sale of this business are the primary domain and also all content and files, email list, Facebook page, Facebook VIP group, Facebook pixel with data, two Instagram accounts, YouTube channel, Shopify account, eBay account, all advertising information and data, supplier contacts and all funnels associated with this business.

                                Mike, can you give me in your own words, your best 30 second pitch on why someone should purchase this business?

Mike:                    Absolutely, yes. So if you’re looking for a lifestyle business, or if you’re looking to continue to grow your portfolio, this business would be the right opportunity for you. All you have to do is use the assets that we’ve built to generate that steady stream of income throughout the year. Or, like I said before, scale the business with the email list and everything we have to offer and you can 10 X, what you want to make with this particular business, it’s ready to go. Just needs somebody with creative passion, and I have no doubt that you’ll make your money back, and more in the next few months.

Jake Davis:          And it can also be extremely passive for someone.

Mike:                    Absolutely, yes, that’s why I mentioned that lifestyle business. If you wanted to just run on what’s going on right now you could definitely do that.

Jake Davis:          Fantastic. Mike, thank you so much for taking the time with me today, I really, really appreciate getting you on the phone here today, and I’ve enjoyed our conversation.

Mike:                    Thanks Jake I appreciate it.

Jake Davis:          You just learned how this business works, and I want to give you the opportunity to learn more about what you can do to buy real online businesses just like this one. If you want to find out more about businesses making real money, head over to and sign up for our mailing list. There is an entire world of people quietly investing their money into online businesses and seeing great returns. Now, we want to help you do the same thing.

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