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ABOUT THIS EPISODE

In episode 16, Justin and Ace describe the steps they'd take if they had to start their business over from scratch.
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TRANSCRIPT

00:00:00I would definitely feel a lot safer putting that fifteen grand and trying something then putting that hundred grand and not having any self financing and doing a deal the wrong way buying and selling businesses just got a lot easier welcome to the web equity show where thousands of
00:00:18successful entrepreneurs go tto learn about buying growing and selling online businesses your hosts justin cook and ace chapman share their real life advice examples and expert interviews to help you build and grow your own online portfolio now to your hosts just in an ace what's with the show
00:00:40have sixteen i'm your host justin cook and i'm here with my co host ace chapman what is going on brother how you doing I am great so they're excited to get into this episode we got some meat questions and some big news yeah that's big news here's the
00:00:55sad news right this is our last episode of the season so we're going to break this up into a couple of seasons next season we'll be talking all about buyers so ideas season to would be completely buyer focused on you know starting from the very beginning all the
00:01:12way through the deal and then expanding growing site looking your second third fourth fifteen deal so we want to basically have a body of work that we can point website buyers to and say hey these are our best tips is our best plan for website buyers you go
00:01:28listen to this season and you're good so i think it would be really exciting i think our listeners we're going to get season three again will be sellers of course and i think i really like the form and i think it's to be some fun we'll probably be
00:01:39back with new episodes in february two thousand sixteen so that's what we're looking at right now yeah i think for people that are getting into the space and what we talked about it would get questions and you know both of us are talking to a lot of bars
00:01:54there are a lot of people that are coming into the space that are completely new they have no i bia even just at the most basic level so this would be an opportunity for us to start at the foundation of just you know the most basic knowledge and
00:02:09then build into some of the more advanced strategies and be able to dig a little bit deeper into the specifics yeah we've got a lot of questions from people that either brand new or they want to like share some information with someone who is brand new and it's
00:02:23like we don't really want to cover that in our general episodes it's like you know it's kind of like really newbie stuff but still there's a need for it so i think if we can do that then work up to like the very kind of like advanced level
00:02:35strategies later on i think we'll get some interesting that people appreciate all right man enough about that let's talk about we're talking about today which things be really fun how we would start over from scratch so here's the scenario you have no connections you have no customers how
00:02:50would you get started again and what would you do differently this time around then you've done previously i know this is an exciting question i love it when you told me about the idea for this episode you know i started thinking about it's like wow it would be
00:03:03way different today than the way i started you know sixteen years ago on my first website obviously but i think the dynamics even though the last couple of years and the market have changed quite a bit and looking back i think this will be a fee fun episode
00:03:20tow walk through i know some of the things you're thinking about i know some things i'm thinking about i think people gonna be surprised at some of our ideas yeah i think you'd be surprised where ideas also greedy the climate has changed a bit so some of the
00:03:32things that you did sixteen years ago some things i did five or six years ago it's just not quite the same and so there are some changes that need to happen so we're going toe hashed re that i think it also puts us in the shoes of some
00:03:42of our listeners right they might have you know fifty thousand hundred thousand two hundred dollars and dollars he'd like to invest but they don't have the first clue on where to start they don't have the confidence that this kind of works that buying and selling web sites you
00:03:55know you could be a profitable venture and so there hasn't it right and so i get where they're coming from we're going to try to break through that using our experience only yeah yeah you know what the thing is we're talking of people we get a lot of
00:04:07those folks that air coming in just like we talked about that have those initial questions and just very basic ideas and a lot of people just like where do i go what do i do there all these different business models you know what sit out by what's my
00:04:21first step and so i think this will be a good promise for some of those folks so the idea is we're going to beat each other up right i'm gonna ask you the questions we're going to go through the process you're going to answer some questions and then
00:04:32i'm gonna beat you up about it man i'm going to dig in teo yeah dig into a little bit and we'll see where it winds up see if we can hash out some value out of the deal Perfect perfect right now before you that we've got some listener
00:04:42questions first up we've got sean smith said hey guys i love your podcast i have a question about capital structure for an acquisition what percentage of the purchase price is a traditional under i'ii bank likely to finance a deal did they even a look att online business acquisitions
00:04:58or does the buyer need one hundred percent cash How about you doing a podcast that was discussed in the capital structure of some of the deals you worked on that would be interesting looking forward to respond to keep up the great work sean all right sean well great
00:05:09question you know our seller's willing to finance deals you know i understand especially the buyer like a i'd like to not have to put up all my own cash i'd say that used to not be is likely that the bank would finance a online business or website that's
00:05:23changing now especially with like spf loans they're opening up a bit now the requirements are still pretty strict and it may take months before you were able to actually you know get your hands on that money get your hands alone but it is possible today yeah it is
00:05:36i mean we're seeing some deals especially on the larger side you know it's kind of tough when you're in between but we're definitely seeing some deals that are in the million dollar in larger range that banks are getting comfortable with financing and even doing s p a loans
00:05:52on when it gets into the smaller deals that can be quite a bit tougher i think a lot of it is just sometimes subjective sister actually looking at the deal and thinking like oh man is this you know what is this and a cz we know it takes
00:06:06a while to get used to it these businesses as assets so i think the banks will eventually come around but yeah we've done a couple of bank financed deals this year which is a whole new thing generally from a buyer's respect to it's almost always better to get
00:06:21seller financing so if you get the seller financing a lot times you're not even paying interest on that so a good deal to you seller francine now the question in terms of like what percentage you're gonna be able to finance that's roth especially comes the seller financing so
00:06:36normally you're not going to get more than fifty percent of the deal financed usually now they're exceptions to that of course there's some stores that are open teo sixty seventy eighty percent seller financing but that's a rare deal you're not going to see those very often and when
00:06:49you do it's normally for a very large business that probably has some level of problems yeah i would be really curious to hear from you i mean i feel like the percentage is going way down in the number of deals that are willing to accept owner financing just
00:07:04as we've seen demand go up do you see that happening with the empire deals where you know four of those deals air getting some level of financing no we see offers all the time but just doesn't normally go through it's like you know someone's coming in saying look
00:07:18i want to give you know sixty percent up front and i want to finance another forty percent over twelve months you got another person coming in and i'll give you ninety percent cash uh taking the cash you know means so that's yeah is actually it's pretty common and
00:07:31a lot more buyers especially you know sub five hundred thousand is a lot more buyers out there so sellers have their pick of buyers really and so it makes it really really difficult for you to finance a deal i would say that there are different like the deals
00:07:48that you're probably more likely to be able to finance are the deals that not anyone could buy so if there's like a very technical or like a very specific knowledge required to take over and run the website or business you're gonna have a better chance of that because
00:08:02it's simply like the buyer pool is limited right So if it requires a particular time developers developers that knows finance or something that might be a little more difficult if you have those skill sets that puts you in a unique position you have a advantage over the other
00:08:18buyers and it just simply won't be a cz many so you'd be more likely to get mohr seller financing than you would otherwise i definitely agree i'm seeing that same dynamic in the market cool man so we got another email from russell jones russell said i just listen
00:08:31your latest episode of great stuff is always anyway you talked about currency exchange again and i've been using a new app for service that i love and that you just check out if you haven't already there are zero fees and he used the interbank rate so it's been
00:08:43costing me nothing to transfer cash in the uk to canada i could go on about it that's much easier to watch the short videos in their website instead that's revolution dot com r e v o l u t dot com he said by the way i'm not affiliated
00:08:57with them in any way and i just seems my email address this one blah blah blah best regards russell jones so i took a look at this really quick before even mentioned his health the podcast literally images some crazy scamming people sign their money stolen but yeah i
00:09:11know they'd raise some money they were on a couple of the tech sites and stuff and so there it looks like a legit company i haven't used them i don't know anything about them but it's interesting i'm going check him out Yeah i know that that's a issue
00:09:22that comes up with a lot of people you know nobody when you're coming into these deals the last thing you want is toe lose money because of having to do an exchange so i checked out the site only got this email and look it looks legit but i
00:09:36haven't used it either you know what's interesting we always get questions about this from new buyers or depositors within powerful person they go hey you know i don't like your deposit process i don't want to pay a deposit and then you know you remind me the positive ever
00:09:49and i lose the papal takes the fees and i lose on the exchange rate and all this right so i'm really worried about that right look first off when you refund via paypal their fees go back into you don't lose the fees and you don't lose on the
00:10:00exchange rate either know so you don't lose anything that exchange rate goes right back to you get everything back there is a slight exception though there are a few like local banks and we've seen this i think from a couple of like local banks in australia where they
00:10:15do charge them money so they did end up losing money on the deposits really rare but there are a couple of banks that take money and it's really really strange but it's like a local bank thing that weird yeah i think you know what i'll tell bars all
00:10:29the time is that and it's becoming more of an issue now man where you know we've definitely seen some of these deals that we get in a lot of cases from other brokers where it's really obvious that a couple copy cater's come up based on the prospectus and
00:10:47i'm in a lot of groups and i just see people talking like you know they're sharing these prospectus is they're basically saying in the group's oh well this would be really easy to copy and you could do this and then the uh and i'm a very big fan
00:11:01you know one of the reasons we've been doing this part guys together is i'm a very big fan and believer in y'all's deposit processes just one mohr impediment to that kind of thing so anybody that is short sighted enough to complain about deposit isn't thinking in their own
00:11:18best in dressed yeah that's so true and so when i had people complain it's normal well pran you tow us like what the hell are you charging a deposit that's refundable everything but you're charging a deposit to see the information the site and yeah i think they just
00:11:32haven't thought it through but they're so new that like what you want me to pay you money put it at risk just to look at the information but if they think it through they realise you know look i don't want everyone and their mother brother sister and aunt
00:11:45to be looking at this perspective i don't want to toss around circles of people who are saying no i could recreate this business or do this or that I mean yes there aren't any other depositors but you want to limit that buyer pool of that potential copycat pool
00:11:57as much as possible on the deposit helps do that A lot of the scammers or the kids in their mom's basement that would recreate the sites are the ones that don't have you know six grand a throw on a credit card So those people don't have access to
00:12:09the cash to even make the deposit keeps them out of even viewing information So i think that's helpful Alright man enough about that You ready units up sewed let's Jump in then All right man let's talk about how we would start over from scratch again the scenario ace
00:12:28you're forced to start over you have zero connections you have no clients and i'm giving you one hundred thousand dollars to work with you can assume that you have that to invest in your business whatever that business would be and so there are some questions right ultimately want
00:12:42see how you would rebuild your online business mogul career there's no questions i want you to answer number one you know where would you start what would be your focus number two what is your first few steps number three how would you put that hundred thousand work done
00:12:54before where would you be in six months One year two years three years of number five how long until you're financially stable and diversified alright man first one where would you start what would be your focus how would you get this business wrong so i was thinking about
00:13:08this you know a lot of actually what we've talked about in the intro to this episode has come into play you know we've seen like we talked about the decrease in the number of business sellers that are willing to offer financing we've seen a lot huge bigger demand
00:13:28from buyers in which is creating interest and you know i mentioned the group's where i see people talking about copy and businesses and all that stuff and you know i'm getting invited into a lot of these things which is it's great that the industry is growing but there's
00:13:41some other dynamics that are happening because of that one is that they're obviously is a lot higher demand so there's a lot of money chasing fewer deals and the really interesting thing i think for years what i thought what happened wass just multiples would increase in multiples have
00:14:00increased the bid but i think multiples are still an amazing deal for what we're getting to get that kind of our ally what's really happening is you know it's kind of like if the man went up for apples and you know it's a very simple asset you can
00:14:16go out and just increase the price of that kind of thing but what if there were a bunch of rotten apples that were in there and you know basically instead of increasing the price for the apples you just start selling those rotten ones and that that's basically what's
00:14:33happening in the market overall there's not an increase in price but there's definitely a decrease in quality deals and a huge decrease like i said in the things that make this whole space work i mean you know you look at hundreds of years of offline deals and the
00:14:55reason that hoping works is that it's just a standard you know You're gonna offer fifty percent financing or whatever like we talked about wanting in this space but what's happened with that demand is those kind of normal checks is not as much about the r a y as
00:15:11it is about due diligence checks as we've talked about in previous episodes and so what we've had is a deterioration of you know that kind of due diligence checks of deterioration of the quality of deals and people treating that brand new apple right off the vine the same
00:15:31as the rotten apple and both them are getting the same multiple all right you set the scene you've kind of lead the pictures there's more apples out there but maura them a rotten it's a little harder to find the quality deals so what do you do man what's
00:15:44the deal so one of the things that i've never recommended in my life but i think we're at a point where you know this is a very strong seller's market i think it could be really valuable to gain the skill set if you're looking at these online deals
00:16:00that's going to skill set of being ableto feel something so you know you could focus on looking at deals that are in a particular area number one for me i would look at what deals are selling at the highest multiple selling with the shortest time own market and
00:16:16i would focus on that space so i was still go out and look att deals in that space but like we talked about it's gonna be tough to negotiate and really get a really strong deal so you're learning about what people are buying and you are able to
00:16:31go and build a business in that space that is going to be in high demand all right man so you're saying you're going to build this is shocking for me sakae that's buying deals right and left who come because you know i think we thought must switch course
00:16:46how much start building from scratch so you start building site from scratch but you did say you're still gonna be in the market is starting the looking because all that you know the crappy apples out there the rotten apples you don't build from scratch here's what i like
00:16:58about that i like the fact that you would be learning the skill sets that you're going to need to expand those sites sorry that got a positive step i mean you know you have to start somewhere so you learn those skill sets i think it would be really
00:17:10helpful and yeah so i think there's some value there i've got some problems what you're doing to yeah so what no no monday morning kicks off it's a new day or start from scratch what do you do monday so first of all i'm beside which path i'm going
00:17:24to go down it could be you know it's a sass business it could be it's a drop shipping business and i'm also going to find someone has a system that's been proven in that space because i still wanna have some kind of leg up so you know if
00:17:37it's a sass business i'm going to go and learn from you know like a dane maxwell the foundation if it's a drop shipping business from anton in them if it's a f b a or amazon business which those air great you know i'm going to go out and
00:17:52learn from the amazing guys around moran or chris that's chris's last name was that rolling with us i'm blanking on it but you know they're a lot of those guys that have created businesses in those spaces are so you just give me a bunch of courses which one
00:18:06you thinking about manu would you do the fda would you do the drop shipping saya me it's monday you can't just look but um all you gotta do one well so i'm just saying for the listener they're going to decide on the business that is in highest a
00:18:18man i consider right now the sas business is to be in the highest demand and sell at the greatest multiple and you're able to get fda likes um so those are some of the criteria that tell me i would go down that path you're going down i would
00:18:34go with sas that's a dane maxwell foundation you going to do the pre sell route You can do all that so i would go down the priests over out but i would do a couple of things in addition to going down the path of trying to build this
00:18:47this is a very small portion budget wise but i think it's the most interesting aspect of my strategy so you know we talked most about it but we're only talking about ten fifteen thousand of one hundred thousand so the lion's share of my cash is still looking toe
00:19:06by something that's in this space so regardless i'm spending fifteen thousand with a ton of upside because if it does work then i'm able to go and sell it and you could have some for away the market is right now you know you have some for six months
00:19:23the sas it's selling it at a really great strong price but you know eighty five percent of my money is going to be looking for a deal but that fifteen thousand has such a great upside because of the hundred thousand can do so little in the market that
00:19:41we're in right now and there's just a ton of risk associate id so what i think the biggest benefit is is not filling rushed to do a deal i think in the market they were in there a bunch of people that feel rushed and there's a lot of
00:19:55cash in the market and so people feel like oh well i got to go in just in this hundred thousand and then it's suck and you know i get a lot of calls from people who make mistakes after they've made him so it's balancing that risk with a
00:20:08little bit diversification so i would start with that process the other thing i would do is start to go to see if there are a bit because i love the consulting for equity strategy i do it with offline businesses and internet businesses where i'm just part of the
00:20:24business and instead of them panned me tow helping their business that give me equity so that would be one of the few first things that i'm looking at on monday where can i go to meet some other people in this space and then i'm started on a course
00:20:38and i'm looking at deals that are out there similar to the one that i'm going to build all right man i'm trying to process all this you threw a lot at me let me see if i got this right so you're looking to put fifteen thousand dollars into
00:20:49a sass business that you're going to start from scratch you have eighty five thousand dollars in reserve and you're still the kind of passively sort of actively looking for deals or opportunities are out there looking for the good apples and then in addition you're gonna do some networking
00:21:04and see if you could work your way into an equity position in a business that either someone else's starting up we're still early ground you're going take your knowledge and applied to that we're going to do some networking at some events make some phone calls and see if
00:21:17you could just talk to some people but you don't know what he wanted i've taken away all your contacts so yeah you got a field that from scratch okay soso where're you going well where would you go to build from scratch from the networking who would you go
00:21:28what events would you go to how would you do it yeah so obviously whoever you're studying with and whatever i have to say i've never taken danes go any of the courses were mentioning so to all of this should be taken with the greatest audits all protective but
00:21:45i would goto obviously whoever i'm following their event i would go to any sass related events because the most powerful thing you can do with that eighty five i think right now the real goal of all of this is that when you're in a seller's market you want
00:22:00to get to the sales side it's quickly as possible so one way as the beale the other way is there find a business that's already profitable and then you could take some of your cash get equity stake or do consulting for equity which i'm a big fan of
00:22:15and get a little bit of a steak then you're driving that thing to be able to get it on the market and kind of leap frog so i've got you know i think people think that that whole strategy a lot tougher like i actually earlier this morning was
00:22:28talking teo one of my clients whose overseas whose negotiated equity and deals in the u s you know what i mean without ever meeting the people or any of that but at the end of the day business owners are lonely a lot of more exhausted they've grown this
00:22:43thing to a certain point they would love they don't want us to really spend money but the have somebody whose interests are aligned with theirs that's going to help them to rob that business across the finish line and especially if they're interested eventually selling is a very powerful
00:23:00strategy and so i actually like that i like what you talking about like the baby boomers and they've got these businesses that they're kind of tired with they don't really know what they're going to do with um they you know i would like for someone to take over
00:23:10maybe they have kids and they don't have kids and their kids aren't interested in that business and like partnering up with them to kind of get some sweat equity in the deal i've always thought was interesting charging you mentioned that in previous podcast but i gotta say man
00:23:22i'm going to beat you up a little bit i don't know unless i know you are man this is out of left feel the wheels turnin males start up the wheels are turning let's do this okay so your first off i'm not sure i like the three pronged
00:23:37approach i mean i like you because you're like diverse fried you've got like irons in the fires of one deal drops that you got into the opportunity you're not risking all of your money buying one hundred thousand dollars site you know as you mentioned your client has done
00:23:49the passion of mimi by me risky you could lose it all that's dangerous what i don't like is the three pronged focus issue like gonna be all over the place you'd be messing with your trying to network and edge your way into an equity deal you kind of
00:24:02like looking around for deals you're trying to start a sass business which i'm getting to that now starting a sass business just from nowhere i know you just talked to dana and the foundation guys and there's some guys has some really good success they pre selling sas you
00:24:16know software they set up but there are a lot of guys that didn't have success doing that too and that just seems like it's a hell of a lot of work building a sass company now yes when they take off and they've got like a nice little you
00:24:28know up into the right hockey stick thing going on even six months into the business year into the business Those things sell like hot cakes but i think you're ignoring or you know not seeing all the ones that failed to launch at all that had no success they
00:24:42try to pre salt didn't work you know what i mean like they didn't try pre sell that try to build some software took six months to work when there's some costs they're going to that outside the fifteen thousand dollars i don't know man of the three i like
00:24:54the sas business probably the least and i don't like the split focus so for me i'm not sure you know which let me ask you this which one do you think would have the best chance of success on which one we give you the return the earliest so
00:25:08at the end of the day that's the reason that the sas idea represents fifteen percent of the market i think we talk more about it because does it is interesting and you know it doesn't take a whole heck of a lot of time but i think that is
00:25:21the most likely and i don't want to say easiest but the most likely to give you a return is going out and doing the consulting for equity so when i have somebody you know when i talk about my gods overseas or guys in the u s when somebody's
00:25:35starting from scratch the easiest way to get from zero toe income is to do what we just talked about is the have that baby boomer who owns the business it's already profitable you know they're pretty much sick and tired of it they're looking for a lifestyle change their
00:25:52you know getting older and nobody's there unlike you know the space that we're in where they're tons and tons of bars there's just nobody there and so they're willing to do deals where you don't necessarily have to go in and operate the business you know like i've got
00:26:05call schedule while i'm traveling all over the world helping these folks and i've got virtual assistance and all that good stuff but we really run it like internet business at the end of the day you start immediately generating casual so that's where the lines share of the cash
00:26:20in the focus would be but i think it's worth because of the market that we're in right now trying to build stuff and i think the other crucial thing and you know i wish that i could go back and really focus a little bit more on this and
00:26:34some my previous calls one of the reasons that i put a huge emphasis in you know financing and getting seller financing all this stuff is you know you talk about the risk of a sass business but you know i get calls from tons of people who don't go
00:26:49through our processing program where i'm kind of reiterating you know you can't do deals like this you can't pay off gas for the better and there's not a lot of talk at this point publicly about the riskiness of buying an existing internet deal without all of those proper
00:27:06things in place and that's the majority of the deals right now are that way so you talk about the risk of a sass business that i would much you know just based off of the feedback i would definitely feel a lot safer putting that fifteen grand and trying
00:27:20something then putting that hundred grand and not having any self financing and doing a deal the wrong yeah that's interesting like building tak at least you know it's built right from scratch from your buying sas cos you be buying some broken aztec or they've reached kind of there
00:27:34max that leading a whole new redesign or like you know they need to build the base up again from scratch so that's interesting how exactly would you go about trying to get the equity deals like what would you say okay you get on the phone with someone who
00:27:47has a business whatever and you're going to phone them what do you tell them to hey give me a piece your business i mean that's a weird approach yeah yeah so one of the very first things that i tell clients to do justice for us you know we
00:28:00do a lot of lee generation when it comes to these offline deals but one of the easiest just low hanging fruit things is when you join a chamber of commerce it cost like a couple hundred bucks and so you know one of our thirty strategies as we just
00:28:15joined a chamber we say we are business buyers and you know when a clothing store joins a chamber they sent out a blast every all of the members in the city and you know it's a neat little thing like maybe they get a couple of customers but this
00:28:30is our one hundred percent target market and we basically brand ourselves as people that are buying these businesses and it's going to be in most of those folks are older and all of them one hundred percent or business bars so literally for a calendar bus you get in
00:28:44front of all of your potential you know clients are deals in addition you get an advocate in that chamber who will you know make introductions like hey i think this guy really needs a sale he just had a heart attack you know his wife trying to run the
00:29:00you know just like all these little things that can come up through that single connection that is a slick tactic man i like that in terms of deal flow in terms of like getting yourself out there and started you connected i really liked that woman that's interesting yeah
00:29:14yeah so there's a ton of those things you can do but literally you could get deals just with that nice man All right so i dig it i think you're gonna be a little all over the place i think you're sassy i like the connections everything you opportunity
00:29:28there and then i know you and i know your skill sets i know you're able to find a deal with the eighty five thousand so i feel pretty comfortable magic you could make it work i think gonna worm your way into some equity deals on some uh some
00:29:39old dude's looking to retire and i think they buy their way least your strategy is call it that the police is a lot better you know i did this would joe my business partner and one time you know what he told me you don't weigh didn't got a
00:29:57podcast he's that i shit you not he said i think if i was starting over one way i would go to take money is to write some of those like vampire romance books or some shit like he actually said that yes did i was like what what in
00:30:12the hell you talking about dude you worming your way it's a teenager's pocket exact really dude it wasn't good it is so funny i beat him up pretty that's great alright buddy so my turn i'm gonna be o let you i'ma let you dig into me a little
00:30:28bit here so here's the deal so what i really like in terms of getting this deal done getting it started from scratch here's the rod i would take i like the idea of the amazon affiliate tio f b a model so here's the basic idea you khun by
00:30:43an amazon affiliate site it's already out there it's earning money so let's say it's earning you know two three thousand dollars a month as a three thousand dollars a month and net profit i'm able to buy the site for let's say fifty to sixty thousand dollars i bought
00:30:56it because i know that it's a product that's a really good fit for f b a which is for filming by amazon basically you know there are people that have you bought the proxy china shipped them to amazon warehouses amble on hills a customer service they handle the
00:31:10shipping they handle all the product stuff for a fee so those guys are making a profit on the back and so what i would do is i look for an amazon site by that amazon site make sure it's a good f b a fifth outdo my only requirement
00:31:21i would have a requirement on nature product or anything and then start sourcing that product from china so i get my first batch over do some testers and then get my first batch over set up with amazon set up my product page with amazon and then change the
00:31:34links for my amazon affiliate sight to my product in the meantime i'd also be building some amazon sites that are in the same or close to the same niches so i can start you know scaling that up and selling both more my own f b a product but
00:31:51an adding new products to it as well i think your complimentary the customer and i think that diversifies mea bit i'm making the amazon affiliate cash on the deal it's already proven i know i've got a proven market because before i bought the site i'm looking at what
00:32:05products those customers were actually buying when they get to amazon as long as it's yet high enough percentage of the actual product that i want a source then i know that that product is you know in demand so i'd be able to basically double dip on my amazon
00:32:18side if i'm making you know three thousand dollars a month and profit on the affiliate site that means if i met you know eight percent that means that it's probably doing forty thousand dollars in sales maybe half of those twenty thousand dollars or so is of the actual
00:32:33product if i can get you know thirty percent margin out of that or something i'm looking at six thousand dollars a month on the fda side so that's my plan man i would you affiliate eh outsource the proxy what you got man so let's go to the first
00:32:47few steps i mean if you're going to go out you're going to find this f b a deal you know one of the interesting things that i always tell people is it can be a tough thing to get super specific where you need a affiliate deal where it's
00:33:05going to be a product that you're going to be ableto find get license and you know you're going to turn it into m b a and those margins are going to be big enough so but let's get to just your first few steps okay so the first few
00:33:17steps you know you're right to be difficult i think to find the right amazon affiliate site but i'm open like i don't care about particular industry you don't just have to be in the health and assuming anything in particular obviously can't be selling tvs this long sony tvs
00:33:32or something well i'm screwed i can't f b a that shit right I'm not manufacturing tv's overseas but its chandeliers or foosball tables or something probably something i could do foosball might be difficult just shipping and everything but i'd probably try make it small to something that i
00:33:46could air freight over so that i don't have the lag time that shipping and come to shipping and might be six weeks or eight weeks to get the product amazon i want something quicker that i could do ship the air so i could you know test through one
00:33:59of the problems with it is so okay first steps right is i would start looking for an amazon affiliate site that's a good match so i started shopping all the brokers you know check out effie quiet lyon empire flippers start looking for the right affiliate site that's a
00:34:14good match so i'd have to dig through quite a few sites would be twenty thirty sites to find the right listening for me twenty thirty amazon sites it would take me a bit i mean i can see it taken you know one two three months in the meantime
00:34:26i don't think i'd build out the affiliate sights yet i'd want to find that first amazon affiliate site that's kind of my anchor and then build around that so i wouldn't want to start building affiliate sites willy nilly is i know especially from a broker side that you
00:34:41know there's a big failure rate is building sites from scratch they may just feel the launch i may build them and they may get stuck in google for a while six months a year year and a half before they get any traction so if i'm gonna do that
00:34:52i'm gonna want to make sure i'm doing it in a niche that i know is profitable because i already have a site in that net selling those products that make sense assuming that i got the affiliates i'd say within the first month obviously i'd take that over i
00:35:04wouldn't change much on that amazon affiliate site to start i just look at history and look at how many of the particular products were sold why some product you're selling over Other products why that particularly usually go to amazon buy that product over another check out that the
00:35:19reviews for that one versus their competitors and see what i can do to operate on that and deliver about our product on my own it would be a branded products i wouldn't buy some no name progress put you know the justin inc brand on it and start selling
00:35:33an fbi i'd probably take the course or at least torrent that shed or down thing that amazing salary amazing selling machine you know those guys so i would get the course probably and go through that and then start hanging out in some of the amazon fda forms figuring
00:35:49out fda yeah man i mean i got to say i'm sure the listen there's a like i thought this thing was about buying businesses and here these guys are in both cases about building stuff as well so i think that that's pretty interesting but also indicative of the
00:36:05market that were in the toughest thing with this is gonna be finding that right deal that has the right product out don't you say a couple of months during once like you know basically i'm unicorn shopping i think your unicorn shopping man i think it would be interesting
00:36:21to look around and see because it's not just the deal coming on the market you've got one hundred thousand dollars it's gotta be the right size so you know right now there's nobody's really given owner financing so it's basically got to be one hundred thousand dollars or less
00:36:37you know i think i do probably like my range i should have mentioned that i think i'd probably looking maybe twenty five or thirty thousand the lowest and sixteen hundred sixty five of the highest in the reason sixty sixty five would be the highest is because i need
00:36:50money for inventory you know those businesses their cash hogs and i'm a screw up my first order and then be out of cash so i need you know maybe you know i do a couple testers to make sure the product's good and then ship maybe ten thousand dollars
00:37:03eh units or whatever at that first order shit i need a little extra cash to be able to back myself up so yeah i'm pushing the little signs especially that takes off because then i'm having to dunmore mohr of my caps in the business and so that's going
00:37:15to be pretty careful with i think his cash flow yeah yeah so that answers the hundred thousand dollars question so talk about how you know what you talked about those first three months what do you expect to be six months a year couple years from them so i
00:37:27think i'm struggling the first few months right until i get that anchor site that anchor amazon affiliate side of struggle i'm not making the cash but i devote all my efforts to doing that so you said to be difficult it might be but i'm doing nothing else shopping
00:37:42for the amazon visits i'm pretty singularly focused i think i start bringing some cash and get that inflates science a few thousand dollars of months not amazing and then the real work is laid out for me so i'm you know at first is just shocking for the deal
00:37:54but then i gotta learn fda program source this product in china ship it out get tested so after the second month or so say i've picked up a site the real work starts i think in the f b a business i think i'm looking pretty good assuming i
00:38:09get the product assuming it's selling and assuming i could start you know because i'm gonna get seals through fda as well right so there's going to be out be a cells there to something to get those additional sales aside from the organic traffic i'm sending him from the
00:38:21affiliate site and i'm starting to build affiliate sites that are supportive of that they're selling my fbi approach as well i think it probably six to nine months before i'm starting to make some decent money on the fda side and the affiliate site and maybe another three to
00:38:35six months before those affiliate sites i started working with start bringing the cash One things i like about this though is i think that because it's a much larger business and i've got organic traffic and i've got some amazon search that are happening i think it's a very
00:38:49diversified business eventually and then i think eventually i'll get a much higher multiple on a sale of that business that i would on amazon affiliate side for example i might get twenty two twenty four twenty six acts where i might get thirty thirty five acts on this business
00:39:04overall so not only is it getting bigger with the additional earnings it's getting bigger in terms of the multiple is well well i like fda only f b a deal it's a great business in the beauty space the couple things that i think will be the toughest points
00:39:20if you can make this strategy happen it'll be beautiful the toughest thing is going to be number one finding that deal that's the right deal with the right product in the right price range that you know you're going to be able to do and you know i think
00:39:31the other part of that is fda has become tougher i mean i don't know if from scratch i would plan on though i think the strategy of selling to the traffic that's coming into the site is great i wouldn't necessarily plan on getting much traction within f b
00:39:48i you know i've got a deal that's been around for eight years and it's really strong and we saw a lot of growth and all that but a lot of the competitors are really stuck in there kind of fighting each other like you know page four of the
00:40:02results and you know i think it's a lot tougher today just i mean because market you know it's what we're seeing in our market it's what they saw on the amazing selling machine market a ton of people come to something an opportunity starts toe not be a zajac
00:40:18there's way more competition everyone's trying to reach for that same piece of the pie just isn't growing fast enough for all the people turning and i totally agree with you i mean there are some definite downsides to fbi i'm hoping that that will be the gravy on top
00:40:30of the affiliate site earnings and it'll kind of like round it all out but yet there's risk man's risky business right so i don't know love work but i like the approach yes like it is well i like it this is a great one man i hope people
00:40:44get some value out of this yeah me too man alright man so that's it we're done till season two huh yeah yeah a few months i think both of us are gonna be doing some neat travelling and playing around we didn't want to try to figure out how
00:40:56to get this together and then we're gonna jump in tow from beginning to end what it's like to be a buyer and some of the things that we're seeing in the market and howto navigate your way around Yeah but that sounds good We'll see if we can sneak
00:41:09in a little mini sewed in between or something Get people in update Yeah yeah let's do it Thanks for listening to the web equity show Now is your chance to be a part of the action Go to www Dot web equity show dot com slash gift and send
00:41:26us your business acquisition or exit question and have it answered on the shell Podcasts you just heard was recorded with anchor if you want to make your own della the android or ios app completely free from anchor dot fm slash podcast That's anchor dot fm slash podcast

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