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RMRB 4 - Multiple Revenue Streams

RMRB 4: Multiple Revenue Streams

JakeDavis September 5, 2018

This Amazon FBA and ecommerce business has grown to $4.5k/month in two years selling products in the apparel & accessories niche. Nate sells his products on many other marketplaces including Walmart. He shares why he’s decided to focus on many different revenue streams for his business. 

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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 PNL. 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 business that is selling products on the Amazon Marketplace, and the owner is making nearly $5,000 every single month in net profit. I was able to sit down with the owner to get his take on the business and figure out what makes the business tic a little bit.

                                Nate, how are you doing today?

Nate:                     I’m doing well.

Speaker 1:           Thank you for taking the time to be on with me today. I really appreciate it and I’m looking forward to our chat.

Nate:                     All right. Well, looking forward to it too.

Speaker 1:           Before we get to the questions that I have, I want to go ahead and run through a quick summary of the business. Again, the business was built in January of 2015. It has a monthly revenue of $35,448, expenses of $30,889, to make for a net profit of $4,551, which is generated on a seven month average. Included in the sales of this business are the Amazon Seller Central account, Walmart account, eBay account, Bonanza account, Zulily account, two domains, and a Facebook page. Please note that inventory is not normally included in the list price. Further details can be provided to active depositors.

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

Nate:                     Well, this is the first one I’ve done. Three years ago, I just went in with the attitude failure’s not an option and pretty much got into sports and fitness type things because that’s what I like doing. My wife and I are very into CrossFit and so a lot of our products are geared towards that. In the process, we got into some compression gear and found that that can be branded a lot better and you can build a brand with compression gear. Rather than having a lot of miscellaneous sports and accessories, you can keep building a brand and people will buy more than one product from you at a time. So now you’ve got more regular customers because it works well for them, and they’ll keep coming back. That’s basically how we started the business.

Speaker 1:           You mentioned this is your first business. Why are you selling it today?

Nate:                     I’m tired of working by myself, to be honest with you. This is a job that it’s not that difficult, not too hard, but I miss being around a lot of people. I’m in a warehouse by myself and I’m just ready to be around people again.

Speaker 1:           You working the business by yourself, how much time would you say you have to put into the business on a weekly basis?

Nate:                     20 hours, tops.

Speaker 1:           What are you doing during those 20 hours?

Nate:                     I start my mornings off in fulfilling the Walmart and Ebay orders. That can take anywhere from a half hour to, on a Monday after a weekend, up to two hours. The rest is just doing a little bit of research, checking the listings, getting back to customers, making sure that if there’s any review issues or anything like that you handle that as quickly as possible and make sure the customers are happy. Really, that’s about it. That’s all I’m doing now.

Speaker 1:           Do you feel like any of that could be outsourced to a virtual assistant or something like that, if you wanted to bring the time commitment down for the business?

Nate:                     Oh, easy.

Speaker 1:           Is there a reason why you haven’t done that?

Nate:                     Just to give me something to do, to be honest with you.

Speaker 1:           Mm-hmm (affirmative).

Nate:                     If I did that, I wouldn’t be very busy at all. It’s enough to keep me buys and allow me to still have a lot of free time throughout the day. But everything I’m doing now, most of it can be outsourced. Everything in my warehouse, all the fulfillment orders, can easily be done through other warehouses that will do it for you. I just choose to, since I have my own warehouse, to do it here. Most of the other stuff, the computer work, things like that, customer service, yes, that can be outsourced through a virtual assistant. No problem.

Speaker 1:           You mentioned that something that’s crucial to the business is this brand that you built up, and you’re selling the branded products on Amazon, on Walmart, Ebay, Zulily, and your own website. That’s correct, right?

Nate:                     Correct.

Speaker 1:           Do you have a trademark on that brand?

Nate:                     As of now, no.

Speaker 1:           Again, is that something that you haven’t done-

Nate:                     It’s something I haven’t done just because I didn’t feel it was necessary.

Speaker 1:           Mm-hmm (affirmative).

Nate:                     So yeah, it’s one of those things, it’s easy enough to do. I just never really thought to do it, didn’t feel it was all that necessary.

Speaker 1:           And it’s easy to sit here and be like, “Oh, should have done that,” but wouldn’t you know, at the same time you were worried about growing the business and fulfilling the orders, and working on the Facebook page and all of that stuff.

Nate:                     Correct.

Speaker 1:           Is there a part of the business, I guess a platform that you sell on that outperforms the others? Or all they all pretty even?

Nate:                     Amazon obviously sells the most, by far.

Speaker 1:           Mm-hmm (affirmative).

Nate:                     Walmart and Ebay are pretty even, I would say. They’re pretty consistent. One day Ebay might sell more, the next day Walmart sells more, but overall, at the end of the month Walmart probably brings in a little more profit just because our prices are higher on Walmart. But other than that, they sell about equal.

Speaker 1:           When you look at the traffic for the last year, you notice that a year ago the numbers were much higher and now they’re a bit lower. This last month you still had a gross revenue of $21,000, which is not a small amount, but it is smaller than last April you had $65,000 in revenue. Can you talk a little bit about why there’s been that downturn?

Nate:                     I just haven’t pursued this business like I was a year ago. I have another business that I own and most of my efforts have been going towards that business. It’s not an online business at all, and I just have chosen to really just let this one go on cruise control. I think if I were to spend more time actually trying to advertise more, trying to do different things, you could still get the numbers back up. It’s just I’ve pretty much been focusing on other things, and I’ve had this business on cruise control for about the past four months.

Speaker 1:           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, share 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.

                                You feel like as soon as someone comes in with the time to be able to put in the effort to grow the business back up, it will be easy to grow it back up to where it was before?

Nate:                     Oh, yeah. It’s very doable.

Speaker 1:           Mm-hmm (affirmative). If you were that person to put in the time to try to grow it back up, where would you start?

Nate:                     I would start with more advertising online, with Facebook. Because when I was doing a lot of Facebook advertising, when I was spending more time doing social media, because I did outsource at one point our social media to an agency that was posting every day, we were getting brand ambassadors and doing all that different type of stuff to really promote the product, that was a year ago. I quit doing that just, once again, because for a while now I’ve been pursuing other efforts and have chose to not do that. So yeah, if were to boost the Facebook presence, like be posting every day, keep the followers following you, keep them on the mind, and then advertising both there, Google AdWords or something along those lines, you could easily get the business back up. Even Pay Per Click campaign. I’ve cut that back quite a bit, but the Amazon Pay Per Click, if you wanted to spend more money, it definitely paid off as well.

Speaker 1:           Did you ever mess around with email marketing at all?

Nate:                     No, I did not.

Speaker 1:           Do you feel like that could be another potential opportunity to grow the business? Because the good thing with email marketing is it helps you really build a brand and a connection with your customers and with the business where the brand is as important as this one. Do you see a strong opportunity?

Nate:                     Oh, yeah. I have several friends that that’s what they do and they spend a lot of time … Well, actually not a lot of time. Once again, you can get a virtual assistant to do most of that for you, but they actually do put the effort and pursue that. As well as instant message on Facebook, a lot of people are going that route and building audiences that way. It’s another thing that you would have. You can set up automatic replies and automatic things on Facebook that way, that could easily get more of an audience that you keep building the brand in that direction.

Speaker 1:           As I said earlier, there are two domains associated with this business. I know one of them is the eCommerce store that’s set up, but can you talk about what’s the other domain?

Nate:                     We had two domains because when we hired the outside social media firm the goal was to have them build up one of the domains and we wanted to have something to compare to, two different stores. But what we found was actually if we advertised ourselves, either through Facebook or through Google AdWords, we were way outperforming what the social media company was doing on just the other website. But that was mainly because a lot of the social media we did was sending customers to Amazon, and we really weren’t sending enough people directly to our domain.

                                So what ended up happening was we’re really getting rid of the one domain because we haven’t been selling on that really for about a year now. It just made all the effort to go towards our main website, which was the original one, and that’s where we’re getting the business from.

Speaker 1:           We’ve already spoken about some of the opportunities that you see for the business, namely in refocusing on advertising, but are there any other big opportunities for growth that you would recommend a new owner take advantage of?

Nate:                     For sure. Canada. We still have some product in Canada, and I sold some of the compression gear in Canada and it sold very well. I only sold a very limited amount and chose to try to get into Europe. Going into Europe, they are already approved, took more of my time. I thought there would be more money in Europe. I didn’t see that really happening as well, and I’ve learned that Canada, out of those two markets for the compression gear, is by far the better way to go. You could easily add another $5,000, $10,000 revenue a month just in the Canada market.

Speaker 1:           That’s something that you haven’t explored as much as you feel like you should have, the Canada market?

Nate:                     Yes. My regret was I went to Europe. I should have continued focusing on Canada, but at the time I just didn’t send anything back in, once it was out of inventory. I quit sending things back in because I sent a lot of inventory up there at first. For whatever reason, I haven’t done it again. Something that if I were the new owner or if I was going to hang onto this business longterm, I would definitely be sending shipments to Canada.

Speaker 1:           Are there any big risks associated with this business that you feel a potential buyer should be aware of?

Nate:                     That’s a good question.

Speaker 1:           You’re allowed to say no.

Nate:                     I’m actually trying to be honest and think. Not that I’m aware of. I don’t see any huge risk. I mean, there is risk when you create a new product that could be hit or miss. Anytime you’re developing a new product or trying to get something new out to market, you do take a risk in that, but with existing product lines there really are not risks because most of our products have good rankings, good reviews. There’s existing sales for just about everything we’re selling. So, yeah. As of right now there are no risks, but if you were to do this on your own you’re always taking a risk anytime you’re developing a new product, because sometimes you’re going to hit a gold mine and sometimes it just might not sell. They’ll still sell, but it just won’t sell as well as you were hoping.

Speaker 1:           Yeah, and I mean, when you’re selling online, there’s always some risk of, “Oh, I’m on Amazon’s platform. I’m subject to their rules,” but from the sound of it, it doesn’t sound like there’s anything super risky about this niche or this area that someone should be aware of.

Nate:                     Nothing at all.

Speaker 1:           As you are I were talking about a little bit before this call, I know plenty of people who are into these kinds of products and into this area. I mean, I don’t feel like this is a niche that’s going anywhere.

Nate:                     No. It’s a huge niche and I mean, the potential to continue growing within is there for anyone that wants to pursue it. I mean, you could easily add new designs and new products with our existing compression gear. That would be another thing that I would recommend a new buyer to do, is take the existing and keep adding to the inventory. New designs, different things like that, because you never know what people are going to like and dislike, but most of the time you get a new design and that starts selling very well right away just because it’s fresh and new. If customers have bought form you before, they often are loyal to you and will come back. You’re just offering new designs.

Speaker 1:           Would you commit to a non-compete?

Nate:                     Of course.

Speaker 1:           How much support are you willing to offer a buyer during the transition period? Would you commit to emails, Skype calls? What would you do to help?

Nate:                     I can do all of that. I would even, pending on if it’s somewhere here in America, I might even fly out for a couple of days and help them on computer and one-on-one if necessary. Or they could come here and I’d be willing to help someone that way as well. But yes, Skype, emails, I’ll be available for 30 days. Whoever takes over I’d want them to be very successful and take this to the next level.

Speaker 1:           Speaking of the transition, I know that earlier you mentioned that you own your own warehouse, which is why you’re fulfilling the orders yourself rather than using a third party to do that. How is that going to work when a new owner takes over? Are they going to have to get a new warehouse? Or if they’re looking to keep the process the same, is the current warehouse going to be open to them? What’s that going to be like?

Nate:                     The current warehouse is being leased, so I don’t own it. I just have-

Speaker 1:           Okay.

Nate:                     … what I said, have a warehouse. The process could be that I could ship the product to a customer who has their own warehouse or even storage units would be plenty that you need to do. Or if a buyer really doesn’t want to get involved with the day-to-day of fulfilling Walmart and Ebay orders, and that was the main reason I was doing the warehouse, is because neither one of those … Ebay you can use Amazon, but Walmart you cannot fulfill through Amazon program, you actually have to fulfill it through yourself or a third-party location.

                                I’ve already contacted warehouses and have found warehouses that can do it, will fulfill Walmart, Ebay, Zulily, you name it. They can label, they can do all that. Because Zulily does require extra labeling, it’s a different label than Amazon. But right now, all of our product, the labels are on the package itself. In fact, it’s not even a sticker, we just make it part of the package. So basically it’s really easy going forward with everything being pre-labeled pretty much.

Speaker 1:           Yeah. That definitely makes sense. I’m sorry, I guess I misunderstood. You don’t own a warehouse, you have it because you lease it, which is definitely fair.

Nate:                     Correct.

Speaker 1:           Would you be open to something like an earn out?

Nate:                     Yes.

Speaker 1:           Awesome. Nate, thank you so much. I do have one final question for you. Before we get to that I want to go ahead and run through the quick summary of the business again. The business was built in January of 2015, has a monthly revenue of $35,440, expenses of $30,889, to make for a net profit of $4,551, which is generated on a seven-month average. Included in the sale of this business are the Amazon Seller Central account, Walmart account, Ebay account, Bonanza account, Zulily account, two domains, and a Facebook page. Please note that inventory is not normally included in the list price. Further details can be provided to active depositors.

                                Nate, can you just recap everything that we’ve spoken about and in your own words give me your best 30-second pitch on why this is a business worth buying.

Nate:                     It’s in a huge market. The sports fitness industry is always going to be growing. Amazon’s continuing to grow and the Walmart website is really starting to pick up and grow as well. Anyone that wants to put forth effort and advertises the right way, you’re sitting on product that works very well. You get emails all the time from customers thanking you for products, just because they work that well. It’s just a great business to be in, especially if you’re just looking for something part time and you’re looking for a lot of freedom, this is the business for you.

Speaker 1:           One of the cool things about this business is that you’re selling on all of these platforms and all of these platforms can be grown as well if you increase the advertising like you were talking about, but a lot of this is also stuff that you could outsource, the social media, the fulfillment, and create this business for yourself that is as passive of a business as you want it to be, or as hands-on of a business as you want it to be. The opportunities for this are plentiful.

Nate:                     Yes.

Speaker 1:           Nate, thank you so much for taking the time with me today.

Nate:                     No problem.

Speaker 1:           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’s 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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