Digital Sport Publication

Digital Sport Publication

Founded in March 2016, this company is a 4-year-old magazine and sport science resource with over 1800 active members. Over the journey, the magazine has become a highly authoritative voice’s in the industry and is trusted by sport scientist from Chelsea FC and the New Zealand National Rugby Team. Our company has found favor with its members by providing curated, premium content that has been reviewed with their internal team of qualified sport scientists. This enables readers to spend less time searching through journals and websites, and more time getting athletes the results they deserve.

There are over 1,000+ new and relevant sports science studies published each month. It’s nearly impossible for practicing sport scientists to stay up to date with the literature. Our editors and contributors narrow this down to one simple publication: The Performance Digest. The performance digest is then delivered monthly in an eMagazine to the global readership and contains 19 research review articles, summarizing the latest key Sports Science research. SFS was founded by Owen Walker MScD CSCS . Owen was was formerly the Head of Academy Sports Science and Strength & Conditioning at Cardiff City Football Club, and an interim Sports Scientist for the Welsh FA.

See The Listing On Flippa!

A transcription of the interview is below for your convenience.

– Hey everybody, this is Ben with Flippa. I am here today with one of our fantastic sellers. This is Owen with a company called Science for Sport. They were founded back in early 2016. They are a four year old magazine at this point, focusing on sport science, everything related to the athletic abilities of the world. They currently boast around 1,800 active members, and over their entire journey, the magazine’s really become an authoritative voice in the industry. It’s been trusted by sport scientists world over places like Chelsea FC or the New Zealand national rugby team. They really create something interesting by curating a lot of premium content that’s been reviewed by their internal team of sport scientists. Enables readers to spend a lot less time searching through journals, websites and getting athletes exactly the results that they trust and that they deserve. So Owen, if you wanna just take a second, introduce yourself, where your background is and how you came to start this company.

– Good, well, good. So I’m basically to roll you back a little bit, 2010. I went to university to study what effectively his undergraduate degree in sport science. And as I was going through, I basically did my undergraduate degree and a master’s degree. And as I was going through, this is when the idea started formulating in my head. So there was no good place to go to get quality information that I needed to do my essays or for the internships that I was doing. And then really, I got a job at a Premier League football club and we had to make some big decisions, one of which was spending $80,000 on GPS technology for the players to wear the trackers and stuff. And so, a big decision to make. I needed to do more research on the actual technology itself. What I did was went away and like everybody pretty much do, try to look online to find good, robust, concise, and that is an important kind of word to use, as well, concise information about this sport science, kind of technology, any of the modalities, whether it’s ice baths and things like that. And what I was hit with was crickets. Really, there was nothing, The only things you could find were behind paywalls of academic journals. And even if you could get access to them, they were too complicated. Lots of jargon, really boring, like conflicting because if you got a randomized control trial, they might conflict in terms of information. So you always need to find systematic reviews and meta analysis. And we were just like, this is far too complicated for coaches working in the field. So what we did was kind of digestible information and decided that we needed to put it onto a website where coaches could just access anytime, anywhere and get actionable information they needed to do their job. And so really, that’s where the journey began was 2010 onwards. And then, we launched this idea formulated, I started working in sport and like said, like you said, sorry, we launched in 2016. So it was formulated in my mind. It wasn’t a construction process that entire time ’cause I was working, and I took the time off. I resigned from the job to build Science for Sport and here it is today.

– Yeah, it’s amazing. It’s doing really well. I know, kind of numbers that you’ve got posted just on Flippa, I mean, just the following itself is pretty, it’s a pretty huge magnitude. Over 230,000 Instagram followers. To me, that just speaks for itself. Like that’s such a hard thing to amass organic following like that, people who really care. And I’m curious, I know you’ve pointed out a big point of the company and the information that you put out is curating this concise sport science information. How are you doing that? What kind of team do you have around you that’s putting that information together?

– Yeah, so what we did was build a team of freelancers and contractors. People who work as experts in the actual field. So these are coaches working at the highest level. And so, what we do is we get them to work kind of with us, I’m not gonna say for us, but with us to help bring this education to coaches. They source the information. We have our information sources, the academic journals. And then what they do is they have a pre structured template, and they digest, they read through the studies, digest the information, and then kind of spit it back to us, if you like, in a document with our expert information. And then, our chief editor translates, puts that into the magazine, the PDF digital magazine and it’s done. So we use the experts source and digest the information, a chief editor curates it and publishes it.

– Sounds easy, hopefully it is. I am curious.

– It’s joyful, isn’t it?

– Yeah, I mean, how much time are you actually spending on the business, or is there anyone else who is a primary partner in spending a lot of time in this business, how does that work?

– I always love that question because it’s, kind of clear as mud in a way. You gotta you got always got to decide for it. So I spend anywhere from 30, 35 hours per week on the business, but 90% of that is growth related at 10% is operational. You know, so operational being like, just general day to day tasks, answering questions from the team, making sure your systems are running smoothly. And yeah, and the other 90% is all growth related. And I would say that, that structure wise 90, 10th is only like as started happening maybe, we’re on November 2019. So was that three months ago? So over the last three months, my role really has been entirely growth related. And that’s where we’re project like up projections for this era. Kind of a doubling in revenue and stuff, but obviously that’s, on us to grow it.

– Yeah, of course. Can you expand on that a little bit by growth related, I assume you’re speaking of marketing tactics, or is that more content creation or what’s involved there?

– We’re gonna release two new products. This is the idea anyway, so we’re releasing another subscription products. Is at the same old digital info product information. It’s just like, content behind a paywall. And we’ve got a content production system putting together for that Interstellar, like a course, an online course that I’m putting together. And also it’s related to like said more marketing in sales. So increase in lead generation, and increasing the conversion rate of those leads. And also like partnerships and sponsor opportunities as well. So for instance, in order to increase lead generation we’re gonna release a podcast, an open access podcast right to the world is free. So that will increase our kind of following, social following. And then we’ll convert those into emails and then into free trial list and then free trial list into paying members. And then what we do is to cover the cost of the podcast we bring in a sponsor because like you said, we’ve got it as our Instagram grows by that 3000 followers per week right now organically nothing paid like unless genuine followship. So we’ve got a lot of big companies that wanna access our stuff. So we’ve done deals with universities as partners, sponsors partners when were Calpol, or the world’s leading technology company in wearable technology, sport science. And we’ll leverage partnerships like that to cover podcast to cover the cost of the podcast, and use the podcast to generate leads to bringing customers. So yeah.

– Yeah that’s amazing. And it makes so much sense because it’s such a, you have such a specific niche that you’re covering, but it’s really like a high spending power niche people who are, you know, top level athletes or top level university athletes and nothing else who really trying to get to that next level. So it’s somewhere that I would imagine any of the large sports related companies in any way, whatever they all would be interested in, kind of advertising here. And that’s really cool about the podcast as well, because I can definitely see this becoming this whole. Just, I mean, it’s just content everywhere. One day, maybe we’ll have a TV show, who knows.

– It’s funny you say that ’cause, you know, like sport sciences. I wouldn’t say it an emerging industry anymore. It’s almost an established industry now, but it’s still, like in its infancy, like, you know, it’s expanded, it’s blown up quickly. And as technology improves, and artificial intelligence improves, it’s only gonna get bigger and bigger. And you talked about a TV show. I’m not not sure if you ever saw it, but ESPN Sport Science. It was a TV show here in the US and around the world, that blew up basically because people love to see the science behind sport and behind the best athletes. And so that I mean that program sees now but it’s again, still a prime opportunity, where Science for Sport is, is literally as pretty much an industry leader in sport science. And so the potential to move into that space and be the world leading sport science educational platform for all levels, not just coaches, we’re talking athletes and just general population in terms of education. We’re in the prime position to do that.

– Yeah, it’s incredible that you’ve built in honestly not that long of a time, although I’m sure it seems like ages for you. I’m curious. It’s not I mean, you have so much on the table already, but do you see any other growth opportunities that you’re maybe not working on that you would suggest to a new owner to take under their wing and they took this company over?

– So pretty much we’ve identified the main areas for growth. We’re basically now tackling those like that it only makes sense. So we’re gonna make those priorities and those are increasing the average order value, increasing the product range to serve a bigger aspect of our audience, basically, serve more of our audience, leveraging sponsors, and partnerships. Those really are kind of the big three is and kind of increasing the conversion rate and leads really so we don’t run any like ongoing paid advertisement in terms of Facebook ads or anything. So again, that’s a big opportunity to build like a self liquidating offer. And obviously, then, yeah, scale it in that regard. So all the big growth related items you’re talking about, we’re now, since we now completely systemize the business, this is our objective for 2020. Though we’re looking at it realistically, this company will be worth a hell of a lot more in 12 months time based on my projections, of course, that’s where it is. So this is a prime opportunity if you are interested in getting the business right before it triples in Bali.

– Yes, a chance to get in on what can be literally, like a sport science empire.

– Genuinely yeah.

– It’s honestly one of my favorite listings right now on Flippa. I think you’ve got something really spectacular and I think the right buyer is out there. And they’re gonna be they’re gonna be getting an amazing deal because as you said, the growth potential is truly fantastic on this. So I just wanted to thank you, Owen, for joining me today. It’s really been interesting. I will of course link to your listing on Flippa below this video. So hopefully, if you’re watching, you become a little bit curious on what you can do with Science for Sport. Thanks, Owen.

– Thanks very much, mate. It’s been a pleasure.

Traigo Tu Compra

Traigo Tu Compra

In 2016, the founders of TraigoTuCompra realized they were often transporting otherwise unavailable or expensive products for friends and family members living abroad in their luggage. They recognized that asking friends/family members to transport products was bothersome and would often come with a delay. They also recognized that hundreds of individuals travel daily with idle suitcase space.

The solution? A platform which allows people to buy products abroad in a simple, safe and economical way thanks to qualified travelers, who give up available space in their luggage and transport orders in exchange for a reward. Traigo Tu Compra removes the need for buyers to use expensive couriers or bother friends and family with requests to transport goods.

See The Listing On Flippa!

Tell us a little about yourself and your website?

My name is Marcelo Machuca, I am an Uruguayan Public Accountant and after having worked at top international consulting firms (like KPMG and BKR) for 20 years, in 2014 I decided to found Desafiomundial.com, a digital content site that had more than 50 million visits and almost 400,000 followers on social networks until I decided to sell the business in 2016 – through Flippa – to US investors. 

In 2016 I lived in New York with my wife and each time we travel to LATAM (to Argentina and Uruguay), we loaded our bags with orders for family & friends… and we did it for free! Why this happens? Because buyers throughout all LATAM do not find certain products or they are too expensive locally.

Therefore, in 2017 we decided to launch https://traigotucompra.com/, to connect buyers who need products from abroad with travelers, who transport orders in their luggage in exchange for a reward.

We did an investigation and identified that Cross Border Market in early 2017 exceeded $100 million dollars in only LATAM and USA (today exceeds $160 million) and on the other hand, we only found a single strong competitor acting in the region such as Grabr.io. So, in April 2017 we decided to invest in the development of the Traigo Tu Compra platform and in August 2017 we were already in a position to launch.

The business has not been around for very long and you’ve found almost immediate success. How have you marketed the product and where are your customers originating from?

At the beginning of the project, during the final months of 2017, we decided to launch the platform promoting the opportunity to buy abroad through travelers, exclusively among our own contacts and friends (through email & WhatsApp), although also incorporating orders that were spontaneously generated through our platform, as it began to rank in the Google searches. Our main customers were from Argentina and Uruguay.

Together with my wife and a friend, we traveled several times to Miami and thus delivered the first 200 orders with total success. The rewards that we obtained (added to the 10% commission) compensated the travel costs, and that travel tests were extremely useful to accumulate experience, adjust details, as well as to make financial arrangements in the United States as the opening of our first Bank account.

During 2018 we continued to deliver orders in a similar way, traveling the team of founders from Argentina / Uruguay to the United States although already alternating with our first spontaneous travelers who registered on the platform.

In August 2018 we received financial support from the Ministry of Production of Argentina that provided us with $5,000 USD, of which we allocated  80% to the development of a Mobile App for iOS, and the remaining 20% ​​for specific marketing actions mainly on Instagram and Facebook.

In 2019 we achieved an alliance with Viasendo (a Uruguayan courier agency that consolidates, stores and delivers packages inside the USA) that allowed us to optimize the process of buying and delivering orders. This alliance allowed us to consolidate an alternative business model that consists not only of earning money through the commissions generated by the intermediation between buyers and ‘spontaneous’ travelers, but also earning money (between USD $1,500 and USD $2,000, net of travel expenses ) product of the trips made by the Traigo Tu Compra’s team (also adding external travelers hired when necessary) and delivering orders for clients principally from Argentina and Uruguay.

During 2019 we also received interviews from the Uruguayan and Argentinian press and the published articles allowed us to gain clients and reputation quickly in both countries.

How does your business make money?

We make money in two ways:

1)
10% commission over $ transaction

2) In some cases we contract travelers and pay their travel expenses in order to obtain not only commissions but also revenue from rewards .

 

How much time each week are you currently spending on the business?

Almost the entire process is automated: all you have to do after the agreement between buyer and traveler is finalized, is to be aware of the status of each order on the platform.

Payments are automatically processed by PayPal: when the traveler delivers the order, the buyer confirms receipt on the platform and changes the order status to “delivered”, and at that time you must manually transfer the money to the traveler through PayPal. This activity, as well as customer service, will not take more than 3 hours a day. 

However, it is important to highlight that in this instance to give movement to the business and considering the lack of funds for marketing, the business owners are traveling monthly to the United States to buy and deliver orders which implies more work hours.

Why have you decided to sell the business?

TraigoTuCompra needs capital to finance marketing actions that will allow the business to expand and at the same time reach an equilibrium point that includes compensation for the owner and for future employees.

Because I don’t have those necessary funds, nor have I been able to get them, and the best thing for the business is a new owner who has those financial possibilities for himself or with potential investors.

What would someone need to do or know to continue operating the business?

Traigo Tu Compra needs some capital to finance marketing actions that allow the business to expand, to be massive, and thus reaching an optimal financial position. So, the best thing for the business is a new owner who has those financial possibilities for himself or with potential investors, to sustain this growth.

if the new owner does not have extra funds or doesn’t have access to potential investors, he can also continue managing the company as I have been doing, with a slow but sure growth. And even if they wish, and following my instructions (I give 30 days free support!), the new owner can also act himself as a Trago Tu Compra traveler and earn revenue from commission and rewards, delivering orders from USA to any country of LATAM.

Can you list a few growth opportunities for a potential buyer?

  • TraigoTuCompra is a global company: anyone from anywhere in the world can make cross border shopping not only in the USA, but also in any country at Europe, Asia, or even LATAM. We started exploring the Argentine and Uruguayan market because we identified a great potential in purchases from the USA mainly. However, there are other markets such as Chile, Peru and especially Brazil, with immense potential to explore and grow the business. Cross Border Trade market reaches USD $160 million at LATAM & USA and USD $1 Billion GLOBALLY.

  • Make agreements with Amazon to obtain income derived from its Affiliate Program.

  • Sign agreements with travel agencies to create a network of frequent travelers

  • Offer buyers the possibility to buy in installments and thus obtain profits from accrued interest
  • Millions of Latins who permanently or temporarily reside abroad want access to national products. (Examples include yerba mate, wine, dulce de leche etc) in their country of residence. Access to these products is difficult and if possible, they have a high cost. Family trips are also infrequent. So an opportunity of growth is to boost the business through marketing actions aimed at exploiting this niche market
How Does A Website Buyer Choose What To Buy?

How Does A Website Buyer Choose What To Buy?

How Does A Website Buyer Choose What To Buy?

Goran Duskic is a serial entrepreneur with a storied experience in buying and selling websites. During this interview, led by Flippa CEO Blake Hutchison, we gain a bit of insight to his strategies that have led to his ownership of over 50 successful websites. From understanding your own skills, to working within your budget, to reading the industry and interpreting trends, Goran opens the doors to his own experience in buying, running, and selling websites so that we might learn from his successes and also his mistakes.

A transcription of the video content is posted below for your convenience.

– Good afternoon everyone and welcome to another Flippa webinar. Today I am joined by Goran Duskic. Goran is a prolific website investor. He’s founded multiple companies, he’s had a couple of successes as well as an entrepreneur, successfully exiting his businesses and today he’s going to give you some insight into his quite prolific website investing journey to date as I said, Goran owns many websites, I believe the portfolio is now up to 50. Goran thank you very much for being with us today.

– Thank you for inviting me Blake. Thank you for this kind intro. I’m happy to be here and hopefully I can contribute to Flippa community.

– Wonderful so what we’re going to do Goran is we’re gonna help out the big Flippa community that are first time buyers to the platform. They’re obviously very excited about getting into digital asset investing, be that as an investor or someone who’s going to build, run, and ultimately grow an asset. Now you’re a successful entrepreneur, before we get started, just give us a brief introduction to WhoAPI, the business that you’ve been running for nine years.

– Yeah so WhoAPI is basically a set of APIs that helps developers around the world to integrate into their own systems for different reasons. For example we’ve had clients like banks, but also website builders and hosting companies, cyber security companies, so it’s a really diverse crowd from around the world in the US, Australia as well, Japan, so it’s a 24 hour gig, you can say. We’ve received angel and venture capital for this startup and I suppose it’s going okay compared to the businesses that failed but also, it’s also going just okay compared to the big acquisitions and investing rounds you’ve been reading on TechCrunch for example. So that’s kind of the story about WhoAPI.

– Fantastic, thanks you. It sounds like a wonderful journey obviously you’ve got some outstanding customers from around the world, so congratulations there. Now let’s get into your journey. As we said, you’ve got over 50 websites in the portfolio but what made you get into this space to begin with?

– Yeah so I was looking for a way to, save some money, to create some sort of passive income as I’ve been reading a lot of books about investing and obviously if you are reading books about investing from an American author he’s gonna say real estate, real estate, which doesn’t really apply to Croatia, if you look at the prices of the houses and the, people moving away from Croatia, so it’s not like we have an influx of immigrants and immigrants from, like the United States so it’s a totally different ball game, so I was looking for something else obviously. And this was before the Bitcoin craze, before it shot up to 20 thousand dollars or whatever, so I was looking into Bitcoin also, and read a few books about Bitcoin and talked to some, Bitcoin investors and I then realized I should really focus on something that I am passionate about and something that aligns with my skillset and something that I could be working on for a long, for several years at least. So my first company was web design, web hosting company, we built websites for our clients here in Croatia and realized, wow I like building websites, I know pretty much everything about websites there is, I already have a systems administrator on the payroll, I have my own dedicated server, maybe I could try this, maybe I could start buying some websites and see how it goes. So the very first website I bought it was obviously a scam and I didn’t do due diligence and I lost two thousand dollars.

– [Blake] Okay.

– And I asked my lawyer if we could do something about it and he told me that the whole cost of suing somebody and the whole thing to go after him would cost around two thousand dollars. So my, okay, so I have to spend another another two thousand just to go after this guy so I just said, okay, this is a learning experience I learned how, how some data points could be manipulated and essentially that’s how that was the first thing I looked into when I was gonna do my second deal. But I didn’t buy any websites for I think two years, or maybe even more, before I was really comfortable and I had much more money to play with and my approach was totally different, I wasn’t even looking for the same type of deal and my due diligence process was also different.

– [Blake] Okay.

– And anyway, to answer your question, the website I bought was chemistryjokes.com for $500.

– Wow.

– I thought that was a great deal, I thought that the name itself was worth $500 and, so that’s I suppose a point you can take if you know a value of a domain name you could buy the website itself just for the domain name and then the revenue is just kind of a bonus if that makes sense?

– Yeah, absolutely makes sense. Particularly if it’s an aged domain name and it’s got some domain authority to it. So your, what is you strategy? So you own 50 websites, what is the approach that you’re actually taking? What interests you about the sites you buy, are they all the same? What’s the strategy?

– Well my strategy changes. So for example, when I was buying my first websites my strategy was okay, let’s see how this process of buying and moving the website really works, what sellers are out there, what do I want to look into the seller, so it was more a learning process of everything. Of positioning myself as an investor or I should say a buyer to the seller, see how to communicate because not all people are the same. You are dealing with sellers in Asia, in America, in Europe, they all have different vocabulary, different styles of selling. Some are first time sellers, some are repeat sellers, so there’s a learning curve, if you’re a newbie. So that’s one strategy, just learn as much as you can, right. Then the second strategy for me was, building my portfolio and seeing okay what works for me, what works in a website, what kind of niches I want to work on. And this also changes because sometimes you feel, oh I really wanna do, I don’t know, gaming, I wanna do gaming websites and then you realize ah ha, with the games there are trends, games come and go, I don’t know Flash is now dying so if you bought some websites that have Flash games, this is obviously gonna go down over the years so, you begin to learn about trends and you start to build your portfolio and then third strategy for me, which I’m currently at is, I’m trying to condense my portfolio I’m trying to combine some of the smaller websites into some bigger websites and obviously if you’re doing great and your budget increases, at first you’re buying just small websites and then you’re going to grow into medium websites and hopefully to some large websites and then again your strategy changes with the size of the deals you’re involved in. But kind of a…

– Could you define a small, medium, and large?

– Well I suppose the easiest way would be on your budget, up to a couple thousand dollars would be a small, and then a medium up to mid-five figures, maybe three figures, depending on where you’re from, and then above six figures you would say it’s a large deal but then again, I think it also depends where you’re from. If you’re in the United States and you say to somebody this website is making a thousand dollars you can’t do anything with a thousand dollars but if you’re in Eastern Europe like I am, you have no college tuition, no college debut, you own the real estate you live in, and you’ve bought the car that you’re driving, obviously you don’t have any debt, then a thousand is pretty much all you need for a really nice life here. So it really depends also where you live.

– Yep, super interesting. Now you mentioned to me through the beginnings of when you and I were getting to know each other you mentioned that it’s really important the people you surround yourself with. What do you mean by that?

– Yeah as a website investor, people and tools is something that you’re working on and working with every day throughout the day. When you start buying and selling websites you’re going to do the due diligence and check up on the websites, see if the backlinks are there, see if the key word, the key word position is there, if the website is opening quickly, if it’s slow, if it has SSL certificates installed, all that, so you need some proper tools to check on the website, like a doctor. And then the people are also really important because as soon as you start buying and selling websites you are going to be dealing with people and if you are lucky, like I have been, then you encounter some good sellers, you’re going to be interacting with them on a repeat basis. Some of these sellers have also particular skills, let’s say in SEO, in social media, and they could be offering you some services to build up the websites that you’ve bought from them. So you’re going to deal with those people and it’s really important that these people are trustworthy, skillful, experienced, ethical, and that you’re on the same page with them.

– And so you mentioned people, you’ve bought a lot of websites, now are you tending to buy multiple websites from the same person?

– I’m agnostic, so I buy off the marketplace, I’ve bought, and I do buy from some forums where I see websites advertised. And then, if I find a repeat seller who has a good portfolio, good websites to sell, we stay on weekly basis in touch, some of them I consider my friends now, we talk about, about everything, so I do buy, and I do buy, let’s say, there was this, few times actually, where I bought a small portfolio of websites. The person would want to focus on some new venture or wants to get out of it completely or has some old websites just lying around and then I just take them off the table for them. And for me it’s an asset to either, build a bigger website or just to have it as a passive income just lying around, an active website that’s bringing some revenue.

– Okay, so let’s imagine that you’re on a marketplace or you’re in a forum and you come across a website. What are the, what are the top three, what are the top things that you look for, before you make a decision as to whether you inquire or not.

– Sure, well that’s a great question because that would probably, that would reveal how experienced I am or how knowledgeable I’m not or I am. So I would say that’s learning process. Right now I’m seeing that old websites and to do better, they don’t disappear overnight. So age is a crucial factor I would say, that’s one. Second, is it has to fall under my budget, so if it’s an opportunity that would ask me to invest, let’s say 50 thousand dollars, or 100 thousand dollars, it would, I would risk too much of my money, so it’s a deciding factor for me. So that would be the second. Then the third, I would say either it would have to fit into my portfolio, like diversity or something I could, I could use it with some other websites I have, or it would have to, it would have to emphasis some of the skillsets that I have or that my team has. So I know a good example would be a website built with django. I bought a website that was built in django and it was an old website in the graphic design industry and I really liked it but it was in django and obviously buyers tend to like WordPress and they weren’t excited about this django website. I asked my developer, what do you think about django, he’s like sure, yeah, I’d love to work on a website built in django so I bought it and this still is one of the best websites that I bought, so you have to look for deals that would cater to your skillset or your teams skillset if you have a team.

– Okay, now let’s talk about after that. So you’ve decided that you’re interested in inquiring, it’s suited your portfolio, it’s got some nice age about it, and you are interested in the subject matter.

– Can afford it.

– Can afford it. Okay so you’ve now inquired, what is it that you’re specifically as a buyer going to ask this seller, how do you start off the dialogue?

– Well, for first of all, I don’t expect for him to, discover something that’s bad about the website, or something that’s good about the website. You have the responsibility and you have to, you have to know these things. So that, I take care of that by myself. Obviously if the seller is willing to help, I listen to it, but if you’ve ever bought a used car, it should really go into one ear and out the other. So what I’m really looking for with the seller is, what kind of a person he is, what kind of background he has, where he is from, just get to know him on a personal level. And then, try to figure out why he is selling. As I mentioned before, some of them want to, I don’t know, they got a, full time job and I don’t know at Google or some big company and they need 100% to focus on it and they have to sell those, let’s say, several small websites they own. So that’s kind of one scenario and you really have to familiarize yourself with the seller and see why he is selling the website so that’s kind of what I’m looking for at this seller.

– Okay, and what about, actual website performance? What are you gonna analyze?

– Well first of all I’m gonna try to figure out if the revenue is really there. Obviously I’m buying websites with revenue so that’s a crucial component. So I’m gathering as much evidence as I can about the revenue from the seller of course with the screenshots and the video, if it’s possible, and that’s kind of one thing but the other thing is you have to be able to explain to yourself if this is supporting the revenue that’s being generated, if the website doesn’t have a lot of traffic, or if the traffic is suspicious and you can’t connect the dots between the revenue and the traffic that’s being generated by the website, that’s something that I would either try to investigate or talk with the seller or I would just completely avoid the deal, just look for a new deal. You have to be able to see, either on Google or social media or somewhere else, this traffic being generated and this revenue being generated. If I don’t see it, I’m just, I’m out of there.

– And how are you–

– [Goran] The seller.

– How are you verifying revenue other than the data points that are being provided to you from the seller?

– Yeah so that’s a great question because that was my first downfall. I had one that I was thinking I had validated the revenue, I saw the screenshots and I thought that the revenue was there but then, then the revenue was faked and my AdSense account got banned and the whole spiel happened. I am trying to verify how the revenue is being generated. Is the website there for, let’s say, top three key words on Google. Is the video that’s so popular on the website, is it being liked and shared on YouTube? I’m always looking for the background. That’s kind of, I have to be able to connect the dots how this revenue is being generated. And then the proof that the seller is showing is just a bonus, if I see the AdSense screenshot, if I see the Amazon Affiliates screenshots, that’s kind of a bonus, that’s the one piece of the puzzle that I’m trying to connect with the whole ecosystem of the website and how the website is working.

– Okay, so let’s talk through a negotiation a little bit. Once you’ve got some more comfort in who the seller is, once you’ve gone through and you’ve verified, some of the information, how do you decide, obviously they’ve got an asking price, but how do you decide what a fair and reasonable price is and what’s your current view on, multiples?

– The worst answer it depends and it changes over time. Obviously the multiples are going up, up and up so who knows how that’s going to proceed, I think today they’re around 30X on a monthly basis but then again it depends on the age of the website and other factors and how experienced the seller is, who the seller is, if, some sellers are asking 40X multiples and, obviously they have the right to do this because they’ve prevetted the website, they worked on the website, they know the website, bottom up, they know what the website is capable of, so that’s also a good multiple if it’s something that you can work with. But I’ve also bought websites with 10X multiples. They are riskier, you have to know what you’re doing, and you have to be prepared to, for the website to tank basically, just to delete it off your portfolio. And there, if this happens you can also, you can have a backup plan if the website has a valuable domain name or you can reuse the domain name for a different purpose or, park it on another website that you own. Then you can basically, limit your downside on the deal that, is gone bad.

– And how much of your decision is based on the prior companies, or the prior 12 months performance, versus future opportunity. I often say that buyers are looking for opportunity but they pay for performance. What’s your general viewpoint and when you’re looking at an acquisition, no doubt you do have an eye to opportunity, but how do you think about opportunity and its relationship to your, the ultimate buy price?

– That’s a tough question. I would agree with what you’ve said. And also I would add to that, it depends on your strategy, why you are buying the website, if you’re buying the website for the opportunity, something that you plan to build, to create, to grow, I would say then it’s more important, the opportunity. But then if you’re looking for, the passive income, to not work so much on the website, to just let it ride until it rides and then if it dies off it dies off, then you are more focused on the past performances. So I would say it depends on the strategy and on the buyer, what he is looking for and what he is planning to do with this purchase.

– Understood, okay to finish up, what is your number one tip for a new buyer?

– Number one tip. Number one, I have several but what would be the number one? I would say, the number one tip. Well the number one thing is, this is going to sound philosophical, know yourself, but it is, you have to know what you are doing with, what you want to achieve. Is it passive income, is it big opportunity, is it this side gig for you, is it going to be a permanent employment, because it can grow into it. I would say you have to know why you are doing this. If you’re doing this for the quick buck you’re probably going to fail, you’re going to loose money, so don’t do it. If it’s going to be a long-term thing for you, then you have to have a certain approach. Yeah, yeah, number one tip would be, first sit down, take your piece of paper and write what am I trying to do with this.

– Yeah, I think that’s a really, really good point and one of the things we see at Flippa a lot is that people are buying their next job and so, their next job they need to expect to be paid like it was a career and so that means having subject matter expertise. So when you go to work, you’re typically hired because you have subject matter expertise and you’re also your employer expects you to be able to do a job very well. It’s no different with the acquisition of a website. You should buy something that you actually feel comfortable running.

– Of course, yeah you need to know your skillset, you need to know who you are because maybe you’re a great, let’s say graphic designer or a salesman or something but maybe you’re not that good at updating your WordPress website, maybe you’re not that technical, maybe you’re not, I don’t know you don’t have the budget to buy the best website that’s best for you. If you’re expecting a certain level of revenue, obviously you’re going to have to have money to invest into this website. So it really depends on the situation and the, thing you’re after, the future that you’re looking forward to.

– Absolutely, well thank you Goran, it’s been an absolute pleasure, a really, really insightful interview with someone who does this regularly and that’s hugely valuable for the Flippa community. We’ve got lots of first time buyers who are out there looking for their first acquisition and so to hear from someone like you is hugely valuable. Thank you so much for your time.

– Thank you, I mean thank you very much for inviting me, I hope it’s been helpful to the Flippa community, to first time buyers, obviously I’ve been a member of this community for a few years now and I’m really excited about what the future holds and I’m excited with the, Flippa community growing and becoming more experienced, as the sellers are and also the buyers, these are the people that I will also interact with and look for the websites there to buy and to sell so I’m really hoping that it becomes an even better place than it is today.

– Thanks very much.

– Thank you Blake, have a good day and greetings to everybody at the Flippa.

The Flippa Buyer’s Journey featuring John Chen

The Flippa Buyer’s Journey featuring John Chen

The Flippa Buyer’s Journey featuring John Chen

John Chen is a serial Flippa entrepreneur. He has had great success previously buying a business via our platform, growing it, and then reselling it for an incredible profit. Recently, he purchased another business on Flippa and is hoping to replicate the success that he’s seen in the past. We’ll be following his journey over the next year to help us all understand a bit of what goes on behind the scenes when it comes to investing in a digital asset. We’ll learn what sort of potential John looks for and how he molds that potential over time.

We hope you enjoy this first video in what will surely be an exciting series and that it provides a bit of inspiration and wisdom for your own online business journey.

Read the video transcript below

Blake Hutchison: All righty, everyone, it’s fantastic to be here today. My name’s Blake Hutchison, I’m the CEO at Flippa and every now and then take the opportunity to meet and greet some of our buyers and sellers, and today I’m very pleased to be joined by John Chen. John’s based in New York and he’s actually been a longtime member of the Flippa platform, having first acquired a business a number of years ago and recently sold that as well on the Flippa platform. What we’re going to do with John over the next couple of months is actually profile his journey as a buyer on Flippa. H most recently has got back into the game, so he’s been very active on the platform and has recently acquired a new asset. So we’ll get into the detail there and then talk to John about his experiences, from looking for businesses ultimately buying that [inaudible 00:05:48], growing that. So thanks for being with us, and John, thank you. John, tell us a little bit about yourself and your journey with Flippa to date.

John Chen: Yeah, sure. I first found Flippa in 2017, I want to say. At the time I was working a hedge fund job and wanted to do something entrepreneurial but didn’t have any ideas of my own. So I went on the platform, bought a very small business, under 10 grand for the entire business, and over the course of two years, grew it to over a million in revenue and recently sold it on Flippa as well in September. I’ve been taking a little bit of time off, but I think this series is going to be great because I recently bought a new business on Flippa around the same size as the first one. But this time I want to document the journey and go through my process of how I think about it and what I’m going to ultimately going to do to try to grow it.

Blake Hutchison: Fantastic, John, thank you. And again, thanks for being a long time member of the platform. I think people will find this a lot of fun because one of the things that we know is that there’s lots of trading on Flippa, but what we rarely get insight into is that growth journey. So what people do after they’ve acquired something. So first and foremost, you started looking again what, two months ago now? How long has that search journey been?

John Chen: Yeah, when I sold it in September, when I sold Blush and Bar in September, I was looking just every week, just kind of casually browsing and eventually found the new business, which is called Gourmet Wedding Gifts. There were a couple of other businesses that I was interested in, maybe a couple in lead gen, and some of the times I would be really interested in the business, I would set up calls and then there’d be another buyer who would outbid me or something like that, and I just tried to tell myself to stay disciplined and not pay a crazy price or get into a business that was a little bit too big for me or get into a business that I didn’t really understand. I tried to leverage my eCommerce experience into something where I felt very confident that I wouldn’t lose money.

Blake Hutchison: Fantastic. You had mentioned in the lead up to to you and I having this discussion that you were disciplined enough to look through maybe 50 or 100 businesses. You may have seen lots of stuff before you actually decided to inquire or ultimately make a purchase. Talk us through that a little bit. How many things do you think you took a genuine look at before you finally settled on an acquisition?

John Chen: A genuine look at? Probably 25 to 50. But a lot more browsing. I think since I worked at the hedge fund, I was trained to disqualify a lot of opportunities very quickly. So if a business was declining or there’d be some element of the business I didn’t really understand very well, or if it was just a little too big, then that would just be like an instant pass for me, no matter how profitable it looks. And also price. If the seller couldn’t come to a price that was very reasonable or I thought I had a cushion of safety, then also that was an instant pass for me.

Blake Hutchison: So you ended up settling on Gourmet Wedding Gifts. When you first looked at the listing? What was the appealing too?

John Chen: Do you want to pull up the actual… I have the listing here. We can probably just go over the listing and go over if that’s okay.

Blake Hutchison: Yeah, that looks fantastic. You are going to share your screen then?

John Chen: Yeah, let me share my screen and let’s see if we can… Cool. Can everyone see?

Blake Hutchison: Yes. We’ve got you, that’s fantastic.

John Chen: Awesome. Awesome. This is Gourmet Wedding Gifts. When I first saw it… I like to look on the editor’s choice first. It just seems a little bit more curated list of businesses that are a little bit more interesting. So this one, what I found interesting about it, if we just kind of look through here, is that first was that it was in a niche that was interesting to me because I… The first business I owned sold jewelry, so it was kind of a similar customer, not the exact same customer, because this is for an event, but I knew that customer well. The second is that a larger percentage of the business was organic traffic, and I liked that it was more organic because even though most of our revenue from the jewelry business was paid social, that’s a little bit more unstable, a little bit more volatile of a traffic source than organic search.

John Chen: With organic search it’s not going to blow up over night, but it’s not going to go away either. I thought about protecting the downside first and said, “If I’m going to give someone money for this business, I’d like to know that I’m going to get sales that come from organic search.”

Blake Hutchison: Yeah, it’s a safer investment. Less dependent on huge mass marketing spend.

John Chen: Right. Less dependent on paid marketing and stuff. So here I looked at the profits, and we can actually go into more detail about the profits. The old owners did something that was really, really interesting that I thought it was a really big advantage. They sold half on Etsy. Etsy is, again, another platform, kind of like a Shopify or an Amazon. But I liked that because Etsy’s kind of this smaller, more insular platform that not a lot of people know. So if you have some traffic on Etsy that’s kind of working, it felt like to me it was more valuable. So those were the reasons for the traffic. I can get into… Do you have any questions so far, Blake, or should I get into-

Blake Hutchison: No, I think that’s super interesting. A couple of questions for you. You mentioned Etsy, and therefore the credibility of that as a sales platform. Clearly it’s a highly competitive platform and the community itself on Etsy is, I guess, relatively sophisticated. So if something is being sold there and selling well there you’ve got something of credibility. How do you think about diversification of platforms when you are looking at something like this? Was it a concern for you and did you ask the question as to whether there was other platforms that they were operating on or was it was a less of a concern for you?

John Chen: It was half on Shopify and half on Etsy. The Etsy thing is good because it’s kind of hard to get onto Etsy. Not every drop shipper or internet marketer can get onto Etsy. It has that homegrown feel. I know maybe it’s not as it used to be, but it’s still a little bit more protected and there’s a barrier to entry there. I felt relatively safe about the revenue on Etsy, and that was actually one of the deciding factors where half the revenue was from Etsy, half was on Shopify. If it comes from Shopify, it could be they’re selling to friends and family or they’re selling to whatever it is. But with Etsy, I was more comfortable that that was a real traffic source, and I said, “Okay, even if all the revenue from Shopify went away, the Etsy stuff is… I’m not going to get killed on this.” Etsy was a big part of it.

Blake Hutchison: And how did you actually interrogate that data? What did you ask the seller for as part of that due diligence process? Was it a matter of just trusting them? Did you jump into Shopify and answer yourself? What did you do to verify some of that [crosstalk 00:13:54]?

John Chen: This probably leads into the next point of the revenue and the profitability and how you prove that out. The revenue is fairly easy. You just get access to their Etsy account, their Shopify account, and see if you can just rebuild their revenue month by month. It might be off like a couple thousand dollars for the whole year or $1,000 for the year, that makes sense. For example, this business, they had some… They sold in-person sales or something, so that wasn’t that big of an issue.

John Chen: So the revenue is relatively easy to prove out that’s real. When it comes to the costs, what was really interesting was that they use QuickBooks and kind of just uploaded all these costs. But when you went into more detail to break down what the costs were… For example, this business, they said they did a about $8,000 a year in profit, but a large percentage of those operating costs were their personal expenses that they spent on Amazon and stuff. I was able to confidently add back maybe like five to 6,000 of seller’s discretionary earnings, and Blake, maybe you can go into that a little bit to to explain a little bit about how that actually all works.

Blake Hutchison: Yeah, I think that’s a super interesting point, John, thanks for raising it. So in this particular case, you’ve got a seller who’s connected to QuickBooks. That’s something that a seller can do through the Flippa platform. Now the upside is that it’s straight from the source, straight from plan accounting software. The downside is, as you said, you’re actually getting a full capture of the costs, and a lot of that will be personal expenses. It could be meals, entertainment, an owner salary, blowing Amazon gift cards for friends and family because it’s beneficial for that business owner to apply everything to a business account versus a personal account. And that stuff needs to be, as you say, added back.

Blake Hutchison: What the SDE calculation is, is that extracted. So it is revenue, obviously minus costs, and then the manual removal of anything which is non-carry forward. So something that you, John, as the new buyer will highly unlikely have to bear. Now obviously you’re not going to have to bear an owner’s salary unless you intend to pay yourself out of this particular business. You’re certainly not going to bear meals, entertainment, travel and Amazon gift card expenses. So they are taken out for the purposes of calculating the true performance of the business, and therefore what is what is termed SDE, seller discretionary earnings.

John Chen: Let me pull this up for everyone just so they can see. Here’s something that the old seller gave me. Everyone can see here?

Blake Hutchison: Yes.

John Chen: So here, the sales year to date, this is from 2019, it’s like 40K of sales. Costs of goods is costs of goods. You’re probably not going to get that down. But all this right here, you have to take a look at what of this is actually core to running the business. Is meals and entertainment core to running the business? No. And I even specifically asked them, I was like, “What is in office supplies and software?” Because if it’s office supplies, you’re buying labels or shipping or something, then you can’t really get out of that. But I found out that there were significant expenses in there that were not critical to the running of the business. Same thing with travel. They put their own travel expenses on there.

John Chen: And that’s a smart thing to do if you’re an owner because you want to lower your taxes, but when it comes to showing the profitability of the business, you could use a little bit more discernment into adding that back. For example, I paid… I think it was a total of 16 or 18,000 for the entire business, and that’s a two times multiple off this number. But if you were to add back a lot of this, the multiple becomes a lot lower, which increases your safety.

Blake Hutchison: Absolutely. Which is fantastic. So good stuff there. At that point in time, you’ve obviously gone through… You’ve spoken to the seller, you’ve interrogated this level of detail here. You then place an offer on the platform and that offer is accepted or not. Do you want to just talk through that process very quickly?

John Chen: Yeah, sure. I was very straightforward and honest with the seller. I know a lot of times if you list on Flippa, you’ll get a lot of initial interest, but people are just kind of poking and prodding around and you know, I told her I’m very interested in this business. I’m going to give you a letter of intent, which is just a short document that details the price I’m going to pay, the terms and everything. I gave her the offer and she accepted within a day or two, and then we went through a quick due diligence process and transferred all the assets, and that was that. The whole deal was done within two or three weeks. Very relatively fast close. Another thing I did was structure it so that a portion of the payment would be paid after the close, in case I found some liabilities, which I actually ultimately did find some extra liabilities, but we can speak to that in a little bit.

Blake Hutchison: Yeah, that’s super interesting. Smart, savvy buyer, made an offer that the seller was comfortable with but structured the terms such as they were protecting you from any, I guess, skeletons in the closet or ugly discoveries at a later date. And ultimately sellers will often accept those terms, as in this case, so I think in your case, John, correct me if I’m wrong, $18,000, and as you said, you held back some amount of that for any liabilities that you might find at a later date.

John Chen: Right. And that was actually super helpful because… So I offered 18,000 for the entire business. I paid 15,000 upfront and then 3000 in 30 or 60 days. And within the 30 or 60 days I’ve found out that their supplier, they actually had a bunch of unpaid invoices. It wasn’t like they were malicious in it. I just asked them about it and they said, “Oh, we’re totally sorry. We forgot about this.” So I said, “Okay, no worries. We’ll just take it from the money in escrow and we’ll take the amount that’s in escrow minus the liabilities and you can have the rest of it.” And that’s just a much cleaner way of doing it, I think.

Blake Hutchison: Fantastic. Well let’s get into what’s happened since then. So you’ve acquired this great new business, you’ve paid what you termed to be a reasonable price for it, the transfer of assets was reasonably straight forward. You’ve now got control of the business. How long have you had the business in your hands for?

John Chen: Probably than a month. Less than a month, yeah.

Blake Hutchison: And what have you discovered about the business in that first four weeks?

John Chen: Well, I knew this going about the business, but one big element that we really focused on is just cutting out a lot of the other products and things that they sell. The business is called Gourmet Wedding Gifts, but 95% of their sales are accounted one or two SKUs. Just these products right here, these heart-shaped stroopwafels. They sell a bunch of other things that are drop shipped from other suppliers and the margins on that are just way lower than anything else that they sell. So it’s not worth it to hold all these products. So I basically went in and got rid of all these other products where the margin would be 10, 15% and focused on selling this specific offer and this product and created a couple of landing pages and I’m testing out a couple of offers and such.

Blake Hutchison: How has it gone? Are you still selling through Etsy? Are you still selling through Shopify? Has anything dramatically changed in the running and operations of the business from that perspective?

John Chen: It’s going well. I think we’re on track to… Year over year it’s going to be a lot better, month over month I think is a little seasonal. But what’s happened is, because I’ve gotten rid of all those smaller offers, those other random products, like a personalized wine bottle or whatever it is, or corks or something like that, I’ve been able to see the average order value rise and the conversion rate rise… Or the conversion rate is a little bit lower but not lower enough where it’s that big of an issue, if that makes sense. The average order value went way up because the only thing people are buying are the stroopwafels or the wedding favors, and that average order value is much higher, 2, $300 because it’s for 100, 200 people. They had little gift baskets and stuff like that and it just wasn’t really worth the time or the effort.

Blake Hutchison: Just explain that to me and the rest of the community again. You basically removed some not profitable or less high-performance product. Is that correct?

John Chen: Right. So they had a bunch of other suppliers that they worked with and it wasn’t like they were drop shipping in that you can just click a button and send it from China. They actually had different vendors that they worked with, so anytime they got an order for that thing, they had to phone in to the vendor and then the vendor would charge them. It would be like you charge 2.25 per item and then the vendor does it for you for like $1.75 per unit. So it’s not a lot of profit there. I decided it wasn’t worth the time to hold all these SKUs and all that and really just focus on the core product. I also created a couple of bundles and landing pages focusing specifically on this core offer, and we’ll see how it goes. We’re starting to send a little bit of paid traffic to it and hopefully that’ll work.

Blake Hutchison: That’s super interesting. And so the organic nature of the business, when you were looking at the listing before, you said whatever it was, I think 65% of of traffic was organic. Is that still the case? Has that played out as you expected it would?

John Chen: Yeah. Almost all of the sales are organic, but we’re trying to add that element of paid. What I like about paid traffic is that… I think it’s really hard to make people buy something that they don’t want to buy. So you can’t just add paid traffic to anything. I like that this had that kind of product market fit, for lack of a better word, that’s kind of like an organic… I would’ve never known that this is what sells or this is what people like. We shot a couple of videos just trying to focus on this product as opposed to just try to come out with new products. I really don’t know new things that would work.

Blake Hutchison: Super interesting. You’ve essentially taken on… It’s a food business and it’s got huge amounts of opportunity because you’re operating in the wedding niche and there’s lots of demand for these types of kitschy product. But I hope you don’t mind me saying, you don’t know anything about this specific product space. Is that right?

John Chen: No. I know a little bit more about it now, but I didn’t know anything about this going into this or I don’t know… I’ve never made a stroopwafel, I’ve never made in one.

Blake Hutchison: Have you eaten one?

John Chen: I’ve eaten one. They’re pretty good, they’re pretty good.

Blake Hutchison: So who are your customers? Presumably the majority would be female buyers.

John Chen: Yep, yep. Females 24 to 32. Engaged and have an event or a bridal shower or something like that. Or the moms of these people who are looking for a gift for them.

Blake Hutchison: Awesome. We’re going to touch base with you in another four weeks time and see how it’s going, but what’s going to happen over the next four weeks, and then let’s… You and I will catch up and go through those things. So tell us what you’re up to.

John Chen: We’re really going to focus on the paid traffic and see if we can make it work. We’ve already tried to do a little bit of paid traffic, but I think what we’re going to try to do is do a free plus shipping funnel where… A large percentage of people who buy a full order or who buy a sample order convert to a full order. Just organically, those were the stats. It seems like if they get the product in their hands and they taste it, they love it. So we’re going to work out some way to get them the products, whether we lose money, a little bit of money, and hope that they reorder because it’s a relatively large order, 3 or $400 per wedding [crosstalk 00:27:53]-

Blake Hutchison: That’s fantastic. That’s an awesome shopping cart. As you and I both know, eCommerce, it’s tough when you’re selling things that are 10 $20 an item, it’s so much easier when you’ve got a hot shopping cart. How are you measuring yourself? Are you measuring yourself simply on month on month growth? Is it quarter on quarter? What kind of flexibility are you giving yourself through this period of experimentation?

John Chen: I’m pretty deep in the stats. I am mainly comparing this year versus last year just to see what the revenue looks like and then tracking number of sample orders that go out, number of orders from paid acquisition. But I’ll have a better idea of that in, I’d say, 30 days or the next time we talk because we just started advertising the offer and it seems to be like a little interesting. We’ll have to see where the CPA actually comes in at.

Blake Hutchison: Good. And you had had some success with your prior business, Blush and Bar from a PR standpoint. Presumably that was ultimately positive for you over the journey. This presumably looks like another business where you’ve got a good niche product which is reasonably well differentiated, and do you see that as being another opportunity?

John Chen: Yeah, yeah, of course. PR is good or good organic growth is good, but that stuff, it’s hard to control that. I’m sure there’s ways you can do it. But I’ve found that if you have… The biggest thing we can do is just put it in the hands of as many people as we can, and then once you hit a certain point, whether it’s from paid advertising or however you do it, if you get picked up organically, it’s just like a little boost that helps you.

Blake Hutchison: It sounds like a reasonably positive experience to date, but is there anything that… Other than finding a few liabilities in the business, which you presumably took care of as we discussed, and other than a couple of SKUs or product lines that you deemed not to be profitable or worthwhile selling, are there any other big learnings that you could share at this stage?

John Chen: I think one big learning I had was that if you’re going to buy a business for its cashflow and treat it as if it was a bond with a coupon, then it’s probably best to not do any work on it. And if you’re going to treat it as a project that you want to grow, then it’s worth thinking about… I have to spend upfront or willing to… For example, paying a designer to do a landing page or be willing to spend ads. The reason I think a lot of these really, really small businesses don’t grow is because they’re trying to fund it out of their cashflow, but the cashflow is like 500 to $1000 a month, which is just not big enough to spark the growth.

Blake Hutchison: Yeah. You want to have a purse sitting by your side, that at least you can experiment with and see if you can drive growth that way.

John Chen: Yeah, for sure.

Blake Hutchison: Fantastic. Well, that’s awesome, John. Really keen to stay close to the journey and we will touch base again in a month’s time to see how it’s all progressing, and obviously really hopeful that you get month on month growth and good luck with the paid marketing.

John Chen: We’ll see you in a month.

John Chen: Perfect. Thanks very much, John.

Blake Hutchison: All right.

 

K-Pop Drop-Shipping site

K-Pop Drop-Shipping site

Kpop Drop-Shipping eCommerce Store

Check out the live listing here:
https://flippa.com/10395909-e-commerce-design-and-style

This K-pop site is a fully automated drop-shipping eCommerce store dedicated to the worldwide phenomenon that Kpop has become. Selling everything from tour merchandise and shirts to branded jewelry to branded airpod chargers, they have been profitable since their very first week and are excited to sell the business to an entrepreneur who can continue to build upon their strong social media following and sales.

Tell us a little about yourself and your website?

My name is Reinis, I am 30 years old. When I started my Kpop store I was already running 4 drop-shipping websites and a few Affiliate websites. I didn’t know anything about K-Pop before. One day I was going through competitors stores and saw one K-Pop store. I did research and found out that there is a huge amount of hype about K-Pop on Instagram. So that was a green light for me that this was a good niche. So soon I opened a store. 

How and where is the product sold on your website made and how does the order/shipping process work?

The website is an automated drop-shipping website. I source products from a private supplier. The supplier gives me a price list and product images and I upload them to my website, write my own unique descriptions, add my own pricing and they are good to go. 

When I get sales, I make an excel file with customers’ info (product, customer address, etc info) and send it to my supplier. Then she sends me the bill, I pay for it and then she sends products directly to my customers. 

How have you marketed the product and where are your customers originating from?

The main traffic source is Instagram as I am buying shoutouts from large fan pages. Many of them have more than 1 million followers. The second-best traffic source is organic Google traffic. Lately, I have had pretty good traffic and sales from Google search. Another traffic source is my Facebook page and Pinterest page. I only generate a few sales from my email list, but I am not sending messages as often as I should, so there is plenty of space to improve.

We have customers from all over the world, but most sales come from the US, Canada, and Europe.

How much time is spent on the business?

It takes between 20 minutes up to 1 hour per day. I am the only one working with this website, I do everything myself. Several things are automated. Social media posting is automated. There is nothing much that needs to be done. Send a few shoutouts and see the sales come in. Then process the orders and the rest is done by the supplier. 

Why have you decided to sell the business?

I am selling all of my drop-shipping businesses including this website because I want to focus 100% on my affiliate businesses. The drop-shipping model doesn’t take much time, but running several websites at once does eat up my time. Also, I need more cash up front for my affiliate businesses to move it to the next level. 

What does someone need to do or know to continue operating the business in its current form?

It would be helpful for the buyer to know some basics about how WordPress works, and the basics regarding the drop-shipping business model. The rest I will teach and show. I will show all the small things and secrets that I know so the new owner can continue to earn and even increase sales.

Can you list a few potential growth opportunities for a prospective buyer?

There are 2 ways that they could bring the most impact. The first is to continue to work with the blog section and SEO. This process has increased my sales quite a bit and it’s essentially free traffic. Second is pushing paid advertising such as Facebook ads. I have only done minor work with retargeting ads, primarily spending on Instagram influencers at this point, but I have seen a few competitors doing great with Facebook/Instagram ads, so there is clearly an opportunity there for growth.

 

BTS Army Merch Shop

BTS Army Merch Shop

 

VIEW THE LISTING LIVE ON FLIPPA

 

BTS Army Merch is a very profitable online store specializing in KPOP merchandise for the band BTS and their fanbase, the BTS Army. Their most profitable products include jewelry, hoodies, plush toys and more.

Their extremely passionate customer base, the “ARMY” is the reason why the business is so successful. BTS is arguably the biggest band in the world and a complete worldwide phenomenon. They are often described as being more popular than the Beatles.

The ARMY is estimated to be a fanbase of 130 MILLION people worldwide! They are wholeheartedly dedicated to BTS and always buy new merchandise for concerts and fan meetups!

Their products are very difficult to obtain and cannot be found on AliExpress, therefore the niche has a very high barrier to entry. Due to private supplier relations and over 800,000 social media followers, BTS Army Merch Shop is at the forefront of this growing industry. 

Tell us a little about you, why did you start BTS Army Merch?

I started BTS Army Merch because I wanted to learn more about running a business. I am originally a fashion designer, but I wanted to expand my business knowledge, so I decided to start a drop-shipping store.

I choose the KPOP niche because it was something that I am personally interested in. It was my first drop-shipping store and I had no idea that it would end up being so successful and that it would soon become my full time profession. 

I am very grateful as it has allowed me to be completely independent and travel the world at the same time. I now feel I am ready to focus all my energy on my fashion design career as I have the business knowledge and funds needed to start my own fashion label which has always been my dream.

How and where is your merchandise made?

We have a private supplier in China that supplies us with our wide array of BTS merchandise. This relationship will of course be a part of the acquisition. 

How have you marketed the product and where are your customers originating from?

We primarily focus on Facebook ads and Instagram marketing. We have a large Instagram following which sends us quite a bit of traffic through our organic posts on that platform. Our main marketing focus is selling merchandise for upcoming concerts or marketing any trending products within the BTS niche. It’s a highly targetable audience.

For example: Army Boxes for the most recent album, or concert t-shirts for the next world tour. 

Our Top 10 Countries are :

United States
United Kingdom
Germany
Australia
Canada
Sweden
Denmark
Switzerland
France
Italy

How much time is spent on the business?

I only spend an average of 1- 2 hours a day on the business as it is highly automated. My tasks fall primarily on the marketing and creative side, developing and scheduling facebook ads, posting on Instagram and managing operations as needed.

I work with a customer service Virtual Assistant who spends an average of 2-3 hours a day on the business as well. His tasks include responding to emails and following up with our drop-shipping agent via our Whatsapp group. 

Our entire fulfillment system is automated and handled by our supplier. Nothing needs to be done on our end. 

In total, 4 people are involved in the business:
Myself: CEO
My VA: Customer Service
Drop-shipping agent: Handles fulfillment and works for our supplier
Supplier: Handles billing of cost of goods

Why have you decided to sell the business?

Personal reasons. I would like to focus on my studies and hopefully start my own private fashion label as this is my dream as a fashion designer.  I wholeheartedly believe in BTS Army Merch, so this has not been an easy decision to make.

What does someone need to do or know to continue operating the business in its current form?

  • Knowledge on Facebook ads would be important unless the new owner would like to outsource this task. 
  • Knowledge on how to use Shopify and how to manage an online business.
  • Knowledge on KPOP (specifically BTS) to relate to customers is advantageous, but not necessary as the store is already set up. 

Can you list a few potential growth opportunities for a prospective buyer?

  • Expand marketing to include other platforms such as TikTok
  • Make use of instagram influencers to post images of products
  • Add new products to the store when new albums are released
  • Include more artists merch on the website (example: TXT)