Last week, I had an opportunity to interview Billy from Forever Jobless, a successful entrepreneur that owned close to 20 drop shipping businesses at one point. He is currently working now on a new project called EcomLab to help others build ecommerce businesses through video tutorials and a supportive community.
Check out the Interview above and let me know your thoughts in the comments section below.
07.06 – Evaluating a Business
11.50 – Buying neglected sites
17.24 – Working with a drop-shipper
25.50 – The “Glass Rose” business
39.25 – Buying sites from Flippa
44.00 – EcomLab.com
- Google Keyword Tool (Now Called Keyword Planner)
- Think outside the box to manufacture your own luck.
- Look for neglected businesses from people or companies that own many sites (scraps with potential).
- For drop-shipping, go right to the manufacturer. Avoid drop-shipping companies.
- Deals that are harder to get on the front end usually make more money on the backend.
- If you wait for all the lights to turn green, you’ll never leave your driveway. – Just start!
Richard: Hey guys! It’s Richard from a Better Lemonade Stand and just the other day I got to interview Billy from ForeverJobless.com. Now if you don’t know, Billy was actually running close to 20 e-commerce businesses at one point. Now he sold a lot of those businesses off and he’s focusing on a new project called ecomlab.com. It was a really inspiring interview and it even got me to look at drop ship businesses so check that interview out and let me know what you think in the comments below.
Billy: [unintelligible] e-commerce was I started 2011, early 2011, and I had a buddy who was killing it in e-commerce and I ran another business and basically was just pretty passive and wanted something else to try out. So my buddy says, hey, check out e-commerce stores. Why don’t you just start a store, buy a store and I had no idea what I was doing and I was like, I’ll check it out and all I knew about e-commerce stores was that my buddy had had success and he was doing it pretty passively. I basically starting scouring [unintelligible] for [unintelligible] to buy and I also started looking at potential niches that I could start and so the same week I bought one store and started another from scratch so I bought an organic baby furniture store on [unintelligible] and it was like for $4,000. It was making $900 a month at the time, which didn’t make sense to me. I didn’t understand why [unintelligible] that I could get this site for so cheap. I thought that I would buy it and all the traffic would disappear the day after I bought it. I had no idea. Actually why it was so cheap was people were asking the same questions in the comments. They were saying something’s off or you wouldn’t sell it for this cheap. I think to buy it now they list it at $86,000-$87,000. People didn’t understand why it was listed so low, something must be wrong so no one had bid up the auction that much. There were just a lot of negative comments so I did due diligence on it. I called the seller just to ask why she was selling and she told me she just needed money for something quick and had to get rid of it. I said, “your auction doesn’t look like it’s doing that well, but if you lower the buy it now, it was already low at $6,000 for a site that was making $900 a month, but if you lower the buy it now to $4,000 I will wire you the money tomorrow. You’ll have the money and you can get it off your hands. You don’t have to sweat out the auction and maybe not get your buy it now”. She did it and I bought it for $4,000 and afterwards the seller emailed me and she was like, “all sorts of people are offering more money than my initial buy it now, now that the site is gone”. They didn’t know it would sell that cheap and so it was funny because all these people were sitting on the sidelines afraid that something would be off. I just took a calculated risk and did it and I probably made my money back in 3-4 months. That one store alone, I sold it recently and probably owned it roughly two years and made over $20,000 from it like a little porky investment that was pretty passive.
Richard: So was that a drop shipping business you were doing then?
Billy: Yes, it was 100% drop ship and so I never had to touch anything. Basically didn’t do a lot, I mean there were a lot of little changes. With that store there were a lot of little changes that you could make money on right away. For example, I don’t think they had a phone number when they bought it and I don’t think they were accepting any payments except for Paypal. You get more transactions if you offer credit card even though you can use credit cards with Paypal so we just added a credit card option along with a phone number and things like that and actually got sales to pick up with a couple of easy changes. That was the first one that I did and the same week I started another store which was in the dessert niche and it took awhile to get sales because I started from scratch. I didn’t know any [unintelligible] when I started hiring guys out to do the stuff. I hired SEO contractors to do stuff and after 3-4 months started getting sporadic sales and then a couple of months later was getting sales every day on it. For a lot of people thinking of getting into e-commercing, I didn’t know any of that stuff. A lot of people are like, “you gotta know Internet marketing, you gotta know this stuff. All I knew about SEO was [unintelligible] supposedly helps. That’s all I knew when I started. I just dug in and the way I did it in the beginning, a lot of people don’t know this, but the way I did it in the beginning was I would hire, I hired 50 guys off [unintelligible] and not for big jobs, like little 3 hour tests. They made $3-$5 an hour so for each guy I was maybe giving a $10-$10 test [unintelligible] but I did it to a bunch of guys. What I would do actually is I’d have those guys check each other’s work because I didn’t know how to manage them. I was like let’s take an SEO guy and I would be like, “what do you think of these [unintelligible] that someone made for me. Are they any good”? They would be like “oh no. They aren’t actually any good and here’s why” and so I learned by $3 guys telling me this was good and whatever. I couldn’t manage them because basically this was my first job hiring for an SEO contractor and I’d be like “hey, I need some links” and people would be like “what do you need” and I was like “I don’t know. How many links can you give me” because that’s all I knew. Slowly I picked up enough lingo to be like “I think this is what I need” or “I think that is what I need”. It was all essentially learned from SEO management from $3 contractors and then I just found a couple of guys [unintelligible] and then I started to go to [unintelligible] packages. You can buy packages off of certain forums, SEO packages and a lot of them are not very good but if you find some decent providers you can get, at the time, the way SEO worked at the time was really easy to rank.
Richard: So things are a lot different now. I’d be really skeptical to use some of those guys now. I’m assuming you too.
Billy: It’s a lot harder now and I’d be really skeptical too to use a lot of those guys. I play it pretty safe with SEO and I wouldn’t outsource a lot of that stuff unless the guy knew what he was doing. I mean most of those guys are essentially just trying to get you the cheapest links possible, which is essentially what Google is trying to avoid. That’s basically how I got started with e-commerce.
Richard: So you said that the first niche was in baby furniture was it?
Billy: Yeah, organic baby furniture.
Richard: Organic baby furniture, that’s really interesting. That little niche you’ve got there and then the second one was in desserts. So what did you use to really evaluate these businesses, because I don’t see you as being the normal type of guy that would, if you were to do a brick and mortar, I don’t see you selling baby furniture. So was it just the price versus what you thought you could get these businesses making or was there more thought behind it?
Billy: I was doing it basically can I have my money back quickly, can I improve this site. I didn’t really care so much about the niche. I was basically buying something that could make a really good cash flow. I was thinking about it in terms of you look at a real estate investment. If you buy a house as a rental, you might put down $30,000 as a down payment and maybe you would get $200 cash flow. I was like I can put $4,000 down and get $900 a month cash flow so I was looking at it like that. A little bit less of a business that I wanted to scale up to be huge but more of like a combination of more on the investment side, like this is just too much of a good deal to pass up, and then when I would start a niche, I would basically just break down all sorts of ideas of different niches I could get into. I would break down some simple math [unintelligible] and I would get a couple of the main key words for the niche and then I would try to figure out, I was pretty novice at figuring this end of it out, but I would try to figure out how competitive it was to reign. I decided to ask somebody else and try to calculate okay I think I can get on the first page to spot #5 or whatever and then I would calculate out based on the percentage of the spot I could rake, multiply it times the number of people who would [unintelligible] spot on Google and then I would multiply the estimated traffic for those key words and multiply it times 1% inversion rate assuming 1% of people bought, times the margin that the product had. Then you would get a rough, super, obviously not exact, but it gives you and idea so I could look at a niche and say, “hey, I think this could make $2,000 a month”. If I do what I think I can do and it just gave me a super rough idea and as you get into a niche, that might be way off but it just gets you to a good starting point. For example, if I’m buying something I think I can make $5,000 a month with this and I’m comparing it to something that maybe makes $600, I’m going to go with this one. So it just gives you a really, really rough starting point.
Richard: So out of curiosity, in the end I guess maybe, how rough were those numbers? Did you end up being somewhat kind of close or fairly close or were they way off? How accurate was it or inaccurate was it?
Billy: It’s really tough to say because some of the stores, I ended up having so many, I ended up with close to 20 that I didn’t end up spending a lot of time on each individual one. For example, a ton of them didn’t end up hitting the numbers I thought I would hit but a big reason is that I never really put much time or money into them, but then there’s a couple of them, like the first one I started and I think maybe 1 or 2 other ones that I think did as good or better than I predicted and it’s like talking to buddies with kind of the same scenario. They found that when they worked really hard in one spot, a lot more money could be made in the mix and it seems from the initial tool [unintelligible] but you have to kind of get over that barrier where you’re just like a mediocre site and that’s one of the main sites in the niche. Lots of times there is a lot more money than the initial investment. In the majority of them, I probably didn’t hit what I thought was possible just because [unintelligible] from the spots that I wanted to ____ for and I didn’t put a lot of money into them. Once I got over a certain number of stores I did it passively.
Richard: And so, I was reading again, I was brushing up on one of your popular posts on your site, foreverjobless.com which was how to get lucky in e-commerce and you kind of go through a couple of e-commerce stores that you own, so the one you already mentioned there that you bought from that woman, I’m assuming that was the furniture one.
Billy: Baby store, yeah.
Richard: Yeah, you mentioned that one. In another example, you talk about how you bought a package of 7 e-commerce stores that were kind of all together and you mentioned one of the reasons you went for the package was because it was more or less the left overs of another company where they were neglecting it a lot and it wasn’t like when you’re buying one store from somebody. They have a lot of emotional attachment to that store where it’s usually their bread and butter probably or they put a year or two of effort into it, but you were kind of going after these stores so you could get them at a cheaper price and usually there was some diamonds in the rough in there.
Richard: Do you want to talk a little about that deal and what was the outcome of that?
Billy: It’s funny there’s a lot of opportunities, I think that’s probably one of the easiest ways if somebody wanted to buy. I was kind of looking everywhere for e-commerce and buyers. These guys have 20 stores or 50 stores, or 100 stores. Basically I approached them and said, “do you have any junk that you want to get rid of” and a lot of guys were like, “here’s these 5 stores I’m not doing anything with or 10 sites here”. So I found a guy with 7 sites the he just wanted to get rid of and one of the sites that I was particularly interested in was getting a lot of traffic, it used to make a bunch of money and I think he bought it for like $18,000 for that one site and he was offering to give it to me for pennies. I asked him “what’s going on here? It looks like it’s getting good traffic. It looks like it’s had sales in the past. What’s going on and why isn’t it making sales right now”? The only thing that happened is that the supplier wouldn’t supply it any more. One of the main suppliers. So he had turned off or put out of stock or turned off the orders for the site just because he didn’t have time to figure out a way to make a deal with the supplier or just didn’t want to deal with it. First I asked him “why won’t they supply you”? So it turns out that some suppliers won’t deal with you unless you have a brick and mortar store. It doesn’t make a lot of sense but basically some people do that. So I said okay. I called the supplier and said “we’re thinking about getting a store in this space. Do we need a brick and mortar store? He said yes so they basically confirmed what he said. I said “okay”. I called somebody and on the first call, someone within that niche who has a brick and mortar store, and basically we worked out a deal where we would be joint venture partners even though we weren’t doing any business with them, but we essentially just borrowed the address of their store location for our brick and mortar. I called the supplier up and at the same time I’m wrapping up the deal with the guy for the package, I called the supplier and asked what if we partnered with a brick and mortar. We have a partnership with a company in town and we are basically going to joint venture with them for their location and they had all sorts of management talks or whatever they had to do because it wasn’t something normal and finally someone got back to us and said yeah, that’s okay you can do that. So as soon as I closed the deal with the guy on the package of sites, this site I got for close to nothing, essentially I just turned on the money faucet on the site because I had the suppliers lined up again and so that site was making close to zero when I bought it and within a couple of months it was making close to $10,000 in revenue. I think I remember we did about 8-8.5 within a couple of months, like on a monthly basis. It was something that didn’t take a lot of effort it just somebody had to work to put the [unintelligible] in it. There are opportunities like this out there for people, he didn’t have time or didn’t think about it like a way he could make that deal work and literally within a couple of phone calls, I mean, I sent a site worth close to zero into a five figure asset, so there are lots of deals like that floating around.
Richard: And once again, I guess like as you talk on your blog, you’re using a little bit of creativity to create your own luck, right?
Richard: Was that one a drop shipping business too then?
Billy: 100% drop shipping.
Richard: Is everything that you’ve done drop shipping or have you ever owned your own inventory and stored it?
Billy: I’d say that 99.5% of the stuff has been drop ship so for that yield we bought a couple of things up front from them and put it in the store front that was in town and actually took pictures in our store front, like our joint venture store front, took pictures and sent them around so they could approve everything. So we actually had to buy a little bit of inventory from them and then there was one other deal that we actually bought in bulk because we got a huge discount and we knew we could move the volume based on our experience during the high season so we bought a bunch of pallets of some heaters just to get a cheaper price on them and ended up selling them from our office. Other than that, it’s been 100% drop ship. That deal was drop ship until we decided to go get a bulk price and discount.
Richard: I’ve always been a marketing and branding guy and so for me, I always want to create my own products or kind of have my own products and brand them as my own products so drop shipping is a business I’ve never gotten into and I’ve always kind of stayed away from them. I’ve only been in e-commerce for about 3 years but I’ve always stayed away from it because I’ve always felt margins were too low and then you hear about some of these drop shipping companies like Doba and stuff like that and they seem to have a bad rep and they seem to be pretty scammy. I remember I talked to a Doba rep once and this guy just kept calling me back and hounding me. He sounded like a hustler, just trying to get my business. He didn’t sound legitimate at all, I mean they were just hustlers and sharks basically, just trying to get you to sign up so they could get that yearly fee from you kind of because the some people sort of drop off. So, what have you done for drop shipping? Who have you used? Do you have any suggestions for drop shipping and where to look.
Billy: Yeah, we actually never used a company. We basically went to the buyer every time. Actually one of the things, that’s one of the main questions I’ve gotten on my blog is how do I get my suppliers and it’s one of the things that really doesn’t take any effort. For the most part, you can see for example let’s say you wanted to sell our organic baby furniture.; If you just Google organic baby furniture, you can see your competitors or your potential competitors if you don’t have a site yet, go to their site and then you can see everyone they list and then all you have to do is, all those people have websites and phone numbers so all you have to do is go to them and say “hey look. We’re looking to sell your product on-line”. They’ll send you an application, you fill it out and they’ll approve you. We probably get approved by 95% of them. They just want to make sure that 1) you actually have a business and you’re not just some guy who is trying to get a discount on the [unintelligible] you want to buy or whatever. It’s not a complicated process but most people who are just starting out think they need to sign up for an expensive service to coordinate you with these drop shippers. I never did that. We just went straight to the source and this is another way to improve the income on your sites if you buy a site. For example one easy way to try to generate more revenue is contacting a couple of extra suppliers and list their products and you’ll have another income stream and another traffic generator so maybe people are searching your site for that stuff and then they find something else on your site that they like. That’s another thing that people should be doing to increase revenue on their stores too is to reach out to new suppliers.
Richard: Right. Cool.
Billy: And by the way, I’d probably go that route instead because like you said with the margin being so low, I would have [unintelligible] insanely fast if I could go back and time it. I’d have twice as big margins because with drop shipping you really can’t scale through paid advertising.
Richard: Margins aren’t big enough?
Billy: Yeah. What happens is, let’s say you’ve got 20-30% margins on drop ship, if you’re trying to be like Edwards for example, you’re competing against suppliers and manufacturers who have 50-60% and sometimes more on their margins so you really can’t, they can always outbid you and they can profitably to do so to where it’s gonna be hard for you to make anything, let alone maximize your traffic from those sources. Then you look at the fact that the drop ship stores are one store. If you have a product that you create, you can have 20 other guys with stores selling your product and so the leverage is there because of the margins, but most importantly you can essentially, if you have a good product you can buy your way to the scaling very fast. I know some guys who have created their own product from day one and they were doing seven figures a year very fast where if you tried to scale a drop ship business to seven figures a year, it’s very hard because you’re essentially depending on 1) you’re selling other people’s products which are [unintelligible] buy anywhere else so why would they buy that specifically from you? It’s very hard to give you a competitive advantage, 2) most of the time you’re going to be depending on organic traffic as your main source and it makes it a lot harder and it’s harder to market that if I’m marketing something other people sell too, it’s hard to get a big marketing pitch, hey we have the same product other people have, come buy from us. It’s a much harder marketing pitch.
Richard: Right. And so I guess your whole tactic or strategy before, like you said you owned up to 20 e-commerce stores but you were basically buying these e-commerce stores and then SEOing them basically. Right?
Billy: Yup. I made a strategy where basically you’re SEO, slightly improving things on the site we just bought from somebody else or adding new product lines and things like that as a way to increase revenue. The main shopping source by far was organic SEO. I don’t know the percentage but it was a huge, huge majority.
Richard: One of the advantages with drop shipping obviously is you don’t have to deal with the headaches of getting your product. If you’re getting it from China you don’t have to worry about importing it, you don’t have to worry about storing, you don’t have to worry about fulfillment so there’s a lot of things you don’t have to take care of when it comes to drop shipping. How passive were these businesses for you? Obviously once you bought them you had to do some SEO work on them, but can you give us a sense of how many hours you were spending on these businesses? Was it worth it in the end? Was it too much work for what you were getting out of it?
Billy: Yeah, so for me, I outsourced everything so my goal in setting up that business was, I didn’t want to operate that so I hired other people to do it so I had people in-house handling any customer service, dealing with the suppliers and all that stuff and for any SEO work, my time was spent finding people I could outsource that work to. My actual day to day, I didn’t do much on a day-to-day basis but I had other people doing that. Obviously that cuts into your margin because you’re paying other people to do your work but my goal in that whole business was I basically wanted to set it up from day one and not have to necessarily have to work. I viewed that business more of like a, lets see if I can scale it up by outsourcing everything and treat it kind of like a mini-investment fund, doing some of the stuff to set it us with SEO guys. Was it worth it? If I could go back again, 1) I would create my own brand and 2) I would have focused on probably building up one authority site in the niche and the reason is its so much easier to make that site very good if you don’t have 19 other stores you’re dealing with, but there’s so much more money when you get over the hump of everybody else in the space. If you make yourself the leader of this space, there’s just a lot more money at the top and it would have made me more excited to work in the business. It turned into more of a passive, the passive part of it was nice but kind of a, where my only job within that business was just managing other people and making sure that they were doing their job. I’m not passionate about managing. I like to market. I like to figure out strategic, creative ways to get ahead in the business. You know, with a drop ship business, and 20 of them, there’s not a lot of opportunities for me to use those skills. I think I definitely would do it differently if I could do it over.
Richard: Right, right. Another example you had in your [unintelligible] how to get lucky with e-commerce, you talk about this glass rose business. Now I know glass rose wasn’t the real product, you didn’t mention what the real product was. Can you mention that now or are you still keeping that a secret?
Billy: I don’t know. I actually sold that business and signed this 90 non-compete stuff. I’m not sure if I can mention that. It was the one that was in the dessert [unintelligible]. I don’t know if I can mention the specific product but basically, the way I started that one, basically I was looking for a dessert that I really like and I looked in the Google keyword tool to see how many people were searching for it and maybe I could sell that on line. That was like the first week I was looking in e-commerce and I kept coming up with a closely spelled term and I was like, why are so many people misspelling this and there are more people looking for the misspelled version. I looked into it and that was actually a different type of dessert I’d never heard of so I ended up looking at that one. It turned out that not a lot of people were selling it on line. It’s a dessert so it broke easily, crumbled easily and then you have to keep it cold and keep it fresh so it has to get there really fast so it just wasn’t a good shipping option. I asked some people if they would supply it and they mentioned all the things, we don’t want to get into that, it’s gonna break, gotta ship it. They were bakers and they didn’t want to get into the Internet business. What I did was I cold called people all over the country and looked for a big city and then I would find a bakery that made that. I’d search the good reviews and call them and ask, are you willing to supply this to me. I want to sell this for you on line. A lot of people were like, what? They are bakers so they’re not looking to sell their baking products across the country. I finally found a guy who was willing to do it and the first time we tried going to the post office, I don’t know if he went to the post office or UPS or whatever. He calls me from line and says it’s going to be $40 or $60 to ship. It’s just a little dessert so I’m like that’s clearly not going to work so we gotta go back and figure out something else for the shipping. He had packed it big to keep it from breaking and this was never going to work. I told him we had to get it in a small box and at the time I had just seen the flat rate boxes at the post office so I asked him if he could get it into one of the flat rate boxes and they do two day shipping for everything so if you can get it into one of those boxes, I think we can make it work with the shipping price. He figured out a way to make it work. He was literally just cutting up cardboard and stuffing stuff in there and trying to protect and put a little ice pack in there. It didn’t look good but it got the job done. He sent me a sample and it was kind of broken and I said, I think that was close but can we do something else. He ended up putting some Styrofoam on there and he got it to where it was perfect. I sent one to myself and I sent one to my buddies and I sent it to a couple of different locations across the US and it worked. It wasn’t breaking. They were getting it fresh. Okay, this is going to work and keep in mind there was nobody selling it on line so at the time I was thinking we could basically scale this up pretty quick because no one was shipping it or not a lot of people were shipping it. So, slowly it took “x” amount of months to start getting sales and then we kept getting more sales and more sales and that business turned into a really good business. We had higher margins than any of our other businesses only because I worked out a deal with someone who essentially doesn’t have a business set up to do that so all these sales were just extra and we were making this up anyways so a lot of times I could say we need five dozen of these or whatever and they just make them extra that day.
Richard: Would they ship them out or would you ship them out?
Billy: No, they’re drop shipped, they shipped them all out. They were shipping out of Nevada and I’m in Austin, Texas. They were shipping out of Nevada and we got another shipper in California so I never touched them. They would just ship them out and I think that is another reason it was so hard to get somebody to do this because most bakers don’t want to be shipping out and stuff. They don’t have time. That was hard to get and that’s what people don’t understand. These deals that are harder to get on the front end, those are the ones you make way more money on than the back end because no one else goes through the hassles of getting it set up. Most deals, for example you mentioned Doba, most people just want to click a button, have all these products on their site and they feel like they’ve done something. They do business, but the reality is now you can sell what everybody else can sell but they’ve not done anything else so that was one of my most successful stories and the reason was there were many hoops to jump through but once you get through them, it’s a lot more work on the front ends. Calling back and forth with the guy in line at the post office trying to figure out how you can potentially ship something. [unintelligible] creates a bigger profit because other people aren’t going to jump through the hoops. That business was doing, I don’t know what our high month was, but we got close to some months where we’d be doing 10K in revenue on this and we had a high margin. I forget our margins exactly, they changed because we changed our pricing at one point but it was where other stuff was 25%, this was more like 40% plus. We could do some paid advertising and each sale that was coming through, we actually made some money on it where the other ones, we would just make a tiny little piece.
Richard: Right. I got a question actually. I was just talking to somebody up here in Toronto and they run a tea company, like a physical store front company out here and they’re taking their business now solely on line. You can imagine the reasons why obviously and so one of the things we were discussing because I looked at doing tea myself before, a particular green tea.
Billy: I was thinking of that one too. That’s a pretty good niche.
Richard: I was looking at doing it a couple of years ago when the grocery store shelves only had Tetley and Red Rose tea on them and now you’ve got aisles and aisles of them. I was looking a couple of years ago, but I got scared I guess. I wasn’t a big enough risk taker and I got scared with the thought that because it was a food product and I was looking at getting it right from China or Japan or something like that, if something ever happened and someone got sick, I’d be sued into the stone age if I didn’t have proper liability insurance. So just curious. Did that ever come up with you selling a food product especially shipping it like that?
Billy: You know, I never got insurance for that. That was something that freaked me out sometimes. Sometimes I’d just be thinking about it like, what if somebody does get sick on this? Even thought I didn’t make it, I’m probably still liable for some of it. I never even approached an insurance company to discuss rates on it. If we had scaled that up, I probably definitely would have. Since it was pretty small, it was normally getting under 10K in revenues so it was not something that was a huge business. I guess that should not [unintelligible] because it only takes one person to sue you. I never ended up getting it. It’s probably something I should have.
Richard: You know what though? That probably would have made you unprofitable at that point. Right?
Billy: It would have been something else to eat into the margins
Richard: I guess the common theme throughout your blog posts is this whole theory of how you’ve made your own luck. You’ve taken these chances, you’re willing to take the risks and to a certain point I guess they’ve paid off. It goes back to one of the more popular posts on my blogs. I wrote it was reverse engineering the perfect e-commerce product. When I first got into e-commerce, I started looking at all this criteria as to what makes the perfect product and I ended up over the course of my learning over 2 or 3 years. I developed these 18 points and that became a very popular blog post. I ended up writing it again for shopify. I guess what I’ve kind of learned from you and even in my own practice here is that you can’t let these things stop you. You get these little hurdles and blocking points. You’ll never find the perfect product that’s going to be perfect with a check mark in every category and so even though the business I’m working on now, you know what it is but I haven’t revealed it yet on my blog. That’s coming up this week or next week when I’ve got more time to write.
Billy: Anybody guess it yet?
Richard: Yes, a couple of people have got it and I’ve just been kind of quiet about it but there are definitely some issues there when it comes to the price and the margins on this particular product. At one point I was going to let that stop me. I was like, we just can’t make it work and we can’t do what we want to do with this sort of thing, and then I realized that you just have to keep going on. I’ll find a way to make it work. We’ll cut our cost later on. As we scale up we’ll find more ways to cut costs and we’ll get more creative with our packaging. Once you scale up, your costs will go down for packaging and just for the product in general. I guess my note for the people watching too for the people who have read that blog post of mine is you can’t let these little things stop you. I don’t want that blog posted to be like this sort of checklist where you have to have checks in every single category. More or less it is meant to kind of gather your thoughts around the product and look at what is the potential? What are opportunities and what are some of the threats that you’re kind of facing with that product? It seems like a common thread among your purchases too.
Billy: Yes. It’s funny you mention the checklist. I have a short check list of stuff, essentially two things when I go into it. I think I made a blog post on it, how do you create a business that makes money. It’s funny because the business I’m going into doesn’t check off those things, my other checklist. I’m still going into it because it’s like a calculated risk. Right? Here’s a good base point, I should probably check off these things but if I can’t and there’s a good enough reason for me to still go into it, I’m okay with taking a chance. Clearly, if you have an 18 point list and every one of them are checked off, it’s probably a safe bet that you’re going to do pretty well where maybe if you’re missing a couple of them you can still look and say, the reward is there if I can get over the hurdles and I think a lot of people. There was a good quote, I forget who said it, but it said if you wait for all the lights to turn green….
Richard: You’ll never leave the driveway.
Billy: Yes and so it’s like most people are like, I need everything to be perfect before I start my first business and then a couple of years later, they’re still on the couch watching tv saying, I can’t wait until I find it, but they’re not jumping into everything and they need every box checked off. It’s funny if they get into something where every box isn’t checked off and they get into it and they fail, it’s totally okay because what will happen is because they were in the game, they will probably see all these other opportunities where it will be like, this didn’t work because of “x”, “y” or “z” but now I know so much about it that here’s an opportunity that I would have never seen because I wasn’t in the game. I think that’s really important to people. You should just jump in. Maybe there’s one or two things you’re not sure on but you just gotta jump in and people can figure it out.
Richard: I’ve been trying to meet up with a lot more people here in Toronto with e-commerce and I ended up meeting up with this guy about two weeks ago and this was when I was on the fence with my product or maybe it was a couple of weeks ago. I was on the fence with my product because of the price. I wasn’t sure. I’m like I won’t really be able to do ad work. It’s really going to be difficult to do ad work with our margins and I was kind of getting a bit unsure. I ended up meeting up with this guy and I ended up mentioning to him the idea of what I was looking at doing for this business and coincidentally he happened to own 12 blogs, it was a network of 12 blogs within this niche and they are doing four million visitors a month. He sold that about a year ago and he was like, I know all the blogs and all the contacts. He’s like, I have a list of the top 200 blogs in your niche with all the contact information. He’s like, I’ll give it to you. Let me know as soon as you’re ready for this.
Billy: That’s awesome!
Richard: Yes, it’s like this opportunity came and this is going to be a very valuable list for me in this business and so it was one of those things. You just keep going forward and you’ll find a way to solve some of these things. Things will happen. Things will pop-up and opportunities will arise but you have to keep going. You have to look for these opportunities and you have to be open and receptive to them. Right?
Billy: Yes, definitely.
Richard: I guess I have a question for you about when it comes to buying a website. So I’ve had a couple of e-commerce business now and I’ve sold them on Flippa and I’ve never purchased on Flippa though. Is that 1) your go to site for purchasing and
Richard: what is your process there? Do you have sort of like a process? When you go there what do you start looking for or where do you start?
Billy: So when I go to Flippa, I usually go to the e-commerce section. It’s a little subsection. Its kind of gotten crowded lately where other people are just throwing stuff in there that aren’t like e-commerce stores, but that’s where most of the e-commerce stores are. I go in there and I’ll sort through them. I don’t want to buy a site that’s vacant for like $10 a month so I’ll look for and sort it by the site should be making at least whatever, $500 a month or $1,000 a month or whatever. Then basically my process is 1) do I think it’s a good deal, 2) does everything check out. A lot of people will say it makes $2,000 a month and then you look at the numbers and two minutes of math will show you that these don’t add up. It’s not making that much. Maybe you have to double check all the stuff that they’re promoting that makes and you can do that by asking for access to their analytics, checking their store, like the back end of the store, asking for access to that stuff or screen shots. Honestly, something that I like to do is talk to people on the phone so I’ll call them. Just from practice I think I’ve gotten pretty good at, if someone is bs-ing me and I’m talking to them, it’s a lot easier to tell than someone who sends you an e-mail and spends all this time writing it up perfect, but if I have you on the phone and I’m asking you questions right now, it’s tough for you to stall and think of some way to trick me into thinking what you want. I feel like putting people on the spot with questions is the best way, because if they’re stalling or stuttering on something, maybe something’s not checking out so I always like to try and get them on the phone. That’s pretty much it. Because the stuff I was buying was so small, I think I bought sites mostly in the range of a few grand to $15,000 so I wasn’t buying the priciest sites. Basically if I checked out the store back end, if I check out the analytics like e-commerce, by talking to the seller on the phone [unintelligible] taking a risk and that’s why a lot of times I can make a deal with people while other people were trying to figure out if they wanted to do it or if it was risky. My strategy was always calling the seller, negotiating the best price possible and then I’d have them change the buy it now and I’d instantly buy it. I’d basically try to take sites off the market before anyone else can bid on them or before anyone can bid it up to a point where the seller is like, I’m going to let the auction play out. I’d find a site that was going for like $100, it’s not close to the end or maybe it’s got a week or two weeks left or whatever and they’ve got a buy it now at $10,000. I’d call the seller, do my due diligence and then say, hey look, if you put it at 8K I’ll buy it right now. Sometimes that would work where I’d save a few grand just because I guaranteed money in their pocket. That was my strategy. I don’t know the total number, I think in that package I bought 7 sites. I don’t know the total number I ended up buying off Flippa. It was 5 maybe. I’m not sure. Then I started the rest of my sites. I didn’t buy a ton of sites. If I was starting over now, I’d probably do something a lot bigger because I’d only want to focus on one or two sites and I’d probably go through some brokers and say, hey send me any sites for a couple hundred grand because it’s not worth the effort to buy all these little sites because if you improve it, out of 20 sites if I double one of them, I only improve my portfolio by like 5%. Right? So if I were to start over, either buying or starting a store, I’d probably buy one with a lot more zeros on it so any change you make that improves the site, is going to make you a decent amount of money, where a lot of stuff I was buying, [unintelligible] unbelievably improve a store and your total numbers across [unintelligible] or it doesn’t improve very much.
Richard: Cool! I guess maybe to finish this off I wanted to talk to you a little bit about your new project and you can tell all my listeners about your new project and I know you mentioned that it’s launching really soon, so if you wanted to talk about that.
Billy: Sure. I guess by the time this airs it will be up so it’s ecomlab.com and it’s basically a site where
Richard: I’m sorry. Is that with two “m”s or one “m”?
Billy: With one “m”. I have to start clarifying that. It’s with one “m” and it’s basically a site with e-commerce training, it’s video based training for e-commerce storeowners. It’s what I would have wanted when I was starting that I spent all sorts of time googling around and trying to figure out what the heck do I do, like how do I get traffic? How do I get people to buy? How do I start? How do I set the store up? I had no idea and I got lucky that I had a friend who was doing really well that I could just call on the phone and he’d help me through a lot of that stuff. I realized it was still hard for me and I realized that a lot of people don’t have that friend who’s in e-commerce that they can call so I basically wanted to make it really easy. If someone wanted to start a store, they don’t know where to start, they don’t know how to contact the suppliers or whatever it may be. We’re basically doing a monthly subscription site where every single week they’re getting new videos and they can just go, I need traffic. They just go to that section of the videos and search for videos that tell them how to get new traffic and its basically, I felt there was a huge gap in the market. You can either do everything yourself right now or you can pay for a course or you can pay an agency to do everything for you but most people starting out don’t have a bunch of money to start out so I wanted to make an affordable option for people. They should be putting money towards their store and not paying an agency all this money and a lot of agencies have huge margins that they’re charging these people. I wanted to fill the gap where, hey if you want to do this yourself but have no idea on what to do, you can do. We will walk you through it and we’ll hold your hand through all the videos. It’s not me doing all the videos. I’ll probably be doing some videos on case studies from my own stores that I’ve owned but am bringing on people. If someone is an expert in SEO, someone is an expert in pvc, those people will come on and do those videos because I don’t view myself as an expert in those bases. I wanted to make this huge community of e-commerce experts. We’re going to have a forum there for people to come share their stories and talk about any problems they are having and anything they’ve learned from e-commerce. I’m basically trying to create a big community for e-commerce storeowners.
Richard: Yeah and I think that’s important because I remember the first e-commerce store that I built too. It took me way longer than it should have because I didn’t know what I was doing and I didn’t know anyone else in e-commerce except for one acquaintance that was very, very successful and I couldn’t even go to him with questions because he was just completely off on a totally different level. It took me like 7 or 8 months to get up and running. I could have built multiple retail locations in that amount of time but I just didn’t know what I was doing. Having that community there to help you and guide you and you can ask questions along the way, I think that’s going to be vital and it will really help to get people started. That’s where the big issue is with people. They don’t know the process. A lot of people are scared because they don’t understand the process or what’s the next step and they get hung up. Where do I go? What do I do? What is the process for this? I think this is a go to place to get those answers. Right?
Richard: Have you locked down the price yet for what it’s going to be?
Billy: Yes. We’re going to start with just one tier but we may change it in the future as we grow and as people have different needs, but right now I think we’re doing a $100 sign-up. I think we have a couple of bonuses to give people when they sign up, like starter e-books and things like that. It’s just $30 a month, so each month they’ll just pay $30 and they’ll get at least three new videos every single week and they’ll have access to all of our back log of videos and forums are free. If people can’t afford the $30 a month, they can just sign up in the forums and kind of talk to other people and start out there.
Richard: Awesome, sounds good! So this is going to be launched probably by the time I post this video. It’s already going to be up. They can go to ecomlab.com and they can sign up. That’s awesome.
Richard: Okay then. That’s all the questions I have. You’ve give a lot of valuable advice and I’ve learned a lot actually because you’ve been in kind of a different space in e-commerce than I have and so I was even able to learn a lot from you right now.
Billy: I really appreciate the time.
Richard: I really appreciate the interview and let’s keep in touch and I’ll keep you in touch as I launch my business and I look forward to checking out ecomlab.com when it gets up and running.
Billy: Cool! Thanks a lot for having me on.
Richard: Okay man.
Billy: Talk to you soon.
Richard: See ya!