Melbourne, Australia / Berlin, Germany – December 19, 2023 – Flippa.com, the leading marketplace for buying and selling online businesses, announced its strategic acquisition of Berlin-based BitsForDigits.com, a premier European M&A platform. This acquisition marks a significant step in Flippa’s mission to democratize business exits and ownership globally.

Europe: A Thriving Market for Flippa’s Expansion

With over 50,000 new buyers and 238 startup exits in 2023, representing a 50% growth year-over-year, Flippa is rapidly expanding its footprint in Europe. The establishment of a new sales and brokerage office in Amsterdam, in conjunction with the BitsForDigits acquisition, demonstrates Flippa’s strong commitment to the European Union (EU) market.

The EU’s Digital Business Landscape: A Hub of Growth

The EU’s digital business sector is experiencing explosive growth. Amazon’s EU Impact report and Shopify’s growth data reflect this trend, especially in key markets like the UK, France, and Germany. Additionally, Europe is home to 19% of the world’s SaaS companies, indicating a burgeoning digital economy.

Flippa’s Core Mission: M&A for Everyone

“Flippa’s acquisition of BitsForDigits is a cornerstone in our vision to make M&A accessible to all,” said Blake Hutchison, CEO of Flippa. “We are reshaping the traditional, complex process of selling or acquiring a business into something transparent and accessible. This move is a game-changer, especially for small and medium-sized businesses in Europe.”

Flippa’s platform, equipped with over 20 valuation consultants and certified M&A advisors, is designed to empower business owners with efficient tools and resources. The platform’s features include embedded legal agreements, AI-driven buyer matching, and comprehensive data tools.

Why BitsForDigits.com? A Strategic Union

The acquisition brings complementary strengths to Flippa’s marketplace. “BitsForDigits focus on European startups is a perfect match for Flippa’s broad marketplace,” added Laurits Just, Co-Founder and CEO of BitsForDigits. “Together, we share a vision to make business transactions more accessible, enhancing our capabilities and offerings to our European customers and beyond.”

Looking Ahead: A New Era of Inclusive Business Transitions

This acquisition is a critical part of Flippa’s global growth strategy, reinforcing its position as the top marketplace for online business transactions. It represents a commitment to making business ownership and exits more inclusive and accessible, particularly for entrepreneurs who might have found traditional paths daunting.

“Flippa’s acquisition of BitsForDigits.com is more than just expanding our market reach,” concluded Hutchison. “It’s about supporting the entrepreneurial spirit and democratizing business ownership, signaling a shift towards a more inclusive and approachable world of exits and acquisitions.”

About Flippa:

Flippa is the leading global online marketplace for buying and selling online businesses, websites, and digital assets. The platform has over 1.9 million users and is the world’s most diverse trading marketplace with 67% of deals being cross-border across 193 countries. The platform combines advisory with industry differentiated technology including AI matching and a deal room for negotiation and legal documentation. 

About BitsForDigits:

BitsForDigits.com is a Berlin-based M&A platform specializing in facilitating acquisitions for European startups and online SMBs with more than $100,000 in annual recurring revenue. 

Media Contact for Flippa:

Tory Gregory
Flippa
Tory.Gregory@Flippa.com

The Beginning of a Successful Career in Brokerage

Joe’s introduction to Flippa happened when he signed up to an online course by the eBusiness Institute, run by Matt and Liz Raad. The institute has long seen the opportunities available on Flippa and encourages hundreds of students and individuals every year to purchase their first online business on the marketplace. While many follow the path of growing and eventually selling their acquisitions, Joe charted a distinct course.

In his early 20s, Joe was eager to get into the world of online businesses, and Matt and Liz gave him the confidence to make his first ever business acquisition on Flippa. The business he acquired was small, and more of a learning experience than a money maker for him,yet  it served as the ideal springboard for Joe’s entry into the intricacies of buying and selling online businesses.

Over the course of six years, Joe honed his expertise in the acquisition and sale of businesses. It was during this period that he recognized he had cultivated a unique skill set in selling, prompting him to shift from being a business buyer and seller to leveraging his skills as a broker, assisting other Flippa users in their business transactions through his brokerage company,  Just Website Brokerage.

Brokering 208 Deals totaling $5.1M in Transactional Value

Now one of Flippa’s oldest brokers, Joe has been a part of a staggering 208 transactions totalling $5.1M in transaction value. 

Working predominantly with Content sites, Joe possesses the skill of effectively presenting a business’s quality, along with highlighting the potential opportunities for a new owner. 

In the past year Joe has achieved remarkable successes in terms of a profit multiple, with the best being a business that sold for $30,000, with a yearly profit multiple of 6.25x.

Joe attributes these successful sales to the quality of businesses that are coming his way, as well as the astute buyers in the market who can not only identify a quality site, but are willing to invest in growth opportunities when they see one.

“The quality of a site is the differentiating factor between online businesses for sale. A sale with a high profit multiple is usually a result of one of two factors – the quality of the site, or the opportunity for growth of a site.” 

While quality involves considering numerous metrics, including traffic engagement, the business’s age, its niche and evergreen factor, and of course the monthly profit,the assessment of a business’s opportunity is more subjective, necessitating buyers to discern it for themselves.

Joe’s Latest Success

Joe’s most recent success was the sale of a booming Italian-based Ecommerce business in the evergreen fashion niche. 

The business’s strengths included a straightforward business model, adaptability to market trends, and exceptional relationships with manufacturers, which made it incredibly appealing to potential buyers. 

At the time of sale, the business had a monthly profit of $11.1K, and showcased a steadily growing revenue. The business sold in just under three months.

Finding the Perfect Growth Opportunities

Having been a part of so many Content site sales on Flippa, Joe possesses a distinctive perspective on what sells most effectively. 

In his experience, buyers consistently express a willingness to invest in the potential growth of a business. One prevalent opportunity that attracts buyers is when a Content site relies solely on a single revenue stream. Buyers perceive this as a significant opportunity to swiftly introduce additional revenue streams, thereby accelerating profit growth. For instance, if a site is exclusively monetized through Amazon Affiliate programs, a buyer can promptly experiment with new revenue channels like Google Adsense.

“Buyers are often willing to acquire a business at a higher multiple when the businesses have more opportunity for growth.”

For every listing he manages on Flippa, Joe provides a list of opportunities without overcomplicating things. He discovered that the best way to attract buyers on the marketplace is by clearly highlighting the facts of the business and letting buyers identify growth opportunities as they see them.

The Process of Selling

Joe thoroughly researches a business before turning it into a listing on Flippa. Generally, he’ll spend up to two weeks collaborating with the seller to ensure he has a solid understanding of the business and its key highlights. 

During this process, he gathers a wealth of information from the seller, and then streamlines it into an easily digestible format for prospective buyers. Once the business is listed, Joe and his team take charge of all buyer communications, keeping the seller on the sidelines until the right buyer emerges.

In the quest to find the ideal buyer, Joe approaches every inquiry and discussion as a potential match for the deal. He adopts a strategy of providing potential buyers with more information than initially requested, a tactic he has found effective in separating serious contenders from those merely curious about the details.

Learning along the way

After more than a decade of engaging in the buying and selling of businesses on Flippa, Joe has gathered immense knowledge on the world of online acquisitions, as well as valuable insights for both sellers and buyers.

Here are Joe’s key pieces of advice for others:

1. For significant transactions, ensure a comprehensive sales agreement is in place.
2. Utilize an escrow service for secure fund transfers.
3. Acknowledge the uniqueness of each sale; the process varies for different types of businesses.
4. For smaller deals (under $25K), adopt a no-reserve strategy.

Joe emphasizes, “Time definitely kills deals.”

Businesses that do well in sales are typically:

• Well-organized.
• In a specialized niche that sparks enthusiasm: pets products, hobbies, niche sports or anything that stirs people’s passion. 
• Laden with opportunities.
• Governed by a straightforward business strategy.
• Free of hidden complications.

One of the more intricated deals Joe managed was a six-figure sale, a transaction that extended over two months for the seamless transfer of assets.

“I guarantee you, this deal would not have gone through without a lot of patient negotiation and back-and-forth between me and the buyer, and me and the seller. This is where the value of a broker becomes clear.” 

Why Flippa

For Joe, the sheer number of buyers on Flippa is what keeps him coming back to the marketplace to sell his brokerage listings. He also appreciates the platform’s user-friendly interface for browsing deals.

“I don’t list businesses anywhere else, other than Flippa. There are so many buyers and if you can create a listing that stands out from other businesses you’ll sell your business.”

Along with the large volume of buyers, Joe loves all the new features that Flippa introduced recently. Managing so many different listings at once can be difficult but he finds that the clean, easy to use Deal Room and messaging capabilities makes it much easier to monitor all the different deals he brokers.

“Being able to shortlist interested buyers is a huge benefit to managing deals and staying on top of buyer communication.” 

As of today, Joe has just reached the incredible milestone of $5.1M in transaction value, has seven live listings ready to find a new owner, with many more in the pipeline. Check them all out here. 

Ready to acquire your next business?

Search for businesses for sale on Flippa here.

Or if you own an online business, find out what it’s worth.

Get a free valuation here.

This is his successful acquisition story.

The Hunt for the Perfect Business

When Andrei first landed on the Flippa, his initial quest was open-ended, contemplating the acquisition of various assets such as Ecommerce, content platforms, or SaaS ventures. He knew though, that as soon as something good caught his attention, he would’ve been ready to buy it. 

He spent about a month looking for the right business to appear on Flippa Then one day, his discerning eye spotted a nine-year-old WordPress plugin Ecommerce business, freshly listed on Flippa. 

Actively reaching out to the seller within 24 hours of its appearance on the marketplace, Andrei initiated discussions and negotiations.

Acquiring a Powerful WordPress Plugin Store

SnapOrbital specializes in selling popular add-ons for the WordPress Learning Management Plugin LearnDash, as well as a stand-alone membership and eLearning plugins, coupled with and an innovative project management platform. 

At the time of sale, SnapOrbital boasted a monthly profit of $11.6K, with an impressive profit margin of 87% and a TTM revenue of $180.2K.

The Experience on Flippa as a First-Time Buyer

In this first-ever buying and selling experience for both parties, Andrei commands Flippa’s invaluable support. 

Certified M&A Advisor, Alexis Whitlock, played a pivotal role, guiding Andrei and the seller through every phase of the process, ensuring clarity in decision-making and facilitating seamless negotiations.

After agreeing to a sell price, Andrei and the seller dried the ink on the contract, and the sale was done. 

Andrei’s Future Plans on Flippa

Impressed by Flippa’s professionalism and the adept guidance of its advisory team, Andrei is now actively exploring opportunities to expand his portfolio with another business acquisition.

Are you ready to find the perfect business for you? Head to our search page, and let the hunt for your next, incredible business venture begin. Your perfect opportunity might be just a click away…

Ready to acquire your next business?

Search for businesses for sale on Flippa here.

Or if you own an online business, find out what it’s worth.

Get a free valuation here.

Together, Mark and Alex co-founded Linkfluencer, a renowned SaaS platform specializing in LinkedIn marketing. Linkfluencer empowers individuals and companies to create leads and sales on the platform using a purpose-built custom software. Featured in 100+ media publications, this award-winning business operates as a hybrid subscription and agency model.

The Genesis of Linkfluencer

The Linkfluencer journey began in 2013 when Alex stumbled upon an email with a captivating subject line: “94% of editors and journalists are on LinkedIn.” 

Intrigued by the potential of LinkedIn for personal branding, Alex actively cultivated his LinkedIn presence. In just six months, he amassed over 300 media contacts, was featured in more than 50 publications, and recognized the platform’s potential for personal branding and PR. This realization sparked the idea for Linkfluencer.

Creating the Perfect Platform

Founded in 2013, Linkfluencer quickly became a global leader in LinkedIn marketing and training. Its mission is to help people unlock the full potential of LinkedIn, offering training, campaign management, certification, licensing, and speaking services. Over the span of a decade, Linkfluencer has generated millions of dollars for clients across 35 countries and 65 industries.

Initially, the business started just by selling courses on LinkedIn success, but Mark and Alex responded to customer demand for additional services, including events and ongoing advisory support. These valuable offerings propelled the company’s growth. 

Juggling their other commitments, Mark and Alex decided to explore an acquisition on Flippa to ensure Linkfluencer’s continued success.

The Decision to Sell

Mark and Alex were determined to secure the best possible outcome for Linkfluencer’s sale. Their goal was to find a buyer whose vision aligned with theirs and who would offer the right price. They considered various options, including appointing a CEO, but eventually, they found the perfect match.

‘The good thing about Flippa is that it wasn’t just about the sale. We had people approaching us with different options’, says Alex. 

The Exit Process on Flippa

Alex and Mark were helped through the transition by Certified M&A Advisor Fiona Laidlaw. 

The entrepreneurs praised the ease and straightforwardness of the process and appreciated the high caliber of individuals they encountered on Flippa. Conversations with venture capital firms, fellow entrepreneurs, and business owners eventually led to a successful exit. Alex and Mark are confident that Flippa facilitated the sale to the right buyer.

The sale has given both Alex and Mark the opportunity to focus on their other businesses and projects. 

In 2015 he decided to create his own website, catering specifically to the mobile gaming audience: Playoholic.

The website is a trusted source of beginner-level mobile game guides, offering in-depth assistance complemented by screenshots and videos.

Empowering Gamers and Following a Passion

In the fast-paced world of mobile gaming, Anurag’s mobile gaming website filled a unique niche in the gaming industry by catering specifically to new players with tips, guides and step-by-step tutorials with detailed visuals and multimedia elements.

What started just as a hobby, soon became a full-time occupation. The website started to get more and more views, averaging 199.2K monthly page views, 100% from organic and direct traffic primarily from the US, UK and Canada. The domain authority also soared and so did its monthly revenue.

Deciding to Sell

After turning Playoholic into an established website, Anurag’s entrepreneurial spirit told him it was time to move on, and he started looking at ways to sell his website.

When it came to choosing a platform to sell, Anurag turned to Flippa, drawn by its expansive pool of potential buyers, user-friendly interface, and exceptional customer support.

Anurag was assisted by Flippa’s certified M&A advisor Ashwin Almeida in the sale process. Once the business was live on the marketplace, Anurag started receiving enquiries right from the first day.

Within a remarkably short span of ten days, Anurag managed to successfully sell his website for five-figures. By this point, his listing had over 1K views, 41 watchers and 39 discussions.

The Experience with Flippa

Anurag says the sale price met all his expectations, and he’s incredibly satisfied with the experience with Flippa. 

Flippa’s support and negotiation facilitation played a crucial role in reaching an agreement that benefited both parties, and he recommends the marketplace to anyone who wants to sell a website.

Meet Max Fontaine, a driven and ambitious entrepreneur who turned his passion for dropshipping and Ecommerce into a successful full-time business. 

After graduating from college in Nashville, Max decided to stick around and kick-start his professional career. His first job landed him in the finance industry, working as a stock analyst at a small financial firm. Max quickly realized that the role didn’t offer the excitement and challenges he sought. That’s when he decided to explore the world of Ecommerce.

The Beginning of It All

Max began creating a few dropshipping websites in various niches. He single-handedly managed every aspect of his business, from product design to marketing and customer service. His hard work and dedication paid off, as some of these sites achieved remarkable success and were sold back in the day. The income generated allowed Max to quit his finance job and pursue Ecommerce full-time.

While growing his expertise in the Ecommerce industry, Max recognized the importance of advertising and marketing in driving sales. Motivated to further enhance his skills, he took on a role as a Senior Paid Search analyst at a local advertising agency.

The job gave him the opportunity to master the secrets of effective advertising and elevated his marketing expertise. After a year of valuable industry knowledge, Max decided to quit the job and launch two, brand-new Ecommerce stores.

The Launch of Two Successful Ecommerce Stores

The first store, which has been in operation for three years, is a jewelry dropshipping store boasting an impressive $1 million in sales. The second store, specializing in unique watch bands for Fitbit and Apple Watch, has already made 10,000 orders in just under two years. 

To maximize the reach of his stores, Max has been using various advertising channels strategically. Smartly executed ads on Google play a significant role, targeting diverse objectives specific to each store. He leverages Facebook ads for remarketing purposes, and utilizes SMS and email channels to ensure efficient customer acquisition.

Planning an Exit with Flippa

As Max’s businesses thrived, he made the decision to sell both of the stores, and he turned to Flippa to do so. The experience on Flippa proved to be exceptional, as Max found the platform easy to use and secure. 

‘Flippa makes it easy to list a website, step by step, verifying everything.’ 

Max confirmed Flippa creates a trustworthy environment by verifying individuals, both buyers and sellers, and by making non-disclosure agreements (NDAs) available to sellers.

‘I like that you can verify everyone on Flippa, both buyers and sellers’ , said Max.

Within days after his businesses were listed on the marketplace, Max started receiving offers. Although the first buyer failed to complete the due diligence process within the agreed timeframe, Max quickly found another buyer and successfully sold his businesses in just over two weeks.

The Experience with Flippa

Throughout the selling process, Max was assisted by Flippa certified M&A Advisor Nick Carlucci: his support and guidance proved instrumental in the sale process.

While Max doesn’t have any concrete plans for the immediate future, he intends to focus on new projects involving his recently acquired house. Max’s passion for Ecommerce remains strong, and with his knowledge and experience, he plans to venture back into the industry soon.

The Flippa sale also opened new doors for Max: his expertise and experience as a one-man company, juggling all the aspects of his businesses, led to him being hired as a consultant for other ecommerce business owners, providing assistance with coding, search ads and website building. 

Watch more Humans of Flippa stories here.

Read the full transcript of the conversation below.

Max’s Entrepreneurial Journey

Blake Hutchison: Hi everyone, and welcome to another episode of Humans of Flippa. It’s a series of videos with some of our favorite customers from around the world. Today we’re joined by Max Fontaine, who’s been with Flippa for some time, has had some success selling his businesses on Flippa, and so we’re going to get to get to know Max today as part of another episode of Humans of Flippa. Thanks for joining us, Max. How are you today?

Max Fontaine: Hey, I’m doing pretty good, Blake. Glad to be here.

Blake Hutchison: Thanks very much for joining us. For everyone’s benefit and setting the context, where are you in the world right now?

Max Fontaine: I’m in Knoxville, Tennessee. Went to college down there at University of Tennessee and just stuck around afterwards.

Blake Hutchison: Fantastic. Stuck around afterwards. For the benefit of all of the listeners and watches out there, your main play right now is Ecommerce. Is that something that you got into straight after college? Can you tell us the story and how you got to be an Ecommerce entrepreneur or the Ecommerce entrepreneur you are today?

Max Fontaine: Sure. The first job I had out of college, I was actually very interested in finance and started working at this small financial firm as a stock analyst. Believe it or not, I had a lot of free time, which you don’t hear that often in the industry, but our boss just didn’t really give us enough to do. So I was like, “How can I maximize my time here?” I remember a friend in college talking about Ecommerce and dropshipping and all of that, and so I looked into it, watched countless videos and read books and stuff like that, and ended up creating a few sites. Of course, the first couple ones were duds because I didn’t really know what I was doing, but eventually I created some that were successful enough to be able to quit the job.

Blake Hutchison: Tell us about the duds quickly. What were some of the categories that you had the duds in?

Max Fontaine: Yeah, everything you can imagine. It was different games that were popular at the time. A good lesson to learn, I was young right out of college. I probably didn’t think this all the way through. My first two successful sites were one was selling PlayersUnknown’s Battleground merchandise and the other one was Roblox. Don’t do that because you will get cease and desist, eventually. That lasted for a while and it was great and all until I got cease and desist and I was like, “Okay, so I’ve going to have to create websites that are my own brand, obviously.” To anyone that’s thinking about being an entrepreneur and selling any kind of merchandise, it’s got to be your own and you can’t do anything like that or you will get cease and desist.

But what was good about the whole thing is that I actually got a ton of experience in advertising during that time because as learning and watching videos, I have to do Google Ads, Microsoft ads, Facebook ads, all that. After those websites were gone, I ended up getting a job as a senior paid search analyst at an advertising firm. That was even great because it was like a free education except I was obviously getting paid for it too. I did that for about a year, and I built the websites that I have now that I’m selling, which is the Moissanite store and the Apple Watch band store.

Max’s Two Big Projects

Blake Hutchison:  That’s awesome. From finance to a couple of duds, as you put it, some learning around not necessarily taking over or launching brands that have clear copyright, as you said. The cease and desist letters would’ve been quite nerve-wracking for a young guy, I would imagine. Now you’ve got these successful sites and you’re currently going through the sales process on Flippa. Let’s set the scene a little bit though. How old are those sites? Give us some sense of the financial performance of those sites. Set the scene before we get to telling people how the sales process is actually going.

Max Fontaine: The Moissanite store, which is a popular diamond alternative by the way, sells Moissanite jewelry. That store is around three years old, almost three years exactly. I remember the first sale was on January 1st and I was like, “Oh, that’s great for tax reasons, especially.” It’s about three years old exactly. It’s done about 1.7 million in sales, almost 4,000 some orders. Then the watch band store, which sells Fitbit bands and Apple Watch bands, that’s about two years old. It’s done a little over 10,000 orders and probably around 400 some thousand dollars in sales. I can’t remember the exact number, but somewhere.

Blake Hutchison: Max, how do you pick those two categories? How do you suddenly land on those two? The success is there for everyone to see. You’ve got a two-year-old site, a three-year-old site. Both are doing very, very well. But what was it about those categories that drew you to them?

Max Fontaine: With the bands, both are dropshipping stores and Fitbit has been around obviously for a long time, and so has Apple Watches. When those have been around for a long time, you have a very wide selection to choose from, unlike AliExpress, for instance. And not just that, but when it’s that old and that long and been around, like that store, for instance, it dropships, but only from within the United States. Everything’s actually USPS shipping. A lot of people don’t even know they can do that on AliExpress. You don’t have to ship it from China. It can be from… You can select ship from the US. And so the fact that I was able to ship those from within the US and have a huge selection, that was part of it. What I liked about jewelry and bands is that you can have unique designs to where if I was selling something incredibly basic, I remember when the pandemic happened, people kept wanting to sell masks and create stores for sanitizer and stuff like that.

I’m like, “You’re not going to be able to compete. You’re just not.” But if people see a specific, unique piece of jewelry that they like or a specific band that they like, they’re not necessarily going to be like, “I can re-look up this exact band with this colorful design on Amazon.” If they see it and they happen to really like it, they’re going to buy it right then because they don’t know where else they’re going to see it per se. That’s what I really like about fashion and that kind of industry. It all just ties together. When it comes to the Moissanite, I liked that it was a higher margin asset. So even though there’s not so many options to ship from within the United States because the margins are so high with the average order value of 400 some dollars, you’re able to select FedEx IP or DHL shipping because that extra $20 isn’t a big deal. Even though both stores are AliExpress dropshipping stores, it’s not your typical, somebody bought some $14 piece of garbage and then has to wait three weeks for it to arrive. Both of them have their own unique way of working out well.

Max’s Customer Acquisition Strategies

Blake Hutchison: Super good learnings there, I think. I mean product range is a really good point from which to consider dropshipping. I think you’ve pointed that out really well. Love businesses that have high average order value, as you just said. It’s a function of margins, but it’s also a function of you being able to get the product to the customer and them willing to pay a premium price to get it to themselves is a really key piece. I often find that really good operators, like yourself, tend to make this sound a lot easier than it really is. Let’s talk a little bit about customer acquisition a little bit. How do you acquire the customer? What platforms have you used, if you don’t mind getting into some details around how much it costs you would acquire the customer and even the creative process you’ve gone through to refine and get good bang for buck or good ROAS, return on ad spend?

Max Fontaine: For the band store for instance, it’s almost entirely Microsoft Ads and Google Ads. By that, it’s just mainly search, not even display or anything like that, just search ads, which of course, historically, have the highest return on ad spend, the most valuable clicks. I think maybe in the past, in earlier days, you might have been able to be really profitable on Facebook and stuff like that, but recently, or not even that recently, maybe the last two, three years, Facebook has become very expensive advertising wise to where it would be very difficult to become very profitable selling such an item on Facebook, especially when the item’s only $24 and it costs you $8. You would have to have a really low cost per sale. For that, I just do the Microsoft and the Google, which of course of all advertising mediums as far as I know, have the highest return on ad spend.

With the Moissanite store, it’s a little more difficult because of just the way advertising works. When you’re doing less expensive items like bands, it’s able to easily get all that conversion data really quickly and within a 30 day period. Those advertising platforms are able to really become efficient on their own without you having to do much, as long as you set the campaign up correctly in the first place. Whereas with Moissanite and these higher cost of sale items, you need to have, and of course Google will even say, and it goes to stand for Microsoft, at least 30 sales within the last 30-day period because they only take that last 30 day period. When all of these sales are split across Facebook, Google, and Microsoft, that’s not enough conversion data and it’ll start very skewing things right after 30 days because one ad group just happened to get four sales, something like that. And so for those, I actually pitted two different types of advertising against each other.

One was return on ad spend, the classic what you’re supposed to do on Google. And then a different type was essentially, Google Analytics made a couple custom conversions. So whether it was one was giving an email, one was staying on the website for two minutes, four minutes, and then 10 minutes. I said for each one to count as a conversion. And then I put that into Google Ads and I let it… Because at that rate, it’s now getting hundreds of conversions a day. So if somebody stays the two, then the six, then the 10, it gives that more importance and et cetera, et cetera. After that, I got to see my bounce rate drop exponentially. The time on the website became almost four minutes per visitor. You were actually making more money not setting your Google Ads on target ROAS, but on these custom conversion events. For the Moissanite it was a bit more complicated. Facebook is still good to use. I do use the Facebook for the Moissanite store, but for remarketing purposes. It’s great for remarketing.

Then I also have a kind of cold campaign on Facebook where it counts every cart and person that gets to check out as a conversion. Then it’s able to get a lot more conversion data than a sale per se. That’s really good for getting people into the advertising funnel and remarketing because that’s down to a $2.50 cents person that gets the cart or checkout. And then when you get them in that, they’re getting hit with the display remarketing, they’re getting hit with the Facebook remarketing and then of course, I have a pretty extensive SMS and email remarketing campaigns that are automated and set up. So it’s really just about finding the most efficient ways to spend your ad money. Of course, that takes so much time to do. Anyone can set up ads, but to set them up correctly is a whole different deal.

A One-Man Show

Blake Hutchison: Often people misunderstand the importance of having data to feed the engine right. I think you’ve pointed that out so well. You can have few conversions and the data engine or the algorithm’s not going to be as helpful to you, or you can change up the way you think about your conversion data. In your case, time on site, that’s a fantastic way to think about it from an Ecommerce optimization standpoint. Sounds like that proved to be very meritorious for you. Do you do that yourself, Max, or do you have somebody else helping you with that?

Max Fontaine: I just do it all myself.

Blake Hutchison: Just so everyone understands, you’ve got these two awesome businesses. Is it literally just you? What does the structure of the organization look like?

Max Fontaine: It’s just me. I did the websites. I created all the content. I did all the SEO optimization. I did all the ads, which of course I have a lot of experience at the ads, specifically. I’ve done all of it from vetting the suppliers, which was really important, to uploading all the products, which took forever and I definitely should have outsourced in retrospect, to a lot of other things. Actually when selling the sites, I got a lot of interesting conversations from buyers because they were like, “Wait, you’re doing this all yourself? You don’t have this or that?” I’m like, “Well, I’ve thought about it, but it just sounds like a lot of work, for instance, to hire somebody to do customer service.”

I was like, because in my mind, I’d have to literally interview somebody at my house, do all this kind of stuff. Then little did I know, it’s incredibly easy to even hire people in some of these other countries. The largest businesses growing in those countries, or the largest industries, I’d say, is customer service. That’s outsourced from here. And so in retrospect, after talking to so many people, even on Flippa, I was like, I can’t believe I’ve been doing my own customer service this whole time, stuff like that. The opportunity cost is insane, but whatever. Lesson learned.

Blake Hutchison: Lesson learned. Fantastic learning. I’m glad you have come to that realization. Certainly you can get some good, low cost resource to assist you with customer service and do a really good job. You’ve mentioned they’re two and three years old and it sounds like you are essentially selling them as a bundle. Just talk us through the exit process. Why have you decided to sell in the first place?

Max Fontaine: Well, at this point, the websites were largely a means to an end, a.k.a. to not have to work at my corporate job that I was working at to be able, to have enough money to not worry about money. So they pretty much fulfilled that process. They’ve done their job. I really do like websites. I wanted to make sure they’re going to a good buyer. If you look at the stats of the websites, everything’s only continued upwards. I mean, yeah, especially with the jewelry site, just even returning customer rate and all of that makes it just easier to be profitable every month and year. But they did their job. I’ve saved up quite a lot of money from running the sites. Then after I sell them, just that influx of cash as well will be enough money to not have to worry about working and I can focus more on little things that I’m interested in, stuff like that.

Delving Deeper into the Exit Process

Blake Hutchison: Fantastic. You decide to sell, you’ve listed them on Flippa. Tell us about that sales process. How has that been and what learnings have you got for our audience out there?

Max Fontaine: The sale process is fairly easy. Flippa makes it easy to list the website. They go step by step, and I like that you guys verify everything. It makes it easier for the customer too, so I don’t have to constantly prove to them everything. I really like the fact that you have to verify your identity on Flippa. I remember I used to sell some very low level random, like I’d just make a site, dropshipping site, run it for a month or two and then sell it on Shopify Exchange, which is no longer around, I believe, but sites like that. Half the inquiries were just scams.

There was no verification process for the buyers or anything like that. It would just be like, “Hey, we’ll send you a check for this much money. Just give us the assets and everything.” It was always a scam. The checks would always bounce and stuff like that. So I like that you can verify everybody on Flippa, both the buyers and the sellers. I also like the fact that you could do the NDA. That just made me feel a bit more secure. But yeah, it’s been a nice process. Everyone’s been friendly. It didn’t really take that long to sell the websites at all.

Blake Hutchison: How long, Max, are we talking?

Max Fontaine: The first buyer that ended up not buying it because they didn’t finish within the 45 day process, but had they bought it, it would’ve been from the time the websites were posted, it was probably two weeks till I had a buyer and actually had plenty of buyers before them, so it probably could have been sold within a week. But the most of them were wanting to do financing or something like that over time. I would be open to financing, but you’d have to put a very large percentage down, otherwise I was just like, “I don’t know you. I don’t know if you’re going to run the business into the ground.”

So I was really just looking for a cash offer. Also, because like I said, I want time to do my own stuff now. I know if I’m involved at all with the website, I’m going to care too much to not be involved and so I was looking for cash offers. So the first person that was willing to pay cash only took two weeks. They didn’t finish in the 45 day process, which is fine. And so essentially immediately after that was over, I already had another buyer.

Max Fontaine: I just sold it to them and they’re doing cash as well, so it worked out really well.

The Timeline of an Exit

Blake Hutchison: That’s good. You mentioned that you’d had a few buyers come in before that initial cash buyer. That cash buyer didn’t get the job done within the 45 day period. Just explain that, for all of the listeners out there, was a LOI, was it a letter of intent with a 45 day due diligence window?

Max Fontaine: Exactly. We did LOI, 45 day due diligence. The 45 days came to an end. Of course, people at Flippa were really helpful. I was working with a guy named Nick, and he was contacting them as well, “All right, it’s time to do this,” blah, blah. They just didn’t… They weren’t ready. They didn’t have it all together. They were like, “We just need more time. We still fully intend to buy.” They were saying, “We intend to buy still, we just need more time.” But I felt like they were just keeping me around to eventually buy… Maybe they didn’t have the cash on hand and they just didn’t want to lose the sites to somebody else, so maybe they were just trying to get me around, but they just couldn’t finish it in time.

So after the 45 day thing was up, the websites technically went back for sale because the LOI was over. Then I just got a different cash buyer from somebody that was honestly nicer and cooler anyways, in my opinion, willing to pay cash. So I was just like, “Okay, these guys couldn’t pay me on time, so it’ll go to you.”

Blake Hutchison: Fantastic to hear. And as much as you’re willing to share, obviously we spoke just before our session here, but am I right in saying that it’s one buyer buying both sites?

Max Fontaine: Right. They were for up for sale separately, but if somebody was interested in one side, I wouldn’t mention that I also had the other one for sale. If they’re willing to buy both, of course I’d offer some kind of deal. They were initially only looking at the Moissanite store, but then the more they looked at the other store, they really liked it too. They ended up just making an offer on both, which makes it easier for me and it actually makes it easier for them too because you only have to go through the process once instead of twice.

The Exit Process with Flippa

Blake Hutchison: That’s fantastic. And has there been anything about the exit process which has caught you by surprise?

Max Fontaine: I don’t think so, no. I mean, it’s all reasonable. The due diligence is completely reasonable, and especially as long as both parties are really open with everything and set actual dates and this and that. It’s a pretty smooth process.

Blake Hutchison: Fantastic. For those who have never thought about listing a business on Flippa, once you are into that deal room experience where all the buyers are then coming in and having a chat and talking to you, is there, I guess, some wisdom around how you work through the buyer base? Did you have assistance from a Flippa staff member? How did that process play out for you?

Max Fontaine: There was quite a lot of chat. There was a lot of different buyers or people that are, even if they’re not buyers, interested at the very least, hitting you up all the time. It’s honestly a little overwhelming because you have so many different types of offers and you’re writing them all down, which of course is a good problem to have. Don’t get me wrong. But yeah, I did have Nick, again, and I believe he is in Austin, Texas. Nice guy. He was helping me through the whole thing. Especially with those last buyers that ended up pulling out, Nick was really helpful in calling them and getting answers out to them. When they weren’t interested, helping me be like, “Okay, let’s move on,” stuff like that, so it was helpful.

Max’s Future Plans

Blake Hutchison: Fantastic. You’re in the process of that exit right now. You’re about to have your hands on, I guess, a good amount of money, which is fantastic. Congratulations. So what does that mean now for Max? What do you do? Do you take some time off? Do you continue the entrepreneurial journey? Do you go and take a corporate job as an Ecommerce exec? What does it look like?

Max Fontaine: Well, I might. You would think I would have a much more concrete plan. However, I’m probably going to get into a couple things. I just bought a house. Me and my wife live here now and there’s a lot of things I want to do. I want to build a deck out back. I want to do a lot of landscaping. So I’ll probably do stuff that I didn’t quite have time for beforehand. I’m going to do some projects. I’m going to get into some kind of hobbies like Unreal Engine 5, some game making engines, stuff like that. I probably, I might get back into Ecommerce. Honestly, I probably will eventually, especially now that I have so much more knowledge.

Even now looking back on the website’s already made, I mean, they’re phenomenal websites, but if I were to go back into it, I probably would’ve done things slightly differently. It would almost be kind of a waste of everything I’ve learned if I didn’t go back into Ecommerce because I’ve put so much time and mental energy into it. If I did go back into it, I would definitely do things like outsource the uploading of products and customer service and just worry more about the complicated aspects of the website and business and ads. I very well might go back into Ecommerce. I would go into different businesses. I probably wouldn’t do a band store or Moissanite again. I would do something else. Also just for the fact that I feel like that’d be kind of scummy to do to my current buyer, so I would do something else.

I’ll probably eventually do that. One cool thing that’s come out of the Flippa selling process is I did get some consulting gigs, which I’m not even a consultant, but people, after talking to them for an hour on Moissanite store and an hour on Axios Bands and just being like, “You did the entire thing?” A lot of people are hiring me on, whether it’s to help them with their ads or how the drop shipping business works as a whole, because it’s easy to get somebody that only knows ads or only knows SEO or only knows how to do coding stuff in Shopify or this or that, but I think I can at least bring to these people a whole, how it all fits together real properly aspect and suppliers and what I look for on AliExpress, et cetera, et cetera. So I’ve gotten some consulting gigs that it’s great because they pay phenomenally and all you have to do is talk to them for an hour here and there and help them with this and that. So maybe I’ll keep going into consulting or something like that. Who knows?

Blake Hutchison: Well look, Max, I mean, as you’ve just figured out, I mean, Flippa’s a huge network of buyers, huge network of entrepreneurs and owners, and you each have such extraordinary skill that you bring to the table. Some of that you don’t even realize how rare it is and how sought after it is. I guess you’ve discovered that now through the Flippa platform. So both the combination of an exit and a consultancy gig, that’s a pretty good story, I think.

Max Fontaine: Yes. I’m happy with it. A lot of things I could do now, so we’ll see.

Blake Hutchison: Well, ladies and gentlemen, that was another episode of Humans of Flippa. We had Max Fontaine with us today, and he has just exited both a, I hope I get this right, Max, a wristbands Fitbit and Apple Watch band Store, as well as a… How do I pronounce this? Moissanite Ecommerce dropshipping store. Had some success with the Flippa platform and also was able to pick up a consulting gig in the journey as well. Max, thank you so much for joining us on another episode of Humans of Flippa.

Max Fontaine: Thanks, Blake. It’s been a pleasure.

Chris was a Project Manager in the corporate world for over ten years. After climbing to the top of the corporate ladder, he realized he wasn’t feeling fulfilled in his career – and life. That’s when he decided to change everything.

Freeing up his property’s capital, he started to make various investments into websites on Flippa. This allowed him to completely change his life, giving him the freedom he lacked in the corporate world. 

How it All Began on Flippa

Chris bought his first website on Flippa for just $400. The content site focused on natural dyeing products, and wasn’t monetized. Chris had to invest time in making it a revenue generating business. He monetized it with ads and affiliate programs, created an e-book and one year later, he sold the website for over $4K on Flippa. 

This was the point at which he knew he had tapped into a winning formula – and his next acquisition resulted in a six-figure exit. Chris acquired a unique content website in the dream interpretation niche, he improved it over the course of a year, and eventually sold it for over $200K on Flippa.

Chris’ next purchase was an established 11-year-old blog focusing on French-inspired weddings. When he decided to sell it, the deal took just 30 days to complete, and he had multiple offers from a diverse pool of buyers, including big corporations. 

Finding The Perfect Business

In 2022, Chris was browsing Flippa and found an unmissable opportunity: a nine-year-old WooCommerce site selling engraved seeds, Live Love Bean. He purchased it right away for $4K, knowing that there was plenty of room for growing the business.

The business is now booming: the products are sold online, direct to consumers, through wholesale, as well as at local markets during the weekend. Chris and his family are absolutely loving this new business venture. 

“To anyone thinking of buying or selling on Flippa, I would definitely recommend it.” 

Chris Hammond, Flippa Super Seller

When it comes to Flippa, Chris states that nowhere else can you find such a variety of businesses available for sale, any kind of niches or products, and have access to such a large community of buyers and sellers across the world. 

Flippa has completely changed Chris’ life: he couldn’t have achieved what he achieved without Flippa. Chris is now able to work on something for as long as he wants, and then just list it on Flippa, and find the next big thing to work on. 

Check out Chris’ latest business venture, Live Love Bean, a unique Ecommerce store selling magic beans, engraved seeds that sprout to reveal their message on the side of the plant.

And find your next business venture on Flippa. 

Rod Gunn was looking for a way to pivot his life-long career in the oil and gas industry: that’s when he found Flippa. 

Three years ago, the industry he always worked in started to slow down and Rod was wondering what he could do next. That’s when his son came up with the idea of Rod becoming a digital entrepreneur… 

Rod acquired and sold numerous small businesses on Flippa.

‘Having a resource like Flippa, that has all these businesses ready to be purchased, was a great fit for me.’ 

He also made a bigger investment on Flippa, and purchased a social media promotion agency. Whether it was musicians trying to make their music popular, random people wanting more likes and followers, or brands wanting to establish social media presence, the agency helped people, profiles and pages to become viral and gain followers.

Rod didn’t know much about social media at first, but he successfully managed to scale and optimize the business. He worked tirelessly to offer a better product: packages and bundles were added to the offering, the website was rebuilt, and Rod introduced a focus on customer service. 

The business was booming at this stage, but Rod’s previous career also started to get back on track. That’s when he knew it was time to sell, and he turned to Flippa.

‘I knew Flippa, I knew the platform, and what it has to offer. When the thought process came up, Flippa was on my mind.’

Rod spoke with Maliha, one of the Advisors at Flippa, and together they scoped the perfect exit strategy, from the initial valuation to finding the right buyer.

“Anytime we got on the phone with a Flippa team member, it was a very positive experience. The team is engaged, and active in the space, and wants buyers and sellers to succeed. The whole experience was excellent.”

The business sold in just under three months on the marketplace for mid-six figures. 

The best part of selling his business on Flippa? The team helped him through every step of the journey. Listen to how Flippa changed Rod’s career and life.

Watch more Humans of Flippa stories here.

Read the full transcript of the conversation below.

Rod’s Entrepreneurial Journey

Blake Hutchison: Good morning, good afternoon, good evening, wherever you are around the world. This is another episode of Humans of Flippa. My name is Blake Hutchison. I’m the CEO at flippa.com, the world’s largest marketplace to buy and sell online businesses. And today I’m joined on another episode with Rod Gunn, who is based out of Houston, Texas. And as early as last week, he was actually with our team in our Austin office at a Flippa meetup. So Rod, fantastic. Thank you so much for joining. Appreciate you being with us here today and looking forward to hearing your story on Humans of Flippa.

Blake Hutchison: Now Rod, what I’d like to do is tend to start with a broad question. How did you get to where you are today? What was your entrepreneurial journey? If you could tell us a little bit about that and help us understand your beginnings and where you are now.

Rod Gunn: It’s a long story, Blake, but I’ll try and shorten it as best I can. I’m not from this industry. I’m an oil and gas guy. I’ve traveled around the world selling oil and gas equipment, services, processing solutions, etc. Things started slowing down in my space about three years ago and it was, the phone wasn’t ringing as much and not as many emails coming in. I’m getting bored, so what should I do? And my son, who’s since graduated uni, he said, why don’t you get into Ecommerce? That sounds great. What is Ecommerce? So he sat down and showed me some things. This looks really good. So we looked at some sites and possible services, solutions, products that we might be able to sell and sites that we might look to buy. So we got in that way nearly three years ago with the site that I’ve hung onto, done some things with, spun off a mirror site.

 I still have the base, and grew from that. No real big successes until this one site I just sold recently, I acquired a little over two years ago. But there were some other smaller sites that I bought and sold. A couple of them were on Flippa, and then the large one we just sold a couple of months ago. But the journey was interesting in that this is not really my traditional space and having a resource like Flippa that had all these already set sites you could step in and purchase, should you opt to do that, was a great fit for me and worked out well, both buying and then eventually selling.

Blake Hutchison:  That’s interesting and quite common. For those listening out there, we do meet a lot of people who have come from one industry, not necessarily would they consider themselves digital entrepreneurs, or in many cases they wouldn’t even consider themselves entrepreneurs at all. But they tend to have a conversation, it’s a serendipitous conversation, and they find themselves all of a sudden as an entrepreneur and operating within the digital economy. The business that you recently sold, would you mind stepping us through that business? What was it, what did it do, what was its service proposition?

Rod’s Most Recent Exit: A Social Media Promotion Agency

Rod Gunn: It’s something that I didn’t know much about until I acquired the site. It’s a social media promotion site. So again, appreciating my age and where I came from, Instagram, TikTok, things like this were things that I really wasn’t that familiar with. But I looked at the site, the valuation looked good, and I thought, I can do this. I can figure out Instagram, TikTok, SoundCloud, Spotify, and support those users on those platforms that were looking for, I’ll say a boost, a promotion, to their post, to their content, whatever it would be. And that’s what we did for a couple of years.

Blake Hutchison: You’ve taken somewhat of a risk, you’ve bought this business in, I hope you don’t mind me saying, but you admitted it’s certainly an industry that you weren’t, well at least not an expert in, but I suppose clearly worldly enough to understand that the world of social media was strong and viable and that businesses were operating in that ecosystem and doing well doing so. And so the business, if you don’t mind me saying, was called Boost Your Presence and it’s essentially a social media promotion agency. Is that a fair description of it?

Rod Gunn: That’s very fair. That’s exactly what it was.

Blake Hutchison: How did that business make money, and then how did you take it from what it was when you acquired it to what it became when you exited it?

Rod Gunn: A lot of work. I’ve talked to people that are looking for, I want to get a website so I can obtain passive income. That sounds wonderful. But I think where I’ve come from, there’s a direct correlation between the amount of work you put into something and the return you get on the back end. Now, not 100% of the time, but usually you put work into it, you figure things out, you develop solutions, you get creative on how you go to market. You listen to your customer base, you come up with something that might be a little bit different from the others. You try and differentiate the best you can, and you bring a product forward. And from then on, it’s just supporting that customer base, tweaking ads as you go, tweaking the offering as you go. But really just focusing on the customer, responding to them when they have needs, and appreciating that anyone that buys anything on a site, especially this kind of site, has a strong potential to be a return customer. So you treat them as equals and you take it forward.

Analyzing the Agency’s Structure

Blake Hutchison: Just for simplicity’s sake, who was the paying customer? Was it the influencer looking to boost their presence, or was it the brand looking to get access to the influencer?

Rod Gunn: That’s a great question. Very few established influencers would come. A lot of it would be musicians that want to get their music out there and they have music, they want to get heard. You’re more apt to listen to a track that’s got a couple of thousand plays and some likes versus something that has nothing. A lot of respect for them to try and get their music out there, and this was the way they saw that they could do it. Small businesses getting new products out there, getting their brand known. That was a fairly large percentage of the business. And then just random people that wanted their posts, their page, popularized, wanted that perception that I too can be famous and this was a way to take a shortcut to get there, maybe build up that perceived following to establish more of an organic growth.

Blake Hutchison: Opportunity to brag a little, if you don’t mind. You bought this business when, as you said, maybe it was a risk, maybe it was a little bit of a speculative business back then. It wasn’t proven in its operational model, and you’ve taken it to something which you’ve ultimately sold for mid-six figures. What was fundamentally better about the business by the time you exited it?

Rod Gunn: The site had improved. One of the big changes we made is that we had built in upsells. Upsell is a large part of econ, but instead of buying this and you get a discount here, I would just bundle views and likes. I would do packages and those were a large part of our business, and it hadn’t really been there before. The pricing became a little bit more competitive, but my costs came down as well. I found other service providers… The main service provider used optimized his costs a little bit. We were able to have a more competitive offering. And again, it just gets back to responding to customers when they complain. No matter what kind of site you have, no matter what kind of business you’re in, something’s going to go wrong.

Whether it’s oil field equipment that goes down or likes that don’t get there in time on your TikTok page. If you just address them in the right manner, if you give a few extra likes or views and show the customer that you generally care, things fall in place no matter what business you’re in. I think there’s a large part of that here, and it worked out well. As you mentioned, we sold, not a huge valuation compared to some of the things I’ve seen on your site, but it was about 270 x what we paid for it. So from that perspective, it was a nice turn.

Blake Hutchison: How long did you own it for?

Rod Gunn: Right at two years.

Delving Deeper into the Exit Process

Blake Hutchison: I would’ve thought 270 x in two years is about as good an IRR as you can possibly expect, congratulations on that. Now you’ve come from a completely different industry, and then you find yourself owning this business, and ultimately you then pursue a sale. What made you want to sell it at that point in time? What was the motivation to do so?

Rod Gunn: I mentioned earlier on, I’m an oil and gas guy. In that business, I still had a side consultancy doing a lot of work in that space. It was starting to pick up, phone was starting to ring again, emails were coming in, I was traveling a lot more. Still am. I really wanted to get back engaged in what I’ve really known for the last 25 years of my career. And to be quite honest, it was getting very difficult filling three to 400 orders a day, and a lot of the people in this space that come to my site wanting likes, views, followers, expected immediate results, and got to sleep sometime, and need to take a break from it. The hours became a little bit longer than we initially thought they would when we came in, but that’s because there was more business. It’s not necessarily a bad thing, but we were looking for an escape. Escape’s not the right word. We were looking for an exit, and that’s where Flippa came in.

Blake Hutchison: Fantastic. Now take us through the experience. Lots of buyers on Flippa, and of course our job is to try to find the right one, but that can take some time. For those people who have never been through an exit of any business of any size before, would you mind just articulating that process a little bit, how you found it, and what some of the challenges were in doing though? What were the frustrations in going through that process? How did it play out for you?

Rod Gunn: I was familiar with Flippa from two years prior. I’d purchased a couple of smaller sites, resold those sites at a very small multiple, but knew Flippa, knew the platform, knew what it had to offer. And when the thought process came up that, okay, we need to start selling, Flippa was foremost in my mind. I spoke with one of your consultants, he gave me a valuation on the business that was far more than I thought the business would ever sell for, and thought, okay, there’s no way this can happen. Spoke to a couple of other people at Flippa, set expectations a little bit lower but not much, and I thought, based on where we are, what’s going on, I do think I want to make the exit and if we can get this price, great. If we get near that price, fantastic. Still happy to do it. I was assigned an advisor…

Rod Gunn: Maliha, and she was awesome. Had a lot of conversations with her. It didn’t sell right away. The valuation was really high. There is a level of risk in this business. You never know what might happen in the US right now with TikTok or whatever else. And there’s a lot of saturation in this space. There are a lot of competing websites. I really was hesitant to think I would sell it for what I ended up selling it for, and certainly what it was initially valued at. It took a few months, three months, to find the right buyer took three months, and that was fine. We were still making revenue, we were still making income. But working with your team there who, I would say, were engaged in my success, they would take that extra step to try and find the right buyers, including going back, re-engaging those when the price dropped. There are a lot of things they did that, even coming from a sales background, I didn’t do.

The Timeline of an Exit

Blake Hutchison: I appreciate you saying all of that. For those out there who are listening for the first time, considering buying or selling, it is important to understand the process. It is not an overnight thing. And I think, Rod, you’ve just said it took approximately three months to find the buyer, and that’s about right. We would tend to say to most of our customers that, for an asset that is mid-six figures, that you can tend to imagine a 12-week sale cycle or thereabouts. Tell us a little bit, obviously without revealing too much, tell us a little bit about the buyer. What was it that they liked? What was their background? Were they from an oil and gas background as well? Probably not. Who did you end up meeting on the platform, and what was it about that buyer that made the deal work?

Rod Gunn: You mentioned the platform. That’s what made selling on Flippa so easy. You would see the engagement coming in, you could see their profile. Flippa did some vetting up front. When these people came to the site, or this, I’ll say, this person initially came to the site, I could see a little bit of his background. There was some back and forth chatting engagement, which is fantastic, and you guys have oversight for that, so you could come in, take a look at it. Talking to him, well initially chatting with him initially and then engaging on the phone, and knowing what his background was, you get a good feeling for that person was the right one to sell to.

And I’m going off subject a little bit, but I also asked Maliha to do a bit of an internal check within Flippa to make sure this guy’s legitimate, and she did that. Came back all good. Other people here have had engagement with him. This is a solid buyer, this is someone you want to talk to. So went back and forth with him for a while. They put a letter of intent together, which took a long while to work through, negotiated a price, and we settled.

The Specifics of an Exit: LOIs, Contracts and Due Diligence

Blake Hutchison: Was there anything about that letter of intent which was, well for want of a better description, funky in nature that gave you any cause for concern, and I guess forced your hand around tougher negotiation? What was it about the letter of intent which was right or less so right?

Rod Gunn: The LOI was, I think, 13 pages in length, which ended up to be half the size of the contract. I’ve read contracts throughout my career, I was okay with that. Non-compete for a longer period of time than I was comfortable with. I really don’t expect to be back in this space, but it was a long time. Payments spread out over a longer period of time than I was comfortable with, a lower price than I was comfortable with, and a few other clauses that just weren’t really satisfactory for me.

And that’s part of the reason probably the sales process extended a little bit longer. And there were other buyers that came forward with an LOI that wasn’t really what I would consider acceptable. So reviewed this, did a few red lines on the contract, on the LOI, took it back, and then we had a workable LOI, which initiated the due diligence process with the customer who, to get back to your original question, was a couple of friends that work in California knew each other from university and have a team of people working with them to support the website, e-comm type businesses.

Blake Hutchison: I appreciate you going through this with such transparency. A couple of bullet points there. You talked about the fact that the non-compete was far longer than you would’ve liked. I think you talked about the fact that the monetary terms of the LOI were lower than you would’ve liked, and a bunch of other terms. And so it’s really important that people understand that LOIs are in fact negotiable. We often hear from sellers who say, oh, I’ve got this LOI, I’m walking away. And it’s very important that people treat the terms of an LOI as something which is clearly preferential for the buyers, and that we invite and welcome everyone to negotiate that. How did you find the negotiation, Rod? Were they open or was it difficult?

Rod Gunn: The LOI was, I’ll say, simple. A little bit of back and forth, some red lines. We came to an agreement on price, structure, things like that. The contract was much more difficult, just a lot of things in the contract, and I was dealing directly with their lawyer, and I’m not a lawyer. And it took a while, but there was baby steps made here and there, but it was taking too long. Eventually the seller himself said, look, let’s get on the phone and work through it. And half an hour later we had an agreement, and it wasn’t that hard. Any negotiation, there’s a little bit of give and take, and there was here, but I felt at the end it was a fair contract on both sides, and I’ve supported them for a period of time, we’re outside of that period of time, happy to continue to support them, but I think the site’s doing well and they don’t need me anymore. But it was a negotiation, it took longer than it should have. But once you get on the phone and work these things out, it went quick.

The emotional rollercoaster of an exit

Blake Hutchison: I’ve checked it out. Boost Your Presence is still operating and appears to be doing really well. So congratulations on a great exit, and it appears the buyers are no doubt happy. The price. Were you disappointed? Were you content? Were you ecstatic? How far removed was it from your expectations? How did you rationalize the emotions around that?

Rod Gunn: Content plus.

Ecstatic would’ve been the price we initially listed at, which to be honest, I thought was somewhat unrealistic. But you try, and we weren’t in any rush. So it came down a couple of times. We ended up at this figure, which was a little bit higher than the offer, but very content with where it came in. I mentioned the sell price to friends in my orbit, my circle, and they are ecstatic.

We’re very content with it. It’s a great exit. It gives us a sum to do other things with, which we’re in the process of doing, partly on Flippa, partly on just our own personal space. Very content. It worked out really well, and I hope it does for the buyer as well.

Blake Hutchison: We do our best to follow up with the buyers and in almost every case, buyers of assets of your type and of your size tend to end up becoming very, very successful in their own right. That’s really something we’re very proud of, and we’re excited to ensure that we keep in touch with the buyers who do ultimately acquire on our platform. First time you’ve gone through this, at least at this size. As you said, it was a social media influencer platform, or a social media platform. It was a new experience for you. For those out there who are listening to you and want some sort of tips and learnings from the experience, how would you summarize what you learned from your exit of this size?

Rod Gunn: Great question, and I really don’t know how to answer that. I came into something knowing a little about Ecom, but not understanding social media. All the tools you need are out there to learn about anything you want to pick up. At your meeting in Austin, there were a lot of Amazon FBA people there. So within a couple of hours and some follow-ups later, learned a lot more about the Amazon FBA space. There’s so much potential in everything that you have on your side and elsewhere. If you don’t know it, you can figure it out. It’s not super challenging.

The answers are out there if you just make a little bit of effort to figure out how to run Google Ads properly, as an example. That was one of the biggest obstructions I had. I did not really understand Google Ads. In fairness, I still really don’t get it all, but I learned enough to make my ads more effective, and we had a conversion rate of near 18% when we were done, which in our little space is quite high. And it was really the quality of the ads, and YouTube’s helpful, articles, there’s so much out there that you can read, watch, learn from, that will help you build your site and create it beyond what you thought it would be coming in.

The Experience with Flippa

Blake Hutchison: Final question for me, and again, thank you so much for the transparent interview today. You obviously mentioned that you were content plus, and it’s enabled you some flexibility obviously to go back into what you know best: the oil and gas industry, but obviously given you, I suppose, some capital from which to do whatever you want with. You’ve summarized this a little bit. You said maybe do some more things on Flippa, maybe do some things for yourself. But how would you summarize, if you don’t mind, the Flippa experience as a whole?

Rod Gunn: Oh, very positive. Go back to your rating system earlier, that’s where… Close to ecstatic. Your team, Maliha specifically, some of the other guys as well, and I can’t remember the name of the gentleman in Austin that first approached me and said, look, this is what your business is worth. I thought, no, there’s no way. Whatever you’re doing in Austin, whatever’s in the water there, can’t be right. And just the platform you guys offer to engage with people that are looking to buy, the support from your team, be it Austin, Amsterdam, Melbourne where you are, to me it’s been, anytime I’d get on the phone with a Flippa person, it was a very positive experience. And the Flippa people I met in Austin, the one I met at the Houston gathering a couple of years ago, meeting some of your people in Las Vegas, you’ve got a great team that’s engaged and active in this space and are wanting buyers and sellers to succeed. And that’s obvious. So the overall experience has been excellent. Near ecstatic.

Blake Hutchison: Content plus on the price level and near ecstatic with respect to the Flippa service, so thank you so much.

Ladies and gentlemen, that was another episode of Humans of Flippa. We had Rod Gunn join us from Houston. Rod was, well, I suppose a buyer and seller on the Flippa platform, but most recently had success selling a social media platform, Boost Your Presence was the name. Go and check that out and support the new acquirers of that business. Thank you so much, Rod. Really appreciate your time today and thank you everyone for listening into another episode of Humans of Flippa.

He’s now back on Flippa to build an ecosystem of businesses in two niches: entrepreneurship and lifestyle development. 

Scott has already acquired five businesses on Flippa this year, and he’s ready to acquire a dozen more by next year. His number one tip when it comes to buying businesses? Consider buying multiple assets, and put them together to build something bigger. Listen to Blake and Scott’s conversation and find out more about the biggest challenges of buying and selling businesses, how to successfully scale a business and much more.

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Read the full transcript of the conversation below. 

Scott’s Entrepreneurial Journey

Blake Hutchison: Welcome to another episode of Humans of Flippa. My name is Blake Hutchison, I am the CEO here at Flippa, and today I have Scott Alford joining us from the Bay Area, specifically from San Rafael. Scott, thanks for joining us.

Scott Oldford: Great to be here today.

Blake Hutchison: Now this is the first time we’ve got to know each other, thanks for joining again, but you’ve just revealed that you joined Flippa some 13 years ago, is that right?

Scott Oldford: It was like 13 years ago and I had my first business when I was seven. I used to have, by the time I was 16, I had a million dollar business, programming and building different things, online stuff. And I remember selling my first website on there, I think it was May or June of like 2010. I just went back in my Gmail because I don’t delete anything and was saw the day I signed up April 27th, 2010.

Blake Hutchison: And I believe it was a content website.

Scott Oldford: It was an online form for people that talked about Phish. Back then I used to build online communities, that was part of what I used to do. And I think I was getting rid of them because I was redirecting my direction, and focus and I got rid of a couple of websites I own like that.

Blake Hutchison: That is very cool. Obviously we’ve got a big community and some of them like yourself have been around for a while. We’ll get into your Flippa stuff in a minute, but let’s just start very high level. How would you describe yourself, your job and what you do on a day-to-day basis?

Scott Oldford: I mean, I’ve been an entrepreneur, as I said, since I was literally a kid selling eggs on my parents’ acreage in Canada. And today I’m largely advisor and investor, I have ownership in 34 companies, so I run a portfolio group, so that’s part of it. On side of that as well, I also mentor a lot of entrepreneurs and have been doing that now for the last about eight years. And up to this point, I’ve helped about 250 businesses all online, go past seven, multiple seven figures, many of them past eight figures. So when it comes to education businesses, media businesses, courses and coaching and consulting, those are the ones that have helped scale and build behind the scenes as well as my own. So now I bring that into pretty much everything that I do. We’re focused on media, education, certification companies, those types of things and some software as well.

Blake Hutchison: So some of them software that would mean tech startups?

Scott Oldford: We do a little bit of investing on the angel investing side, but largely when I’m looking for a software, I’m looking for a tuck-in software. We have all this audience, we have all these people, what are the things they need? What ends up happening is I see a software that failed at being able to get market adoption, they ran out of money and they’re selling us their software, their customers, they’re trying to go do something else. They weren’t able to raise, they weren’t able to… But I’m able to take it, and because we have an audience of over a million people in the entrepreneur niche, I can take it, tuck it into all the different businesses we have so that everything redirects there. We take away the marketing sales cost and that business just ticks away, we’re not trying to scale it to this some big thing, it’s more so solving a problem that a lot of our audience needs solving.

Blake Hutchison: Diverse background, you obviously get to see lots of different businesses. You probably therefore get to see that the operational problems that some businesses have are very similar to the operational problems that other businesses have, and no doubt that gives you a pretty strong sixth sense for what a good asset might look like or does look like.

Scott’s Portfolio Approach to Scale

Scott Oldford: I think the largest part is a lot of the time if you are only buying one business, you really are at a disadvantage than buying and saying, “Okay, this is my investment thesis, this is what I believe.” And the economy as a scale really solve a lot of the problems that you have when you get into buying and acquiring businesses at the end of the day.

Blake Hutchison: It’s a really good point actually, because the vast majority of people who buy on Flippa do buy more than one business. In fact, most of the time when you see quite a big acquisition budget, let’s say someone lists themselves as having a 5 million total acquisition budget, you’ll see that their budgets for acquiring businesses could be as low as say 50,000 dollars or 150,000 dollars because their entire approach is to take what they think works, but apply it across a portfolio.

Scott Oldford: I think it’s a more diversified approach, it’s less risky. If something doesn’t work, it’s not a big deal, it’s not a big part of the budget. I also think it allows you to get gold where you wouldn’t be able to get gold otherwise. I’ll just give you one example, one of the things that I bought from Flippa was… I won’t disclose what it is particularly, but it is a software company and if someone didn’t buy it and brought it into a current ecosystem, there’s just no way this makes sense. It just does not make sense, and it sat there for a while and I was able to get it, I think 30,000 dollars under what the actual price was because it was just something that by itself made no sense.

But I already have a programming team, I already have the marketing, I already have an operator, I already have the marketing taken care of. I can plug it in, and the software itself is great, but everything that surrounded it just wasn’t. So that acquisition was only about six months ago and I think I’ve made three times my money back on that already.

Blake Hutchison: Already?

Scott Oldford: Already, just because it’s plug and play.

Identifying the Right Businesses on Flippa

Blake Hutchison: That’s exactly what I’d love to talk a little bit about right now, these businesses that you identify. Now, my observation is that you were pretty active on the platform in the last half of 2022.

What is it you are looking for, what is the theme?

Scott Oldford: Coming into 2022, majority of my business beforehand was someone’s paying me money and it’s a good deal of money. I had a very successful business generating anywhere from three to seven million dollars a year mentoring and selling courses on how to scale a business, a couple books, those different types of things. And that’s still rolling, that’s still going, but I’m no longer focusing majority of my attention there. I said, “Okay, I’m at a point where now I want to be able to build an ecosystem of businesses.” And my belief is if we are looking at the next 10 years, software, education and media, meaning newsletters, podcasts, blogs, things that we can control, at some level we can control not just the website that has search traffic, but the website that also has a quarter of a million email addresses on the back of it that we own.

I said, “Okay. That’s the way and direction that we’re going to go in.” That’s what brought me to saying, “Okay, let me sign up for Flippa,” as well as the different other competitors of yours obviously as well and let me start seeing what is in there. I mean, I haven’t made any massive acquisitions off of Flip, but by any stretch of imagination. More so what I’m looking at is either number one, either a tuck-in or number two, something that I might not fully know but I’m going to dip my toe in to see and understand if that’s something that I want to bring into the overall ecosystem. Or in a couple of cases, I went and started talking with a person behind it and I was like, “I think that person might actually have the skillset,” and in two of the cases, they’re on my team now.

I bought the property, but in reality I really just wanted to hire the person because I was like, “They built that, they got all that off the ground, that’s interesting. Let me get that skillset and let me bring that into my entire group of companies.” I mean, more than likely, I’ll probably do another dozen acquisitions in 2023 from Flippa alone, continuing to do that because a lot of the time, again, there’s a lot of gold, by itself you can’t extract it, you bring it in, you put it into the whole gold smelting machine, and now you actually have some gold. So largely I’m looking for properties that are new newsletters, we own a few podcasts. Right now we own 13 newsletters, we own a few podcasts, we’re going to continue to grow the podcast network and content sites.

But again, things that are inside of, I have two large niches, entrepreneurship and business, and then lifestyle, wellness, personal development. If it’s outside of that, I don’t touch it, I don’t care about it. If it doesn’t make sense in those two, I’m done. If a SaaS is not a tuck-in, meaning it needs its own marketing, I’m out. If a media site doesn’t have a newsletter on the backend or some type of thing I own, besides the search traffic, I’m out. If it’s an education business, I’m not looking to buy those, I’m looking to partner on those, but that’s because that’s my background and that’s my clients, and my deal flow on that is just great. I’m looking for deal flow largely on media and software.

Blake Hutchison: Okay, and as part of this, how do you undertake the search? Are you simply going to Flippa or somewhere else and using a keyword, are you using filters? How are you finding out about these deals? Where are you getting your deal flow from?

Scott Oldford: My son came about eight months ago, at the beginning I had a lot of free time in between because I went back from the business, said, “Okay, I’m going to take a step back.” I got a lot of time on my hands, and I would just spend time going through Flippa, and the other different websites, and doing a little bit of due diligence, and this and that. And obviously I’ve been investing in businesses probably for about four years, this last 16 months by far majority of my focus.

Now, I essentially have somebody else that does it for me, goes on the website, compiles and essentially says, “Hey Scott, I think this might be good to look at.” I take a look at it, an initial look at it, and then I go from there. That’s how I do it today, obviously when I started back in the summer, I had all the listings to go through because it was all new, I wasn’t looking at it each day. And then as time went on, there was only so many listings that come up, but that’s the process today, and there’s not that much in my criteria really come when it comes down to it.

You’re only going to see probably a few deals a week that fit my criteria at this point, and understanding your criteria is also important so that you… You just waste so much time on due diligence, it’s just the biggest time suck ever. And also you have people that you just don’t know when you’re buying from somebody, you just don’t know them.

Scott Oldford: The amount of due diligence you have to do of going in there, I’m used to going into business, people literally pay me a lot of money to go into their business and say what’s wrong, and I’m really good at that. I can look at a business and in 10 minutes be like, “All right, this-this-this is all messed up, now what matters? Does that matter?” And it was also fun at the beginning, and now that I’ve done it so many times and just whenever I do something, I do it obsessively, and then I move on and I delegate it to somebody else. So that’s what I’ve pretty much done. But it was just me on my phone just being like, “Look at this bit. Let me talk to this person,” and it was a lot of fun.

Blake Hutchison: I love that. So first you did it yourself, now it sounds like you’ve got your own personal deal origination service, which is pretty cool.

Scott Oldford: We’re expanding that now… Because obviously an advantage when you have more time, and more cabinets to go and say, “Can we start approaching people versus people that are actually looking to sell?” And there’s advantages and disadvantages on both sides of doing that at the end of the day.

Blake Hutchison: Wow, you just gave me a opportune time for a plug. Flippa just recently launched our off market, so for those of you who are new to Flippa, click the search button, then next to the live listings, you actually see 10,000 off market listings. They’re not actually for sale right now, you get to prospect on that directory. That’s pretty cool, and hopefully we can help you out with that Scott.

Scott’s Scaling Process

Blake Hutchison: We’ll be continuing to add to that, and then it sounds like you are clearly very experienced and so to some extent you have an ability to de-risk your acquisitions. But what I’d love to get into, just briefly, if you don’t mind, you mentioned you bought a site, whatever it was, three months ago, and I think you said two or three times the return on that small investment. What is it you do once you take over the asset to either stabilize the patient we might call it or accelerate?

Scott Oldford: I think we finished that acquisition in October, it’s February right now. So that’s the timeline on that, and it really depends on every business. Some businesses, I’m like, “We literally don’t have the time to do anything with the business.” I’m actually buying one right now, it’s a little software that allows you to do some legal stuff, and I’m buying two businesses, I’m buying the software, and then I’m buying the legal templates from… I’m buying two businesses, bring them together, and then the lawyer’s going to be on retainer to be able to take care of that.

I got a SaaS that didn’t work, and then I got legal templates with a lawyer that doesn’t know how to market it. I brought it together, and then I have an entire army of entrepreneurs that need contracts that don’t want to pay 10,000 dollars for a contract, you can’t screw that up.

In this case, it was a situation where I went in, I did the due diligence, I liked it, I gave a low-ball offer and they accepted it. And I was like, “That’s great,” and I think it was the first sale I did on Flippa if my memory serves me right. I did that, it went smooth. My due diligence, I actually went into the thing… Funny enough, I actually knew the people that sold it to them, they were friends of mine. So I went to them and I was like, “Hey, what’s the deal with that?” And they’re like, “Listen, this is going to be a pain in the if you’re going to try to build it by its own thing. We sold it because we couldn’t make it work because of this…” I’m like, “Okay, cool, sweet.”

Then I went to my programmer, my head programmer and I was like, “Hey, can you do a little bit of a review?” And he’s like, “We don’t need to screw around with the code, we don’t need to update it, assuming that we don’t want to do this, this and this.” I’m like, “Well, I don’t want to do this, this, and this.” So then I was like, “Okay, sweet, let’s do the deal.” So I did the deal, it was 33 days from the time that I submitted the offer to the time that the cash was done, it took about a week to do that. So then I went and I talked to the operator and I was like, “Man, this guy’s worth the money alone, this guy’s amazing, he’s been there from the beginning, he’s bought in, he loves it. I’m in the process right now giving him a percentage of the business because I believe in him, I believe in his vision.” So it has about six and a half thousand a month in monthly reoccurring revenue, 6,500 bucks. In the entire scheme of things, never going to miss 6,500 dollars.

I said, “Okay, 6,500 dollars covers all the expenses so it’s basically at zero.” We need change the website, we need to change the marketing, we got to activate the email list, we got to get some marketing stuff, we got to get the backend. How many clients can we actually take? So beforehand it was a do it yourself and it was 35 bucks a month, and I was like, “Listen, we’re never going to be able to scale with that. We’ve got to be able to bring in some done with you or done for you element and bring the SaaS on the back of it.” So then I took that, helped on the marketing a little bit, and then I went to all the certification companies that I’m owner in or partner in, I said, “Listen, we’ll give you the first year free, and then after that it’s going to be 399 dollars a year.”

You can go to every single person and tell them, “Hey, we’re doing this promotion, we’ve partnered with this business and it’s working incredibly well, but now here’s what the other thing that happened, there’s a 3,000 dollar upgrade.” We’re getting all these people come in getting their free thing, it’s going to cost us about 70 dollars per person for the first… So of course it’s going to be a loss, but we are capitalized, that’s fine. But as people are coming in, some people are upgrading and they’re pushing a buy button right there and then, we’re getting the cashflow from that because we own in the education businesses, we don’t have to pay any affiliate fees on that. And based on our current projections, that business will probably 15X within 16 months it’s revenue that I bought it with. If again, the churn rate’s not massive in 12 months from now, again, I don’t know what that’s going to be.

That was my strategy on that particular business. Again, this is the advantage of having sort of an ecosystem versus just one business, and it’s also not particularly easy to build an ecosystem and it takes time. And there’s a massive unfair advantage where when I buy something, it’s really hard for me to mess it up.

Blake Hutchison: It’s super enlightening. I hope people are listening in who are first timers and thinking about how they can chop up their overall acquisition budget to begin that ecosystem play. But the other thing I like about what you’ve just said is, you know what you’re getting into. You’ve got a business which is doing 6,500 a month. You’ve bought it probably on a multiple performance or I at least imagine that was how it went out and then…

Scott Oldford: I got it for 70. It was a firing sale.

Blake Hutchison: And all you’ve really done is gone, “Well, it’s a good business at the heart of it, but it’s financials and its operational metrics don’t quite make sense, so what I can do is add my ecosystem network to ensure its efficiency and then optimize for performance long term,” and as you said, whatever you said then, 16 times.

Scott Oldford: My thesis is, my belief is, “Let’s get all these people here.” Worst case scenario, in three years, it has probably a couple thousand customers if I keep on going this way, and I can do a long-term flip and probably get two and a half million for it, maybe more. Or it’s just a cash cow, and we just keep on doing it and it churns a little bit every year, obviously every month, every year, and I’m collecting checks. But it’s not a business that I’d go into where you’re like, “Okay, I need 70 grand to buy it and then I need…” You wouldn’t need a quarter million, a half a million, and you wouldn’t even be able to compete because this is not something that by itself is any better than its competitors.

The advantage I have is proximity, and I think that this is probably one of the biggest lessons I could probably tell anybody that’s going to get into buying and acquiring, which is if you don’t own the traffic and you can own traffic through paid ads, or organic, or partnerships or all three, but if you don’t own the traffic, that’s one of the biggest risks you can have. You can fix operations, you can get in there and figure out operations, you can get in there and figure out customer support. Those operation and delivery issues are generally not that expensive, but if you run out of money trying to get customers from a marketing and sales perspective, you’re done, pack up the bags and you got to sell it again. I think probably most people overestimate their skills on marketing, and sales and how much it costs to get that momentum for our business.

Finding Your Niche and Expanding It

Blake Hutchison: The number of people who say, “Yep, I’m making this product, or I’m going to sell this product, or I’m going to run this service, getting my first thousand customers will be easy,” and not recognizing the cost to acquire, and not recognizing the unit economics and the contribution margin for that effort is surprising. So that lesson is really pertinent, and critical and thank you for mentioning it. I’m going to put you on the spot here, and I hope you don’t mind me saying, I’ve discovered an asset that you’ve purchased and it’s in the camping space. I want to know why you bought that asset, I’m looking at it, I know why you bought it because I can see the data here, but you’ve bought an asset that is essentially campground booking software, so why do you like it?

Scott Oldford: That’s a test for sure. I told you part of what I’m going to is lifestyle, in the lifestyle niche. I also own a productivity company, so we got a productivity planner, some productivity products, and some e-commerce products. E-commerce is not my strong suit, I don’t know e-commerce but it came with 94,000, and this wasn’t off a Flippa, this was off… Came with 94,000 planners, so I said, “Well, worst case scenario, I sell them all to my audiences and I make my money back, worst case scenario.” So I have that, I also just acquired another from Flippa website in the spiritual niche. I just acquired two other spiritual websites that all collective have 10 million visitors a year, majority in America. So I’m creating a little bit of a lifestyle media brand.

So I don’t really care about… The software is terrible, but there’s a couple of very powerful assets that came with that. So number one, I had a great operator that ran campsite and RV phone sales, so they would actually sell to the camp and I was like, “Well that’s wonderful, that’s great, you understand it.” He knows a copywriter that also writes for another campground software company so we brought that person in, then I went and I bought a camping newsletter that already had, again from another website, 20,000 people on that email list with about a 70% open rate, which is phenomenal.

This one came with 50,000 email addresses of people that booked, people that spent money, not just email address, people that literally booked a location in America. We’re going to turn the software of booking, the reservation system, which is basically what this is, a reservation system in the camping niche, and we’re going to turn it into a directory. Right now the business model’s taking 10% of booking fees, which is a terrible business model for SaaS unless you have massive scale. So we’re going to turn it into a directory sell ad space there. We’re about acquire a podcast and a Facebook group so that there’s a community and there’s a podcast on the back of that.

Blake Hutchison: There’s a theme here.

Scott Oldford: We acquire all the assets and then we’re going to utilize influencer marketing and audience swaps of other lifestyle brands and that type of thing build half a million-person email list and now we can go and sell advertising. And because I have a media brand with the media where we’re selling, we’re buying, and newsletters and media brands, we already have the infrastructure to be able to do that, that’s the play. Whether or not it works, I don’t actually know.

Blake Hutchison: I mean, it’s a system, the system is benefited by the ecosystem, the ecosystem implies that there’s a community and then there’s a theme here, and the theme is that you’re going after operators who have subject matter expertise to some extent, therefore, the asset is defensible because they know what they’re doing. You don’t have to worry about having to school yourself up on that particular industry or category, they already know it.

Scott Oldford: Another part of my due diligence is that there’s always an operator that always has a part of the company that understands that niche intimately. If I don’t have an operator, I will pass on a deal just for that reason, or if I really love it, I’ll buy it and just let it sit until that person comes.

The Experience with Flippa

Blake Hutchison: Amazing. And now if you don’t mind a selfish question, why do you love Flippa? Why are you buying six or seven sites per half year on Flippa right now?

Scott Oldford: I feel like Flippa is the OG of the space, you have great market share, great deals that are there, it’s easy to use. From a functional perspective, it’s probably the easiest of the platforms that are available. I mean, it’s interesting from a market perspective, you go from the guys that have 10-20 million dollar business, I’m not looking to buy those businesses, that’s not my budget, that’s not how I’m looking to build what I’m building, at least not right now. So it’s interesting because on Flippa, you could see that 10 million dollar business, that 10 million dollar business might be there, but at the same time you also have the 7,000 dollar business or the 170,000 dollar business. So the range of that is nice, I think a lot of the search filters and those different types of things, I really like that.

Not that there’s so many, there’s a couple of dozen that are necessarily out there, and I think the other part of it is that in the buying that I’m looking, I’m not looking to have some broker involved that makes my life just terrible, which not against brokers. I think that brokers for a certain type of business make a lot of sense-

Scott Oldford: I would want a broker if I was selling, don’t get me wrong, but for the way I’m going about buying, having a broker is just going to make it so that negotiating is impossible, and it’s just going to make the deal three times longer and all these different types of things. So I like the fact that, obviously, there’s a level of due diligence that Flippa does, and at the same time I’m not dealing with, “Well, let me talk to my client and I’m here waiting for three days.” The other advantage is a lot of the time when I’m buying, I want to ideally even hire the person that’s selling whether or not for a long term… [inaudible 00:29:08] Well, a lot of the time people want to keep working on their thing, they just ran out of money, and that to me is the perfect person to be part of that because I mentor people for a living, I can help them be able to make it work. So that’s some of the reasons.

Blake Hutchison: Excellent reasons, and thank you for articulating that. It’s a really important piece. You want to get to know the person selling the business, you want their skillset, you want their knowledge, and the fastest pathway is to go direct to do that. Particularly for a certain size of business, and we all accept that over a certain value advisors and brokers are absolutely critical so that’s a key point too. Now, Scott, thank you, because what you’ve talked about today is really critical. You’ve talked about the value of buying something versus starting something. You’ve talked about the fact that multiple transactions across multiple different marketplaces, including quite frenetic buying in the last half of last year. You’ve also talked about the fact you might do even more of that in the future now that you’ve got a system and a process to do it. So thank you, I really appreciate you being a part of Humans of Flippa today.

Scott Oldford: It’s fun talking about this stuff. I think it’s super cool, I think buying them building makes a lot more sense than just starting, especially if you can do it, and I think buying a portfolio allows everything to grow faster than just putting all your eggs in one basket. So I’m excited to share once it all works, I’m excited to share the results of it.

Blake Hutchison: Let’s get you back in six months time, we can talk about that portfolio and how it’s going. Thank you again, Scott.

Scott Oldford: Thank you.

Blake recently sat down with Nathan Bush from Add to Cart Podcast, to chat about investability, valuations and democracy of the exit in the Ecommerce industry. 

While you can listen to the full conversation here, you can also find (and print off for the future?) Blake’s top tips on how to succeed with Ecommerce below.

1. Purchasing a Business: An Alternative to Starting from Scratch

Imagine you have a burning passion for candles or food, and you decide to turn your passion into an Ecommerce business, or maybe a content blog. This is incredibly common, but the reality is that passion alone can only take you so far. 

Eventually, you will need to monetize your efforts and commercialize your business. However, commercializing a business is not an easy task: it is time-consuming and can be quite costly.

When you do the math, the cost of acquiring customers to reach a significant scale can be quite high, and the risk of not reaching that scale before running out of steam and money is also high. 

So why risk it? Consider buying an existing business with an established customer base, cash flow, and brand recognition, which can cost you less than trying to build one from scratch.

2. Prepare Your Business for Success: Optimize its Potential

Even if you have no immediate plans to sell your business, it’s still essential to structure and position it for success right from the start.

Start focusing on how to best optimize your business: concentrate on financial performance, operational efficiency, and growth potential. Streamlining your business processes, improving cash flow, and diversifying your customer base can all contribute to making your business more appealing to potential buyers, and more functional if you don’t want to exit just yet.

Taking a proactive approach to optimizing your business can help you position it for a successful sale, while improving its performance at present.

3. Stop Comparing Your Business to Ecommerce Giants

It is crucial to have a clear understanding of the actual value of your business. The most effective way to achieve this? Stop comparing your business to dominant players in the E-commerce industry or huge FBA aggregators that are sitting on the cover of Forbes Magazine, and start comparing it with others of similar size.

In order to accurately value your business, stay clear of public markets or any buy side negotiation strategies, and focus on identifying businesses that are comparable in size. 

4. Diversify Your Sales Channels, and Watch the Results

If you already own an Ecommerce business, diversifying your sales channels can help to boost your revenue and expand your customer base. And setting up an FBA storefront might just be the perfect idea. 

FBA businesses have lower customer acquisition costs, streamlined shipping process, and simplified operations. Blake’s idea? A/B test your core business against this business model and see what happens.

5. Sell a Product You Can Call Your Own

Owning a product can make a huge difference when it comes to successful Ecommerce businesses. Everyone can start a business by buying something that’s already made, but if you create a high-quality product that meets the needs of your target market, is uniquely branded and has its own story… Well that’s a winning trifecta.

While it may not always be the fastest path to growth, owning a product that you manufacture and brand will be more sustainable over the long run.

6. Shine a Light on Transparency

Whether you are preparing for an exit or simply setting up your business for success, it’s crucial to prioritize transparency to avoid potential setbacks.  

Transparency is key, and what this means is you need to have your finances under control, plan and map out your strategies and processes in detail, and more importantly, never rely on guesswork or make up numbers. 

And if you have any skeletons in the closet and are negotiating an exit… you better get them out straight away.

Inspired by these tips? Read up on those who have successfully bought and sold their Ecommerce businesses here.

If you’re ready to sell, check out our First Time Seller’s Guide.