109: Flip Websites Using Amazon Associates and Amazon FBA with Jon Haver

Robert Plank: Jon Haver has been building online businesses for the past 7 years and just recently left his day job to pursue online entrepreneurship full time. His current focus is turning Amazon Affiliate sites into FBA businesses and has generated a 500% ROI. I don't know about you guys but I'm super excited. How are things today, Jon?

Jon Haver: Things are great, it's a nice sunny day here and just looking out over some water at my [inaudible 00:00:42] office setup and it's fantastic.

Robert Plank: Just living the dream. Cool. I understand that you're going to be telling us today about affiliate sites and about Amazon FBA, so could you get us all caught up and tell us about what exactly is it that you do?

Jon Haver: Sure. I think like probably a lot of people I started out online just kind of as little bit of a hobby. Instead of playing computer games I was building a business, building up websites. Got more serious about it when my son was being born a few years ago and the model I picked at the time was building up authority sites, content-driven authority sites that make money by driving people to Amazon or other sites, but primarily Amazon Associates was my main passive income portfolio sort of income stream. One of the sites that I picked up -- like probably most people on the podcast had been hearing about -- FBA and how great it is. I, again, probably like most people, always had the struggle of chasing after too many shiny objects, so I always swore to myself that I wasn't going to jump into FBA until I had a competitive advantage. Then when I was looking through analyzing some of my sites in my affiliate portfolio, one of the sites I noticed was driving a lot of sales of a product that I was pretty sure was private labeled. I just flipped that model and said, "Instead of sending traffic to Amazon to a non-discreet product, I would send traffic to Amazon to a product that I was importing." I used an Amazon affiliate site to drive the growth of my FBA business that I started.

Robert Plank: I like a lot of what you just said there and a lot of your thought process as far as you look at the portfolio you have, you look at the competitive advantage you have because, I don't know about you but a lot of the people that I chit chat with and my peers and people like that, they'll build up a site -- like you said, like an authority site for example -- and they'll just kind of dabble a little bit and play around. They'll get a little bit of traction but it seems like, especially with stuff like Amazon and Amazon Associates and FBA and Kindle and pretty much any hot, high traffic marketplace, there's always the slap. I think what I see a lot of are people, after trying enough experiments they luck out into something good, but then they get slapped down a little bit and then they just completely give up. I really like what you just shared there how you had this site that was linking to some affiliate products and getting like 5%, 15%, and then you said, "Okay, well the traffic's going from A to B anyway so I might as well just cut out the middle man," so you get more money from the same traffic. Is that right?

Jon Haver: Exactly. With Amazon Associates, when the account's big enough you're getting 8%. My goal was to turn as many 8%'s into still make that 8% but also make -- whether it's 30% margin or 40% margin on my physical goods -- so turn as many 8%'s into 38%'s.

Robert Plank: Cool, so how comfortable are you with sharing some numbers or niches? How detailed do you want to go into this case study?

Jon Haver: Sure, I'm happy to share numbers. Because there was a sale I can't share much details about the ... I can share that it was kind of a fashion clothing product, so I can share that, but as far as the numbers, I share tons and tons of details about it at my website, authoritywebsiteincome, and happy to share all the numbers here. For my site, I started in September. I tried to come analyze it from a standpoint of if I was starting flat in September and just bought the site that I owned at fair market value, the website that I acquired plus then I went out and bought another website because I figured if one website was good in this space then two should be even better. It was a total investment including investing into the product of $50,000. Definitely not chump change. $50,000 investment I do an affiliate site plus physical goods, and then 8 months later I was able to sell that, plus the earnings, and generate a $350,000 cash into my bank account essentially between the prop for the months that it was operating, as well as the ticket price. That was a pretty sweet return, that sort of validating a model that I think is pretty interesting.

Robert Plank: That is cool. The numbers that you're sharing, it's like crazy real estate numbers almost. I'm really curious about that. I'm curious about how you located a site to buy for that amount and was that your budget? What kind of criteria were you looking for, because sometimes I'll look on, say like Flippa or something, and they'll have site for $100, $200, $500. Could you tell us about how you acquired that site in the first place?

Jon Haver: The site that I acquired in the first place was actually from the individual that I ended up partnering with on another business where he goes and actually builds these affiliate sites for other to people to buy. That's at Brand Builders. That site had come to me through my audience, but if I were to go out, as I have since then, to kind of try to rinse and repeat this model, the metrics that I'm looking at is I'd like a site that's doing about at least $2,000 a month of fairly focused sales on Amazon. $2,000 a month income of fairly focused sales, meaning if you have a general health site that's selling products, in a ton of different products, it's not going to have the focused energy that you need to be able to drive the sales of whatever product that you import. The high level metrics that I'm after are $2,000 plus a month in income, and then selling a lot of one specific product that we can definitely private label. If it's doing that then I'm pretty comfortable with moving forward.

Robert Plank: Would you say that's kind of your business model now is you find these sites where they're selling Amazon Affiliate links and you say, "Okay, my criteria, 2K a month at least, focused sales," and then do you also look for something in their library that you can convert into an FBA product?

Jon Haver: Yeah, that's exactly it. The focused sales of a product that I have a good chance of being able to convert. I'm still testing this model out. I've done it once successfully. The second time I went to do this the site had a substantial drop in earnings so it went down to 25% of the expected earnings. That really sucked. That's still a slow process on building that site up. I'm doing a similar model on some other sites, so is it my model? It's definitely a very big focus area for my business right now.

Robert Plank: That's really cool because I don't do any buying and selling of websites, but just from when you hear people talk about this kind of thing, they're always looking for the built-in weakness or the built-in untapped opportunity, so that's a pretty easy opportunity to spot there. I'm glad that you brought up -- I'm kind of glad -- one of the sites you bought kind of dropped in income, and that's something that I'm always kind of concerned about, just from casually looking at some of these sites for sale. They show these earnings but how do I know that they don't have some kind of outside traffic or they're just propping up the numbers in order to get a sale? Could you talk about that a little bit?

Jon Haver: Yeah. I wish I knew more. I fully trust the person that we bought the site from. It's one of these things where the earnings per visit -- the traffic has performed as expected -- it's just been the earnings per visitor has been substantially less than what had been planned. There were some challenges with link tracking at the start but we think we got all that sorted. It's unfortunately but it does seem to happen sometimes. I've so far been unsuccessful at really being able to pinpoint what the heck happened, what was the difference. The clicks seem to be the same, it's just the traffic is converting so much worse. Maybe it was a market shift that I just didn't detect and he was able to detect before he sold and that's why he sold. I wish I knew more right now. It's kind of one of those things. Ideally you don't have losers but if you're going to be investing in anything, some are going to be successes, some are not going to be as big a success.

Robert Plank: A little bit of a gamble. It's almost like you bought a house and then the next day or the next month they built a Walmart down the street and plummeted the value, right?

Jon Haver: Yeah, yeah, exactly.

Robert Plank: Cool. You went and you found the site that had a couple of criteria that you wanted and you bought it for 50K and you went ahead and turned around and sold it for 350K, and then you have this new site that's a little bit more of a fixer upper. What are your plans moving forward as far this whole site flipping thing?

Jon Haver: I'm continuing to be in the market for Amazon Associate sites and continuing to look for opportunities to try and really build, especially now that I've been full time, really build my team to be as world class as possible in both the Amazon Associate sites -- I've got a lot of experience in that space -- and then continue to build up my skillset in the Amazon FBA space. I think that model gives me a lot of flexibility and robustness from potential Amazon slaps, in whatever form that takes, whether it's an associate company shut down or a seller account getting suspended. I think my ability to drive off Amazon traffic is a sort of a strong selling point for this model.

Robert Plank: Do you have any plans for any other ways to monetize aside from associates and FBA?

Jon Haver: Yep. With the traffic there's a few benefits to this strategy, but we're starting to send them through ... I'm still involved in the [OneWeb 00:11:22] business that we sold that still has a ton of traffic, and we're starting to send people through an email capture sequence to get them onto our email before we send them off to Amazon, and in exchange for that they get a small coupon which drives up our conversions once they do get to Amazon, while at the same time we're collecting up to a hundred email opt-ins a day. We're looking to monetize that audience with other offers.

Robert Plank: That's cool. Any retargeting, any social media stuff?

Jon Haver: There's certainly opportunity there, it was just prioritized low on the stuff that I was going after quickly. I think especially now that we're getting a bit more of a funnel set up there's a lot of opportunity to get our retargeting and some other paid traffic opportunities.

Robert Plank: Only so much time in the day, right?

Jon Haver: Yeah, exactly, especially with the kind of potential sale. My ideal of this whole business was pull the build it, sell it, repeat model off, and try and get this ... One of the challenges with an online business is there's such high profit margins in them the challenge is in the ability to reinvest at a predictable and similar rate of return. Pay traffic you can certainly do that, and that's not the world that I've unfortunately played in to some extent. That was the model that I'm trying to find, and with it being a sale I just hadn't pursued those opportunities yet.

Robert Plank: Okay, fair enough. If someone is looking to kind of replicate what it is that you're doing -- I know you mentioned that first site, you lucked into it because you had a contact -- if someone was looking to kind of follow in your footsteps and take a couple of steps to go from locate an undervalued online property and buy it and turn it around and sell it, what do they do? If they look at some kind of marketplace and they see, for example, like a fashion or clothing site, how do you differentiate all these things for sale with what they should grab?

Jon Haver: It's tricky. That's what I've been discovering to be the biggest hurdle of this model is the good websites that fit the model for sale. A great marketplace for sites like this is Empire Flippers. Flippa you got to be able to weed through a lot of crap there. FE International's great as well but usually a bit of a higher price point, so Empire Flippers for kind of a under 20K investment into a site. That's definitely the place I would say. FE International again, really good. As far as does it meet the right criteria, I talk a lot about that on my website where I try and provide exactly, "Here's what I did, here's what I look for, here's what I'm doing now." To kind of help your audience on what you're looking for, it's just a product that you can ... If there's a website that's focused on selling a specific product and that product is available to be sourced on Alibaba, then that's kind of the key.

Robert Plank: Okay. When you do your research do you keep a spreadsheet or do you just look around until something interests you?

Jon Haver: Look around until something interests me and then I definitely have, I'm a bit of a spreadsheet nut and I definitely have a ton of spreadsheets that I fire things into to determine the potential profit of that conversion.

Robert Plank: Eyeball it just to find something that captures the interest and then the spreadsheets for the deeper research.

Jon Haver: Yeah, definitely.

Robert Plank: How do you know when to cut something loose or should you cut something loose as opposed to keeping the profits going, and how did you decide, "Okay, I'm going to price this at $350,000?"

Jon Haver: The 350 was the monthly sales, the net profit plus the sale price. The marketplaces are reasonably well developed for determining what the multiple is. The reason that I decided to sell as quickly as I did -- even though if I had held it for another 6 months I would have been making the money plus increasing my own multiple -- was that I believed the steepest -- if you plotted the rate of return versus time -- with this business strategy that steepest rate of return is in the initial conversion to FBA. The dream scenario is that there's always deals that are coming that I can reinvest the money into and I'm keeping that money on the steepest part of the curve.

Robert Plank: Okay, so you're just rolling full steam ahead then?

Jon Haver: Yeah, that would be the ideal scenario. That was not quite what I view it that way because of the deal flow and sites don't always perform as we expect them to perform but I'm continuing to work through those bugs so that we are continuing to go full steam ahead.

Robert Plank: Awesome. A few years ago I heard about some guy and he kind of did something similar to what you're doing and it just blew me away in the thought process. I think it was some kind of situation where this person, I think he had bought a website that sold a WordPress theme and then he went and hired some employees to fix it up. Then it got to the point where he was trying to sell it for something like $50,000 or some kind of precise number and then people were trying to low ball him and trying to buy it for like 20 grand or 30 grand. He was super annoyed because there was this property that's worth X number of dollars, and even if someone tries to undercut him 10%, 20%, that's like if someone tries to buy your house for 20% below what it's worth. It's kind of like a cool, unexplored area that I really like where instead of starting this whole thing from scratch, and everyone teaches about Amazon or FBA or associates or whatever, "Use this page bill, use this software," and so you're just finding something that's already been built up and making it better.

Jon Haver: We're certainly starting because our biggest bottleneck right now is the deal flow on the front end. I come from building a website passive income portfolio background. We're building sites with intent of once they have enough traction of converting them to the FBA business. We're trying to do both to get those sites on the front end, both building and buying.

Robert Plank: Right, so that way it's all very scientific. As we're winding down this call, could you tell us what you see, like the number one mistake all these website buyers and sellers making?

Jon Haver: It's the same mistake across, whether it's Amazon FBA someone's committing themself to, whether it's building up an affiliate site or investing in a site, a lot of people that move into this space -- and I'm absolutely guilty of this when I started as well -- it's a combination of both moving too slow and not fully committing to being successful at the process. A lot of people, and myself included, it was like, "Oh, this is kind of cool," and kind of half commit to it and then don't really through, don't do everything that's needed to be successful. As a result of that they're not successful and then they say -- and myself included, I'm not throwing stones here -- say, "See, it didn't work. Told you." Versus somebody that really just commits that this is going to be successful no matter what and they set up the processes to be successful. Those are the ones -- whether it's FBA or building an affiliate site or buying websites, they seem to be the ones that make an online business successful.

Robert Plank: It's like that say, "Whether you think you can or you think you can't, you're right." I like that about your message and that kind of comes full circle because you were telling us at the beginning that you were kind of doing this and that and kind of taking your time, but then once your son was born then that really pushed you into action to do everything that needed to be done.

Jon Haver: Yeah, absolutely.

Robert Plank: Cool, I really like everything you have to say. You seem like a smart guy, you have a lot of great advice, I like your message. Could you tell everyone where they could find out more about you and sign up for your list and buy from you and all that good stuff?

Jon Haver: Sure, there's two main places to see me. My main site where I talk about all the different things that I have going on is at AuthorityWebsiteIncome.com, and then the second place is if you're interested in what I just talked about from buying an affiliate site and then building it, converting it into an FBA business. A lot of people were interested in what we were doing, and then I partnered with a guy that I ended up actually buying the site that I just talked about from the case study in, and we now build affiliate sites for four people, and that's at BrandBuilders.io.

Robert Plank: Awesome, so Jon Haver, Amazon FBA, lots of cool stuff. I'm super impressed, so everyone go check out that website right now and thanks for being on the show Jon.

Jon Haver: No problem, thank you. Thanks for having your podcast.