EFP 134: Building 6-Figure Sites In Questionable Niches

Justin Cooke Justin Cooke April 23, 2015

Would you sell your soul for your business?

Yikes! Ok, so we’re not going that far, but what are your limits? What types of businesses would you get involved with and which would you avoid?

What Would You Avoid? What Kind of Businesses Would You Embrace?

Joe and I get into this topic a bit in this episode and later interview the owner of Listing #40200 and his site for sale in the vaporizer industry. We dig into how he built a $130K website inside of 18 months in the, ahem, “vaporizer industry”.

It’s a really insightful interview with an honest/open seller and we really hope you enjoy it.

Check Out This Week’s Episode Here:

Direct Download – Right Click, Save As

Topics Discussed This Week:

  • Niche Selection – Why the vaporizer industry?
  • Why put the site up for sale?
  • Site History, Traffic, and Earnings
  • Opportunities/Risks

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“Building websites was a hobby for me that turned into a full-time gig.” – Christian – Tweet This!

“There’s a big risk in buying a ton of inventory that doesn’t sell.” – Justin – Tweet This!

So – are you interested in building your business abroad? Still not sure why we’re doing it? Let us know in the comments!

 

Justin:                   Welcome to the empire podcast. Episode 134. There’s real money to be made in what some would call it questionable industries or niches. In this week’s episode we sit down with Christian, discuss how his site Vape.Ca was built into $130,000 business in less than 18 months. You find the show notes and all this discussed in this episode of Empire flippers.com/vapes all right, let’s do this.

Speaker 2:           Sick of listening to entrepreneurial advice from guys with day jobs wants 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 checkout the empire podcast. Now your host, Justin and Joe.

Justin:                   First off, if you got a chance to listen to the startup podcasts. I’d highly recommend you check it out. Its run by Alex Bloomberg and his new company called Gimlet Media. There’s an episode on Alex Bloomberg Show where he talks to a self-proclaimed atheist to, make money, made an app for the Christian Bible in Spanish. Now the guys bringing in some serious cash over $100,000 a year, but he’s feeling a little conflicted and after this episode went live, the Internet blew up. There were articles on, business insider, all the Christian sites all the atheist sites. They were linking to it, talking about it. It was a big deal. It is a weird subject Joe.

Joe:                        Yeah, definitely. I never heard of that before you mentioned it here, but good on them. I probably would’ve kept it a little more private if I was involved in something like that, especially if it was bringing in that money I think. Transparency does work and maybe it’s going to work out for him in the end.

Justin:                   You’re saying that maybe the transparency of him saying, this is against my core belief is going to do well for the business. It definitely got him some press.

Joe:                        I don’t know, but it seems to be that it definitely could work out for him in the long run. I’m all about transparency and as uncomfortable as it made me feel in the past, it has done very well for us. I would think that this is a bridge too far where you started to say I’m morally conflicted about this subject matter, but I’m doing it anyway because he’s doing it for the money. Being, upfront and transparent about that, I wouldn’t think it would work out for you. It’s interesting if it does.

Justin:                   This is the question, Joe. At what point is it just business and at what point does it a crossover to where he just won’t do it? Because I know you personally, man. We talk and I know that you’re against guns, right? As long as we’ve had gun, you’re laughing at it [inaudible 00:02:41].

Joe:                        Because I’m not against guns. I don’t know how this aid.

Justin:                   Your anti-gun guy, no, I don’t know. You’re not a big fan of guns. Can I at least say that?

Joe:                        Yeah.

Justin:                   You’re not a fun of guns. Selling even brokering a gun sight, you’re okay with it and we do it right or sites or related to guns and we’ve done it and you’re okay with that but it you, went a little bit, when we do it. Right now clearly we’re not talking about, selling sites that are directly illegal. We’ve had some of those sites where people, example of one, it’s someone trying to sell hacks to, Microsoft software, right? It’s basically ways to hack and cheat and steal and get, whatever and things that are clearly illegal. There’s another one that was, how to protect yourself from hackers, but it was basically a guide to actually hacking. Other people were like, no, we’re not taking that side.

Joe:                        Yeah. I think, unethical sites like that. Then there is a little bit of morality. If the gun sites went to the point of, hey, if you’re going to do a school shooting, this is the way you should do it. I wouldn’t want to sell those sites.

Justin:                   Oh God no. Can you imagine the article?

Joe:                        Yeah.

Justin:                   It would blow up. It’d be viral, right? For sure. This is how you really do a school shooting.

Joe:                        Right.

Justin:                   Oh my God.

Joe:                        Yes.

Justin:                   That’s horrible. See, the fact that you would even be dealing with a site that might deal with that viral content sounds skarch there. It sounds icky. Now we don’t do things that are legal either a porn, right? We don’t do gambling sites. We avoid those types of sites in general. We don’t allow them to be sold our market place, but it’s not a moral issue for us. It’s just we just don’t want to be in that business.

Joe:                        We tried a couple of times, with the sites that were in questionable content areas like that. Every time, the people behind them, they don’t want to give their real names. The information and data they provide tends to be very off and not the numbers don’t add up. In dealing with the people behind the scenes, it’s itchy.

Justin:                   Yeah. The background on this episode really is, we’ve had some buyers say they’re just not interested in, this niche or that niche. One of them actually started it would be have to be a site that he’d be proud to show both his grandfather and his son. If the site doesn’t meet that criteria, it’s not one that he’d be willing to purchase. He got us thinking about, aside from your clearly illegal sites, but just the ones that are in niches that you’re uncomfortable with. Would you, sell a steam with Spanish Bible as an atheist, would you?

Joe:                        I would definitely sell a Spanish Bible as an atheist, but I just wouldn’t talk about it. I wouldn’t go to cocktail parties and promote that.

Justin:                   Or get on a very popular podcasts.

Joe:                        Yeah.

Justin:                   To help pull your name and do it. What about if you’re a Christian, would you sell, a translated, Muslim a book or something? Would you do something like that?

Joe:                        I absolutely would, but that’s just me. I would be more willing to do that.

Justin:                   But there are areas though that you’re just, you probably wouldn’t do right, the school shooting one [inaudible 00:05:26].

Joe:                        Yeah, just the ones that are absolutely immoral and unethical. I think that people that are looking to buy and do the, I’d proudly show my grandfather and probably show my son I good on them. That’s great. I think they’re fooling themselves a little too much. There might be sites that fit their other criteria especially in terms of a risk profile, but happened to be in a niche that it’s not so attractive in terms of the content.

Justin:                   Well, I actually sat down with Christian who is selling a public listing of ours, Vape.Ca. He doesn’t have any problems with some of the fakes, but I think it’s in one of those questionable niches where some people might. I asked him a little bit about that. We actually go through the history of the site, how he created, and what’s worth over $130,000 and he created just under 18 months ago. I think it’s interesting. I want to encourage the listener to think about that.

                                What types of niches are okay, what types of niches is it just business and which we should be knocking into to where you’re like, no, I absolutely would not do that on either moral or ethical grounds or just an uncomfortability that comes with it.

Joe:                        Yeah. When he initially submitted this site, I was to say I was very skeptical. Then when I dug through the financials, the traffic and the way he has it set up, it’s a solid business.

Justin:                   That’s funny that, you had a problem with that.

Joe:                        Didn’t have a problem with it.

Justin:                   Sorry.

Joe:                        I was skeptical because I thought, this is someone, another stoner trying to submit some say that really doesn’t make any money. He slapped up some products on a website and he thinks he’s going to make a gazillion dollars, but he makes good money, solid money. He had a great process in place. He has a fulfillment center and he’s living the dream living overseas and able to run this business remotely. All the numbers do add up.

Justin:                   Yeah, it’s an interesting business man. By the way, when you say all those stoners, you’re really sounded old man. You’re really suck. Come on buddy. I’ve known you a long time. You sounded like an old man talking about all those stoners. Let’s get into the feature listing of the week. It’s time to pay the bills buddy, what we got?

Joe:                        We talking about listing four zero one nine six well, we’re talking about controversial sites. This is an affiliate site created back in August of 2013 and we’re saying it’s in the health and fitness niche, but really it’s a female sexual health product. I’ll just leave it at that. I’ll leave you curious to find more. It comes from our friends Josh and Jill red screw the nine to five.com. We sold some other of their sites and it had similar type of niches going on, I would say we’re familiar with this. It’s a very reliable site making almost $700 a month net. It gets, a little bit of traffic now a whole lot, but it’s well monetized with this affiliate offering.

Justin:                   Yeah, it gets 10 to let’s say $13,000 page views a month. I would say this is one of those questionable niches. I don’t know. It’s not necessarily questionable. I guess it just depends on where you’re coming from. It’s definitely legitimate and if anyone interested in this thing and paid the deposit, get the exact URL and we’ll lay it out for you.

Joe:                        Yeah, I definitely turned a little red when trying to sell this on the phone to customers, but-

Justin:                   Right. I know. Its sounds like okay. Here’s the niche and they’re like, what I, it works though, man. It is one of those niches where it seems a little funny, but hey, it makes money. There are women searching for these key words and Admin as well and I think it works.

Joe:                        Yeah, it’s not a fad. It’s not cool in a way. Anytime soon.

Justin:                   All right man. Let’s dig into the heart of this week’s episode.

Speaker 2:           Now for the heart of this week’s episode.

Justin:                   Thanks for tuning into our seller interview series. Up to date. We’ve got an eCommerce site for sale on the vaping niche. Which $25,000 per month in sales and making just under a six point $5,000 per month in net profit. This is a public listing and the URL for the site is vape.ca. This is listing number four zero two zero zero now we do these interviews to give potential buyers more information about what the seller and the sites are looking to purchase. We hope these insights are helpful for you in making a buying decision. We’ve got the seller Christian here with us today to go through the site and cover everything from niche selection to traffic and monetization. Thanks for coming knockers. Appreciate it.

Christian:             Hey, thanks. No problem.

Justin:                   All right man. Let me do a quick summary I can let everyone know what we’re looking at. The site was built in December, 2013. It’s on the Shopify platform. Monthly revenues are just under $25,000 a month. You’ve got expenses of about 18 to $19,000 a month in net profit of just over $6,000 a month and you’re getting around 55,000 page views per month and traffic. Does that sound about right?

Christian:             Yep. That sounds right.

Justin:                   Cool. Okay. All right. Christian, if you can give us a little bit about your background in building or running websites and online businesses. How did you get started in all this?

Christian:             I got started a long time ago when I was still a student, just googled how to make money online and I got into SEO. I did finance in school and then finally found I didn’t want to do finance. Then I got into the SEO agency world. I worked in a few agencies, been really got the hang of SEO. Start doing my own consulting. I always made my websites since I was 12. Then I decided I wanted to get into a niche that could be allowed on Amazon because that would allow me to maximize my profits through SEO because then it would help me rank race my rankings higher above things like E-bay and Amazon. That’s why I got into herbal vaporizer is in the first place.

Justin:                   Got you. You were looking for anything that could not be sold on Amazon because that gives you an advantage, right? You’re not stuck, competing with Amazon in that space and you came across vaporizers. Why vapes? Why were you interested in that?

Christian:             Well I had used one back in university and I was blown away by how efficient it was. Also the high you get from it is very different from anything else. Also it’s rising industry. Just from the keyword research, you can see that vaporizer searches are on the rise. There’s a lot more companies looking to get involved with the vaporizers, a lot more startup companies making their own vaporizers. The green industry just booming as a whole with Colorado and many other states becoming recreationally legal as well.

Justin:                   Basically the vape industry has arisen with the rise of the legalization of marijuana. How closely associated is these with marijuana. Is it you don’t talk about it on the site, I see. Is it just hand in hand. As it becomes more popular in the US you’re getting more sales, in Canada as well. Are you seeing that?

Christian:             Yeah, absolutely. I don’t mention on the website purely for legal reasons. Getting it over the border when we have to do that. I don’t want to be affiliated with that and I don’t think the new buyer will want to be affiliated with that either. It’s easy to just put herbal vaporizer and then tell them it’s for lavender or Ginseng or whatever the other herb is meant to be. When people look for vaporizers online, they know what they’re looking for. Whether it’s a medical marijuana user or any recreational user, they know what they’re generally looking for when they’re looking for a vaporizer.

Justin:                   Yeah, it’s the water tobacco pipes. They used to call him at the head shops back in the US back in the day. I think everyone gets it. They know what the deal is there. How does the site primarily make money? Is it just selling vapes? What else is sold?

Christian:             It’s almost 100% vapes. The accessories, the vapes, a little mouth pieces that you might need or plugs into the wall. They’re also grinders that I rebrand and then I get them from China. I’d be happy to give that supplier over to the buyer as well. You can get really cheap grinders and mark them up pretty high as well as I give away a grinder with each vaporizer purchase, which is pretty standard in the industry. The lower the price that you can get the grinder for, the more money you make.

Justin:                   I actually saw a review on some forum that was talking about, one of the vapes they purchase from you and they did nice full on images and gave you a nice review. They actually put a post-up there saying they were a little nervous, about hiring for you because you’re one of the newer players. I think that probably helped sales and the more the word gets out there, the better it is. Right?

Christian:             Yeah. I think I saw that post because I was following vape don mention.net and I scared them because I posted too soon.

Justin:                   Yeah. You look at total spammer, right? You wrote the own post. I just, I was thinking about ordering from these guys. What do you think? Then you pop in and saying we’re a great company. Yeah. Everyone was like, I don’t know about this. You’re like, no, no. Really? Seriously. It’s funny. Okay. The vape site you got into it because of the Amazon thing. That was clear and then you had some experience with vapes yourself. After you got into the niche, what were some of the things that you, that distinguished the niche aside from others. Why do you think this is a hot a niche? What do you think the long term prospects are in this industry?

Christian:             I think as recreational marijuana becomes a legalized and more people are using marijuana. It’ll become much bigger. Asides already becoming quite big and there’s already a lot of traffic for it. To be honest, I wish I had more capital to invest in it so then I could do wholesale with other people. Because the amount of wholesale request I get is crazy. Except I’m a relative newly Grad. I’m just two years out of university. I’ve been running this, I don’t really have the capital to invest in it, which is why I want to sell on it. Invest full blown into another project.

Justin:                   The capital requirements for inventory are there, right. It would cost quite a bit to provide enough inventory to supply wholesalers.

Christian:             Yeah, it’s at a level right now where it can maintain the retail side of it. No problem at around 15 to $20,000 but if you wanted to supply wholesale. You would probably need to hold around $100,000 all to get the proper pricing on the vape prices to then sell the shops.

Justin:                   This leads into the next question is actually, I’m going to ask you. Why are you selling this site? Why don’t you just keeping grower and you said the cash which aren’t exchanging and need that for inventory, but couldn’t you raise money? Couldn’t you borrow the money for inventory and go the wholesale route? Why are you still on it today?

Christian:             I’m selling it because I have gotten a pretty big opportunity actually here in Indonesia to open up a Condo whole foods, weight supplement website. The Indonesia market is prime for explosion and I really want to jump on that opportunity. I’ve been talking to a few people, we have a few investors, but I do need money to get that up properly.

Justin:                   You’re going to be selling in Indonesia?

Christian:             Yeah. Selling in Indonesia. I have a guy who lives here who will be taking care of the warehousing and that stuff. Yeah, it’ll be a Co. Dot Id website.

Justin:                   Cool. Okay. What are you doing with the cash when you sell it? What do you need for the investment in the other business?

Christian:             We need about 50,000 from me to start with because opening up a company in Indonesia can be a little bit expensive for foreigners. It’s actually a German guy living in Indonesia that I’m going to be opening it up with. We’re two complete foreigners and it makes it pretty expensive. Just opening will be around $25,000 and then as well as inventory, hiring a few other things the way you want to do right off the bat.

Justin:                   Got you. Okay. You’re selling this so you can raise the cash to A, set that company in Indonesia and then B, get the inventory and everything in place to really get back business open. Let’s talk a little bit about the history of this site. It was built in December of 2013. What was the trajectory of the website when you, built it and started selling. Was it right out the gate you started selling or was it a slower burn?

Christian:             It was a slower burn. It was more of a hobby for me to be in with. I don’t really like to watch TV or anything. I like to make websites. This is more of a hobby and it turned into my full time gig when I, it started making more money than my full time gig. What I basically started with, just set up a basic website with a few products and then I specifically picked products that had high keyword volume. Then I just targeted those keywords as well as vaporizer as a whole.

                                If you google vaporizer in Canada, we’re always coming up number one or two, yeah, once I hit that one or two invade prices, that’s when it exploded. Then also built out the keywords like magic flight launch box, A-riser, volcano, stuff like that. Now it’s getting keyword searches from all of those really good keywords and driving sales from all of them. It did take a while to build the links and build the content and everything. It was a few months’ work for sure.

Justin:                   When you picked your first few products that you’re selling, did you just buy the inventory and ship it to Canada or was it, you put it up and test through? Which ones were getting traffic? How did that work out?

Christian:             At first, at the very first I was actually working mostly actually I wasn’t working with them. I was working almost at a loss with a head shop near me because I wasn’t sure what we’d sell, what wouldn’t sell. I would list almost everything they had accessory wise as well as a few vaporizers that I was getting. Mostly A-riser products and magic flight launch box. Which is only around four or five products to start. Basically I just wanted the site to look big from the gig.

Justin:                   I love that.

Christian:             From the get goal.

Justin:                   Okay. You go to the head shop, you see what they have available, you buy some. Take really good images or whatever and just see what sells. Who cares if you’re not making any money at that point? You just want to see if you can get some traction. When you start getting traction and you can go and get them online and obviously get it for less than you’re buying retail at the local shops. Yeah, man, that’s good. [Inaudible 00:19:03].

Christian:             That was exactly it. Yeah.

Justin:                   Obviously there’s a big risk if you’re out there just buying a ton of inventory doesn’t sell. This really minimize your rest building an eCommerce site. That’s smart, man. I dig it. Well, what have you tried on this with this site or would this business that just didn’t work? Was there anything that was just a failure? You bought the product and it’s socked or people didn’t buy it or anything like that.

Christian:             To be honest, people buy almost everything. I buy for some supplies. That let me buy one of everything. Not that I do, but there is some more obscure items like the Zephyr Ion for example, and I never think it’s going to sell. Then every two weeks the $500 weird vaporizer always sell, there hasn’t been much that sits on the shelf to be honest.

Justin:                   Is there anything that you wish you would have done earlier with the site that you realized was a win that you were like, God, I wish I would have done that from the start?

Christian:             Not particularly. I wish I had bigger scale and then a little more capital because there’s a competitor called Vape World and that’s probably the main competitor. They’re not a competitor in a sense that they sell the exact same stuff. It’s because they sell the premier products, or at least according to the customers. It’s a premier products, the packs and the firefly vaporizers and they just have an exclusive deal with packs and firefly.

                                That’s how they worked it out and packs and firefly and now won’t sell to anybody. No other vaporizer companies online can hold them. I just wish I could get in there and get an exclusive deal because that differentiates you from the crowd. I tried, I went to Hong Kong to meet with the Vape team guy, which is a new vaporizer. I went to meet with them and try the new vaporizer and then he blew the news that he had already done the exclusive deal with the Vape World.

Justin:                   God.

Christian:             At a good time.

Justin:                   Yeah, it’s interesting. It’s a risky move for a manufacturer, right? They’re tying themselves to one retailer. That retailer just doesn’t get it done. That can be scary. It sounds it’s working out for them in particular. Do you have any insight into how big Vape World is? How much business or doing anything like that?

Christian:             To be honest. I don’t have numbers or anything. I know they have at least 10 employees. They go to all of the big, what are they called, where everybody gets together?

Justin:                   Conferences.

Christian:             Conferences. That’s the word. Yeah, they go to the big conferences, spends money there. They have money to spend, but I couldn’t give you exact numbers on it.

Justin:                   Got you. Okay. Let me ask you this. What do you think with this business, just work that was a real winner, something that you’ll apply to future websites or businesses that you learned during the process of building this business?

Christian:             I think one thing that really worked was paying attention to the customers and eating a bit of money when they have a little complaint about something tiny, not working. Or if they didn’t get a grinder when I know we sent them a grinder and they might’ve thrown it out by mistake or whatever. Just send them another grinder because it only costs $2 for me to make. Stuff like that has gotten really, good reviews on the website. People have noticed and time and time again. I get emails from people saying, hey, I just ordered it. I just saw such good reviews on the website. I can’t wait to get the product. It’s paid off having good customer service and it really doesn’t cost that much money. In the end of the day. It’s worth it.

Justin:                   Because you’re buying at wholesale whatever and your shipping costs should be lower obviously. Yeah, that’s interesting. Over delivering for your customers or something that you are going to continue or a trend that you’ll continue with future businesses. Let’s talk a little bit about traffic and earnings. How much of that your traffic right now is organic, how much of it is referral? Are you doing any paid traffic? Where’s that at?

Christian:             It’s almost 100% organic traffic. It might say referral in analytics because they don’t necessarily disclose all of the organic traffic, but it’s almost all organic. I attract some referrals and there’s one called the Vape Critic and he sends me about one to two sales a month and he’s the biggest vape reviewer on the Internet. I give him 10% of the sale.

Justin:                   Do you have affiliate agreement set up with anyone else or just him?

Christian:             Just him because he’s big and I thought if he was big he could send a lot of traffic. He’s not sending as much as I thought he would.

Justin:                   Okay.

Christian:             He’s still-

Justin:                   Did you ever, you just have basically a handshake affiliate agreement with him. You don’t have an affiliate program in place for this as of today, right?

Christian:             No. That’s another opportunity with other Canadian websites is setting up that affiliate. I haven’t really gotten down and dirty with it. I just basically set it up for the Vape Critic.

Justin:                   Have you done any social stuff? Any paid Facebook traffic. Have you got built a Facebook page at all or is that frowned upon on Facebook?

Christian:             There’s a Facebook page with about 400 likes, but Facebook won’t let you promote those posts. Anything to do with vaporizers or e-cigarettes or anything like that. Facebook just won’t let you.

Justin:                   What about AdWords? Have you done any AdWords or is that not allowed? Other.

Christian:             AdWords is, if you fight with them you might be able to get accepted. Except they’re very strict on it. They don’t give straight answers. I’ve been in fights with them and I just got fed up with it and said screw it, but it’s worth looking at again. If somebody buys it, go with a fresh new face and ask them, hey I just bought it. How can I get this on AdWords because our competitors are, Toronto vaporizer, Canadian competitor is on AdWords. I think that’s our number one revenue driver.

Justin:                   Got you.

Christian:             If they can be on it, then that was my argument to Google and they just blocked.

Justin:                   It depends on whether you can win the battle. It doesn’t look good, but it’s possible apparently. Because there are some competitors there. Have you done any deals with very popular Facebook pages where you do a sponsored or paid post or anything like that? There’s opportunity there I’d imagine.

Christian:             Yeah. There’s tons of websites and Facebook groups that promote the use of, and I haven’t paid to promote a post or anything like that. I’ve just never gone into that. I know SEO the best. That’s what I feel most comfortable with. That’s why I’ve stayed to SEO and it’s worked for me. It’s another reason why I want to sell it is because I don’t know whether to take huge flow or how to really take it to the next level. It’s a branding exercise as well.

Justin:                   Yeah.

Christian:             Then I’m not really familiar with.

Justin:                   I got to tell you, I, because I just understanding on marketing, if you were connected in those groups, those communities online for weed smokers, for that crowd, I think that you could have sponsored opportunities. You could just have some just being there helpful answering questions about Vapes. I think there’s opportunity there, for someone, a potential buyer that would like to do it like this. An opportunity. Okay. I got an understanding a bit on your traffic.

                                It’s most of the organic, you tried to go to page stuff on Facebook’s it’s a no, ad words is a question mark, but definitely paid opportunities in some of the other communities is not something you’ve tried, but there’s an opportunity here. Let’s talk about the earnings. You’ve been on a bit of an incline since you started. It seems things are a bit more stable now, but they were growing pretty heavily toward the second half of 2014 and all the way through the beginning of 2015. Tell me a little bit about those earnings, where most of your customers coming from. Are they repeat buyers? First Time buyers?

Christian:             Yeah. Most of my customer, almost all the customers are coming from organic or hearing from friends. I do get quite a few repeat buyers. I don’t have exact numbers on that. I can find it if you wanted to. Yeah. A lot of people do come back because the service is really quick and they had a good experience.

Justin:                   Do you have an email list?

Christian:             Yeah, it’s over 1500, I believe.

Justin:                   Okay.

Christian:             I can check that quickly too.

Justin:                   Some of those are customers, some of them are not customers, right?

Christian:             Yeah, that’s correct. I do have the whole email list of the customers obviously, but that’s another opportunity. I haven’t done any email outreach either.

Justin:                   Christian. What marketer or are you man? What are you doing there? What are you doing?

Christian:             I’m an SEO guy.

Justin:                   Entirely. No, I think sending out some emails with relevant content even in or around your niche or parallel industries. I think there’s an opportunity for that. I’m actually surprised that you haven’t been doing that. I think. What platform are the subscribers on? Is AWeber get response what is it?

Christian:             It’s on MailChimp.

Justin:                   MailChimp. Okay, great. How much content do you have on the site? Do you have a blog associated with it? How, much content is there overall?

Christian:             There’s a blog that’s very on and off. That’s been posted maybe once a month on average since it’s opened. Most of the content is on the product pages, they’re pretty thorough. That’s why I made the, it took a long time to actually get the product pages up, how I wanted to. If you go, they’re pretty in depth reviews are there, has the breakdown of the type of vaporizer and everything on the left hand side. As well as a top 50 vaporizer buying guide, which took a long time to get together as well. This response, if it looks beautiful and it just gives people a breakdown of how to base one vaporizer against another.

Justin:                   Cool.

Christian:             It helps them in their buying as well as a quick, there’s a vaporizer buying guide as well. Whenever somebody has a question more usually, it goes to the live chat. Which is handled by another company, but then they’re referred to these top 50 vaporizer page in the vaporizer buying page. It really answers any of their questions and it really helps with the buying process.

Justin:                   Cool. Okay. I see, I’m looking at your product pages right now and I love the fact I can zoom in or as I hover over the images it gives me a nice clean look at the products. Yeah, your descriptions are well filled out and I think very clear very helpful, shop fly man. They run some good looking sites.

Christian:             Yeah.

Justin:                   I know it takes a lot of work on your head too, but I Shopify hours for sure. Okay.

Christian:             Absolutely I love them.

Justin:                   Yeah man. I like the site. It is looking good. Earnings are definitely have been growing a bit more stable in 2015 but they were growing all through 2014.The context of the blog is off and on. You’re putting one post up a month or so. Let’s talk a little bit about opportunities. Where do you see the greatest opportunities for someone to buy this site and really expand it over the next six 12, 18 months?

Christian:             There’s a few ways they can. I was speaking about before, wholesale is definitely a good way to go because not only will you get good prices on vaporizers for to sell to other stores. Then that will increase your profit of your own sales because you’ll be getting better prices as well.

Justin:                   Yeah. You’re dropping your cost across the board until your retail sales, you’re making more margin.

Christian:             Yeah, that’s exactly it. Yeah, that’s the first way. Second way is I was really thinking about getting involved with E-Cigarettes and Mods, not necessarily e-juice but other E-Cigarette things. Vaped is a perfect brand name to get involved with something like that.

Justin:                   Yeah.

Christian:             It’s not necessarily limited to vaporizers. It can be E-Cigarettes for sure. That’s a huge market in Canada right now that there aren’t any big websites doing it. The biggest problem with that was payment processing. It was a pain for me because I was just out of university. I didn’t have much credit history and I couldn’t get the payment processing that I wanted to. I kept getting turned down by the big guys for if I wanted to sell E-Cigarettes. There are people doing it online, if you find the proper payment processor, you can do it.

Justin:                   I know a guy sold his E-Cigarette company in the UK for eight figures. Yeah, there’s some serious money-

Christian:             Wow!

Justin:                   In that business for sure. Yeah. He’s good man. He made a few money, he’s out. Okay. You said there are payment processor issues [inaudible 00:30:42] E-Cigarettes. Who are you using for payment processor right now with this site?

Christian:             Just PayPal. It’s just running off PayPal.

Justin:                   PayPal straight up. You take credit cards but only through PayPal. PayPal’s the only thing that you’re currently using.

Christian:             Yeah. Right now it’s PayPal. It’s another opportunity to get credit cards pricy there too. Because a lot of people understand that PayPal does accept credit cards, but then every often you get the person just doesn’t get it. Wants to put it in their credit card number right away. It could increase your conversion rate if you get, proper payment processing as well.

Justin:                   Do you have any one click upsells in the funnel at all? Do you have any on your cart abandonment emails that go out and anything like that?

Christian:             Yup. The pretty standard cart abandonment that had been changed a bit in Shopify. They bugged them twice if they don’t buy as well as upsells on each product page, there’s a product accessories.

Justin:                   Yeah.

Christian:             If you click down on it, you can see little check boxes for what you want to add. That can also be done more obviously if you wanted to or even a pop up as you checkout. Adding on, I do need a grinder, hey, do you need this plugin? Hey, do you need, whatever it is.

Justin:                   Cool.

Christian:             It might be able to be done a little bit better. Yeah.

Justin:                   Have you done much split testing on the page itself? How do you, which ones do you have, which parts you have above the fold, just your top sellers? Have you tested through that at all now?

Christian:             Yeah, I basically run the top sellers on there.

Justin:                   Okay.

Christian:             I haven’t done much testing on it.

Justin:                   Okay, cool. All right. I see some opportunities here too. You mentioned the wholesale opportunity that’s simply a good one. I love the fact that it can improve your margins. The fact that you’re not doing any affiliate marketing really aside from the one seems a pretty big opportunity. If someone understands that space, it could happen and set up an affiliate program here. I think that would be pretty interesting. I think that connecting in some of the forums and communities, if someone knows how to do that and get in there and connect and become a leader in this niche already.

                                I think there’s opportunity for someone to get in there and make a name for themselves. Really promote the brand that way. I think content marketing would be discreet. I have no idea if this is true, but like really putting some good content out there, comparison type content, this vape versus that vape. Getting some major people on there that are, vapes, smokers or whatever. Getting them on to talk about their different experiences I think is interesting. Maybe even like a podcast on this would be interesting. I don’t know if they have any or your potential audience would be listening, but it’d be fun I guess.

Christian:             Yeah, there would definitely be people who are listening. There’s a huge community behind it. There’s a big forum called fuck combustion and suppliers actually or retailers can actually post on there, which is a problem for me, but it’s a massive community and I think a podcast would do really well.

Justin:                   Cool. All right. Let’s talk about some of the risks with this business. Right? It is, it’s not illegal at all by any means, but its borderline. There’s some questions here about like the niche it’s targeting, but that was one of the things you mentioned as a risk. Can you talk about that a little bit?

Christian:             Yeah. I just wanted to make that claim before somebody buys it is there is always the risk. You never know what’s happening with the Canadian government and there has been problems with a smoking paraphernalia before. I don’t think there’ll be a problem. I think we’re past that in Canada. I don’t see it coming up again, but it’s something you should be aware of and keep an eye out for in the news. Is just anything to do with the smoking paraphernalia, vaporizers, anything possibly becoming illegal, having problems. It just something that you should keep an eye out for.

Justin:                   Okay. All right. Can you tell me Christian, a little bit about the type of work you do? What do you do on a daily basis to keep the site running? What do you do on a weekly basis to keep the train to chug it?

Christian:             Yeah. Well, I’ve been traveling for a while now and I haven’t been putting too much work into it. Every day. I try and get on for around half an hour to an hour. This is to answer basically a customer emails. A lot of people are anxious to get their product and they email almost right away just asking for a tracking code.

Justin:                   Yeah.

Christian:             Or if the product is faulty. I have to talk to the manufacturer and then get that connection going.

Justin:                   Do you have automatic emails that go out with the tracking code or no?

Christian:             Yeah. That’s all automated. They get that for sure through the fulfillment center. A lot of it you don’t have to worry about, it’s just here and there. Out of every 100 orders, maybe one or two we’ll have a problem with the product. Then again, it’s the manufacturer’s fault at that point. Then you just have to have to lead them to the manufacturer as well as ordering products. That’s something I still do myself.

Justin:                   How often do you do that? Once a week. Once a month?

Christian:             Probably about twice a week from different suppliers. I put an order twice a week. A lot of them have free shipping, you can order as much as you want or as little as you want. It doesn’t really matter.

Justin:                   Most of your suppliers are in what country?

Christian:             Canada, they’re almost all Canada.

Justin:                   Cool. Okay. You can get up there pretty quickly and everything. You said right now you have about $15,000 Canadian in wholesale value and inventory, is that right?

Christian:             Yeah, that sounds about right for right now.

Justin:                   Okay. That’s not a lot of products for how much product you’re pushing through. You don’t have a whole bunch of extra inventory. It keeps you lean and mean, but that’s probably why you’re ordering twice a week too, right?

Christian:             Yeah. How I order, it’s on the seat of my pants and just sometimes I can sell it of one thing. If there’s 20 of it, it can be gone in a day and a half. Then that can hold back revenue as well. The revenue might not be maximized right now because we might’ve been sold out of something. Yeah, maybe order in bigger quantities. That’d be a better way to go, but I just don’t have the capital. To do it.

Justin:                   What are your margins in general on average on that? The products you’re selling.

Christian:             The margin on each product is only making 30 to 40% on each product.

Justin:                   Okay.

Christian:             Bottom line, yeah.

Justin:                   We’ve got about a little over $18,000 in expenses. Most of that I’m guessing is cost of goods. Is there anything else in there? Do you have any advertising expenses? Customer Service expenses?

Christian:             Yeah. Customer service is a lot of chats. The live chat is 250 American a month and that’s done through another company and they do a really good job. They handle most of the small little inquiry’s like, hey, do you accept credit card? I only see PayPal. Do you, can I take my credit card or whatever the case may be. If they can’t handle anything, they email it over to my email and it’s separated so then I’m just go through those. There aren’t more than one or two a day because the live chat does such a good job.

Justin:                   Got you.

Christian:             Then the other costs, it’s the fulfillment center. They take [inaudible 00:37:16] each product sold.

Justin:                   Okay.

Christian:             That’s another costs.

Justin:                   Cool.

Christian:             Those are the main costs.

Justin:                   It makes sense. What skills or requirements can you see being helpful or useful for someone looking to buy this site? What kind of skill sets could they have that you think would help them take over and then grow the site pretty easily?

Christian:             Someone who’s had experience with branding a website before. I liked the Vape brand name. I think the logo is pretty strong, but I don’t know how to really take it to the next level and make it into a really multimillion company, which I think make them be. Other than that, if you just want to keep the website going and make a bit of money, then customer service, being able to order products is important. If social media, definitely, I don’t pay much attention to it, but if you know how to do social media really well, get in there and you can kick some ass for sure.

Justin:                   You’re effectively an SEO guy that built this business on the back of SEO. They’ve got it ranked and it’s doing well there, but you’re not really a brand builder. Someone who could step in and take that to the next level. Let’s get them some additional information or questions that we might have. Would you be willing to sign a non-compete for the new buyer? Then one that concerns when you buy a site is that, your, the guy just sold to you is now you’re a direct competitor. Would you be willing to not compete in the Vapes industry for a while?

Christian:             Yup, absolutely. That’s no problem.

Justin:                   Okay. Then how much support are you offering buyers, you want to do some phone calls? Email.

Christian:             Yeah, I think I said three hours of phone calls and then email for a month. If he keeps emailing me or she, that’s no problem. I can answer emails. I guess a month.

Justin:                   In terms of turnover, I would say you turn over the customer list you are you going to turn over the email list are going to turn over a smaller social media profiles. All the [inaudible 00:39:02] the Shopify site and that should be good with the support. Now the fulfillment center, you’ll make an introduction there and make sure that that’s handed off the customer service team. You’ll hand that off. Now ideally, you would definitely take 100% offer for the site. No problem. That’d be ideal.

                                Are you open to something like a split out or a split or an earn out? Let’s say for example, someone came along and said, look, I’ll give you 70% up front, but I want to give you 30% after 30 days of training. Or they said, hey, I’ll give you 80% upfront, but I want to give you 5% over the next four or six months. Is that something you’d be open to?

Christian:             The minimum would probably be 85% but yeah, 85% is probably the lowest. I’d go.

Justin:                   Well, it’s not ideal, right? Always depends on. It depends on what the offer is and what you’re looking at. That makes sense. Okay man. Another thing that we see sometimes, and I think it might make sense in a site like this, it might actually make sense for you. Is if a buyer comes in and said, hey, I’d love to buy from you, but I’d love to keep you on as an advisor. Would you be open to retaining some equities, say 10%, 15% in an advisory role as they take over the site that may require getting on the phone once a month or something like that. Is that something you’d be open to?

Christian:             Yeah, I’d be happy to do that.

Justin:                   Cool. On the upside for you is it someone takes it over and is a brand builder and they build it into a massive brand. You still love equity and you get the benefit of them building it up. Right. Cool man. Let’s do a quick wrap up. Just talk about, and then what we talked about so far. The niche is Vapes. It is Vaped.Ca it was built back in December of 2013. The monetization is eCommerce. You’re selling their products directly through a fulfillment center and the customer service, it’s already set up. It’s plug and play. Net profit we’re at $6,048 and 53 cents. That’s on a six month average. You’re getting about 55,000 page views per month. Christian, can you give me your 3O second pitch on why this is a really good pickup for a new buyer?

Christian:             Yeah. Vape would be a great pickup for a new buyer because there’s a lot of opportunity to expand the business, whether it’s through branding, social media, posting on forums, going the wholesale to shops around Canada and the United States. Expansion to the United States, expansion to Europe, expansion to Asia. There’s really so much you can do and the marijuana market is really growing. I think everybody knows that it’s a hot market that everybody wants to be in. I think it’d be a win for the right person to come along and buy this site.

Justin:                   Awesome. Christian, well thank you so much for, for anyone listening to this. If you’re interested in hearing more about this listing, if you’re on you tube or wherever else, there should be a link to the listing page in the comments. If you’re on the listing page and you want, full details about this, look in the top right hand side, you can pay a deposit and we’ll give you everything you need to make an informed decision. Do your due diligence. Thank you so much for your time, Christian. Appreciate it.

Christian:             Cool. Thanks Justin.

Speaker 2:           You’ve been listening to the empire podcast. Now some news and updates.

Justin:                   All right Joe. Let’s get on some news and updates. First off, we’ve got a bunch of new sites getting listed this next Monday we’re looking at what, eight, 10, 12 new sites.

Joe:                        I don’t, I’d have to check the numbers, but yes, it definitely will be a bunch of new sites.

Justin:                   We’ve got a bunch of them coming out of the hopper coming out of the vetting process and ready to elicit, which is great because this last week we listed one new site. When I thought it was a brand new site was actually a realist. That was, I had some guy reached out to me on Twitter, hey, is this really a new site? I was like, yeah, of course it is. It turns out was not, we were just relisting aside those that were previously. Yes, we’re going to have a bunch of new sites. We’re interested in buying some, I’ll check it out this next Monday.

Joe:                        Make sure you’re on the list.

Justin:                   I don’t think I want to bring up Joe is that we’re actually feeling a website buyer’s pain and hesitancy when it comes to purchasing sites. We’ve got some cash from our investor for the investor program we’re looking to deploy it, but there are a bunch of sites that just don’t meet our criteria and we have a specific price range and we’re trying to build out a portfolio and it’s difficult. I’d say 36 days ago we had the right sites and the right price range and we don’t today. I can understand why buyers sometimes where they have a price range, they have a set criteria how it can be difficult to find the right site.

Joe:                        Yeah, I think that’s definitely some of the issue and I feel you’re coming from, it could be a little too much of too many cheats and none of Indian there as well. Where if we had one person making decisions, I don’t look to buy and what not too. We might move forward on some of these deals.

Justin:                   We absolutely would have moved forward. I’m certain of it. The thing is when you have one person making the decision on criteria that’s not fantastic. You also make really bad decisions too. I think that’s our struggle right now is trying to balance that out. Actually one of the sites that we’re looking at is Vape .Ca. The ones we just talked to Christian about, and this is one of the sites we’re considering for the investor program. I think there’s a lot of opportunity. There are people that would like to be in this space but don’t necessarily want to run the site.

                                I think that would open this up to them. This is one, we’re definitely considering. Other thing I want to mention is we had our quarterly strategy session last week, last Friday, and we had in the office here in Saigon and we recorded it, man. We recorded the whole meeting. Now we’re not going to be sharing that completely publicly unedited or anything, but I would like to take sections of that strategy meeting and turn it into a podcast. I think if we can break down some of the meeting and talk about different things or things that happened I’ve got to make for a really interesting show.

Joe:                        Yeah, it would be interesting to break it down and talk about different segments. Maybe we can have a round table with both Mike and Andrew on and talk about some of the topics that came up.

Justin:                   Yeah, I think that would be interesting. Definitely an insight review. I know the wide list in the podcast. I would love to get some inside information. I love to be on the fly on the wall that’s listening in to some of these conversations and now that we have recorded, which is a little freaky, I think if we can go back through and look at certain points and discuss I that’d be some value to that.

Joe:                        I don’t envy the editor’s job.

Justin:                   Yeah for sure. All right man. Let’s move it to the listener shop section also knows the indulgent ego boosting social proof segment. First off, we have no new iTunes reviews buddy. I would love some. If you’re listening and you appreciate the show and he appreciate the work that we’re doing, please stop on over to iTunes and give us a review. We’d really appreciate it. We’ll get you on the show. I got a couple of mentions. We had a great monthly report that just came out, we broke $500,000 in sales from March.

Joe:                        Woo.

Justin:                   Yeah Buddy. Not Bad and we got some Twitter love from that Ben Hiebert. [Inaudible 00:45:21] for the killer month crushed status. Then Hebrew runs natural stacks.com they recently sponsored a poker player in the world series of poker tournament. Guy end up winning. They got a ton of love out of that. Their company was blown up for other reasons, but that was just icing on the cake. They’ve got a promo video I was watching.

                                Those guys are crushing congrats [inaudible 00:45:44] over there. We’ve got Wilts Journaling who one time reached out to us when he was just graduating college. Send us an email, ask some questions, and we answered it. Come to find out and guy’s crushing it. Ends up selling on Amazon. Did I think $6 million in sales last year. He gave us a quick message saying, hey guys, nice bounce back after last month. I talked to him on the phone recently and he’s been doing a lot of business for his parent’s company and he’s looking to go off on his own and see if you can recreate that Amazon success. I’m wishing him all the best.

                                We’ve got Tony who asks, are you listing some new sites today haven’t seen it come out yet? If you do want to see new sites, they’re always listed on Mondays and if you’re on our email list and the buyer lists, we’re going to send you an email. As you know right away when those new listings come out. Make sure you get on there. We’ve got another guy on Twitter, Saw Ziad said, hey, I’m interested in one of your deals, how safe is paying a $6,000 deposit with you? Thanks. I think I reply to something sharp saying, hey, could you use the beer money man? Sure. Send the 6,000 of it, but to be clear, deposits are completely safe. We refund deposits on a regular basis. It’s 100% refundable. If for whatever reason you don’t want to buy the site, it’s just a way for us to help filter people out.

Joe:                        Yeah, just to further that a little bit more. We have three different people looking at those deposits and the last one is our bookkeeper every month who make sure that unused deposits get refunded back.

Justin:                   Yeah. That’s my biggest concern is that someone deposits and then they never asked for it back. They never say they’re done looking at the site or whatever and it just rolls over or whatever. We have a bookkeeper checking that too, to make sure that all deposits for feedback, even if they forget we won’t. We got a message on Zendesk. We get a lot of good positive messages, but I want to read out one that wasn’t so positive. I gave us some feedback. Now this is a seller that submitted his listing that we ultimately reject it. I’m not going to say his name because I don’t want to put him under the gun, but this is what he said, man, that was disappointing.

                                That was a lot of time and effort spent for nothing. Maybe you could have told me beforehand that you can’t list sites with declining revenue or you could have told me that from the first screenshot of ad-sense I sent you, it took more than a month for you all to tell me that you wouldn’t bother even list my site. Additionally, my request is ignored for over a week before I got a reply. I probably will not be back with any other sites of mine, but perhaps you’d use this feedback to make sure you don’t lose any other customers. I appreciate this feedback. We took a pretty close look at these and we just recently got back to him. He did take long.

                                Remember this is a time where he submitted his site for listing when we were worse we were like four weeks of our two to four week process. We’re getting it down much faster now. Probably about a week, week and a half. I’d say. That it wasn’t just a declining revenue problem though because we’ll take sites with declining revenue. It’s looking at the site overall and there were other problems with the site that I think would make it very hard for a new buyer to recreate the success that it’s had. To pull it out of the decline that it’s in, and for those reasons, that’s why we rejected it.

Joe:                        Yeah, exactly. It’s definitely a very interesting site in terms of its SEO set up and the way it was gaining traction for organic traffic. That’s really the reason why we rejected it. We really should have recognized that a lot sooner and we’re working on that and that’s one of the reasons why we have Andrew here for customer service. We should make sure that doesn’t happen again. Appreciate the feedback and we’ll definitely take that under consideration.

Justin:                   Next thing, we’ve got a couple of mentions. I was interviewed on the income school podcast about buying and selling websites. These guys are pretty cool. They’ve actually bought a site from us and they talk pretty publicly on their site. Then their show about the success they’re having with that, some of the changes they’ve made to it. They invited me on and it was great to talk to them. Because I think they got a pretty good understanding of, they’re not just within it from the buying site website standpoint but an investor asset standpoint.

                                We’ve got to talk about that a lot more than I usually do an interview. That was fun. They beat me up a little bit on the contracts piece. That was the piece that they disagree with. They say, look, you guys should really do contracts and contracts are protective. Yes, sometimes, we’ve talked about this before but with a contract, how enforceable is it? Sometimes it is enforceable if you have two people in the US. I told him, I said, look, we do contracts sometimes.

                                It’s not like we just refused to them overall. We never do a contract. It just that, we prefer not to use contracts. Because ultimately they’re only as good as they are enforceable and you can clarify points in a deal without necessarily using a contract. It is really interesting interview. I, encourage you to check it out. I’ll put a link to that in the show notes. We also got a mention from our buddies over at Effy international regarding escrow. We had mentioned previously that we had a problem with some scammers, scamming us for about $25,000.

                                I think I had mentioned on Twitter, briefly in a monthly report. They got all over that and started, mentioning escrow is a great way to avoid that. Unfortunately, in this case, escrow would not have protected us from this particular issue. I’ll get into the details here in a future blog posts. It’s interesting that they use that as a point to pitch escrow.com. It’s hitting to me like I don’t have any inside information on this, but it’s almost that they own escrow.com or they got stock in that company or something. Right? They are pitching all the time.

Joe:                        Yeah. I’m talking to the escrow.com guy tomorrow night, I’ll let you know how that goes. Yeah. In my experience, I don’t see what they bring.

Justin:                   What’s the value? They don’t checks for the site. Right. They send you the third party arbitration if there’s any kinds of speed, they don’t step in. They don’t specialize in website transfers. They don’t know, how to help with the process if there are problems.

Joe:                        Yeah. Basically they just-

Justin:                   I don’t trust them to do anything.

Joe:                        Yeah, they used to evaluate the domain name transfer. That’s all they do. Yeah, I definitely, they’re not set up to evaluate real revenue generating websites. It’ll be interesting for me to talk to that guy, see what he has to say. Then come back from my thoughts on our podcast next week, which would be more about this whole scammer incident.

Justin:                   Yeah. Definitely come back and let me know, man, I’d love to hear what they have to say. I say we are episode 134 the Empire podcast. Thanks for sticking with us. We’re back next week with another show. You can find the show notes for this episode and more at Empire Flippers, dotcom slash vapes, and make sure to follow us on Twitter at empire flippers. See you next week.

Joe:                        Bye everybody.

Speaker 2:           Hope you enjoyed this episode of the Empire Podcast, the Justin and Joe. Hit up Empire flippers.com for more. That’s empire flippers.com. Thanks for listening.

 

Discussion
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  1. Jon Tucker says:

    Justin, we’re the website chat company he mentioned and you and I exchanged emails a month or two ago about possibly working together – small world ; )

    Looking fwd to reconnecting with you and Justin soon and helping you out if you buy the site thru the investor program.

    Great interview!

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