There’s no such thing as money for nothing – but this one comes close!

There’s no such thing as money for nothing – but this one comes close!

If like me you’re interested in creating a rewarding website-based business, then this particular pathway can generate a lucrative income for relatively little investment of money or time, with the potential for eventual sale at a substantial profit.

Why this opportunity is so different

In a traditional commission arrangement, you sell something which isn’t yours and receive a commission from the owner of the goods or service. We all understand that. It goes without saying that you are actually working at some kind of job which provides the platform for this incentive-based remuneration.

But imagine if you had a set-up which produced automated online referrals to a seller, who then paid you a commission on anything that was sold as a result of your referral. You have no real costs entailed. You don’t own the inventory or pay the cost of the storage and delivery systems and you don’t have any accounting to manage. You just get paid for doing almost nothing.

The basic requirement is that you need to set up, or buy, an effectively functioning website that draws regular traffic. Once that’s been achieved, you’re well on your way to owning a potentially highly profitable ‘Affiliate Business’.

What is an Affiliate Business?

So what is an Affiliate (Advertising/Marketing) Business and how does it work? Well, Amazon Affiliate is only one of the many enterprises now operating in this space, but as it was one of the first and remains the largest let’s look at Amazon primarily.

Becoming an Amazon Affiliate business is as simple as registering with Amazon at no cost and then you begin promoting literally any of the products Amazon handles and you get paid a commission on all sales which emanate from your promotion.

How does it work?

The infrastructure for this is amazingly simple. You have a website which features products relevant to your audience. When a website visitor clicks on a product profile, created by Amazon with no work involved for you, this creates a 24-hour duration cookie. Now here’s the exciting part. You get a commission on anything at all that the visitor buys from Amazon in the next 24 hours, not only the items you were actually featuring.

Simply to illustrate, let’s say you have created or acquired a website that features boating and fishing tips, news and stories. On a current post, you have an engaging and informative article on how to choose the best fishing reel, having regard to the fact that these vary in price from around $40 to well over $1000.

Using an extremely simple process you embed Amazon’s own seller descriptions for some of these items, enabling your visitors to click through the links. That’s all there is to it. Tracked by the 24-hour cookie if they then buy anything at all on Amazon over the next 24 hours, including download services, you get the commission. This includes expensive high-end items totally unrelated to the direct content of your website.

Think of it as being paid by a business for your online version of a ‘word of mouth’ recommendation. The actual commission structure is quite complex and strongly rewards higher volume sales, with a peak commission of 8.5%. But even a single sale will earn you 4%.

Is Amazon Affiliate the only option?

No, not at all. There are numerous providers of Affiliate Marketing programs. It’s important to do the research and decide which will work best for you and your website niche. Whether you decide to hook up as an Amazon Affiliate or commit yourself to an alternative targeted ads partner like Google’s AdSense, it is obviously important to understand the commission structures and to do the due diligence so you don’t get caught not understanding the Terms of Service (ToS) arrangements.

For a beginner in this space, Amazon is a very safe place to start because it has massive inventory in virtually every market niche and has a very high level of customer trust when it comes to making an online purchase. You can always migrate to an alternative program later.

Some things to consider

Always carefully check and observe the Terms of Service provisions. While Amazon, for example, makes the setting up of the Affiliate Business arrangement pretty simple, they don’t hesitate to embargo you if you breach a condition, such as making sure to never state a product price or specification within your own website content. And once embargoed, it is close to impossible to be reinstated!

Setting up the relationship and commission payment arrangements is fairly straightforward, but because of stringent identity checking requirements, it takes a bit of effort – more than setting up an Airbnb host account, for example.

The real challenge is to have a website which will attract traffic of the right kind and in sufficient volumes. Amazon will require the details of your website/s as part of the initial registration, but there is no stringent website quality checking on their part. At the end of the day if your website doesn’t attract sufficient traffic to re-direct to Amazon products or services in any great numbers, then all that means for them is that they won’t be paying out much commission.

Naturally, you want your website to be of the highest possible quality anyway and to feature regular posts of interest to engage your target audience. The more clearly you can define this niche and then concentrate on developing quality content for that audience, the better.

Personally, I like this Affiliate Business model because it genuinely rewards the creation of high-quality websites, including blog/vlog sites, and provides monetisation rewarding the level of audience traction gained. All of this at no additional cost to you and with the potential for very substantial commission payments.

Initially, you may be covering only your website hosting costs, but once you create and sustain good quality content with precisely targeted affiliate ‘advertising’ you may be earning enough to pay freelance writers for a great range of engaging content. Eventually, there’s a real potential to earn more than a good salary and start paying off the mortgage at a stellar rate!

Producing high traffic to make your affiliate advertising take off

It’s essential to have a website in an area of genuine interest for you. Authenticity of interest will enable you to work effectively with commitment and enthusiasm and will provide sustainable motivation for the long-term, or until you sell your website at a good profit!

High traffic can be produced if your website is in an area of interest to a large number of people, for example, a site on pet welfare and nutrition. Think of the enormous range of relevant products you could be ‘advertising’ in this context. While more narrow interest areas may produce lower traffic, there may still be a very high level of potential buyer interest in higher-cost products that you have sourced and can promote.

If you have your website up and running already, then linking it in as an Affiliate Business with Amazon or another partner is a prospect really worth considering. Alternatively, you can plan and create a website in an area of authentic interest for you but intended from the outset to be pitched as an Affiliate Business.

Would I consider buying an existing website and turning it into an Affiliate Business?

Yes, this is an intriguing and genuinely exciting opportunity which I’m currently exploring for myself right now. It’s also worth considering the acquisition of an already existing Affiliate Business which is up for sale, if it’s currently operating profitably or better still if you can see it’s got high potential yet to be realised.

It’s true, there’s never money to be made without any effort at all. The trickiest part of the Affiliate Business model is choosing a website niche that genuinely suits your interests and developing it as an affiliate advertising platform. Generating high-quality content and managing your SEO is the key to high visitor traffic and conversion to the click-based commission revenue. Ultimately the yield will make the website profitable and self-sufficient enough to support paid content writing. That will free you up to start your next website in a different niche, working towards your ultimate goal of building an Affiliate Businesses portfolio.

How does Broker Matching work on Flippa?

How does Broker Matching work on Flippa?

Flippa’s business broker network

Flippa partners with a world-leading network of business brokers. Each of these brokers has been reviewed by Flippa and hand-picked to represent our ecosystem of high-value business owners. We’ve chosen them because we believe they can help you better prepare your business for a sale, liaise with buyers and ensure you get the most out of the Flippa platform. When you join and choose to list your business for sale on Flippa we offer two options; either ‘Self Service’ or ‘Broker Matching’. The big difference between the two relates to the value of your business. Businesses over a certain value will tend to require a little more time and effort to sell and a broker is there to help. They’ll take on the process. They will work review your valuation, work with potential buyers, help prepare critical paperwork including the necessary prospectus, field offers and manage the DD process which can often be time-consuming and cumbersome.

So how does Broker Matching work? 

If you choose Broker Matching Flippa will:

1. Review and categorise your business Flippa will ensure your business meets the relevant criteria, request some additional detail including a current accountant verified P&L and ultimately categorise your business by size.

2. Match you up with up to three business broker This part of the process involves us reviewing our broker profiles and ultimately picking the most relevant broker for you. We’ll tell them a little bit about the business and review their fit.

3. Invite brokers to review your business and register their interest Once they’ve been assessed for fit we’ll invite them to formally review your business. They’ll sign an NDA and be given access to some key data.

4. Set up a ‘Meet the broker’ call Finally, it’s your chance. Talk with up to three brokers and make your decision. Once you have decided your listing will be converted to a ‘Broker Managed’ listing. Your success fees are fixed unless they have otherwise been negotiated, and from there, brokers will handle the Flippa marketplace and associated services.

If at anytime prior to your listing being converted you wish to opt for self-service instead simply contact [email protected]. Good luck. It’s a big decision to sell your business and regardless of the service you select Flippa will be with you every step of the way.

Case Study: EZTool

Case Study: EZTool

Platform: Amazon FBA
Business Model: eCommerce
Business Age: 3 Years
Sell Price: $160,000

EZTool sells watch repair kits via Amazon FBA. They’ve tapped into a niche and the growing direct-to-consumer FBA space. The search power and logistics capability of Amazon has helped them to find a sweet spot. The product is simple and suits the home watch enthusiast! This month EZ Tool Founder Angus Hess successfully found a buyer and has recently completed the sale on Flippa.


What is the product?

EZTool sells two different watch repair kits. Kit one is more conclusive with a wrench and illustrated manual and kit two – the QuickFixxer – is a 16 piece tool kit.


What makes EZTool such a good business?

There’s really two things. Firstly, it’s found a path to popularity in a niche. The product is well supported by a 41 page illustrated guidebook and comes with a 100-day replacement guarantee (nothing like a guarantee to woo customers). Secondly, they’ve successfully leverage Amazon FBA and benefit from cost-effective shipping, storage and world class customer service.


Who is the EZTool customer?

There best selling kit is perfect for watch enthusiasts and connoisseurs alike. Aimed at those who enjoy DIY as well as those looking to save money on pricey jewellers fees the EZTool products sell steadily all year round. And, they’ve found their kits have become very popular gifts.


Why was it so appealing?

Easy to understand this product had significant interest among the Flippa buyer community. Couple that widespread appeal with the FBA model, the strong consumer feedback scores and strong financial results – EZTool was generating between $5-14k profit monthly, which is in part due to low time commitment – and you have a winner.


How did Flippa assist?

The Flippa model has evolved and it’s beginning to suit higher value buyers. That alone is a big win. Flippa now has over 150,000 registered buyers representing a combined purse of over $9bn wanting to be placed. There are not enough sellers. Once they pop up, sellers like EZTool are benefited from the self-service platform, lower success fees than other channels and dedicated account management.

Seller showcase: Dion Lovrecich, oktoberfest.com.au – eCommerce business for sale on Flippa

Seller showcase: Dion Lovrecich, oktoberfest.com.au – eCommerce business for sale on Flippa

This week we caught up with Dion Lovrecich, who along with his sister Andrea, are the owners of business oktoberfestcostumes.com.au. The business is currently listed on Flippa. Here is the full conversation below. 

Background of the business 

Tell us a little bit about the background of oktoberfest.com.au? I understand your sister is involved in the business in some way?

Yes she is and we can’t believe how this has taken off! Within three months it’s doing $60,000 in revenue and has already made $14,000 in profit. This is my sister Andrea’s business and I’m helping her sell it. She’s had ten years experience in costumes but always in a bricks and water capacity. I told her she had to take it into an online capacity and I was open to helping her since I have worked in digital marketing for years. Within just a couple of months, it absolutely took off and we are still getting sales even though October has finished now.

 

That’s probably a big question and tell us more about your customer base? What do you sell on oktoberfest costumes.com.au?

We sell a traditional German costume with the ladies wearing a dirndl and gents a lederhosen. These costumes are actually used all year round which many people don’t realise. In truth, this a highly seasonal business and we did more than 800 transactions over the last two and a half months. The thing is, customers still come through, but if I’m being honest it is a seasonal business. It has achieved huge growth and the potential is there for someone to build the business with other types of costumes or for a buyer to attach the business to something else.

 

The customer base and how this was grown

 

There are customers coming through thick and fast from the October period, in celebration of Oktoberfest of course. As you have said, the opportunity for the new owner is to obviously take it on in its current form but is it also to grow this into a generalist costume business?

Yeah, it could be a generalist costume business or it could be a closer niche to German costumes or you could pick another niche entirely to get into. There is a lot of organic traffic coming through and we have used social very successfully, along with some paid advertising too. The combination of the two was such a beautiful start. Andrea and I are keen to sell it but she is torn because she wants to keep the business given the phenomenal results we have seen in the first few months. At the end of the day, we’ve decided ‘let’s do this, it’ll be good for you (Andrea)’ and hopefully, we can find the right kind of buyer. Andrea wants to pass the business onto the right buyer.  

 

The business opportunity and marketing efforts to date 

 

Fantastic, when we talk about buyers, we here at Flippa often educate buyers and tell them to make sure that they know how the business is acquiring customers. So from the perspective of Oktoberfestcostumes.com.au, how has it been so successful early on? What are your marketing methods?

You can’t be that successful without paying for traffic. If you see a website that says they don’t pay for traffic and claim to have thousands of viewers, ask them a few questions. In fact, ask the guys at Flippa, they’ll help you out with that.

 

So you guys are buying keywords around the Oktoberfest period and around no doubt the specific product units so lederhosen and dirndl. You mention social, so how has social been beneficial? What platforms have been working for you?

It has been Incredible and the cost per click has been so low. There can be a lot of industry terminology that people throw around. But, at the end of the day, the cost per acquisition/cost per sale was exceptionally low. People liked the adverts, and they were being shared a lot on Facebook and Instagram and that’s how we built the business so quickly.

 

Andrea and Dion’s business is now on Flippa and its Oktoberfestcostumes.com.au. This successful start-up is six months old and has already made $60,000 in revenue. Make sure you check this profitable listing out. 

Flippa adjusts pricing and adds key services as it evolves to service high value digital businesses

Flippa adjusts pricing and adds key services as it evolves to service high value digital businesses

At Flippa, we are always looking for ways to add value and we will always add new features to support our growing ecosystem of business owners, buyers and the brokers who often support them.

 

Over the last few months we’ve been working on several ways to improve our seller and buyer experience. This has included the introduction of Flippa Escrow, high value business sales, dedicated account management for both sellers and buyers and the introduction of a broker program. Moving forward, we’ll also be investing for efficiency and to protect the integrity of the marketplace. This will include:

  • ID verification to assure buyers and sellers
  • Seller declarations to pre-qualify business inclusions
  • In-platform buyer / seller messaging services
  • An easy to use profile creator

And today, we are announcing new pricing plans designed to better suit our three core services. The new plans take effect effective immediately – Monday 5th November 2018 and are as follows:

  • Asset Sales including the sale of a domain, app or starter site, i.e. something not generating any revenue, can be sold for a listing fee of $25 and success fee of 10%.
  • Self Service Business Sales  is best suited to profitable businesses with a minimum six month trading history. Sell for a listing fee of $200 and a success fee of 10%.
  • Broker Supported Business Sales will match you with a specialist broker. Best for those with annual profits of 200k+. Sell for a listing fee of $200 and a success fee of 15%.

The 10% success fee on Asset Sales and Self Service Business Sales is a reduction. This was previously 15% for Credit Card payments and 12% when using Flippa’s escrow service. Flippa still absorbs the escrow transaction cost.  

 

Note: Pricing and fees are in USD. Your sell price should always be in USD.

New Services – Buyer and Seller Management

We’re pleased to announce that Flippa has introduced Buyer and Seller Management services. These services are free and designed to streamline the sales process for you.

  • Buyer Management takes the hard work out of the search. If you are looking to buy a business over $50k, simply schedule a call with one of our buyer managers here. They’ll learn about your needs and explain the matching process. They’ll then search for businesses on your behalf and will act as matchmakers.
  • Seller Management takes the hard work out of the matching process. This service is designed for businesses priced over $50k. You’ll be matched to an account manager post listing and your account manager will ensure your profile is optimised and that buyers are verified before they are put in touch. They’ll be by your side every step of the way.  

Coming Soon

We’re excited to announce that we will soon introduce two new services designed to improve the integrity of the Flippa platform – we take the security of our customers very seriously:

  • ID Verification. Flippa has partnered with the award-winning Jumio to ensure that both buyers and sellers are verified before listing or making an offer for a business. This service will be released in November 2018.
  • Platform Messaging / Negotiation. Flippa is working on improvements to the existing messaging functionality. This will enable in-platform messaging and negotiation to ensure buyers and seller private contact details remain confidential and that all communications are confidentially and securely stored. This service will be released in January 2018.

Helping to support the thriving business sales ecosystem

We’re excited by the progress we’ve made in recent months. We are proud of our history as an asset marketplace but we have evolved. Our vision is now to service buyers and sellers of businesses globally by connecting all parties, key services, and facilitating the end-to-end business exchange in a trusted and efficient environment.

 

Is it time your business jumped onto Amazon FBA?

Is it time your business jumped onto Amazon FBA?

If you already have, or you’re contemplating, a start-up with an actual physical product to sell, then you have probably heard of Amazon FBA – but what is it exactly and what are its advantages and any potential drawbacks you need to know about?

Well, as a budding mature-age entrepreneur myself I’ve been very interested to follow the progress of one of my friends, Georgina, who has been steadily building a very successful business in high quality skin care products, emulating the well-known and pricey Aesop’s range, but with some extremely creative additions as well.

Like so many other successful start-up businesses, Georgina’s was initiated in her garage, where she worked hard to experiment with bases and herbal ingredients (some of them very expensive) and the mixing, matching and blending processes to create not just practical but alluring fragranced skin products – from hand-wash, to body wash, to nourishing body oils, and later on perfumed candles and aroma diffusers.

The design of packaging (again very expensive) was a major challenge. Logos and branding took time and creativity. The initial sales (obviously on a loss basis for quite a while given the development costs) were to family and a network of friends. But there was a vision. The vision held firm and the viability grew. Finally there was proof of concept as the sales took hold online and some great exposure was achieved when a major Melbourne homewares brand with several suburban stores agreed to stock some of the range.

By now the garage was completely outgrown. It was time to lease a bigger space just for the production itself, and the rental was a significant expense. Georgina took on a couple of university student casuals to help her – but by now the real problem was storage, managing inventory and delivery. Packaging and posting individual orders and hand delivering the store orders had become unmanageable and Georgina was completely out of storage and handling room.

Amazon FBA (Fulfilled by Amazon) entered the Australian market space just 12 months ago – at exactly the right time for Georgina. As a great example if IaaS (Infrastructure as a Service), Amazon FBA manages every aspect of the pick-up, storage, inventory management, order shipping and even customer returns.

It’s useful to clarify that your product does not need to be sold on Amazon itself (although of course it can be). The winning point of differentiation for Amazon FBA is that it’s an end-of-the-line system which saves your business time and money because Amazon stores your products and manages their delivery in your direction. The fulfilment fees are extremely competitive, given Amazon’s vast network of storage, delivery and inventory management systems. Their advanced data management systems allow you to monitor and track all inventory, orders and deliveries as they are happening.

The fulfilment fees include all packing of orders, inner packaging and delivery, even including the management and accounting for any returns. Separately there is a monthly storage fee, based essentially on your cubic metres of stored product. It would be impossible for a small start-up company to access its own rented storage facility in an equally cost-effective way.

All of Georgina’s products are classified by Amazon FBA as ‘standard-size’, but companies with large physical products such as craftsman-made tables and furniture are also accommodated on a different storage fee schedule. One potential financial hiccup to be aware of, is that Amazon FBA storage fees have a price hike (literally tripled) in October-December because of the premium on space in the lead-up to Christmas, but this applies to the storage fee only, not to processing and delivery fees.

Obviously, costs will depend on the kinds of products being handled, but as an indication in Georgina’s case, her typical $30-$40 product has a per-item cost of under $3 for picking up, packing and shipping, plus around $30 each month per cubic metre of stored products. In the case of her business, that’s a lot of product she doesn’t need to store, package and handle for shipping, allowing her and her couple of part-time assistants to concentrate on what they find more interesting and enjoyable – developing and actually making their product range.

For a small business, there are really very few drawbacks in using Amazon FBA. Initial account set-up, including business and individual identity verification, and learning the system for preparing product for FBA collection is a bit complex initially, but once managed it’s plain sailing. It’s also sensible to check out the very large number of order fulfilment alternatives to FBA offered by many companies now for Australian-based businesses. Few can rival the economies of scale of Amazon, but the best deal for your business may depend on exactly what it is you’re selling and your own production or sourcing processes.

In this article, I’ve concentrated on Amazon FBA for Australian-based businesses creating physical products for sale. However, it’s important to remember that there is a massive growing global enterprise in third-party selling. This is where the trader sources products from an original supplier literally anywhere in the world, and then markets it with a price markup, often at a huge margin. Using Amazon FBA the third-party seller can create a highly profitable business without ever actually handling the physical merchandise at any point at all.

A variation on this, and one that is often highly successful is the ‘Private Label’ approach. This is where an already existing product is sourced, usually from a low-cost producer overseas, and branded with the third-party seller’s own logo and brand name.

Now that’s a completely different scenario from Georgina’s business, but a very interesting one to explore in a separate discussion another time along our journey.