I'm excited about today's episode. I had a great conversation with Coran Woodmass, a business broker with a very specific type of business modeled after one of the principles we talk about in the 8-Profit Activators.
This is exactly the type of conversation I love having on More Cheese Less Whiskers and we were able to hatch some pretty amazing schemes that are going to make a big difference to Coran’s business.
The FBA Broker
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Transcript - More Cheese Less Whiskers 005
Dean: Hi, it's Dean Jackson. Welcome back to another episode of More Cheese, Less Whiskers. I'm very excited about today's episode. I had a great conversation with Coran Woodmass from London. Coran is a business broker specializing in FBA businesses. If you don't know what that is, it's fulfilment by Amazon. You'll find out when we start the episode, I didn't know what that meant either, so don't feel bad. FBA, fulfilment by Amazon. It's a very specific type of business, modelled after the idea that we talk about in The Breakthrough DNA book of weshootbottles.com, being very specific on your target audience. Coran's just getting this business started. This is exactly the type of person that I love to talk to on More Cheese, Less Whiskers. We're able to hatch some pretty incredible evil schemes that I think are going to make a big difference, and just a delightful guy. I hope you enjoy this episode. Without further adieu, here we go.
Dean: Coran Woodmass.
Coran: Hi, Dean. How are you?
Dean: I am fantastic. How are you?
Coran: Very good, mate. Very good. I got to say, you're the first person that has pronounced my name correctly first go. That's pretty awesome.
Dean: Well, how do you like that? What do you get mostly?
Coran: I get a mixture of Coran or Koran. Koran is probably the most frequent one.
Dean: Well, there you go. Welcome, all the way from Ireland. Are you in Ireland right now?
Coran: No, I'm in London.
Dean: Oh, in London. Okay. I thought you were in Ireland for some reason. Awesome. We're recording right now, and the way that this works is this whole hour is all about you. It's all about your business. We're going to hatch some evil schemes for you. Maybe you could kind of take a little bit of time and tell me a little bit about what you're doing, what's working right now, and maybe what we could focus on to hatch some evil schemes for you.
Coran: Perfect. Well, yeah, thanks for the opportunity to come on board. I really appreciate that. To start with I'm a business broker. I've been doing this for about the last year, and recently I left the brokerage I was working with to form my own brokerage. I followed the eight profit activators from memory, actually. I didn't pull it out. I probably should have. I remember the we shoot cans and we shoot bottle examples.
Coran: I went with a very literal domain and business name, which is BFBAbroker.com. I sell Amazon FBA businesses. What that really means ...
Dean: What does FBA stand for?
Coran: Right. I'll explain that. FBA is fulfilment by Amazon. It means you ship your products ... It's basically an e-commerce channel. You ship your products into Amazon and they'll do the fulfilment for you.
Dean: Got you. Everybody who's looking to do that, that's lingo that they would know. That's kind of what everybody would call that, FBA.
Coran: Absolutely, yes.
Coran: Yeah. If someone has that as a channel, FBA will stand out to them.
Dean: Okay, perfect. Good. Just like if you have a ... Rather than being a guy who just sells any business, FBAbroker.com is a crystal clear ... Just like we shoot bottles. Good for you. Okay.
Coran: Absolutely. The sneaky little trick behind it is I'm actually looking for e-commerce business owners who have Amazon as a channel. The BFBAbroker is the marketing banner, so to speak. What I'm really looking for is multi-channel e-commerce and larger businesses.
Dean: Right, and you're going to get because they're curious about that element of it.
Coran: Yeah, exactly.
Dean: Cool. Who's your target audience then if you're saying all kind of online businesses? You kind of have two sides of this. Right? You're looking for people who want to sell them, and then you've also got an opportunity to look for people who want to buy an FBA business, too. Right?
Coran: Exactly. Yeah, both sides of the coin.
Dean: Tell me about what you do in your before unit right now. How would you narrate the way your before unit works right now as you're saying let's take the ... Up to you, whether we take the buyer's side or the seller's side.
Coran: Okay. As I've just started, the business has been running just under a month right now. The first thing I'm focusing on is the sell side, the sellers. If you find ... The shortage in the market basically is quality businesses to buy. The buyer side almost takes care of itself. There is some work to do there, too. My primary focus right now is helping people understand that first of all, they can sell their Amazon FBA business. There's a little bit of misinformation in the market that you can't sell an Amazon FBA business. I've put out some good content helping people understand that they can sell it, and answering the most common questions.
Dean: Okay. What would be some of these most ... What would be the questions that people have if they have an FBA business that they're thinking they might like to sell, or they didn't know they could sell it? I imagine part of it is that there's a bit of trepidation on people's part for the longevity of building a business on somebody else's platform just in case things change. Is that not a non-issue?
Coran: Exactly. That's a really good point. Yeah. This is something that buyers are wary of, which is why I help people to plan a little bit out, so six to twelve months out start diversifying their traffic sources, income sources if possible, so go into multi-channel, take some sales on your own website, things like this if you can diversify the business. There's quite a few steps that people can take and that actually directly correlates to a higher multiple when they go to sell. It's well worth doing ahead of time.
Dean: How do you find them now, the business owners? Are they visible prospects? Is there a list of them that you can identify?
Coran: The list side of things is a little bit tricky, so what I'm doing, I'm doing a multi-step approach. The first thing I'm doing is Facebook ads to a ungated large article on how to sell an Amazon FBA business. That will be the first layer, so to speak. No need to opt-in. You can read the information using the Facebook pixel to remarket to those people for an opt-in opportunity. The next question people have every time once they realize they can sell is how much is it worth. I have a valuation form so they can put their information in, not reveal their product or brand name or anything like that, because there is a portion of this business that you don't really want to be public necessarily to many people. Yeah. We keep all that private and I provide a valuation range just from about ten questions, super easy. That's actually generating quite a few leads which is awesome. It's all about pushing people through, educating and motivating them to take that survey and get a valuation.
Dean: Mm-hmm (affirmative). I got it. Okay. I always loved these brokerage type of businesses because they're so similar to the real estate world. It's really the same thing. You're looking for a buyer and you're looking for a seller and you've got an opportunity to match them. Typically the owners are more visible than the buyers, but very similar here. How successful is the ... What's your best way to get somebody to raise their hand? They go from this Facebook ad to the article. Is there something that they can opt-in for? They read the Article, How to Sell an FBA Business, and then the opt-in is find out how much your business is worth? Is that your offer to get them to raise their hand?
Coran: That would be my ideal opt-in, but I'm testing whether that's the prospect's ideal opt-in. I have another option which is a seven point checklist that I use when I'm doing exit planning. They can just enter their email and get that information straight away.
Dean: What is the best result that you're able to get there. Is it predictable that you can say, "I can get an opt-in for X dollars," like, how much does it cost you to get an opt-in right now? What would be your happy number and what's the reality right now?
Coran: I love that. My happy number versus the reality. The reality is quite high. Right now we're sitting at around $10 an opt-in. Obviously way lower than that would be great, but basically because I'm starting out from scratch I'm viewing every lead as gold basically. It's quite hard to identify people and the lifetime value of even just a first transaction value is very high, similar to real estate. I'm seeing every person that opts-in as a little nugget of gold, so to speak. I'm happy to pay more for those leads.
Dean: It is. I mean, so what is the pot of gold at the end of the rainbow here? If you're able to help somebody sell one of the businesses, what's a client worth to you?
Coran: Sure. My commission slides from 15% at the low end under half a million dollars, and slides down from there as the deals get larger. I had to call Elliot today. That business is looking around the four million range to list so that will be under the 10% mark there.
Dean: Wow. [crosstalk 00:11:55] That would be worth $400,000, is that about right?
Coran: A little bit yes. Yeah. It's a little bit lower than that.
Coran: Quite a large commission possible.
Dean: Sure. What is the average? You've been doing this just over a month. Have you been able to sell any yet or what would you say would be the range that you can ...
Coran: Over the last year I've sold four FBA specific businesses. Most of them were in Q1 of this year, so before it was my own brokerage and still yet to sell a business. I have a decent lead funnel right now, but actually sales in the month, none just yet. What I'm using as a benchmark is the public deals information that I cold find out from last year. There were about fifteen public deals done. The average deal size was a hundred and eighty thousand, so that would have net on average $27,000 per deal. I know myself that this year, in the first half of this year, the deals I know personally, there's been at least fifteen deals done. There will probably be more, and I'm estimating that the average list price will double this year as more and more people realize that you can sell these type of businesses.
Dean: Right. Okay, so you're ... Is it kind of it's starting to thrive now, becoming more and more common?
Dean: Yeah. I know that there's been a lot of buzz around Facebook, I mean, around Amazon businesses like this. You're expecting that this is going to continue to grow, that there will be more and more of them and it's kind of a viable, long-term thing that Amazon is supporting? Is the kind of thing that people are ... If you're in early, you kind of figure out the loopholes and then Amazon's kind of struggling to close the loopholes to make it less advantageous as you go along?
Dean: Is it something that they're supporting and it's going to grow?
Coran: That's a brilliant question. Often people in the internet marketing or online marketing world refer to organic SEO back in the day where you could gain Google and get your rankings up. There is an element of this within Amazon. What we're seeing though, is there's a different mindset with Amazon. Obviously I'm not an Amazon employee, so I'm not speaking for them. This is just my person opinion, is their main goal is to sell products. With Google, comparatively it's about information. In theory, the best information wins. On Amazon, it's the best product wins and the best sales page, basically. If your product is good by reviews of real people and the conversion rate is there, Amazon will want to promote you. If you create a good product and use the leverage that you have available within Amazon to help it rank legitimately then it's a win-win. Amazon are taking a 15% commission of every sale to begin with, so they're motivated to help you sell. Yes. The ecosystem is definitely set up to help Amazon sellers sell their product.
Dean: Okay. The ones who do best, are they selling their own products or also ran in selling other brand of products?
Coran: Sure. As far as just the selling side and making a decent amount of money from this type of business, it's all sorts. A lot of people ... There was a pretty big course about three, four years ago, that came out that explained the private label idea where you stuck a label on a similar product and sell it. There's a lot of people doing that. There's people prior to that that are doing sort of retail arbitrage where they'll see something at their local store that's cheap and then put it up on Amazon. These businesses aren't as easy to sell, the types of businesses. The private label is better than the retail arbitrage, because it's actually your stock and your brand. The better version is where it is your own unique product in some way, so it's a supplement. It's your own formulation. If it's a product you've designed, something a little bit different, and it's unique to you and your brand, that's the type of business that I see having more longevity.
Dean: Mm-hmm (affirmative), cool. How many of these businesses do you suspect there are, like that would fit in that range of ... If they're going to sell $480,000, what kind of multiples are they selling for? How much volume would that be?
Coran: Sure. As far as how many potential businesses there could be, do you mean?
Dean: Yeah. Mm-hmm (affirmative).
Dean: If we could uncover everybody who owns an FBA business.
Coran: That's an interesting question. It's something that I've been trying to figure out. The best way I can figure this out is one of the largest Facebook groups for FBA sellers has about thirty-five, forty thousand members. Obviously not all of those would be actively selling. An even smaller portion would be at the level where they could actually sell. I'd say there would be, at any one time there'd be hundreds if not a thousand or more businesses that would suit this criteria.
Dean: When you look at this, part of the reason I'm asking that is because that's ultimately what we're looking for. Right? If you could, if there was some way to get access to who those people are, that would be an advantage because you've turned then sort of an invisible prospect into a visible prospect. Even if there's a way to do it with effort ... By that I mean one of my favorite episodes of I Love Marketing was when we had Richard Viguerie on. Did you hear that episode or remember it? He's the guy in the United States, he's really the founder of conservative fundraising, politically in the United States. He has built a huge business. That episode is worth listening to. The guy is like, eighty-two years old now and is still going strong, like still a real strong force.
One of the things that he talked about was he started his business in the '60s. You know, 1962, '64, something like that, when there was a new rule passed that anybody who donated more than $100 to any political campaign had to be registered. That donation had to be registered. That meant that there was a public record of people who donated $100 or more to a political campaign. He went into wherever the congressional records were, they keep all of this information, and he found the list of people who had donated $100 to the conservative candidate who was running in the presidential campaign. There were, I think he said something like twelve thousand of them. Twelve thousand people had donated $100 or more. He went in and hired some ladies to come in with him and hand write all of those names and addresses, and have them put on a magnetic tape.
Back that that was the way they kept data, had them all transcribed, transferred to a magnetic tape so that he would have a record of everybody. That was the beginning of his empire. I thought about as you're describing this, it's kind of an emerging thing. I just think it's so on-trend that the back end of stuff, fulfilment and distribution and cloud services and all those things, I mean, Amazon is definitely on the way like that. I'm thinking out loud that even if there was a way to identify through Amazon even by just doing manual searching to find the most popular businesses that are selling on Amazon and the most popular categories, you could probably ... Somebody who's got a business that's doing a large volume would probably be pretty ... They'd have some kind of a footprint on Amazon. Wouldn't they?
Coran: Yeah, absolutely. Yeah, definitely.
Dean: Okay. Just thinking out loud, that we'll put that to the side, that if there were some way to identify those people ... Just like you said, there's thirty-five or forty thousand people in a Facebook group. If there's some way to get to them, that's what we're really looking at. As it emerges there's ... Where are the public records of these sales kept? You said in 2015 there were fifteen businesses that sold, and you know that this year already in the first quarter there's been fifteen that would be of note.
Dean: Who keeps that information?
Coran: Most of that is coming from public information. A lot of the brokers in marketplaces publish their numbers, and some of them publish even what things are selling for. As far as I'm aware, there isn't a central repository, which would be awesome if there was. I will look into this.
Dean: That's my point, because what if you were the central repository? See, this is exactly where I was going with that, is what if you were that central repository, that you became that part? One of the things, one of the very best strategies and the biggest distinctions that I make is isolating the profit activators and not just thinking about it as one thing, as a funnel. Not just thinking about it as the before unit, which it is, but the before unit is made up of four very distinct pullers. You've got profit activator one which was identifying who they are. You know who they are to define them, but there's not a reliable way to find them.
Not like in the last episode. I talked with Kenny McCarthy who's a real estate broker in Cape Ann. His target audience were water front homeowners on Cape Ann, and there's just about a thousand of them. They're visible prospects. You know these are the waterfront homes and these are the people that own them. We do that same thing with any lakefront homeowners here in Winter Haven. Your target audience are people who own FBA business, and there's no really easy way to identify who those are because it's sort of an emerging category. If it's going to be a long term thing, if it's going to be a really great way, there's nothing stopping you from being the repository that you wish existed.
Coran: That's a good point.
Dean: I point that out there because a lot of people don't know this. Here in the United States there's ... I'm sure you've heard of Proctor and Gamble, the big company.
Dean: I'm sure they're internationally, too. What most people don't know is that Proctor and Gamble invented the soap opera. Do you know what soap operas are?
Coran: Yes, yup.
Dean: Okay. They invented the soap opera so that they could run shows on TV that would gather their target audience, housewives, in front of the TV, so that they could sell them the soap and their products on the commercials. That's why they call them soap operas.
Coran: Yeah, that's genius.
Dean: What if you had this opportunity to create ... You've got maybe the opportunity to own the category of organizing and reporting information on FBA businesses. Right? Instead of focusing on FBAbroker.com, which is about you, which is still good because it isolates and differentiates you as opposed to any other type of business broker. What if you were the FBAreport.com, or the FBAjournal.com, or FBArecords.com, or FBA something that implies the public information available, or whatever sources of information available on the current state of what's selling right now among FBA businesses? Is there something like that?
Coran: No. There's a lot of people with audiences that train people how to do FBA and how to optimize FBA. I've been focused on getting interviewed by these people. This is an interesting angle because yeah, there isn't really one spot for this.
Dean: Right. There's the opportunity. I think if you were able to create the category, create the vehicle that is going to start and gather your audience, that's I think, going to be a big piece. You know?
Dean: I think there's a pretty cool ... It could be very simple. It so mirrors what we do in the real estate world in that we offer, for Kenny with the waterfront homes, we offer the August 2016 report on Cape Ann waterfront house prices. If somebody is thinking about selling their house, that's what they want to know. Right? Just like you said, people want to know what their FBA business would be worth, but they may want to do it in a voyeuristic kind of way right now, without committing themselves to revealing information about their business or about where any valuation, how much is my business with. There's a little more information involved in that. You know? Are you saying that you're getting people, for $10 you can get them to fill in the, "How much is my FBA business worth," form? Is it some other opt-in that you have?
Coran: That's loosely the valuation tool, or form that I have. Yeah.
Dean: Okay, so for $10 you get those. Do you have a sense of what percentage that is? If you got a hundred visitors to the site, how many people would fill out that form? What percentage does that work out to be?
Coran: Sure. Right now it's pretty low. I wish I had better statistics for you because this direct campaign is quite new. What I'm actually going off is people reading the longer article and hearing a podcast interview and coming through. I don't actually have that number on hand. Sorry.
Dean: Okay. All right. You're saying it was low. Do you get a sense is it ... If you were on Price is Right and you were kind of guessing, would it be, is it 10%, is if 5%, is it 50%? What would you guess intuitively?
Coran: It'd be under five. I'd guess around 2% to 3% maybe.
Dean: Okay, great. There we go. Right away, if we could get that up to 20% to 25%, that would be a win on a lot of levels.
Dean: You're getting visitors, but you're getting ... That ask is a little bit of a leap. Right? That's the equivalent of, "Tell me all the information about your house and I'll tell you how much it's worth." If people had to fill out a form with ten pieces of information about their house, that seems like I'm sort of committing to something. It's more effort than I may want to put in and it's more sort of ... I'm more reluctant to do something like that. If we were taking this idea and saying that you could download the first quarter report on FBA business sales data, that that is like where I get to see what all the other businesses are selling for. That I get to do without revealing that I'm looking to sell my business. You know what I mean? It's kind of like, I get the data, the market data that I want, without having to commit to revealing information about my business right now.
Coran: Right. Yeah, I see how that could work. Definitely.
Dean: Right. Another example. I do work with ... I do these Breakthrough Blueprint events where I come to London. I've been to London five times now. I've had financial advisors come to four of the five events I've done in London. At the very first event, one of the things that we focused on was his website and the offers that he was making. Essentially the offer initially was, "Let me show you how to maximize your retirement savings," or, "Here's some strategies to maximize your returns," essentially offering advice or offering something of an opinion-based type of offer. We switched to offering a free report on ...
We would do the August 2016 report on UK Annuity Yields, which is market data. Most people when they retire, they get their pension and they get it in a lump sum and are in control of now managing it. A lot of them choose to just put it in annuities. If that's the way it's going and I'm going to be doing that, then it might make sense, it would be an advantage to me if I knew which annuities get the highest yield. If we rank it in a way of saying, "These are the top ranking UK annuity yields," and the current data this month, that is going to be something that would feel like a shortcut.
Coran: Yeah, definitely.
Dean: I think it would make me the smartest investor ever. If I'm going to put my money in an annuity and I have access to these are the highest yielding annuities, I get the list, I look at the top, there's number one, I'll put my money in there. Done. I'm the smartest investor there is. Right?
Dean: Because if have access to the market data. If I'm thinking about selling my lakefront house here in Winter Haven, rather than invite a real estate agent over to tell me how much my house is worth initially, revealing that I'm thinking about selling if I'm not really yet thinking about selling, compare that with offering a report, the August 2016 report on Winter Haven Lakefront House Prices. That sounds like I'm going to get the voyeur in on what are all the lakefront houses selling for. That's going to give me an idea of what my lakefront house might be worth. It'd be the same thing here where if we're offering somebody the report on FBA business sales. That sounds like something, if I own an FBA business and I'm thinking about at some point selling my FBA business, that seems like something that I would want to have.
Coran: Absolutely. Yeah, I agree.
Dean: Right. I would look at kind of cornering that market where you've got the opportunity now to create something that nobody else can have, kind of thing. Nobody's doing it, and so why not you be the aggregator of all of that information, to be the one source where ... It's like you take that model, it's like the Nielsen ratings for television here in the United States. They monitor all the TV watching, and they've got all the access to the reports. Somebody is going to be the de facto source of that information. Right?
Dean: It might as well be you.
Coran: That's a really cool idea.
Dean: That would be a great advantage for you. Right? If you have everybody turning to you to get that information, now you're building ... The only goal of profit activator two is just to get a conversation started. It's to get somebody to raise their hand.
Dean: Now in profit activator three, now it's about educating and motivating, knowing that most of the time it's not an impulsive thing that somebody is going to wake up one day and think that they could just all the sudden sell their FBA business. There's going to be some preparation for it. There's going to be some, just like you said, how to ... Now they're ready to hear this message of how to sell an FBA business and how much is my business worth and getting ... You've got the ear now in a way of all of the ... You've got email direct access to people who may not specifically be FBA business owners, but the good majority of them would be.
Dean: The same way you're targeting these people now, it's just what I'm looking to do, is in stead of 2% to 3%, what kind of a softer offer could we make to get 20% or 30% of them. I mean, when you're offering just valuable information ... I run Facebook ads and print magazines. There's a big magazine, Success Magazine, here in the States, and we'll get 60% to 70% opt-in by offering a book.
Coran: Wow, that's awesome.
Dean: I think that, looking at creating that data that somebody would be, without having to commit themselves to saying, "I'm thinking of selling my FBA business, what would be valuable for you," is to get a list of people who are interested in knowing what these FBA business are selling for. You know?
Coran: Absolutely. Wow, that's really cool.
Dean: No matter what, what kind of access to data do you have right now that you'd be able to put together a report like that?
Coran: I'd have to reach out to brokers individually and get them to share that information, which some of them may be a little bit resistant to do. Yeah, I'd have to ... Yeah. That would be interesting. A couple of them…
Dean: I'm just going to say, but do you think that those brokers might be more willing to share if that was in turn going to give them then access to what everybody else is doing?
Dean: I'm sure in the UK there are people who do salary surveys that become like the source of record for this is what typical brand managers are making or typical entry-level IT guys or executive pay. All the corporations kind of share that information to have access to all of the information. You know?
Coran: Of course. Of course. They want the information too, because it's hard to compile. If they put their information in, they'll get back the information from everyone else. Yeah, that's genius.
Dean: There's one. Now, I look at that as separate. I would even look at that as a separate business from your brokering business, because it's not ... That data is going to be valuable. That list is going to be valuable. I would listen to the Richard Viguerie episode of I Love Marketing, because from there, as soon as he had that list, he was able to rent that list for I think it was $350, right the same day. That was a lot of money in 1960 something. He realized at that moment ... Like, it was really great to hear him tell that story and to ...
He closed the office, took everybody out for lunch and he knew that he was onto something there. Nobody else had figured it out. Then he went on to go and through these public records he would go and at the state level, for every state election, they would go to all the courthouses, all the county records or state records, and get the lists of people who donated for the governor campaigns or congress campaigns. All people who were supporting the conservative candidates. He has now still to this day the biggest database of conservative supporters. He was able to build a while direct mail empire around that.
Coran: That's amazing.
Dean: Right. You may be on the cusp of something? Right? If that's a business that is a category that's going to continue to grow, which I believe it is ... Amazon is just continuing to grow and grow and grow, strategic outsourcing and specialty of infrastructure and all that stuff is continuing to grow. People tapping into the FBA ecosystem is only going to continue to grow. It just makes sense that there's going to be more and more of those businesses. I think you might have an opportunity to be a really, be the leader in that, in gathering that data.
Coran: Well, yeah. This lead I was talking to earlier today, he said something that was interesting. He said over the last five years ... He's been in e-commerce for over ten years and in the last three to five years he was finding it difficult to compete with Amazon and Google, so he started selling on Amazon more and more, so focusing more on their channel than their own channel. The sales well outweigh the e-commerce sales through Amazon. Yeah, that's correct. A lot of people will be shifting or coming across to Amazon that are also having a more of off Amazon business or an e-commerce business.
Dean: Right. Perfect. Now, then in profit activator three, I think just doing that even with the limited thing you have right now, if there's only fifteen businesses that you know of that sold last year, that's the ... Whatever data you have, it doesn't have to be big. It is what it is. Right? This is what you know, just to give people a general idea. That's going to be a good place to start. I think that just offering that, that's going to bump up from 2% to 3%. I'd love to see you get in that 20% to 30% range, and that would make a big difference because your cost for opt-in would come down tremendously. You know?
Dean: In profit activator three the asset that you're building is this list of people who you have their name and their email address as a potential FBA business owner. Your list of FBA business owners is the profit activator three asset that you'll have. How many of them do you have right now? How many opt-ins have you had in the last month or however long you've been doing this?
Coran: Sure. The opt-ins, it's small. It's around fifteen to twenty, so it's a very small sample size.
Dean: Okay. Yeah, so I get it because you're just kind of starting out here. Then you haven't been doing it long enough to know what the gestation period is on how long somebody is going to take before they actually decide to sell. What's your process right now in profit activator three to engage with the people who fill out that, "How much is my business worth," form right now? How many of them are you able to engage in a dialog with?
Coran: Sure. About 10% to 12%, in that range. I've had conversations with about six people so far, whether it be by email, and probably three or four actual phone calls with people so far. [crosstalk 00:46:54] It's quite high once they actually get in.
Dean: Sure, absolutely. You know, the thing is that you're kind of most excited about it because it's small and you're giving them sort of personal attention and they're interested to have that conversation. What have you noticed in the conversations that you've had?
Dean: Are they thinking about selling and are they businesses that are the size that you need?
Coran: Absolutely. For the most part the leads I've got directly and through the website are large businesses. Because of the content and the way I've written it, I've geared it more towards the type of businesses that the buyers already have or are looking for. I'm trying to filter people out, maybe too early. Now we're talking about this, I think maybe too early, but I am trying to filter people out and make sure that the right type of businesses are coming through. The next step is generic ... Well, not generic. Helpful Amazon sales information. My wife actually does an FBA newsletter each week and I'm starting to send that out to people, which is just Amazon's seller information. Like what's happening in Amazon, what's changing, that type of thing.
Dean: That's perfect. That's a great vehicle. Whatever you've got is ... Part of it in profit activator three is about bridging this gap of identifying the people who want to do something right now and the people who are going to do something later. That whole initial first twenty-four or forty-eight hours is your opportunity to see who's willing to engage in the dialog. I look at it that ... On one of the episodes of I Love Marketing we talked about this idea of what happens with a bundle of a hundred leads today, if you'd look at over the course of the next twelve, eighteen, twenty-four months.
When I first started really going deep into lead management and looking at it as a science, there I found a company called The Inquiry Handling Service, and they did all kinds of leads from corporate clients where if you go to a trade show and you fill out a information card to get faucet information from one of the big faucet makers, Moen or Kohler. They would fulfil that data, or if you go to their website and ask for a catalog they would do the fulfilment of all those kind of inquiries. The thing that was fascinating that they did was they would do what they called, "Did you buy," surveys, where every ninety days they would call a sample of ...
Across all different industries. I mean, they had the millions of leads, so it didn't matter what you had inquired about. If you did inquire about faucets, they'd call you up and say, "Hey Coran, you came to the Home Show and you inquired about faucets. Have you bought any faucets yet?" That's the only question they would ask. They'd take a sampling at ninety days, six months, nine months, twelve months, all the way out. What they found was that in eighteen months, just over half of the people that inquire about anything will buy what it was they inquired about. Only 15% of them will do it in the first ninety days, so 85% of the value of a bundle of leads generated today is ninety days or more out. I've got all kinds of research on the real estate side of this being absolutely true, that the longer out the better. We have to balance this idea of trying to find the people who are within the 15% right now without alienating or scaring off the people who are in the 85%.
Dean: Ideally what we're looking for are what I call five star prospects. We're looking for people who are willing to engage in the dialog, who are friendly and cooperative, who know what they want, who know when they want it, and would like us to help them. They have to meet all five of those in order for it to be a five star prospect. That's really the only people that you're going to be able to do business with. If you take any one of those, you're not going to be able to help somebody if they don't meet all five. The good news is that they happen in that order. That's the order that we want to find out. The very first thing is just to see if they're willing to engage in the dialog.
When we send sort of short, personal, expecting a reply emails to people once they opt-in for something in the first twenty-four hours that we've got an opportunity to identify the ones who are willing to engage in a dialog. They'll reply to your email and make it okay that the ones who don't feel like you're pushing them or don't feel like you're only interested in the ones who are looking to sell right now. That's where something like a weekly flagship like your wife's email newsletter is something that would be a valuable way to continue the conversation, to add value and to over time get people to know who you are. That could be parlayed into a podcast where you're becoming the source here, where you're gathering people. The important thing about that is that you've got the opportunity then, every time you communicate with them, to make offers that are going to move people towards doing business with you. That's what profit activator four is all about, is figuring out what are the offers that you're going to make. What are the, I call them cookies, that you'll be able to offer to people?
Coran: I always want a cookie when you mention that.
Dean: Yeah, so you know what I'm talking about. Right? I use that example a lot, that if I just invite you into my house and say, "Hey, if you're hungry or thirsty there's all kinds of stuff in the fridge. Go ahead and help yourself." That's very difficult for people to take me up on. If I come in with a plate of freshly baked cookies and say, "Hey Coran, would you like a cookie?" It would be very difficult for you not to take the cookie. I use that as a metaphor to just describe, rather than saying to people, "If there's anything I can do for you or if you have any questions please feel free to reach out to me," which is so ... You can say it and mean it and be sincere with all your heart in it, that you really would hope that somebody would do that. The reality is that what we're really counting on is for them to take the initiative. That's what that really means.
Dean: Nobody likes to take the initiative. People are silently begging to be led. Now, if somebody downloads this report on FBA business sales data or prices or whatever you decide to name it, but that's the tone that we're looking for. The August 2016 report on FBA sales data, that sounds for all the world like that's the source of the information. Right? Just pure market data without somebody trying to convince me of anything or filter it in any way. As soon as they ask for that, we know that some of them are going to want to know what to do to ... They want to know what their business is worth right now. That would be the next step, is how much is my business worth, that form. I think that what you're going to find is that the 2% to 3% people right now who are filling out that form are a subset of the 20% or 30% of the people who want the information about what all the other businesses are selling for just to get the lay of the land. You know?
Dean: And offering it as the next step is going to increase the number of people that will fill it up. Now you've got kind of commitment and consistency on your side. Right? If I asked for this information about the market data and I do own one of those, an FBA business. It just makes sense the next step might be to find out how much my business is worth specifically. Another cookie that you may be able to offer might be something like on the real estate side, the three cookies that we offer ... We know that somebody is either going to want to know what their house is worth, they're going to want to know what to do to fix it up before they sell it so they get the most money, or they may want to just ... If you had a buyer they would consider selling.
I think that those three things are going to transfer almost directly to what you're doing. Right? People find out how much your FBA business is worth. That's one of those cookies. You were talking about what you actually do with people if you can start them six months or eight months ahead of time to what they can do to add on or supplement or prepare their business to be sold for the best price. How to make your business as attractive as buyers as possible would be kind of the equivalent of our room by room review that we do for home sellers.
Dean: Then the same kind of thing is you may be able to sell your business in as little as twenty-four hours without even putting it on the market, as part of our silent market. That's what we do on the real estate side. We've got the silent market where if somebody wants to know, if somebody would sell if I had a buyer for their house, it'd be the same thing. Somebody would sell if you had a buyer for their business. It might make sense then for them to tell you about their business. All three of those paths lead to the same thing. We're in a conversation with them. That's all we're offering, but we're coming at it with three different appeals. If somebody says, "I'd like to get a pinpoint price analysis," perfect. We'd pop by. I'll take a look at your house, give you an idea of what it would sell for today based on all the other homes that are for sale on the market."
If somebody says," I'd like to get the room by room review," well say, "Perfect. Let me pop by. We'll take a look at your house and go through it from the curb to the closets. I'll point out all the best things you can do to maximize the sale price." If they say, "Well, do you have a buyer," or, "If you had a buyer I might sell." It would be a, "Perfect. Let me pop by. I'll take a look at your house. We can see what you've got and if it might fit one of the buyers that we're working with right now." No matter what it all ends up with, "Let me pop by." With you it might be, "Perfect. Let's get on the phone and you can tell me about your business."
Coran: Absolutely. Then I'm guessing with the real estate side you use the same process, the same sales process really, once you get in the door. Is that correct?
Dean: Yes, exactly.
Dean: If I had you ... This is the way that you want to think about your before unit. You want to treat your before unit as a separate business, if it was a supplier to your during unit. Your during unit is helping people buy and sell FBA businesses. Right? The actual mechanics and logistics of doing that. That's your during unit. I'm quite confident that if I were able to deliver to you somebody who said, "I've got an FBA business that I'd like to sell," that you could take it from there. Don't you think?
Coran: Absolutely, yeah.
Dean: Yeah, so that's what we're looking for, is just to make your before unit that deliverers, that supplier of those people.
Coran: I've never thought about it like that. The before unit is the supplier of leads ...
Dean: That's all it is.
Coran: ... or people that are ready to buy or sell.
Dean: That's the way I look at it. That's why I separate them. Right? We want to separate your before unit as a separate business. We want to treat your during unit as a separate business and we treat your after unit as a separate business. If you look at it that you can be the CEO and the owner of all three of them, but you're putting on your before unit hat and your mandate is to deliver to the during unit people who want to sell their FBA business at a price that you can afford to pay. If each one, if the average sale price is going to be $27,000, what would be, if I could say to you right now, "I can deliver all of the FBA business sellers that you want," how much would you cheerfully pay to have somebody just show up and say, "Hey, I'd like to sell my business"?
Coran: I'd pay anywhere from 10% to 50% really.
Dean: Right, and there you go. That's your mandate. Now, for your before unit is you're starting to say ... If you'd look at, let's say even a third of that, just for round numbers, I would just say $8,000 or $9,000 dollars that you would pay for that. Right?
Dean: That gives you a good benchmark. Now you've got a budget. Right? Now you know what your mandate is. You know what the opportunity is. While you're figuring it out, a lot of this you've got to look at the numbers and you've got to get some base line metrics to know that, "Okay, right now I'm predictably getting people for $10 and I'm converting about 2% to 3%. If I could change this offer in profit activator two I can get that up to 20% or 25% to get my costs down to $1 or $2 per opt-in. That makes a bundle of a hundred of these leads worth $200 to $300, and what's the two year value of those?" You've got a very predictable opportunity there.
Dean: How did you hear all of this? Coming up we've just got a few minutes for you to kind of recap what you got from that and maybe if there's anything I can clarify for you.
Coran: Sure. I think the biggest takeaway was to treat, as we just mentioned, treat the units as if they're a separate business. I was understanding what you were saying about being the pricing authority or the data authority, but something was kind of resisting that idea until you said that at the end. Treat them as separate units. I think that could be super valuable to put out there in the marketplace as a service. I also liked the idea of monthly. Even though the data won't necessarily change all that much month to month because there aren't a massive amount of deals, it makes it seem more interesting. If I was looking at that ...
Dean: Absolutely, and you can get the last twelve months. I mean, you can have a rolling, "This is what's happened in the last twelve months, but we update it every month."
Coran: Yeah, exactly. That sort of put those few concepts together. I think that thinking in the mind of the prospect and really going deep, obviously as a third party you're outside of the problem or the niche. It's great to get that feedback from you just to see that from a different angle. Yeah, that's amazing. My mind is blown.
Dean: That's awesome. Cool. Then you've got your ... Do you think that in profit activator three, expanding out on your weekly email that you're doing, could you see yourself perhaps doing a podcast on that where you're highlighting other FBA businesses and highlighting sales data and all of those kind of things? Being the podcast that all the FBA business owners would love to listen to. Is there a podcast like that?
Coran: Not specifically.
Dean: There you go.
Coran: The updated information we're doing in this newsletter, or my wife is doing ... I shouldn't take credit for it. She put this together because she couldn't find it. I think piggybacking on that, her email list is growing organically. We kind of modelled Peter Diamandis' abundant emails that he sends out each week, Abundant Insider, how he says, "Share this with someone and they can opt-in through you," kind of thing. We borrowed that and the list is growing. I can see that on the front end getting people that are interested in the price information and then following up with this constant flow of information would be great. I think a podcast would be perfect because no one's really doing it at that level. Then it seamlessly, I can add, wouldn't need a sponsor, just add if you're looking to sell.
Dean: Then every time you send it out you've got the opportunity to offer that report and your cookies, your, "Find out how much your FBA business is worth," and be a market maker.
Coran: Actually on the cookies part, I am curious. Even if it's just in the real estate example, that's fine. Do you train people to offer those in sequence or do you offer that separate?
Dean: All at once.
Coran: There's three angles, like you were saying.
Dean: All at once.
Coran: Oh, all at once.
Dean: Whenever you're ready, here are three ways we can help you right now. First of all, we have a pinpoint price analysis where we can come out and show you exactly what your house would sell for compared to other homes on the market right now. Number two, we have a room by room review, which will show you all the best things to do or not do to maximize the sale price when you sell your house. Three, we may be able to sell your house in as little as twenty-four house without even putting it on the market as part of our silent market. Those are the three things. Right? Those are the articulations of the offer.
Dean: With every email that goes out, if there's the PS that says whatever you want to say in the PS, and then it always has, "Whenever you're ready, here are the three ways we can help you now." As that list grows, every time you send it out, every single time people click on one of those offers.
Coran: That's genius.
Dean: It is. It really is, I can't deny it.
Coran: People would even see that and know it later and wait for the next email to go click on it or search for the email then click on it.
Dean: Yeah. Kenny McCarthy on last week's episode, somebody has been getting his newsletter ... We have a Get Top Dollar newsletter that goes out to everybody who requests the Cape Ann waterfront house price report. That goes out every single month, and after three years he had a lady ... Well, he's had three people in the last ninety days that have been on for two to three years getting this. One lady called and said, "I get your," she called it paperwork, "I get your paperwork every month." She had a bit of an accent, a foreign lady, "I get your paperwork every month and I'm interested in finding out about your silent market, so please give me a call." After three years of every single month getting this and never having had any other conversation with her, just this visible mounting evidence month after month after month that he's been acting as her real estate advisor.
Coran: Wow, that's brilliant.
Dean: She's got a four million dollar house. They're all million dollar plus homes, so one was four million, one was 2.8, one was just over a million in the last ninety days. It all adds up.
Coran: Yeah, absolutely. Wow, that's genius. I've definitely got some work to do but this is brilliant. Absolutely brilliant.
Dean: I'm glad that you could come up, but this is exactly what this podcast is about. You know? Just real businesses, real opportunities to apply the profit activators and hatch some evil schemes. I think we've done some pretty good evil scheme hatching today.
Coran: Absolutely. I've got to say, listening to the Yellow Pages Roulette a few times on the I Love Marketing podcast was great. Listening to other people with real businesses was amazing and you almost get as much out of it talking to you directly, although this is more actionable for me because it's specific. It's amazing. This podcast is brilliant.
Dean: Awesome. Well, thanks so much Coran. I want to keep in touch and hear what's happening.
Coran: Definitely, I will do, and I hope to catch up at one of your [inaudible 01:13:08] too. I almost made it to London last year but the dates didn't work.
Dean: Well, I'm in London at the end of June next year, same time.
Coran: Oh, perfect. That's in summer. That would work well. I'll be back here by then.
Dean: Perfect. Awesome. Well, thanks again, Coran.
Coran: Cheers, mate.
Dean: And there we have it. Now, one of the things that we talked about in that episode was the idea of cookies, of telling people what to do next. I think you'll notice that I've been modelling that in episode of More Cheese, Less Whiskers. We end the episode by saying if you'd like to continue the conversation, here is what to do next. You can go to morecheeselesswhiskers.com and you can download a copy of the More Cheese, Less Whiskers book where you've got a transcript of all of the episodes where we introduce the idea of More Cheese, Less Whiskers. You can do that for free at morecheeselesswhiskers.com.
If you'd like to go deeper into the eight profit activators that we talk about on each of the episodes, that's what this was all modelled around, you can go to breakthroughdna.com. There you'll see a video that gives you a great overview of how the before, during, and after units all work together, and you can download a copy of the Breakthrough DNA book, Eight Profit Activators You Can Trigger in Your Business Right Now. On this episode I also mentioned some specific episodes on ilovemarketing.com. Now, Joe Polish and I have been doing the I Love Marketing Podcast for over five years now. We've got almost two hundred and seventy episodes right now, so there are so many episodes to choose from. It's just an incredible resource and body of work for you to go back, and I'll keep referring to it in different episodes, pointing people to things to listen to.
I would recommend listening to the Richard Viguerie episode on I Love Marketing at ilovemarketing.com. If you'd like to spend three days with me in a small group doing exactly what we do on these calls, talking specifically about your business, I do these breakthrough blueprint live events. I go to places like Orlando, Toronto, London, Sydney, Australia and we spend three days in a small group with ten or twelve people. You can really kind of get a full immersion experience of laying out the blueprint for applying the eight profit activators to your business. If you'd like to get information about those, send me an email at email@example.com, and put Breakthrough Blueprint in the subject line and we'll get you all the information and the schedule of when I do these events. There you go, perfect modelling of how to offer cookies in every communication that you have with your prospects. Tune in next time. Another great episode coming up every week.