Purchasing And Selling Digital Assets with Adam Beebe

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Hi everyone, welcome back to Feed you'd Brand. I'm Tom Hazard, your host for today and I have a very interesting interview that I've been looking forward to for quite some time with a gentleman named Adam Beebe of Latonas, which is a e commerce business of a different sort. It is a company that brokers online businesses, I.e. websites in particular, and they are someone you would go to if you wanted to invest in a website, meaning purchased one that is already a revenue generating website or one that you want to sell. If you've grown a website and built up that traffic and have a large number of unique visitors every month, and especially if it's any kind of an e commerce site, you know, Shopify or other site that's making money, that is an asset you can sell, just like a business. You know, you could sell your business if you've grown it. Well, you can sell a website whether it is your business or it's only a component of your business or one asset of your business. And this is something that we get a lot of questions about. And anybody who you know is listening to this podcast for a long time or knows me and Tracy personally, we're firm believers. And in the fact that a website is an asset, and especially for podcasters, you absolutely can build that website into a business or you can build that website into an asset that has very real commercial value that you can sell. Or if you're someone who is an investor and you want to buy a profitable asset that's already generating revenue, there are sites, especially like Latona's that you can go out there onto their website. And I'm going to have the link for this obviously in our blog post at FeedYourBrand co. But where you can go and you know, search just like you're, you know, searching in Google. But you can search on all this different criteria for a kind of a website you're looking to purchase and see what's there and look at the prices. And if you have an asset you want to sell, you can work with them as a broker. You could work with Adam BB directly and do that. But there are a lot of questions around this that I had, and I wanted to make sure that we sort of separate fact from fiction or, you know, myth from reality. And that's why I wanted to have Adam on the show today. So let's go right to the interview, and I'll be back with a few final thoughts after that.

Well, Adam, thank you so much for joining me today on feed you'd brand. It's great to have you on the show.

Hey, thank you, Alex, you and Tracy, for inviting me.

It's our pleasure. Well, this is an area of particular interest to me and I think it will be to a lot of our listeners because we all have businesses, usually in terms of the people that we communicate with, all have businesses and have a podcast that is somehow related to or supporting that business. And it usually involves a website. And I know a website is only one digital asset that can be bought or sold, but it's, I think, the most common one people have or at least think about. And I'm sure a lot of our listeners would be interested to know what does it really take to have a website that someone else might want to buy? And I'm hoping you could help shed a little light on that for us today.

I'd be happy to. And just the strength of my beam, so to speak, my flashlight, if you will. Been doing this for about 12 years, and this is going to be more anecdotal than anything else because as Alex is aware, I'm sure, as well as a lot of people on the hearing this, you know, there's not a Walmart for websites, if you will. There's not a standardized pricing, so to speak. So there are quite a few metrics and some it's based on the check writer. A check writer is going to have a certain weight for this metric. A certain weight for that metric maybe may have some that are not even included. But just for the purposes of setting up the conversation and just so I fully understand, a website can be defined as, you know, it's a URL address, but that same website can have multiple fulfillment channels, meaning Amazon, Shopify, et cetera. So for the purposes of this discussion, is website kind of analogous to a business?

It really is. And I think there clearly are many different kinds of websites. And I know, like you said, there's no Walmart for selling websites. I'm sure no two websites are exactly the same. But let's just say a website that has a lot of organic or unique traffic each month and is monetized, you Mentioned Shopify, I think that's a great one as an example, which is the website has either an E commerce component to it where they're actually selling product or I'm sure there are, you know, there are many other kinds of websites that are making many thousands of dollars a month in revenue, but maybe it's more affiliate commissions. Does it matter how a website is making money in order to be valuable, to be, you know, an acquisition target?

So a general comment and there are always outliers, but if there is good diversification of revenue, meaning not all eggs in one basket, almost invariably speaking, that's a check in the positive box. Okay, so for instance, if a website, if we're talking about an E commerce website as opposed to, and you alluded to, you know, there's affiliate network, there's lead generation, there's SaaS, software as a service where credit cards are getting banged each and every month.

Right.

For access to software. But as it relates mostly in this case for an E commerce website, if they're doing fulfillment via say drop ship through sales, solely staying and in the ecosystem of the URL, meaning drop ship, they can have that fulfillment channel. They can also have some 3pls as it, you know, Amazon can be one of their fulfillment partners, Shopify. And the more diverse it is, generally speaking, holding everything else constant, the better. That is because case in point, we have a situation where if a business is doing well in Amazon, they're getting the buy box, they're getting a lot of the keywords, the reviews are great, et cetera, et cetera. Big brother Amazon notices, they try to muscle in, so to speak. What if that website's fulfillment Amazon fulfillment channel. What if it goes from doing very well to doing almost non existent? Well, if it's diversified, then it has, it's kind of like a. Is a chair more stable than a stool? You know, with three legs? I mean the more legs it has, the more weight bearing it is, you know, a variety of different areas, the better.

That's a great analogy. I like that furniture analogy. Yeah. With less than three legs you're not standing up. And if any one goes away, you're in trouble.

Exactly.

It's kind of what I remember somebody who I knew in the automobile sales business earlier on in my career educating me that any car dealership has three revenue streams. There's new car sales, used car sales and service and usually.

And finance. I sold Mercedes for 10 years.

Ah, finance.

Well it's the back end, front end.

Back end parts, the fourth leg. That's Great. And usually not all of those are making money for a dealership, you know.

That rarely new cars, but. Right, exactly.

So maybe I jumped in too quickly to what makes a website valuable because it seems there are so many things I'd like to ask a question in general which might be of particular interest to many of our listeners because I think that probably very few of our listeners have the kind of website, I mean, maybe in the 10 or 20% range have a website that is already making money today directly, let's say. But they may have, I think a lot more of them have an awful lot of unique visitors per month. Like in the, you know, thousands and tens of thousands of unique visitors per month. So let's say you're at an earlier stage of your website and you aren't actually monetizing it directly from that traffic, but you have the traffic. Does that have an inherent value? Is there anybody out there who would be interested to purchase that for the traffic value?

The short answer is yes. And just to make sure I'm understanding, when you say monetize directly from the URL, meaning is it monetizing at all, meaning through just fulfillment by Amazon or by directly through the URL, are you meaning that they're conducting sales and fulfilling sales solely through their URL or in this case not doing that?

Well, I guess what I'm suggesting is, let's just say for the sake of argument, they're no money at all. No money at all. The site has a lot of great content, a lot of great keyword rankings that's bringing search traffic into the site every month. And they have a lot of good backlinks, mostly because of the written content on their site. But they aren't actually selling anything and they don't really have a serious affiliate program going on. If anything, they're just using that traffic for lead generation, for maybe their own consulting business or you know, service related business they may provide where they're making offers to that traffic on their site, but not really offering products or even recommending products that they're sending people elsewhere to buy, you know, via affiliate links. So really more you got raw traffic, but you haven't really done a lot to directly monetize it.

Yeah, the short answer is yes. I mean there's always Google Adsense and that's a way of monetizing. And if, I mean the question is, is that, is that website of value? Meaning will people buy a website that's not to use the term under monetized, which in this case is tantamount to not monetized at all. Yeah, I mean the value is the eyeballs that are existing, coming to the website right now. So a potential buyer would look already got a built in audience here. And as opposed to having to do the SEO that either. You mentioned the scenario having where they're doing fresh content which is creating backlinks. So the current owner is doing some good SEO right there. They're not doing link exchanges or anything like that. But it's all white hat, good stuff, good traffic. Absolutely. We have buyers for that now. We're more, you know, as far as who I work with and such and we can get into that at whatever point. But where we're at as a company, we deal with businesses that are currently monetized, at least for the past 12 months. But in saying that if I'm approached by someone who has, you know, thousands, tens of thousands of visitors a month, there's definitely buyers out there for that type of business who know how to monetize something that has that existing client base already.

Now I'm sure a website that is already monetized in revenue independently as a passive income website, I'm sure is going to be more valuable to another company or individual who is looking to buy a property that's already making money. Clearly that would make more sense because they wouldn't have to do as much work to get it monetized. But it's great to hear that there is value in the eyeballs on the website, which is really what I sort of thought just from my own experience.

Absolutely right. I mean that's just to make an obvious statement. I mean the goal with any business would be to how do we get people through the door? The next goal is to have them come in the door, meaning brick and mortar. That's an actual physical door for online. It's how do we navigate people to our website. That's the big challenge and the initial challenge. Then it's to how do we monetize though. But if someone has figured out which it sounds like, you know, one of the top two or three is for the sake of this discussion, adding new content regularly, relevant content regularly, and unique content, well, that's valuable.

What I see all too often are entrepreneurs, business owners who go and develop a product or a service that they believe a market needs and they go and build this website and they get it all done. They get all the e commerce details worked out and how are they going to fulfill. They get all that supply done and then, okay, now I have to go and get demand for this thing and they're stuck there because like, well, how am I going to get people to my site? Well, you can pay for traffic and try and drive it to your site, certainly if you have a big marketing budget. But usually that's what gets left till the end in their considerations. They don't really plan your product, your service, whatever you're selling is only going to sell as much as you can get it in front of people that may want to buy it. So I would think, and I'm curious to see if you would agree, that if you had to go one way or the other and you didn't bring them both up together, you'd be better off generating traffic to your site first and then monetizing it a number of different ways versus coming up with a way to monetize and then having to figure out how to get traffic to that site.

I mean, absolutely.

Would you agree? Would that make sense?

Not only makes sense, I agree with it.

Yeah.

Well, the website is the most, I think, I don't know if common is the right word or the most obvious, you know, digital asset that people might want to acquire. Your company, Latona's is a broker, is that right? Of many different kinds of digital assets. And so what else besides a website are you guys brokering?

Well, yeah, and when you say your company, I'm not one of the owners, but I'm one of the senior brokers of which there's six full time commission only brokers working here. Latona's is, and it's one of our catchphrases, we establish money making businesses and a business is, as we've touched on, it can be a website. I don't mean this derogatorily, but it can be solely a website. It can be a Amazon storefront. That's a lot of what our current business is. People who have a brand on Amazon and they're fulfilling almost exclusively or solely through Amazon. That's the second type. The first type to review is a URL where all the business is handled within that website and where we start representing businesses so as to include websites. Amazon storefronts. The websites go into many different subcategories is as long as they're making $1,000 a month or more in profit over the past 12 months, we have a buyer for it. Now we don't do adult, we don't do, you know, know, variety of different SEO plays.

Sure, sure.

We're very agnostic as it relates to. Maybe the better choice of words would be we don't pick and choose because we've been doing it for enough time where we tend to have some book of business for basically any business model that makes money online out there. I don't know if that answered the question fully.

No, that makes sense. That makes sense. So it's interesting. So you know, really, as long as it is an online, somehow digital asset, either website or E commerce, Amazon Shopify, things like that, that's making more than $1,000 in profit. Did you say correct? Yes, in profit per month, then you can match up an appropriate buyer with that digital asset if you want to sell.

That's the goal.

And you have some guiding principles, some guidelines. You have certain kinds of websites you don't get involved in and I think that's understandable. But other than that, it's a pretty open field. That makes sense. See, I don't think people often realize when they create a website and for their business or in combination with their business or somehow related to their business or even, let's say you start a website for your podcast. Because there are, I mean, some of the earliest well known podcasts are called passive income podcasts where they're monetizing that audio listener traffic, but through a website. And a lot of it is affiliate marketing and things like that. But I mean, there are an awful lot of podcasts that are making money that way. And even through sponsorships on the audio show is another way. I mean, so many different ways that people can create something on their own that is a valuable asset that they could sell. And I think not enough people really understand that.

Oh, absolutely. I mean, and getting back to the initial. And I think main point is if something has traffic, if something gets visitors, it has value for the potential monetization value. You mentioned sponsorships. You know, there's advertising that can be done. Sure, absolutely.

You mentioned earlier the integrity of. I guess I don't know if it's the traffic or the way in which the traffic has been gained. You mentioned white hat tactics, which I think was clear in context. But I want to emphasize the point a little bit here is that the traffic was gained in a proper way with integrity that wasn't hacking anything, gaming the system, you know, one way or another, the eyeballs on the site are, I'm going to use the word legitimate, whether that's completely accurate or not. Now, are there any disqualifiers? I'm wondering if there are any specific things that if you find a website has been configured a certain way or is there any technical issues that can Be a disqualifier.

I mean mostly when it relates to the someone's buying followers on Facebook, Instagram. That's the gaming of the system that isn't legitimate, even if it's monetized already. And we're leery of taking something where, hey, unless it was in the very beginning to get a boost and a jump start. And that's understandable. But if someone is black hat versus white hat, meaning link exchanges, buying followers, copyright infringement or copying content from a different site, you know, those are all obvious red flags. DMCAs, you know, different warnings that can come in, we're leery of those. The examples that I have of websites and what would mostly in current inventory apply to what we're talking about? I mean we've got a 17 year old wrestling site that makes about 200,000, $250,000 a year in profit. That's the one that pops to my mind right away as a very robust established content site. So if that person, you know, of the tens of thousands of Facebook followers he has, you know, if it was discovered that those aren't real, then the value of that business would go down. There would be value in that business regardless because it's got fresh content, it's been around for 17 years. But that wouldn't in any way disqualify the business. It would just lessen the value of the business because the ancillary assets, it's the website that's the overarching thing. But what social media accounts is associated or are associated with it, you look at a variety of different things as it relates to the website, what all comes with it.

I would imagine that in the final analysis of any digital asset that that someone is considering purchasing, that you've got to disclose those revenues. There have to be financials to back it up. And one way or another, however, you're getting the traffic. I imagine if using a black hat tactic, that the revenue would not be consistent and sustained over time, that there has to be a certain amount of legitimacy in the longevity of this profit. Would you agree with that?

Yeah, if it's black hat, it's going to be up and down, up and down, up and down and it'll be more so apparent over time, so. Absolutely right.

So consistency probably is another important marker there. So you mentioned earlier about Amazon storefronts. I imagine as Amazon has exploded, that's been an increasing amount of your business and I think you mentioned that earlier.

Well, correct. I mean we, as mentioned, we've been doing this for 12 years. I have Been, but I was one of the founding members of the current iteration. Prior to that we were doing domain names only, which are just the permutations of letters and numbers. Rarely if ever, do they have a URL. It's more of a speculative asset. It's just, hey, with XYZ.com I could do this with it. So we bought, sold, traded those, then switched to more of the website concept where, hey, we're going to do lead gen, we're going to do content, we're going to make money through affiliate and advertising networks, whereas we still have those. There's a lot more E commerce businesses and SaaS businesses out there where John Doe is selling a widget and is being fulfilled via Amazon. And the value here is the Amazon seller account with the reviews, the product and the seller reviews. There's just more of those profitable out there for sale. So that's why most of our inventory, maybe 50% is e commerce, followed by, you know, a smaller percentage SaaS, a smaller percentage of true websites. And by that I mean the classical term where all the business and all the revenue is generated solely from that website, from that URL.

Okay, that's very helpful and very interesting information to hear. Now, with the Amazon businesses, do you find that the eyeballs to the Amazon Store, the reviews, obviously the sales and the profitability are the most important thing, or is the brand of that particular Amazon seller a key issue because sometimes they're not selling their own products, Right?

Correct. And to answer the question, I want to give an accurate answer and a well thought out answer. And there's not an answer that's going to fit every situation. So to answer, look, what we advertise as is ultimately what we're selling is cash flow, we're pricing it, and the market is bearing a multiple of ebitda. So it's something where if product reviews are important, the product reviews are important, the seller reviews are important.

I'm sure those reviews are very important. And I think they became more important about two years ago when Amazon changed the whole thing where you can no longer use the review clubs to get reviews.

Correct? Yeah. And they also did something this past July which really had caused a lot of people to take down reviews who were just following Amazon policy and then Amazon did a 180 on it. But all roads lead to the revenue. So it's the same concept of the furniture. You're going to want great reviews. I mean the brand in itself. I mean, at very least a trademark, which to Get Brand Registry 2.0, you need to right now, which in order to survive in Amazon, you really need that. The days of arbitrage, just wholesaling, you know, buying low and selling high, I mean, those days are. Unless it's economies of scale. I mean, if you're doing millions upon millions of dollars of that, I'm actually selling a business that does that. And you can make a minute amount of margin per widget, if you will, but sell millions of them a year. Those are the people who are going to survive the arbitrage business model. Everything's important. But the more you do average to above average to, well, those are better than just having. It's the same concept of just having one fulfillment channel. You can have great reviews and then nothing else. And then there are, you know, we just talked about it. There could be a massive review policy change in Amazon. Then you're, pardon the French, you're screwed. But if you're doing everything okay, average well, and that's leading towards strong revenue, that's the most important. That's the best set of circumstances. Because if one or two of those things go awry, then at least you're doing a good enough job in the other things.

Sure. I mean, revenue at the end of the day is what it's all about, for sure. I imagine it's probably easier for some companies that are selling their own products if they're having them manufactured exclusively for them. And it's not something anybody can buy on the open market and slap their name on. But the end of the day, if you do that and you do it very well and you have a good brand, you're still going to have cash flow and profitability. At the end of the day, that's the most important thing. Which makes sense.

That's correct, yep.

So obviously, as you get into other kinds of websites and other kinds of business, it's very interesting. I mean, I don't think people really understand they can embark on a small business, create it from nothing, and build a digital asset that has real value that they can sell and walk away from at some point or otherwise. I don't think they understand the kind of value. So I was looking at your company's website, latonos.com and it seems that anybody can go on here and look at your listings, Is that correct?

They can look at it. We provide, you know, here's the price, here's the profit or annual profit over the trailing twelve months. Here's the trailing twelve months of revenue in order to get access to the trailing 12 months. You know, the actual monthly numbers as well as the prospectus. And the prospectus is going to contain the business in question. So the only thing that's for public consumption without signing up for Latona's account, which is free, you just pop in a name and a password and all that, is that once you've done that, you're able to gain access to the monthly numbers. And then if you want to go even further with it, then to download the Prospectus, we require one NDA signed. And that NDA is good for all of our listings up to $3 million. And be sure to pick Adam Beebe as your broker if you're doing that. Listeners?

Yeah. Oh, definitely. You want to do that. And we're going to have your contact information and your bio in the blog post on feedyourbrand.co. our listeners know to go there always to get more information because a lot of them are going to be driving or at the gym when they're listening, and so they'll come and they can get linked directly to you. I just find that it will be really illuminating, I think, for a lot of people not only to consider as they grow their own business and are interested in potentially selling it, but I think there are others that are more of the investment mindsets. Like a mindset where they would say, hmm, I want to grow my business owner, expand it. Maybe acquiring another company that's already well established in the same market or in a related market would be how they'd prefer to go. And of course, you know, this is a brokerage business you're doing right. You're matching up buyers and sellers.

Correct.

So fascinating. A whole nother world. I've known about it tangentially and I've heard about companies that do this. I don't think I've ever spoken with anybody, certainly not on this podcast, with anybody that's directly in the business of buying and selling websites. But this has been your career, you said, for over 12 years in one facet or another, right?

Correct. That's right.

Wow. So it's real. It's here. And in case anybody ever wondered, I mean, this is actually probably, I bet in the United States with the decrease in manufacturing companies is probably an increase. Can you share any, even if anecdotal, information about. Do you see the market for buying and selling websites growing in recent years? Are there any trends that are interesting for you to share with us?

The trend of online businesses, which contains the classically defined website, the Amazon seller storefront, the Shopify, just all of those different niches. So Equal online businesses. Yes, the sale of online businesses is definitely up. I mean, it's just brick and mortar is not going away. It's shrinking. It's consolidating any statistic anyone looks at more businesses being conducted online. So it's just a natural result of that, you know, the. Okay, if more widgets are being sold online, then who sells the widgets? Well, they're making cash flow. So as opposed to a private equity firm, we've sold businesses in the multi millions of dollars and a lot of those have been the private equity firms, you know, they're getting into, you know, instead of the Dick's Sporting goods of the world, instead of, oh well, I mean, case Toys R Us. Right. Pay Less shoes. I mean, those are two recent examples where, you know, I'm 49. It tugs on my heartstrings, so to speak. But you know, I'm not a Toys R Us kid anymore. It's the same concept. The horse drawn carriage went away and then the combustible engine came up and soon there's going to be the flying car, the automated car, the flying car, all that kind of stuff. But it's the same concept as it relates to businesses. It's transitioning to online businesses makes perfect.

Sense to me from what I experience as a business owner and as a podcaster and how we see the trend in podcasting increasing. So it makes perfect sense. But I'll tell you, it's a real pleasure to have an expert in the field of buying and selling such digital assets here to give us your perspective and thoughts. So I really do appreciate your being on the show with us today.

Oh, no worries. And I'm here and I know you're going to give out my contact information. So anyone listening, please reach out to me and would love to help you.

Yep, definitely. As I said, we'll have all that in the blog post at FeedYourBrand Co and we, we will make sure everybody knows how to get in touch with you. Well, thank you so much, Adam. I do appreciate your time and I look forward to checking in with you again in the future, especially as things may change in the market.

I appreciate it. You have a good night.

I hope you found that as interesting as I did. I'm really impressed that this company has been around and doing this since about 2008. I was involved in the original dot com boom in the mid to late 90s, before that first.com bust, and had a business that really conducted a lot of its business online. And that's in the days when we had to hard code our own shopping carts, you didn't have Shopify or you didn't have WooCommerce on WordPress and you didn't really have WordPress. So, you know, everything about your website had to be custom coded and, and it was a very different time. But in this modern day and age, I think it's much more well understood that your website is a huge asset for your business, especially if you've created a lot of content that generates a lot of unique visitors to your site. It's obviously easier to sell a website if you have an existing, like, you know, shop within it, shopify or otherwise, and you have products you're selling, or even if your website is just a vehicle to drive traffic to sell things on Amazon. I mean, if you're an Amazon seller, you know, that's a big part of your brand and you've got an asset there that is really valuable and worth something, especially if you're looking for an exit strategy at some point. I hope that was helpful to many of you and eye opening, as some of it was to me. I mean, I had some assumptions that yes, even a website that isn't selling anything but just has a certain amount of unique traffic is of value to someone if you wanted to sell it. And even if you don't, hopefully this was a little eye opening that that traffic, that volume of people going to your site every month is something that you can monetize. It's just a matter of deciding to do it and working with the right people or hiring the right resources to actually monetize it. But it's very realistic and very doable. So I want everyone to remember that if you want to contact Adam and ask him any questions about either buying or selling a website, or maybe it's even just ask some questions because you're thinking of doing it in the future or prepping maybe your asset, your online asset for sale in the future. Or maybe you're considering buying something and you know, you just want to do some due diligence and find out what you don't know before you do it. Definitely reach out to Adam. All of his contact information is on the blog post@feedyourbrand.co and let us know what you think about this episode. I'm interested to hear if this was a value of interest to a lot of you. It's not our usual topic, obviously. We're usually more in the podcasting, marketing, growing your brand side of things, and this was a bit different. Talking about one component of your brand your website as an asset, whether you have one or you want to get one. I found it pretty interesting, and I hope you did too. So you can reach out to us anywhere on social media FeedYourBrand, especially our Facebook page or Instagram. And of course you can go to the blog post and find our contact information@feedyourbrand.co. so thanks so much for listening everybody. We'll be back next time with another great episode. This has been Tom on Feed you'd Brand.

You've been listening to the Feed you'd Brand podcast. We'd love to hear your comments on today's show, as well as suggestions for future topics and guests. Visit us online@feedyourbrand.co or on social edyourbrand. Thanks for exploring content marketing and podcast influence with us.