January 2, 2019
Jake had to chance to speak with Emmett about his affiliate 4-site package. The sites were created between 2014 and 2018 and are earning $30k/month in profit. The sites feature audio software deals and partner with audio software companies to offer limited-time discounts on their products and take a 30-50% cut of revenue. Deals are announced to a private and highly engaged mailing list of 60,000 people, and the business does heavy retargeting on Facebook.
Find more businesses like this one on our marketplace: http://bit.ly/2rXJzbW
Speaker 1: 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 that this entrepreneur has discovered, that you can use the level of 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 Pro Business podcast. This week I spoke with Emmett about his foresight affiliate business in the audio niche, that is making over $28,000.00 every single month, partly due to the highly engaged email list of over 60,000 subscribers.
Emmett, thank you for taking the time to be with me today. How are you doing?
Emmett: Good, thanks. Thanks for having me.
Speaker 1: It is my pleasure. I’m very eager to discuss this million dollar business with you, valued at nearly 1.2 million dollars. Very big number. Before we dive into the questions that I have for you though, I want to go ahead and run through a little quick summary of the business.
Speaker 1: The sites were built from 2014 to 2018, has a monthly revenue of $102,054.00, expenses of $73,669.00, to make for net profit of $28,385.00, 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, and source code, associated subdomains, social media accounts, email list, affiliate list, also P’s and spreadsheet, associated with the domains, advertising accounts, and several business tool accounts. Emmett, can you tell us a little bit about your background, in building and running online businesses?
Emmett: Sure, yup. I got started originally back in 2014, when I came up with the idea for this website. I didn’t have any experience back then. I pretty much learned everything from scratch at the time. I just put out a very generic website to get started with, and built it from the ground up from there, and expanding on it every month with new features, and continuing to developing and building new relationships. I didn’t have any experience, when starting off. Well, I learned everything I suppose from sales, marketing, and development over the years.
Speaker 1: Now, you’re here and it’s been four and a half years really, since you started this business originally. Why have you decided to sell it today?
Emmett: I’m hoping to sell it, basically because we bought a house about two years ago, and we have our second child, hopefully coming on the way, and to be honest right now, time is more valuable to me than money. So, for myself, my wife, and my family, it would mean more to us, just to have the time, and the money to pay off the mortgage, and not have that pressure in our lives, and then kind of having to run the company continually. So, right now the lump sum would mean more to me, than anything else. That’s basically why I’m hoping sell. It’s taken this many years, just to build it to what it is, and I suppose it’s my own baby, having built it for that long, and I’d be sad to see it all go, but I think just being able to pay off our mortgage, would mean more to us right now, at this stage in our lives.
Speaker 1: I think that brings up an interesting question then, because you mentioned that the time is more important. Does the business currently take a lot of time, to run in it’s current state?
Emmett: No. So, to keep everything ticking over. So there’s a few people that work on the team with me. There’s the site manager, there is a product manager and developer, and then a customer support Skype. So, they pretty much take care of everything every week. I could spend on average, I suppose, two hours a week. It depends how much I want to get involved, I suppose. Like I said, because I built this myself, I tend to want to get more involved, than I probably need to be I suppose. So, to keep everything ticking over, we generally have a call once a week, and that can last from half an hour, to an hour. The site manager then puts everything in to place, that we’ve agreed on in the call. So, it takes one to two hours a week, but if I want to spend more time, I can do, I suppose.
Speaker 1: One thing you notice when you look back over the numbers for the last year, and not diving in to any specific numbers, but there was a really high peak in December, and then since then has kind of gone down a bit, and now you’re looking up again. What caused the downward trend, that you see from really, the start of March through June?
Emmett: Yeah, good question. Depending on the products that we promote, it changes every single month. Different products have varying degrees of popularity, and they can be quite specific to certain audiences. When we promote a product, we try to have plenty of variety throughout the year, in the different products that we do run on the website. Some of them are quite industry specific to one area. Some of them might be more open to multiple areas. It really just depends on the product, and the popularity of that product. It’s not seasonal, in terms of different times of the year. We do notice, kind of maybe around the Summer and Christmas, there’s maybe slight changes, but it really is more just dependent on the products that we’re promoting.
We kind of have quite a lot of data from the past four years, and I have to see which of the most high earning products to promote on the website, but at the same time, I like to kind of keep offering customers plenty of different options, and not promote the same types of products every single week, because I think that might just eventually wear down customers. So, we try and just have plenty of variety throughout the year. Sometimes that can result in very high earning months, and sometimes another month might be lower earning, but over the course of the year, it balances out nicely.
Speaker 1: Then how do you choose the products, that you want to refer, if you try to just keep them switching up?
Emmett: It depends on a few different things. We have a huge list of potential companies, in a company outreach lists. We have companies that we want to contact, and products that we’re interested in running promotions on. Like two of the people on the team are working in the industry as it is, so they have good idea. They’ve sort of their finger on the pulse there, as to which products are hot products and which ones are good products to run promotions on. Once we engage with a potential company to run a promotion with them, we then look at the kind of discount that we can run with, the content that’s included, and we just have a look at the industry, and and our previous sales figures, to see if those types of products specifically, have been popular with companies.
Another thing just to remember, I suppose as well, depending on the price of a product, sometimes higher selling products can result in higher revenue, but less actual sales for that product. One product might sell 200 times, at a price of 10 Euros, but another product might sell only a hundred times, but at a price of 100 Euros. That’s why each month can kind of vary in terms of revenue, because sales might be high or sales might be low, but the end price of the product can vary quite a lot as well. So, that’s something else that we try and change up, if we don’t want to continue to blast customers, with products that they can’t afford. Some customers can afford products over 100 Euros, some customers only want products under 10 Euros. So, that’s the variety that we’re trying to look for products in different areas, that are of interest to different types of customers, and products that are priced differently as well, just to offer plenty of variety throughout the spectrum.
Speaker 1: Why did you decide to get in to the affiliate business?
Emmett: I’ve always worked in the audio industry myself. I’ve always had a keen interest in it, and I suppose I originally had ties with some of the companies, because I use their products. So, from there I got interested in how I can help those companies,, with selling more of their products, and that’s kind of where the idea spawned out of.
Speaker 1: There are four sites that are packaged with this sale here, as mentioned, and are the four sites even, in terms of revenue for the business, or it does one of them kind of tower above the rest?
Emmett: No, not at all, and one of them definitely towers above the rest, and the other three of the other three, one of them towers amongst the other two, and then the other two, I think that there’s still quite a lot of room for growth, there as well. But definitely there’s one that really towers above all of them, and the second one will be quite a lot higher than the other. The last two then as well am.
Speaker 1: Then if you could quantify it, and say 90% of the revenue, or 80% of the revenue for the business comes from the first site. What is that number approximately?
Emmett: Yeah, I’d say around 90% comes from the first one, and I think the 10% then is made up from the rest of the other three, with one of them making up five, and then the other two making up the other 5%.
Speaker 1: You’ve mentioned the fact, that you have a team, and employees that help you run the business. How many employees do you have?
Emmett: Not counting myself, because I only kind of really have a call with the site manager every week. There is site manager, and there is a product manager. We have a developer who helps with new products, with new developments on the website, and any new features that we add. There’s a front-end developer, who does styling changes, for any of the new features we add to the website. There’s a graphic designer, and a customer support and member as well, so that would be six people, but they don’t all work full-time. The all work on an hourly basis, as in when they’re needed. Sometimes we might not need the developer. Sometimes we might not need the graphic designer. Sometimes the customer support member, might not be needed as much each week. So, they’re all on just a [inaudible 00:09:59] wage, rather than a set wage every week.
Speaker 1: Are they willing to continue working with the business, when a new owner takes over?
Emmett: Yeah, absolutely. Yeah, they’re already familiar with it, and they’re all happy. I’ve spoken to them about the sale, and they’re all more than happy to stay on, and they’re eager to stay on. They like what they do. So, absolutely. Yeah.
Speaker 1: Can you describe for me what you do for the business, or really what your team does for the business, in terms of marketing, on a weekly basis?
Emmett: Sure, yeah. The team basically puts together a product page for the promotion, and from there we deal with external affiliates. We have a network of outside affiliates, who help push customers to our website as well. Every week we work with them, send them the product, we get graphic design done up for each promotion, set up Facebook campaigns, and retargeting campaigns, and prepare the newsletter. So that’s all the things that we do on a weekly basis for each promotion, but then outside of that, I suppose we’re always working on other opportunities of growth, to grow the business outside of it as well.
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Speaking of opportunities for growth, what are the major opportunities that you see this business having, that a new owner can take advantage of?
Emmett: There’s quite a lot of different areas to go in to. At the moment, what we’re doing is, we’re working on a new feature on the website, that lets us push out our own products that we own 100% percent. This will allow customers to buy those products, using credit that they’ve earned from previous purchases, so that’ll increase revenue, and by releasing products that we own 100% of. All those products are ready to go, and ready to release for when we’re going to release that quite soon.
Outside of that, because at the moment, our schedule for promotions is we’re looking for ways to increase the amount of products that we can promote, without changing our entire business structure. There’s a few different ways to do that, through setting up special multi-product promotions. So, we have a lot of those lined up and ready to go as well.
Outside of those long term goals that we always work on, are trying to increase the email list, and this can be done through paid and free methods. We’re working on a few paid methods at the moment, through Facebook ads, and just paid advertising, to get people to sign up to the email list. There’s loads and loads of different ideas, that we’ve kind of mapped out as a team, and we try and work on the ideas each month. There’s also boosting email subscribers will be the largest and most important one in my mind, because we can see a direct correlation between the size of the email list and the revenue.
By focusing on growing the email list, revenue grows with it as well. Another idea that we’re trying to work on, which is a very long term strategy, is to, we haven’t set up a blog, but we’re working on that now, and we hope to start using SEO to start boosting our email subscribers, and then boosting the visits to the website through organic means.
More specific ideas will be warm email onboarding. Each customer when they sign up, we can improve the signup process, and reduce churn of our email subscribers through warm onboarding, to increase the overall email open rates. One of the websites doesn’t have cart abandonment set up on it. Well, actually three of them don’t have cart abandonment set up on them. So, in particular, if we were to add it to just one of the websites, I think that would increase quite large revenue uptick, for that particular website. It’s also possible to pivot in to new industries as well.
So, this particular model, we’ve looked at it but we haven’t done it yet, but it’s definitely possible to take the website, duplicate it, and move it in to a completely new industry, to promote products in a completely different industry, to a totally different type of audience, but it’s a completely different market, that we think has been untapped, and would be very possible and quite easy to begin that process.
I think there’s quite a lot of different areas for growth. They’re just some of them. Like I said, we’ve mapped out lots of different specific ideas to work on, and each month we have a chat about it, and see what would be the most effective one to work on next.
Speaker 1: Do you feel like there are any potential risks associated with this business, that a new owner should be aware of?
Emmett: Yeah, there are some risks, as with any affiliate industry. For us, we always try and plan out our calendar, a few months in advance. We do this to try and mitigate the risk of having an upcoming promotion, and that promotion being pulled at the last minute. We always ensure that we have contracts signed, and everything ready to go, a few weeks at least beforehand. We also have a waiting list, so if the product does get pulled at the last minute, we always have another one that we can start in at the last minute.
Outside of that, I suppose because we’re in the affiliate industry, we are reliant on outside products, and external companies. The industry is quite niche, so it can be small, but there’s always new companies and new products, being developed every single week, and there’s literally hundreds of new releases every month. There’s definitely no shortage of new products coming up, and to promote on the website.
If a new owner was to take over the website, one risk they might be thinking about would be not knowing the industry, and not having any experience with the audio industry, but again, that could be mitigated through the fact that we have a company outreach list. We know which companies, and which products that we want to target. We have returning companies every single month and every year, so companies who have run products with us, continue to want to run new promotions with this as well. I don’t think that it would be a risk at all, to be honest. There’s always a drawn up calendar, and there’s always a waiting list, and then always new products to promote, so I don’t think that there are any risks, to be quite honest.
Speaker 1: Seeing as you built this million dollar business here, and that is no small feat at all, I’m sure you have some advice for anyone who wants to start their own affiliate business, and hopefully reach that million dollar mark. What advice would you have, that you wish you had known, when you were starting out?
Emmett: That’s a good question. I guess, focus on one thing to start with. Focus on one area. Generally, nobody can have experience in every single areas, so don’t expect to be the developer, marketing person, the customer support person. Once your company is up and running, once your website is out there, put a person in place for customer support, or put a person in place for marketing. You can’t do every single role, and grow the business at the same time. I think, I definitely would have put people in place earlier along the process, to give myself more time to be able to spend on growing the business. Outside of that, I think do it only in an industry that you’re passionate about, because I think otherwise it takes a long time to get to this point generally, and if you don’t have the passion and the interest, then it’s easy to fall off early in the process. So, just do it in an industry that you’re passionate about.
Speaker 1: Emmett, would you commit to a non-compete?
Emmett: Yeah, absolutely. If I did so, the set of websites, I would have no interest in going back to running a company in this industry. I want to just spend time with my family, so I’d be happy to sign a non-compete. Yup.
Speaker 1: How much support are you willing to offer a new owner, during the transition period?
Emmett: As much as is required. Like I said in the beginning, this has been my baby, and I want to see it succeed, and continues to succeed. So, as much as required from the new owner, if it’s email support, Skype support, Amazon support, I’m happy to do it for as long as it’s required, within reason. Yeah.
Speaker 1: Are you willing to negotiate, on something like an earnout?
Emmett: Yeah, absolutely. Yup. It doesn’t have to be an upfront fee 100%. I’m happy to discuss other different options, and yeah, I’m flexible with different potential solutions there. Yeah.
Speaker 1: Emmett, thank you so much for the time today. I do have another question for you, but before we get to that, I want to go ahead and run through that quick summary of the business again.
The sites were built from 2014 to 2018, have a monthly revenue of $102,054.00, expenses of $73,669.00, to make for a net profit of $28,385.00, 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 and source code, associated subdomains, social media accounts, email lists, affiliate list, all SOPs, and spreadsheets, advertising accounts, and several business tool accounts.
Emmett, looking at this business, and trying to be objective about it, why do you feel like this is a business worth buying?
Emmett: Yeah, good question. I believe it’s business worth buying, because I think that there’s a lot of room for growth in the future. I don’t think that it’s hit it’s peak at all. I think that we have so many different areas for growth still to dive in to, and like I said, it’s very easy to pivot in to other industries, from where it is right now. If I was looking at it, and looking to buy it, I suppose I’d run through those different options of where it could grow, and once you start to look at it, you can see the potential of where it can get to next.
Speaker 1: Emmett, thank you so much for taking the time today, to discuss this business with me. I really appreciate it.
Emmett: Yeah, thanks very much for having me. I appreciate it too.
Speaker 1: You’ve 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 empireflippers.com, and sign up for our mailing list. There is an entire world of people quietly investing their money in to online businesses, and seeing great returns. Now, we want to help you do the same thing.