159: Different Ways to Create an Income Online with Mark Daoust

In this episode, I talk about building your virtual vault. And we talked to Mark Doust from Quiet Light Brokerage about the different ways that you can build a business online. Hey there everybody. This is Bjork Ostrom and you are listening to the Food Blogger Pro podcast brought to you by WP Tasty. And for those of you that aren't familiar, WP Tasty is the go to place for plugins for your WordPress blog, especially if you have a food blog. We have three plugins right now. Tasty links for everybody that wants to really effectively manage their links on their blog. Tasty recipes for food bloggers that want to mark up their recipes in a way that are optimized and recognized by search and by Pinterest and Tasty Pins for those of you that want to optimize your images for Pinterest and SEO. And every week on the Food Blogger Pro podcast we do a Tasty Tip, which is sponsored by wptasty. And today's Tasty Tip is all about creating a virtual vault for your passwords. And this is something that is not exciting, but it is really important. And that's why I wanted to feature it as today's Tasty Tip. As a matter of fact, right now, both personally and with our businesses, we are going through and doing a big password overhaul, making sure that all of our passwords are unique and all of our passwords are really secure. And we're using an app called 1Password to do that. Another really good option for those of you that aren't familiar with 1Password or don't want to use 1Password is a software called LastPass. But essentially what these password management companies do, these password management software does, is it allows you to create really secure passwords for every single login that you have. And then you manage that by having one super secretive password that unlocks all of those other passwords. And you can check out 1Password or LastPass to get an idea for how they work. But the basic idea is you want to make sure that you're not reusing passwords anywhere across any of the sites that you use. Because the issue with getting a site hacked isn't that then that person or that hacker or whoever it is has your email and password. The issue is that they can then use that in other places if you use the same password and email or username across other sites. So you want to make sure that you have a unique password for every single login that you have. That might sound overwhelming in my case, there's over a thousand different logins that I have. But the great thing is with a password management app like 1Password or LastPass, you're able to manage those in what's called a vault in a really effective, easy way. And the great thing is you can actually use these companies. You can use this software to do a review to make sure that all of your passwords are secure. So they do it in an automated way where you can click little areas in one password. You can look and say, hey, what are my weak passwords or duplicate passwords? And we'll show you those if you need some proof that these are good things to be doing. Uh, just this month, Apple announced that they are deploying 1Password for over 120,000 employees at Apple. So they're using this internally for their password management. And I would really encourage you to do the same. It's going to help you to be secure, to be safe across the Internet. And that is one of our jobs, right? If we're building a business online, it's just like if we had a brick and mortar retail store. We need to put a good security system in, make sure that we're locking things, make sure that we don't have a, you know, really generic key that allows you to get in through the door and to access all of your information. So if you haven't yet set up a password management app, I'd really encourage you to do that. And I would suggest 1Password or LastPass as your solutions for that. That is today's Tasty Tip brought to you by WP Tasty. In today's interview, we are talking to my friend Mark Doust from Quiet Light Broke. And Mark is this has this incredible perspective where he on a daily basis looks at online businesses and creates values for those online businesses. Because he's kind of like a real estate broker, but for online businesses. He buys and sells, helps to buy and sell websites for investors or people who are looking to sell their website. And he also is a online business owner. He owns businesses that run and operate online and also is a broker. And he offers this great perspective into the different ways as an online business owner that you can be creating an income. And one of the realities for a lot of people that listen to this podcast is we think of building a blog or website and then creating income from two primary ways, advertising or sponsored content. But the great thing about building an online business is there's lots and lots and lots of different ways that you can be creating an income. And for you, the person that is pursuing this path it's important to think about, hey, what is it that I want? What is my desire? What is my goal in building a business? And then to look creatively at the different ways that you can reach that goal. And there are some examples that are going to be more obvious than others. And that's why I want to do a podcast like this with Mark. That was the goal, is to point out some of those things that aren't as obvious, some of those other paths that you could look at in order that will help you reach your goal. So I'm going to go ahead and jump into this interview with Mark. It's going to be a great conversation around different ways to create an income with online businesses. Mark, welcome to the podcast.

Thanks for having me.

Yeah, it's fun here because you've actually been on the podcast before and have since started a podcast. So before we jump into it, would love to hear what it's been like for you to officially launch a podcast for Quiet Light Brokerage.

It's been a lot more fun than I expected it to be. So I was inspired by you, Bjork. That's the sole reason I started.

Right? Exactly. The number one and only reason that you started a podcast.

That's right. I live my life wondering how I can be more like you. No, honestly, actually, some of the work that you're doing was an inspiration for it. And then we were doing a lot of appearances as guests on podcasts, and we just found it to be a really great way to connect with people. The people that came to us from those podcasts, they had this personal connection with us that we weren't getting through, just the regular content we were producing. And we thought, well, why don't we actually start doing this? We know a lot of people in a variety of industries, so we started the Quiet Light podcast. Now the main business. As you know, Bjork, maybe not all your listeners know we are an M and A firm for the online business industry. So bloggers or e commerce business owners or SaaS, business owners who are looking to sell or maybe plan and exit, we work with these people and in the past what we've done is we've just written content on this stuff, but now we're starting to interview experts on everything from how to achieve higher email open rates to how do you go about that planning process of selling and really kind of bringing in the vast network of experts in that podcast. So it's been a lot of fun and very diverse and hopefully, hopefully it's got some really good Information for people.

Yeah. And I'll say this, and I'm not saying this just because you're a friend and you can plug your ears so your ego doesn't get too big. But it is one of my favorite podcasts. I love it and it's actually the only podcast I've ever left a review on, which is crazy because we ask for reviews all the time on this podcast. And subtle plug. For those of you that haven't left a review, that would be a great thing to do. But it is a great podcast and to give it a plug, you know, you are in this space of buying and selling websites. You're kind of like people would be most familiar with a real estate agent that would help buy. Help you buy a house or sell a house. And it's kind of like what you do is kind of like that. Is that a fair analogy for online businesses?

Absolutely, that's a very fair analogy. In this case, instead of selling a house, we're selling a website or a web based property. So sometimes that'll include an Amazon store or a marketplace. But essentially, yes, it's like selling a house. And the funny thing is that we talk about all the time is for anyone out there that is blogging or has something online that's generating money, oftentimes this is the most valuable asset that you own. But we never think about our sites that way. We think about them as things that we're doing, but it might be one of the most valuable assets that you own. And so a lot of our pitch, if you will, we really don't do pitching, but a lot of what we try and get people to do is to just know the value of what you own because it is probably valuable and it's good to know where that lies.

And we can talk about that a little bit. One of the things that I was going to say before we get too far away from the podcast, is that one of the reasons I love the podcast is because even though it's under the umbrella of Quiet Light Brokerage, which is buying and selling websites, you talk specifically about how to run a really profitable, a really clean, a really well organized business. And even though we have no intent to sell in the near future any of the things that we're doing, we have this very long term mindset with how we are building our businesses. I love listening to it because it allows me to build a business and specifically an online business that is really, really solid. Because in order to have a good sale of a property, it has to be a really solid business. And why not just take that advice and implement that, you know, as you are working on your business. Even like in our case, you kind of have a long term mindset with what you're doing. So I just, I love it. We'll link to it and make sure that people can follow along with what you're doing there. One of the things that I wanted to spend a little bit of time with before we get into talking about the kind of meat and potatoes food analogy, use them as much as possible on this podcast. Before we get into the meat and potatoes of the podcast is talking about this idea. You talked about valuation and the value of your business. Can you spend a little bit more of, a little bit more time on that, talking about how do people get a sense for how much their business is worth, even if it's kind of high level general idea?

Yeah, absolutely. And let me just touch on something that you said. You know, I'm a firm believer that owning a business is better than selling a business. Right? So taking a long view on your business is the way it should be. It's a good thing to own, but a good business to sell or a business that's going to be valuable is a good business to own and run. And so that's why we do cover all those topics. It's, we want people to build really great businesses to own. As far as the general value of a business is concerned, there are different approaches to valuing an online business. And it's important for everybody to understand when we're talking about a valuation method or any valuation methodology, what we're really trying to do is we're trying to predict what somebody will pay for your business. It's a predictive formula. So I've had people come to me before and I'll give them their valuation and they say, well, I dug out this textbook with valuation formulas and I think we should really be using this. And it gives me this value instead. At the end of the day, I just try and tell them it doesn't really matter what formula you use. It's a predictive thing. When you're calculating the value of your blog, your business, what you want to do is you want to be able to say, okay, what is somebody potentially going to be able to pay for my business? A general way to do that would be to take a look at the amount of business you're. The amount of money, excuse me, the amount of money your business earns over 12 months. When we say earns, I'm talking about the Money that you earn after you pay your expenses, not your own salary, just, you know, the regular business expenses. So you take that number, and then we're going to multiply it by a number. And this number can be, you know, on the very low end, if the business is suffering and having trouble, might be like a 1.5 on the very high end, depending on the type of business, which is going to be what we're going to be talking about a little bit in this podcast. I guess it could be five on the very high end. Most are going to settle in between that 2.5 and 3. And I would just caution people when you hear that, to understand something here. When anybody quotes you numbers in terms of multiples like this, when we're talking about, if you want to know the value of your business, take your earnings and multiply it by three. Understand this. It's not as simple as that. This is just very, very generic. There's a lot of things that go into determining what multiple your business receives, and there's a lot of things that go into understanding what the earnings of your business is. But you can get a pretty good sense of, ballpark sense of you kind of take that generic framework.

Got it. That's super helpful and really interesting to think about. So if you have a website, your blog, or something that you're building, let's say it earns $50,000 a year, a really, really rough estimate with all of those disclaimers on it, like, there's lots of things that go into it and can impact it, But a really rough formula that you could use is a multiplier of somewhere between two and a half. And on the high end, let's say four. And so if you had a $50,000 business, it earned you $50,000 a year, and you multiplied that by three, it could be worth potentially $150,000. So it's kind of fun to play with that a little bit and to think about the value of the thing that you own. And if people want to learn more about that, we can actually refer you to episode 32, way back. It was one of the first 50 episodes we recorded with you, Mark, and it was all about buying and selling websites. You go deep into what goes into that multiplier and how that works. So you can get there by going to foodbloggerpro.com 32. But today, what we're going to talk about is we're going to actually look at online businesses from a couple different angles. And one of the things that I'm that I try and do as much as possible on this podcast is encourage people to think creatively about, number one, what their goal is and number two, how they can get there. And oftentimes the goal for people wanting to build an online business is freedom and flexibility in their schedule, maybe the ability to build an income that is tied to how hard they work and strategically they work. Right. So your raise becomes effective when you do, which is a nice thing to have. And the other thing is what I mentioned about looking from different angles and that's what we're going to focus in on. So can you talk, Mark, about in general, when you look at a website and when you look at an online business, are there certain businesses that you look at and say, okay, a business that sells a physical product that's worth less than a business that sells a digital product, or are there any things that people can should consider if they're strategically thinking about what type of profit they want to or where they want their income to come from? With an online business, sure.

So if you're talking about it strictly from a valuation standpoint, yes, there are different strata of businesses that can be worth more. For example, right now, SaaS, businesses, software as a service, they tend to get higher valuations just because of that subscription aspect, that renewing recurring revenue, which can really grow and multiply upon itself. That tends to be a little bit more valuable than say an E commerce business where you're simply reselling somebody's product. So there definitely are different valuations that you can place with different types of companies. But that said, one thing that I would encourage people while thinking creatively about how can they monetize their content, how can they monetize a blog to also make sure that you're getting into something that you're going to be able to do. I know some people that would be terrible at SaaS if they tried to build SaaS, then at the end of the day it's not going to work. I myself, I'm terrible at E commerce. I can say that I bought an E commerce company before and that was a terrible year for me. I was very glad to get rid of that. It just doesn't lend itself to my personality.

Yeah. Generally speaking, before we get too far away from that, can you talk a little bit about that? So you purchased an E commerce site and it was something that as you got into it, you realized, hey, this isn't a good fit for me. So what, you can talk as specifically as you'd like. What was the business and why wasn't it a good fit?

Yeah. So obviously I see a lot come across my desk here, right. I mean we literally have dozens of people reach out to us on a daily basis for evaluation. And this was, I don't know, maybe five, four or five years ago, a woman came to me. She had owned these sites forever. There were eight websites and they were selling gun safes and fire rated locking cabinets and medical cabinets. And what I loved about it was that they were really old, so really nice old domains. They were on old technology, straight up HTML, no shopping cart system here really.

So they built it all on their own essentially.

Exactly. And I'm looking at this kind of salivating like, oh my goodness, what can I do with this? And when I did buy, it was a pretty small acquisition. I shouldn't say pretty small, it was a very small acquisition. But where I really found out that I just wasn't very good was the minutia. Dealing with, okay, I've got to write product descriptions for 250 SKUs now and then I have to figure out shipping. And when you're shipping a gun safe, I mean that's not easy. I had to ask things like how many stairs do you have to take this down? Do you have a lift gate? And you know, that sort of detail oriented thing just didn't work for me. And I think something that I've learned, I've done an acquisition since then. For me personally, I'm service oriented. Right. That, that is what I'm good at. I'm good. I've got a natural empathetic personality and so service based businesses work well for that. Whereas other people. I just worked with one client and he was telling me how he moved warehouses, he moved from a 9,000 square foot warehouse to a 20,000 square foot warehouse. And he was telling me how much he enjoyed that. And I'm thinking you're nutter.

Like really just sounds terrible to you. Yeah.

Right.

Yep.

So yeah, so that was that. It was a great lesson for me. I ended up probably making out just as much as I put into that business. And I decided to get out because it was taking up way too much of my time and I wasn't having fun.

And it was a huge lesson that you learned and you're able to apply moving forward and have a better understanding of yourself, which I think is valuable. Obviously not monetarily, but also monetarily as you think about what you want to be doing moving forward and what you're going to be most successful doing.

Absolutely. I'm A huge believer, especially for people buying. And again, we're a little bit away from the topic here. But for people buying, if you've never bought before, start out small and buy yourself an education. And that's essentially what I did. You know, it wasn't super expensive. I learned a lot about myself. I'd be pretty slow to do E commerce. Again, that doesn't mean you shouldn't, you know, if you're good at managing vendor relationships or you're a good networker or, you know, are really good with operations, that's a good place to be because those people tend to do well.

Got it. Okay, so you were talking about SaaS businesses, and you're saying that's something that's going to in general be a valuable business. So that's one type of business, SaaS, meaning software as a service. So it's something that you sign up for and you pay for on a recurring monthly basis. And an example would be, we have a nutrition label generator called nutrifox that bloggers use, and they put that into their recipes and then that hooks into like tasty recipes and things like that. That would be a SaaS service. So all of the software is located on the cloud. Right. So it's a service. It's not something you download and have on your computer and you pay for it on a recurring basis. So that, that would be one business that you could start as a SaaS business. Now, obviously you would have to lean towards technical or have people that you know or on your team that are technical as we do. So it's not me doing the development with that. And I would guess that there's a vast majority of people that listen to the podcast that wouldn't necessarily say, yes, I want to do a SaaS business business, but that would be something you could do. So how about people that. Let's say. Let's look at Pinch of Yum as an example. Now, obviously it's a personal ish blog. It's Lindsay talking. But let's say that just to speak generically about a blog that is monetized via, let's say sponsor content and ads, what category would you put that type of business into?

So we just put those into probably misnomer category. We would just call them a content site, even though a lot of sites are driven by their content, but we just put them in a generic content site. Right? It's a content site and it's going to be monetized by advertisements. So that'd be the generic category. We would look at.

Got it. So a content site, meaning this is a site that is getting the traffic, which then converts into dollars through content. So they're publishing things that bring people to the site, and then people are either seeing ads and then they get money from that. Sponsored content. Get money from that, or products, and they get money from that. So let's talk about the different product categories a little bit. There's the E commerce product category, and then there's kind of this digital products category. Are those two things different or are those the same? And then can you have a content blog that is also E commerce and, you know, sells digital products or how do those all overlap?

Yeah. All right. So E commerce is a big umbrella and we can really break this down into very minute categories. And I don't want anyone to be overwhelmed when thinking about this because it can get a little overwhelming. But digital products would be one. Digital products are great. They're great in that they're easy to create, they're easy to deliver. There's really no cost with them once the product is actually built and developed. The downside to a digital product is they tend to have a limited lifespan. Oftentimes you often see with digital products, you'll see like a big bump when they're first released, and then you see them kind of tail off in revenue over time, and then they might settle in on a pretty settled monthly amount of revenue.

Sure.

But you really do have to continually be generating new products. I think what I would. I'm not sure if I would put subscription or education under that as well. But you might want to put like an educational content site underneath that as well. Right. So somebody pays access for a course, and there's a video course, again, that'd be a digital product that's being delivered just under a different medium. Sure.

And Food Blogger Pro would be an example of that. So we have a forum, we have videos, things like that. So people are signing up. Sometimes those products are one time and sometimes they're recurring. In Food Blogger Pro's case, it's a recurring monthly or yearly. Sometimes you'll have just a 1 price point. A lot of times it's a higher price point. 500, $1,000. And you can get access to this course.

Yeah. And I think those type of sites we were talking about SaaS and how available those can be. Membership sites in general that have that recurring aspect to them tend to be pretty valuable as well. So if you're able to develop a good membership site, that's obviously a really good option.

Yeah, why is that? Can you talk about why something like that would be more valuable than maybe a one off kind of general digital product?

Sure. A lot of it comes down to being able to measure just how valuable every customer is. Right. You get somebody to register for a year and you know that they're going to probably stay with you for 33, four or five years. That's future income that you are able to predict. And from a buying standpoint, I think this is important to understand when a buyer is looking to acquire a business they're really concerned about am I going to make my money back? Am I going to see a return on investment? And if you know that there's a subscription, you already have that customer base which is likely to continue to purchase from you. Now if you're selling a physical product, say a bracelet of some sort of, you can sell them a bracelet, but then you have to pitch them again to sell them another bracelet. They're just not automatically going to be saying, hey, unless you have a subscription based e commerce business, you typically have to sell them again. Now it's not terribly difficult to do, but there is that effort that's needed. And then there's also that additional cost. When you're dealing with a subscription based business or a membership based business, there's often a cost to bring in that member initially and that can be pretty high. But after that, the cost of supporting members tends to drop off pretty low and it doesn't necessarily expand at the same rate with larger members. So for example, let's say you have a membership site with 100 clients, you're offering a certain amount of content to them. If you increase that to 500 members, you still have to generate new content. But it's not like you have to generate unique pieces of content for every single member. If you're selling a physical product, and again using an example of a bracelet, you can sell a bracelet to every member. And then if you increase the 500, you need to sell 500 bracelets, which means you have to acquire that. In the world of e commerce, we call that the cost of goods sold. You have to grab that good. And there's going to be a cost associated with that. So because of that, they tend to be a little bit less valuable just because you don't have that future revenue.

To bank on the predictability of the past revenue being future revenue. How likely is this to stick around?

Absolutely. And you can get super geeky with the data and nerdy and honestly, Bjork, you'd probably be Better to speak about that. I know that you love a lot of that stuff, but you get into ideas of what is the lifetime value of a client, what's the cost of acquisition, what's your mmr and all these acronyms start getting thrown out. But what it all boils down to is you can understand a little bit better what a customer is going to represent in terms of revenue and how much it's going to cost you to support that customer in a much clearer sense.

Yeah. And it's interesting that, you know, that can be applied across the board with, for people to think about that maybe are advertise based or they get their revenue from advertisements. You can think about that and you can say, okay, I can look at my dashboard. If you use AdThrive or Mediavine or one of these ad companies and you say, I know that on average, I'm just throwing this out. I'm not saying this is what it is all the time, but, but let's say $15 for every thousand visitors. You can kind of crunch those numbers and say, okay, if I can figure out a way to pay for a thousand people to show up, and this would be really hard, but let's say you can figure out a way to pay for a thousand people to show up and only pay $10, then you kind of have this little lever that you can, that you can pull and say, okay, I'm going to spend money to make money. And that's something that we've never done a great job at. We've always been pretty organic. But I've heard some people in the online buying and selling space talk about actually the value of really understanding how to use advertising to generate income. And can you talk about how that works and from a value perspective, why that's important? In previous, previously, before I started to understand this better, I kind of thought, hey, it's more valuable to like have really good SEO where a lot of people would come organically. But I'm starting to understand that that's not necessarily the case.

It really depends on who your buyer is. But there's a lot of buyers out there that really like the value of a paid acquisition channel. Paid acquisition being you're paying for those people to come in. And the reason that that is liked and why it's preferred in many cases is because you can really control that volume pretty heavily and you can be a lot more targeted. I remember seeing an example I think was on, I think it was on neilpatel.com where he showed the example of two different landing pages. Just by way of example, in order to do an organic landing page, you needed to have it set up for organic, which is not always the best for converting somebody to a customer. With paid acquisition, there's just a lot more fine control over how that person interacts with your website. How do they convert to maybe just a soft lead with your site, and then you can also really control again the amount that you're spending. SEO is a little bit less dependable. And I think from just a. Just from a market standpoint, from buyers, there's still a little bit of sting out there for people that are familiar way back when with the panda penguin hummingbird updates, they call them the animal updates at Google, where all of a sudden they changed the way that they were ranking websites. And it was dramatic. A lot of the rules that professional SEOs thought were in place got changed overnight. I think there is a little bit of distrust with SEO, but again, it's also just something that's a little bit out of your control. Whenever you're looking at any business, and not just from selling your business standpoint, just from how valuable is it and how good is this business business, you want to be able to say that it is protected from outside risk. And whenever your business is dependent on an outside source, entirely dependent on an outside source, that's a potential risk. I'll give you a quick example. It doesn't deal with Google. It's actually Facebook. I was working with a client who had a daily deal of the day site. So you would go in and they were. I forget what they were signed, but let's just say it was like electronics and they would go out and they would source a bunch of TVs and sell them for a huge discount and everyone would buy it. And they were doing all of this through Facebook acquisition. They built up a really great Facebook audience. Well, as most of your listeners probably know, Facebook is really hard to do organically now. They've just tone it down a lot because there's just so much commercial noise. And so they went from having two warehouses because they needed to expand that quickly to all of a sudden having two warehouses and no traffic.

Yeah. Which isn't a good position to be in.

And the problem was they were reliant on one source. The benefit of paid acquisition is you're not completely reliant on one source. Typically you're able to really control that flow a lot better.

Got it. And in order to do that, though, you need to have some type of product that you're Selling. Right. Like it would be rare to do paid acquisition for advertisement. Like if you have CPM ads or paid acquisition and then do an affiliate.

Thing, it would be really hard to do. I remember years ago seeing some people do it, but it's not common. And yeah, it would be crazy difficult to do that.

Yes, got it. So this is really helpful. So we've talked about SaaS, businesses, kind of software as a service, the general content category. And we talked about the fact that content, really, if you're strategic about it, should be applied to any type of business that you're doing and can be applied to it. E commerce, digital products, physical products, membership sites. The goal here is to talk about all of these different angles that you can think about building a business so you don't get stuck in just thinking about one way of creating an income so you can move towards achieving that goal, whatever it is that you have. Another area that I'm really interested in and have very little knowledge about is this idea of fba. And I see these businesses popping up all the time and I just, I understand how they work kind of from a distance. But can you talk about what FBA is and why Amazon stores are so popular?

Yeah. So Amazon FBA stands for Fulfilled By Amazon. It's where you take product, you ship it to Amazon directly and then they can fulfill the products for you. So when you shop on Amazon, if you're shopping for, let's use a food analogy, you're shopping for a set of really nice knives and you go on there and you're looking up Wusthof knives and you find that pair and you click Buy. Now there's a place on there that will often say sold by and it'll be an individual store. So it's not necessarily being sold by Amazon directly, it's just being sold through their marketplace. Anybody can sign up and start selling their products through Amazon fba. There are some categories which are restricted and you have to be able to get special permission to sell in. But for the most part, anybody can start shipping products to Amazon and Amazon will start to rotate your products in. And as you get good feedback, and there's a lot more complexity to it than I'm going to let on right now. I don't understand it fully, but as you develop a good reputation on Amazon, you end up winning more of what they call the buy box. You become that default seller for those particular products.

It's kind of like SEO for Amazon.

Exactly, exactly. So what you're doing is you're really riding The Amazon train. And I know everybody knows Amazon is big, but I'll just throw this one statistic out there and it's probably even outdated by now because I think I saw this last year. Let me see, that would probably be 2016 then. And in 2016, Amazon did more E commerce revenue than every other e commerce company combined. I mean, you think that's Walmart, that's Target, that's Best Buy.

Every tiny little shop.

In every tiny little shop, they did more than everybody combined. And also, Google is losing some search results in the e commerce world to.

Amazon because people go straight to Amazon.

People go straight to Amazon over half of product searches. So start on Amazon now. And so from if you're selling products, for the most part, almost every product that's out there, it makes sense to put it up on Amazon and the way it usually happens. And what we've seen this with E commerce stores, right? People will start up an E commerce store and they think, well, okay, why don't I open up this Amazon sales channel as well? Well, next thing you know, they go from being an E commerce business with, you know, mygreatstore.com and to, oh my goodness, 75% of my business is coming through Amazon now. And it just blows up on that side. So that's why you're seeing all these stores pop up. It's really a fertile marketplace that Amazon continues to grow and all the merchants that are on there are growing right along with them.

That's great. So the idea being you purchase this product in bulk and you could have something that's, I know you could do white label, which is essentially the same type of product that somebody makes, and then they put your brand information on it. Or if you want to be really strategic and really dive deep on it, you could create your own custom product, whatever that would be, and then one of your strategies could be having that available in Amazon for people to purchase. Do you see a trend with this? Like, are most people doing kind of this category of white label where like you said, you know, maybe there's a set of knives or, you know, cutting board or something. And then they say, okay, I'm gonna take this listed on Amazon, but I'm gonna put my brand on it and try and be really strategic to get it to show up?

Yeah. So within the Amazon world, there's also this sort of strata of types of businesses. And so I'll start at the bottom as far as the least valuable and the one that I wouldn't necessarily recommend doing. And then we'll go up to what is the most valuable and most sustainable. And I'll start this out by saying, okay, Amazon is a bit of a gold rush right now. There's a lot of money to be made there and I think people do need to look at this. But there is a problem with Amazon and that is that it's a general marketplace without a lot of distinguishing factors. When you buy a product from Amazon and a third party seller, chances are you don't even know that you're doing that in the first place. Right? So how do you distinguish yourself on the marketplace is the number one question. How do you distinguish yourself and protect yourself from competitors? With a website, it's pretty easy to do. You can have different designs, better customer service, all sorts of things. Amazon, it's really down to the product and then your store ratings. And that's essentially what it is. So with that in mind, we'll start at the very bottom and that is the people that don't really have a single product to sell. These people will go out, they're kind of like, if you ever watch the show American Pickers, they're kind of like those guys, right? They'll go out to Walmart and see, oh man, they're selling these clearance items. I'm going to buy these clearance items, ship them off to Amazon FBA and I'll make a couple bucks. Okay, that's not really a business. That's more of a trade and more of a hobbyist. Very low strata. Second on the list would be people that are simply buying wholesale and they're buying from a company and you know, Alibaba or what have you and put the product over at Amazon and they'll sell it. The problem with those companies is there's really nothing to distinguish them from somebody else coming in.

No competitive advantage. Yeah, exactly.

And it becomes a race to the bottom who can get the best price, because that's really your last distinguishing factor. So we don't really recommend those either. Then you get to the white labeling like you talked about, where you take a product and you put your own brand on it. That begins to distinguish yourself a little bit. But it can be difficult too to do that. We had a client a few years ago, they were selling those Moscow Mule mugs that you'd see and initially they just blew up on Amazon and then sure enough, all sorts of competitors came in and started to eat away the market share. The third would be these unique products, right, where you actually have created something on your own and you're selling it on your own. These are the most valuable. They're also the most difficult to do, of course, because you have to have a unique product and manufacture it. But these are kind of like the creme de la creme of the businesses on Amazon with the most staying power. I would say for anyone listening, I would go with those last two options. If you can get a brand, do it. There's value in your brand and that's a good starting point. And then starting to fold in creating products, that's also a really good sustainable model.

So if somebody has an established brand, let's say they have a website and they have an audience, are they going to be at an advantage in creating their own product that they then offer on Amazon, or is it just going to be the power of Amazon? And the reality is like, so many people are on Amazon, even If you have 100,000 people that are coming to your site, it's not really going to matter because there's 100 million people coming to Amazon every day. I don't know if that's true, but that's what it feels like.

That's what it does feel like. I do think there is going to be some advantage to having that brand and bringing it on. But I think at the end of the day, I mean, standing next to Amazon, we're kind of peons.

Yes.

You know, and that mass golly to traffic is going to take over at some point. But having a brand again, that, that's going to set you apart. And what is really important about having that brand is when you're listed on Amazon, when you white label a product, you aren't going to have people selling the exact same product.

Right.

So somebody clicks on, you know, a Sony product, they're going to be buying a Sony product. There's only one person that's going to sell that Sony product at that given time. There might be 100 people trying to sell it. But when you pull up that listing, that's what you're going to see. But if you have, you know, if you're your own brand, you're going to show up separately in those product listings. It might be the same product, but you'll have your own listing there and you're not going to be fighting for the one listing with a bunch of other people, if that makes sense.

Yep, it does for sure. So, and again, the purpose here is, you know, with any single one of these, we could go really deep into explaining kind of the intricacies of how each one of these categories work. The hope Here is to expose these to people, to allow you, the podcast listener, to say, oh, actually that's really interesting. I want to look into that. So it's kind of planting the seed and we're not going to water it, we're not going to give it any fertilizer. That's your job. But if there's something that sticks out here as one avenue for you to potentially pursue, you know, business growth in, I would really encourage you to look into that and explore that. So one of the questions that I have for you, Mark, let's say that somebody is moving along. They've kind of figured out content they're good at producing, that they're maybe making a little bit from ads on their site and maybe occasionally they work with a brand and do a piece of sponsored content. If, if, if somebody has those skills, those, those abilities, what would be a good next step for them to add in another revenue stream to their business?

Well, I mean, I think first depends on what they want to add in. But you know, with any of these things, testing, whatever testing you can do first to see, you know, how are your clients going to, your customers or your readers going to respond to this would be really important. So let's say that you wanted to start up a membership site, try it out maybe on a very small test basis, and maybe email only a portion of your readership to see again, what is that response going to be? If you're going to try and launch a product of some sort, maybe partner with somebody first and do it on a test basis there and just say, hey, we partnered with XYZ company over at Etsy for all we know, and go ahead and take a look at this product and see what the response is from your audience before you really jump in with both feet.

Yeah, I think that's so great. And one of the things that we talk about occasionally, but probably not enough is this idea of push versus pull and figuring out the things that you can create. And when you give them to your audience or talk about them, it is a pull of like, ah, like please, people kind of, you can imagine people like pulling it towards them and being like, this is something I want and need versus you having to kind of push it on them and be like, this is something that's awesome. You really need this and using testing to do that. I think that's such a great idea. And we did that actually with Food Blogger Pro. We felt like there was kind of some pull from people saying, hey, we'd be interested in this and so we did this pre sale for three months where we didn't have the product built and we said, okay, let's see if people would actually be willing to pay money for this thing. And if they are, that will confirm what we think is true, which is this could be a sustainable business. And it turned out to be the case. And, you know, here we are, whatever it is, five, six years later, still running it. We have a small team with it. But a lot of that comes not from us having this brilliant idea. It comes from the people that we were working with and alongside and our audience saying, hey, this would be something that would be valuable and responding to that. So I love that idea about testing and kind of getting a feel for it before you actually launch that. What would that look like? You talked about kind of physical products. What would that look like with a physical product? Can you talk through how that would work, partnering with somebody? And would that be an affiliate relationship that you would do? Or how can you kind of test the market with that?

Well, you know, I do think there are probably people out there that are smarter than I am on that topic. But if it were me though, I would probably start with that sort of affiliate sort of relationship and more of a partnership and joint venture sort of relationship. So if there's somebody who's selling something then, and you're just an absolute fan of what they're doing, partner up with them. You'll reach out to them and see if there's a unique product that you can create for your audience, rather than just selling something that they already have and doing that completely through them. And then I would probably do it as easy as possible. If I were doing it again, my first step would be to say, look, can we set up just a dedicated landing page on your website before our audience only we're going to sell this unique product through you and kind of drive some customers over your way and see what the results are. And understand, of course, that the results on something like that are going to be a little bit different than if you set up your own store as well, but you're just kind of looking to see your push versus pull is perfect. Is your audience craving this sort of thing? Have you built up that relationship with them where they really love everything you're doing and trust you to be able to lead them that right direction as well? These are things that you want to test for right away. So I would, I would probably start out with some sort of a joint venture or affiliate relationship with somebody, and then if that works out well, then I would probably move at that point to setting up a Shopify store, which is something that we haven't talked about yet. But when you develop products or you find out what you want to sell at that point, maybe setting up a Shopify store. Setting up a Shopify store is not terribly difficult to do in the grand scheme of things. And it'd be a nice next second step to be able to see just how much attention is there and how much need is there for selling some of these physical products. And then you can kind of build from there with any of this. Bjork, I'm going to actually give you a plug on this here because you came on my podcast when we were starting and if anyone wants to listen to it, I loved the episode you had talked about making these just small, continual improvements every day. When you're thinking about, man, I'm going to start up an Amazon business and an E commerce business and get physical products and inventory and oh my goodness, it's overwhelming. It absolutely is. But when you think about it and digest it into these small chunks and not worry about the big picture so much as what am I going to do this day and this week to kind of move in this direction? And how can I do this without investing the next six months of my life into something that I don't know how it's going to result? And having that mindset, I think is super important.

Yeah. And to be able to learn and build, learn and iterate. So. So you build it. Just a tiny little version of it. You learn about it and then you iterate on that and continue building. And it's just this loop. Right. Build, learn, iterate. And the nice thing about that is you're not building for a long period of time and then learn. You're taking those small steps and learning along the way, which I think is so valuable. So we've talked about. We've hit some really good categories here, and I think it'll open a lot of doors for people that normally were doors that they didn't know, rooms that they didn't know existed. In terms of building a business online, is there anything else that you would add, Mark, that you don't feel like we were able to talk about or other types of businesses that would be important. The one that you had mentioned just recently was Shopify. You can talk about that a little bit and then anything else that you can think of that would be an important kind of business category to talk about. Online business.

Yeah. So something that I'll touch on here would be Etsy. I think we should probably talk about that that briefly. Etsy is a great place, is a great marketplace to be able to test products and test to see, you know, what sort of pull is there. The only caution I would give with Etsy is there's not a lot of flexibility once you grow there. You can't sell an Etsy store. It doesn't get moved at all. And once you get to a certain size, you probably want to move off them. But I do think that would be a good place if you have a unique product idea, that'd be a pretty good place to test it and see what sort of reaction you would have there. But again, if you have an established audience, if you have an established blog and people are reading you, you're doing some basic level of email engagement with them. Shopify is a great resource to learn. There's lots of free resources out there to teach you how to use Shopify. And with a Shopify store, you can realistically get set up with an E commerce store relatively quickly with them. And that would be a place again, I think as maybe at that second or third iteration of okay, we're going to inch into this e commerce area that I would look at. Lastly, a resource that I would point people to. And Bjork, I can email this to you later for a link in the show Notes. I'm going to confess, I'm a bit of a Neil Patel fanboy.

Sure. And for those that aren't familiar, can you talk about who he is and what he does?

Sure. Neil Patel is a content marketer. He's been in the game for a really, really long time. He's founded several multimillion dollar companies and he blogs an insane amount. I think for a while there he was writing three blog posts per week that were 5,000 words or above. Kind of crazy when you think about that. Obviously he has a team behind him doing this, but it's pretty insane. And he gives out just a ton of information about what he's doing. He's done a couple of challenges over the past few years. One of them was on neilpatel.com where he had just started the site and he said, okay, let's see how long it takes me to get up to 100,000 readers per month and I'll tell you what I'm doing. And so he tracked that live. And then another challenge that he did was I'm going to build an E commerce business or I'm going to build a business that generates $100,000 in revenue per year within less than a year. And I'm going to blog about that journey along the way. And so he started a site called Nutrition Secrets and he showed what the traffic was every day, and then he showed how he was going to end up monetizing that. And he went that route where he started with content and just pure content marketing and built up the readership rapidly there. And then he transformed that into an E commerce business where he was selling nutritional supplements and then expanded over to Amazon and he hit that $100,000 in revenue in that first year.

And I think it was 100,000amonth, wasn't it?

I think that was the visitor count, but maybe I'm wrong on that.

I'll have to look it up and see because I remember the one that you're talking about. And I remember I was just like, what? It was insane. We'll have to link to it and see. I might be wrong on that, but it was a really cool experiment because it was all done in real time from the ground up.

Right. And you kind of think, okay, well, he cherry picked what he was doing. He actually let his readers choose the niche he was going to be in. And then initially he started out with his name and everyone said, well, you're Neil Patel, of course you're going to get links and stuff like that. And then he said, fair enough. So he stepped back and he had one of his friends run it and he was still able to do it. So I think it's really appropriate for this conversation when we're talking about taking a content site and monetizing it in a different way and finding different monetization because, you know, 100,000 visitors per month, my first thought would be ads. But his first thought was, I'm going to sell something. And it worked very, very well. So I think that that's a good resource to study.

Yeah, that's great. And we'll be sure to link to that in the show notes as well. So, last question for you, Mark, like you said, you see lots of businesses that come through lots of proposals or are putting together lots of estimates for business. And you have this unique ability to look inside of hundreds of businesses. And obviously it's not just you, it's your team as well. But, you know, over the past, let's say six months or a year, what are some of the things that you've been able to see as trends or things that are working well with online businesses that you would say, hey, you know, after kind of getting a Sixth sense for what's working well and what a successful business looks like. Some of the things that they're doing. What would be, let's say the top two things, if you can think of them that you've seen with businesses doing and things that we should consider as we're building our businesses online.

Boy, that's a really good question. The top two things that I'm seeing businesses do. I hope this doesn't come across as too generic of an answer.

Nope, anything works.

Anything works. Good. What I would say that I've really seen, and this has been over probably the past five years, out of businesses that have been able to sustain the changes in Google, sustain the changes in Facebook, would be more of a business like approach to people's businesses and understanding the ability to outsource the stuff that people are bad at and, and keep doing the stuff that you're good at and enjoy. You know, a business partner keeps telling me all the time, he's like, mark, what do you suck at? Stop doing it. You know, and you know, what do you hate doing? Stop doing it. You know, there's this gut instinct of like, okay, if I don't do it then I'm gonna have to pay somebody. I don't want to have to pay somebody for this.

Right.

But you know what happens and I've done this slowly in my business as well. When you stop doing that, A, life becomes way more enjoyable and B, you're actually freed up to do the stuff that you do better more often and that actually has net increase effect on the business. So that would be probably the number one thing that I've seen people do is really understand how to build out teams in a smart way. It doesn't have to be like a full on employee, it can be a contract worker.

Sure.

So that would be the top thing that I've seen people do.

That's great. Yeah. And how valuable that is for you from a lifestyle perspective, not just from a business perspective, but if you can get to the point where you are excited about getting up and doing what you're doing every day as opposed to dreading it. Which even for entrepreneurs that have built a successful business, I know a lot of people that will kind of have this dread towards, you know, they've built themselves a job that they don't like. And so to think strategically even from the outset, even if it's just, you know, a couple hours a day to have somebody help out with some of the things that need to get done but maybe aren't super Exciting. I think that's a great little tip.

We always say here that we want to work to live, we don't want to live to work.

That's great.

It should be that direction.

Yeah, absolutely. And I feel like that's a really great note to end on. So we'll wrap up. But before we do, Mark, can you talk a little bit about where people can find you and then maybe talk a little bit about your podcast if people want to subscribe to that and listen?

Absolutely. So you can always find us@quietlightbrokerage.com and one thing I would encourage everybody to do would be to reach out to us to get a free valuation. We will not try and convince you to sell your business. I've already said in advance your business is better to own than it is to sell. That's the way it is with everybody's business. It's great to have a business that you can own, but you should know the value of it. And we can show you what's going on with your business and what makes it valuable and what you might need to work on to make it more valuable down the road, and that should make it a better business to own.

And I think that's such a great little point that you made where it's. You're able to say, hey, this would make your business more valuable if you did this. And that in and of itself is such a valuable thing. So I know firsthand from the long time that I've known you, the conversations that we've had, that it's like a very, very zero pressure kind of conversation and would encourage people to touch base with you just to make that connection and to learn a little bit more about online business. So we'll make sure to link to Quiet Light Brokerage in our podcast as well. And this is. We're coming to the end and wrapping up, but it's actually one more thing that I just remembered that I wanted to talk about and I feel like is worth mentioning. For some people, the best avenue to go down is not to build from scratch, but to buy. And I feel like it's worth pressing pause on wrapping up on this podcast to talk about that, because I know it'll. It'll hit somebody and they'll be like, oh, yeah, like the. It doesn't. Building a business doesn't have to start from zero. There is a way where you could look for a business and an online business, if that's what you want to do, find one that's a really good fit. You can Crunch the numbers, get a good idea. Maybe you've saved up a lot of money and have cash for it, or maybe you need to take out an SBA loan or something like that. But you can purchase a business and know that it has built in cash flow and a little bit of history. So I wanted to mention that and even though we're at the end, wanted to point that out as well. And there's a way where people can go to your website and look and see what listings you have as well. Can you talk about that real quick?

Yeah, absolutely. So you can find all of that@quietlightbrokerage.com listings or just click on the top menu that says buy. And if you want more information on that and Shameless plug on the podcast here.

Yes, please.

I interviewed a guy by the name of Walker Diable. He actually just joined our team as a broker. Award winning documentarian, premiered at Sundance festival. He's bought seven businesses over the last 10 years. And he talks specifically about that, about that aha moment that he had where he was trying to start businesses with limited or varied success and then he thought maybe I should be buying these and was able to really turn that into something quite valuable. So he talks about ways to go about buying and turning that into a different way of pursuing entrepreneurship. And next week we're actually, I interviewed some professors from Harvard because we worked with them over the past five years. They have a whole course on entrepreneurship through acquisition. So we talk about that on the podcast.

Is that the Harvard Business Review, the people that did the Harvard Business Review stuff on that?

It is, yep. So it's Royce. And we've been working with their program since they started and supporting them by providing them with some cases studies.

Yeah, that's great. And I know that there's gonna be some people that hear that and it's gonna be a little light bulb for them. So I'm glad that we snuck that in at the end. Mark, thanks so much for coming on the podcast. Really appreciate it and great to connect with you.

Hey, thanks Bjork. Hey.

Hey, wonderful listeners. Alexa here bringing you the reviewer of the week. And this one one comes from Sarah from realbalanced.com and it says I've been a long time listener of the podcast and follower of Pinch of Yum, but haven't yet taken the time to write out how helpful the Food Blogger Pro podcast has been for me. Bjork does an absolutely fantastic job with his interviews and each episode is clear, concise and always leaves me motivated in new ways. Between listening to the podcast, being a member of the Food Blogger Program community, and Lindsay's Food Photography course, I've managed to become a full time food blogger after only having my blog for 16 months. I'm truly grateful for the resource that Food Blogger Pro provides. Thank you. Well Sarah, thank you so much and congratulations on all of your success. We are so thrilled and honored to be a tiny part of your awesome journey. And if any of you would like to leave a us a review on itunes, we would really appreciate it. And you'd get a chance to have your review, your name, and your blog name mentioned in this section of an upcoming podcast episode. So, from all of us here at FPP hq, we're signing off until next week. Make it a great week.

Sam.