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How to Identify the Right Online Business to Buy with Mike Nunez (Part 2)
In today’s part two of two Chuck is talking once again to Mike Nunez about his tips for being a successful buyer. We first heard about Mike’s nine tips for a successful acquisition, and today he delves into the types of things he looks for in a business he is considering for purchase. We’re also diving deep into one tip that Mike shared on part one of this two-part series. Finally, Mike also shares some great efficiency tools he’s loving these days.
- What Mike looks for when buying a business.
- What he brings to the business with his own expertise.
- Examples of things that stand out to Mike in a listing.
- Advertising account criteria he checks for in a potential new business.
- Goals and intentions he has and the opportunities he looks for when on the hunt for a business.
- The importance of keeping criteria lists.
- Tips for content sites looking for affiliates.
- Certain synergies to look for in a search.
- Lessons Mike has learned through his acquisitions.
- Tools Mike is using and recommending these days.
Mark: Chuck in the last podcast episode that we had we had Mike Nuñez on. He offered nine very actionable tips on how to be a very good buyer; how to be a buyer that can win deals by having the right disposition. And I know you guys talked; you guys are friends, you live close to each other there in Florida and all that. So you guys are friends and naturally, your conversations are long but also Mike’s got a ton of content to share with us and you guys got into a second episode. What can we expect from the second episode with Mike Nuñez?
Chuck: Yeah, so let’s start off by saying if you haven’t watched the first one or listen to it make sure you do because it kind of leads into this. On this one, we talked about what are the types of things that he’s looking for as a buyer and you should be able to get some stuff out of that to help you figure out maybe some ideas for the types of things you’re looking for. We also talked about; there was like one tip that we gave that he gave us somebody at Rhodium conference a year or two ago and it gave that guy a 25% boost in his revenue like overnight. So that was a nice little take away there and then at the end of the call, one of the things I always like to do is just ask for any special tools or things that he uses so he gives us a list of additional tools he uses so a pretty little bonus at the end.
Mark: Fantastic. Mike is a great guy. I’m super glad that he was able to come back on the podcast. Let’s get right into it.
Chuck: All right welcome back everybody this is Chuck Mullins here with Quiet Light Brokerage and this is part two of a two-part segment with Mike Nuñez. Welcome, Mike; welcome back.
Mike: Thank you, Chuck. Thanks for being accepting of my long-windedness.
Chuck: No, I think we had a lot of great stuff in the last one. If anybody didn’t get a chance to watch it you might want to go back and watch that one first. What did we end up on; nine super-secret tips?
Mike: They go to 9, yeah 9 super-secrets.
Chuck: 8 or 9 super-secret tips of how to be a great buyer which Mike Nuñez is a great buyer. Now we wanted to segway in and Mike wanted to make sure that everybody know that he’s not wearing, or he is wearing the same suit but only because we’re recording these back to back because the last one went pretty long. So you still look great Mike. For anybody who didn’t watch the last one, Mike purchased a custom-tailored suit business from us so this is probably why he’s wearing the suit because I’ve never seen him wear a suit before he had purchased that business. So he’s definitely stepped up his wardrobe game since then. So today we wanted to talk about what you’re looking for when you buy a business and maybe some of the lessons you’ve learned along the way. So again maybe let’s start off; before we jump into that just give a brief introduction for anybody who didn’t watch the first part of the series about you.
Mike: Well, so I think it’s important if you’re listening to this one you probably should listen to the first one first because it does set up a lot of the things that we’re going to talk about here. But for those that just don’t listen, I’ve been in internet marketing for about 20 years now. I spent most of it working for an agency or owning an agency. I worked for Google for four years in their paid, search division. And so today I own a company called AffiliateManager.com that manages affiliate programs as well as the performance company which manages paid search for companies as well. So that’s the super brief synopsis.
Chuck: Perfect. So let’s jump into what is it that you look for when you’re buying a business? Always people come to me and they; Chuck what kind of business should I buy? And I say okay well what are your interests, what are you good at? So I think you probably you’re looking…well, let me just let you tell what are you looking for.
Mike: Yeah, so I think it’s important to say what I look for or what we look for; so I do have a pretty solid team around me but what we look for is going to be very different than what somebody else looks for. And so please take that with a grain of salt; everything that I’m going to say today and I think is important for everyone to just recognize, just be self-aware what is it that you are incredibly good at? If you’re good at sales go find a company that has an incredible product and but they’re bad at sales and you plug yourself in and you now have an incredible business overall. Or if you’re fantastic at operations go find a company that’s selling like crazy but their operations just can’t keep up with all the offers and plug yourself in there and that’s going to work. I like to say that real opportunity is at the intersection of two different expertise or two different types of expertise. So for me, it’s online business and online marketing and I’m not so great at everything else. So I’m not an operations person, I’m not a finance person so I don’t look for companies that are lacking in those areas. I look for companies that are strong in those areas and that are; I don’t want to say lacking because I think that’s potentially disrespectful to either the people that I purchased businesses from or will in the future but it’s more where I see opportunity where they wouldn’t know unless they worked at Google for several years or they wouldn’t know unless they’ve been in online marketing for 20 years or they never had an affiliate program. They never thought about it and we’re incredible at it. So plugging what we are really good at into things that maybe they’ve tried that they’re above average at because you have to be above average if you’re going to own an online business but they’ve spread themselves so thin that they couldn’t be an expert at just one thing. Another nice side effect that I’ve seen with buying these businesses, some of the previous owners they just worked so long and hard in the business that when you’re so down in the weeds like that it’s hard to pull yourself out and kind of take a 40,000-foot view picture. When acquiring a company it’s almost a natural thing that happens along the way and you start to say okay let me take a step back and look at this not so closely; so close I can’t tell exactly what this is and what’s going on. And then as you start to peel that back and say okay this is something that the previous owner did, is this something that I need to take over, do I bring the value? The previous owner either maybe they enjoyed it, maybe they liked it, or maybe they were really good at it but I’m not and so the answer there is who else within the company can take that over. And I got to say that’s probably one of the biggest benefits of purchasing an online company not only for the buyer but for the seller that they’re able to peel themselves out and all the while that’s the transition of okay these are the daily duties that this person does and this is who can take that over. So the new buyer; so myself as an example can go focus on what we’re good at. So with that caveat to what it is that you’re asking some of the things that I look for and I think just another quick note on this; this is an ever-evolving list, just because I’ve written this today doesn’t mean that there’s not more to come. Every time we go through a business or every time actually we have a call we run into an issue with the current business. I say okay that sounds like an opportunity that when we purchase the next business that we need to look at and say can we help there. So some of these are super simple and most listeners might say oh well that that’s kind of common sense. Well, it’s not always common sense. Somebody on this call is going to really or somebody listening to this podcast is going to really benefit from it but I listed because it’s things that I want to make sure that I go and check every time that we’re looking at a business. So, for example, we are like I said really good at online marketing specifically affiliate marketing and paid search. So we’ll go look do they have an affiliate program? Are they overpaying? Are they not paying out commission based off of the influence that each affiliate had on that actual transaction? It’s actually super interesting to see how much people overpay for things. And even more interesting to see when they’re underpaying affiliate. So for example affiliates, they are business just like you, just like me and they want to maximize their revenue for their inventory. A lot of people get stuck and they look oh my competitor pays 5% commission, that’s what I’m going to go pay. But a really good affiliate is equivalent to an upper-funnel page search keyword. And if you’re paying a two to one for an upper funnel page search keyword; let’s use my custom suit business, if I’m willing to get a two to one for the keyword custom suits or men’s custom suits, if I’m willing to take a two to one return on ad spend for that I should be willing to pay an affiliate who is upper funnel; who’s educating customers about me, I should be willing to pay them a 50% commission because they’re upper funnel.
Chuck: Alright so that makes a lot of sense to use something that you do on a day to day basis with your main business to look to acquire a company. So can you give some examples of specifically what something you might look for is?
Mike: Sure. I’ll give two examples one of where we succeeded at this and one where we failed but then you use that failure to learn and regroup. So the first business that we acquired we identified that there was a significant amount of overspent. It wasn’t the previous owner’s fault. They had hired an agency who was just; they were doing good. I would give them a six out of 10. But within 20, 30 minutes we can evaluate a Google Ads account and say we can save this account 10, $15,000 a month.
Chuck: And you were talking about like an Ad Words account as opposed to affiliate stuff?
Mike: Correct. Yeah, a Google Ads account that maybe this ad, the Google Ads accounts is spending 50, 60, $70,000 a month and if we can look in there and say we can save 10, 15, 20,000 on this and still get the same level of sales based off of our expertise we’re adding 1 to $200,000 straight to the bottom line; straight to EBITDA and we did exactly that. We actually just finished reviewing January through October and we actually generated more sales than the same period last year and we spent I think it was $160,000 less to do so in that period.
Chuck: It kind of goes against the thought of ad expenses are going up, right? There’s more and more competition every day for ads so people think that but yet you’re able to cut ad spend and make more money with it.
Mike: That’s 100% correct. You have to know what you’re doing. There are very, very few good paid search companies out there. And I know because I used to work with a lot of them when I was at Google. Kevin who’s on our team; his job was to go out and train agencies on how to appropriately use Google Ad Words. Pat who’s the mastermind on our team has been doing Google paid search since Yahoo or as Yahoo started before Google was in existence. So it’s just such a level of expertise that we have on our team overall that we can go and then apply and get these level of savings overall. And again it’s straight to the bottom line and we take that money; the first acquisition was partly done via an SBA loan and the savings that we’ve got doesn’t quite cover the SBA loan but it’s about 75% of it. It’s almost like we acquired the company for the price of the down payment and a much smaller SBA loan so to speak. So that’s got to be our number one criteria; same thing with an affiliate program again with the first acquisition they weren’t doing attribution based commissioning. It was a smaller effect on the overall business. We probably saved somewhere between 30 and 40,000 for the entire year on that one. So it’s again a much smaller effect but that’s a part-time person. That’s an initiative that we can go fund now because we’re saving 30 to 40 grand that we wouldn’t have to spend otherwise.
Chuck: So let’s call out specifically there what it is you’re looking for. So Mike looks at a company, requests access to their ad account, and then Mike looks for what?
Mike: So in their ad account I’m looking at are they using negative keywords appropriately, what bidding algorithm are they using on Google, what matching types are they using, are they using segmentation correctly. And this is all super 40,000-foot level things but as Pat, our behind the scenes masterminds like to say, a poorly run paid search program is typically death by a thousand paper cuts. It’s not one of these things. It’s a thousand of these things that we meticulously go and identify, find, correct, and improve.
Chuck: Alright so you will go into an account, you see all these things and they’re doing everything right does that mean okay it’s a great company I’m not looking to buy this one; like are you specifically, if there’s not something you can fix you’re not going to acquire it?
Mike: Yeah, that’s a fun question. The good news is for me at least I’ve never seen one. That’s good. And to be fair I’ve seen; when we are getting an RFPN for the agency business I’ve seen two or three that were so well run that we tell them we can’t help, they’re doing an amazing job. You’re going to look to us for growth in three or four months and we’re not going to deliver because your current company is doing fantastic so don’t leave them. But when acquiring a business and the research that I do before making an offer I have not yet come across that. If that were the case yes it’s not a kiss of death but it is a factor in whether or not we feel like we should purchase the business because we know that there’s so many out there that do it so poorly. Investing; I know I’m not teaching anybody on the call anything new with this but investing is where’s the next best place to spend your dollar? And if they’re doing a bad job with paid search that’s a good place for me to spend my dollar because I know we can fix that. If they’re doing an incredible job well there’s probably a better place for me to go spend my dollar.
Chuck: Sure. And I don’t think it’s a negative thing for you to say nope I’m just going to move on to the next one they’re doing everything right. Like you’re looking for specific things in order to want to acquire and like you said you’ve only got so many dollars to spend. You need to place it where it’s going to do the most good for you. And if somebody else is doing everything right like that’s not your area of expertise to grow the business. Maybe again they’re not doing sales well and that’s not what you’re specifically looking at so sales is where the person that is going to end up ultimately acquiring the business is good at. And there’s also people who maybe they don’t have necessarily an expertise at something and they’re just looking for an overall good run business that can keep chugging away for the years to come. And that’s not a negative like just because you don’t have some really specialized thing that you’re good it doesn’t mean that buying a business would necessarily be a bad idea for you.
Mike: Yeah it’s one of those things begin with the end in mind, right? And if the if your end goal is that you want a super stable business but it’s not going to grow because everything is so well optimized and you’re willing to pay the same multiple for it and you just want to kind of run that business day to day as is without expectation of growth then that’s it. And there are people that want that. I would even consider a business like that if it was strictly almost a lifestyle business. But the businesses that we’re buying; our goal, our intention is to take this 15 million dollar company and turn it into a 25, 50, 100 million dollar company and so there has to be opportunity when we’re purchasing and the bigger the opportunity that we identify that we can do so fairly quickly with what we have the more we’re willing to pay for it and the more we’re willing to compete for it overall.
Chuck: So we were talking recently we had lunch and you said that you recently discovered something with one of your businesses that was something you know I’m going to start looking for that and it revolved around shipping. Do you remember what we were talking about?
Mike: Oh yes I have it. It’s on my list. And that’s funny and that’s yet another reason to have a list right, right?
Mike: And so as we’re talking like; I know I’m not alone in this, right? I know you’re like this Chuck. I’m sure you, the person listening to this right now is the same way. And I’ll wake up in the middle of night and I feel like sometimes not thinking about things or telling yourself think about this in the back of my mind and you’ll solve problems; like I’ll get things out there just to solve them. I’ll wake up in the middle and be like that’s the answer to this and literally I’ll roll over, I’ll pick up my phone, and I’ll just type a note to myself and say this is the answer and I’ll go back to sleep. And the one that you’re talking about is we have a warehouse for both of the business but the one that we’re talking about now has a warehouse, a large warehouse; tens of thousands of square feet, I’m not sure exactly how big it is but we were getting fined by the shipping company because the dimensions of our packaging was incorrect. And so as we printed out the shipping labels for it, it was off maybe by an inch or whatever it was. And so when we send it to FedEx who was our shipping carrier and they would measure it we would be off by however much and they would actually fine us and so it added to tens of thousands of dollars in fines that we are receiving; not shipping costs, fines because our dimensions were wrong. And so for less than $10,000, we purchased a dim scanner and basically eliminated that. That dim scanner pays itself in one to two months and then from that point forward we now recovered yet another 20, $30,000 back. So you see the recurring theme here; paid search, this is how much we can save by doing it better, affiliate, this is how much we can save by doing it better, shipping, this is how much we can save by doing it better and then here’s the freaking key. Like this is the thing though; don’t just sit on that. And again I guess this depends on your goal. If your goal is to just absolute squeeze every penny out of these companies that you want then go and do it. My goal is growth and to turn these companies into large companies so that one day I may list with Chuck and get a great multiple on these companies. But take those dollars that you’re taking and now do all of the things on the list; in that plan and the things that the previous owner said I could never afford, I could never get to, I can never pay somebody to do it. Now you found the funds to go and actually do those things. Use that money to fund that growth. Again I’ll refer to Pat who runs our paid search; he calls that feed the winners starve the losers, so just taking the wasted money and putting it back into reinvest on growth and winning.
Chuck: So with the shipping fines that you discovered how long have you been running this business; it’s been a year and a half?
Mike: A year and a half, yeah.
Chuck: And you just discovered it now. Is there something that you are having; we don’t know what we don’t know, right? So we don’t know what to look for. Is this something that you could have identified on day one to have seen even more value?
Mike: Yeah, thanks for pointing it out Chuck. It’s always painful to look back and say oh we could have made an additional 30 to 50 grand in the last 12 months if we just would have found this.
Chuck: And this is probably not a common problem, right? But it’s something you’re going to look for in the future. Where would they have identified that; what due diligence would you have done in order to have seen that?
Mike: Yeah, looking at the shipping invoices and seeing exactly what those are. And there are some pretty cool companies out there that will A) look at that for you and B) they’ll actually monitor your shipping and make sure that it arrives on time. There’s one called Late Shipment it’s I think the one that we use; LateShipment.com and if FedEx doesn’t deliver within the agreed-upon time; the one to two days, they’ll actually refund; we get a refund on that shipping cost. So that’s another example if they’re not using; if you send out a million dollars or if you pay a million dollars in shipping costs every year and I think I know ours is above a million but I’ll just use that, so a million dollars, if you can recoup 2, 3, 4% that’s 20, 30, $40,000 back in your pocket that just appeared out of nowhere. So that’s another one on my list. So are they using a dim scanner? Are they getting fined for this? Are they using LateShipment.com and getting a refund on anything that’s late? Again stacking up this $160,000 in savings in paid search, $40,000 in savings in affiliate, 30 to 50,000 in dim scanner, late shipment another 30 to $40,000 just stacking and stacking and stacking. Another one is credit card fees; are they using a good credit card process? Have they negotiated their rates since they grew from zero to 15 million dollars in sales? And if they haven’t that’s an opportunity like just a one or two; what do they call them? Bits I think is what they call it but it could mean a huge difference in your overall company. Just one or two bits is 15 to $30,000 on a 15 million dollar business.
Chuck: And so in your defense, I think on the shipping thing the company that you purchased did have one of those companies in place that were looking at the delayed shipments but that company wasn’t looking at the penalties you were receiving.
Mike: That’s right.
Chuck: So even if somebody is using a company that is monitoring the late shipping and getting those refunds they may not be looking at the fees which is strange. You think they’d be doing it but they weren’t. Something I’ve heard you say at conferences when looking at it from a different type of business, so right now we’re kind of talking about e-commerce but you also work with people who are doing content sites and their affiliates with other people. So what’s your number one tip if you purchased a content site that makes money off affiliates; what’s your number one tip for those people?
Mike: Go ask for a raise.
Chuck: What does that mean?
Mike: Go to the affiliate management; either the advertiser or the affiliate management company who’s managing them and say I want to make more. And there’s many ways that you can position that. One is if you’re a content site just know that my affiliate company, AffiliateManager.com is always looking for more content sites. We want to bring that value to our clients and you are in a position; it’s a content site’s market, let me put it that way. We all want what you have and some make the mistake of because they’ve been beat down and offered 1, 2, 3, 5, 10% commissions in the past day they just turn away affiliate marketing. Don’t do that. You’re leaving money on the table. If you find a good advertiser or a good affiliate management company that knows what they’re doing and they know that this content site is upper funnel and bringing incremental business to the table they’re going to be willing to pay for that and they might pay 20%, 25%, 30%. One of our clients pays 100%. Another one pays up to $150 for an acquisition and they might make zero on it. So it’s just one of those things where you have to go and be willing to ask for a raise. And again a good affiliate management company they’re going to look at the incremental value, we; not to get too much into us because I know this is more about acquisition but we actually have an attribution tool that we built because it didn’t exist that shows where in the clickstream each of these sites are. And if it’s a content site going back to your point and we look at their overall numbers and 70% of the time they’re the first touch for anybody who’s making a purchase on your site, yes we want that incremental traffic and sales coming from that content site. So to you content sites out there you are in a position of desire. We all want to work with you more and go and ask for raises. Somebody who recognizes your value is going to very much be willing to pay it. And if they’re not go find somebody else; they’re going to be willing to pay it. You are valuable.
Chuck: And just to give an example of something like that. I’ve got a number of content sites and one of them the affiliates that I was getting paid from is a Canadian company and they send me a Canadian check. So every time I cash the Canadian check I get hit with like a 10 or $20 cashing fee. And it’s just like annoying and it’s small amount of money but it’s annoying so I emailed them and I said hey can you just like PayPal me the money or wire me the money or do something else because I want to get ahold of the $10 fee every time I cash your check and they go oh how about we just double what we pay you? Okay, that’ll work. So they really are willing; if they see the value in what you’re providing them they are willing to pay more, so just a nice little tip there from Mike Nuñez.
Mike: Yeah. And there was a guy Greg; I won’t say his last name at Rhodium one year and I said that at a table and one year later he came back and said by that one tip that you just said because he was a content site or is a content site, I have grown my revenue by 25%. All I did; I didn’t do anything else but go back and ask for a raise and the revenue on my site grew 25%.
Mike: Free, yeah.
Chuck: Alright, so we’ve talked about shipping, we’ve talked about affiliate, we’ve talked about ads, is there anything else specifically that you’re looking for when you’re acquiring?
Mike: Yeah if they’re not on Amazon I think that’s a pretty obvious one. If they are on Amazon and either doing a poor job or no job at Amazon ads; Amazon ads I probably the biggest opportunity right now for everyone that sells on Amazon.
Chuck: And this is kind of new to you in the last couple of years, right?
Mike: Yeah. Well, I mean it didn’t really exist a couple of years ago or it was very nascent. So it’s still one of those things like if you remember Google back in the day when clicks used to be available for a penny or five cents and such.
Chuck: Yeah man they sent me a refrigerator. I had spent so much money I got a Google refrigerator.
Mike: So I’m not saying that pen that clicks are available for a penny on Amazon but if you incorporate the right system and how to manage it you can gross it; like I’ll give you physical numbers year over year in November even those Cyber Monday fell outside of November this year. We grew Amazon sales on that outdoor brand by 50% using Amazon ads. So it’s another example of having expertise in this paid search world and finding opportunities within it. Amazon ads; I think maybe that’s super-secret number 10. I think we’ve gotten away from the super secrets but maybe super-secret number 10 and it’s probably one of the most powerful ones I see right now available for people.
Chuck: So what else are you looking for?
Mike: So besides being on Amazon and Amazon ads, me personally I’m looking for a strong operational foundation because I’m not an expert at that. I’m not good at that but thankfully the businesses that I purchase have that. I’m looking for a barrier to entry like how replicatable is this business and what is the barrier that people have to get through? And this is a little bit less quantifiable but this is just a general do I want to be involved in this business; how hard is it for somebody who’s just as good at paid search as me or Amazon or whatever, if they just got a hold of my supplier could they replicate this and do I want that? And if the answer is it’s too easy then I move on. Is it a learnable industry? One of the things I was worried about with the custom suit company was maybe before purchasing it I wasn’t as sharp a dresser, Chuck. Maybe my wardrobe might have consisted of free conference t-shirts but I was worried about that and…
Chuck: You’re pulling it off still.
Mike: Thank you. And once I got into it I learned no this is a learnable industry. I can do this and it’s worked great since then. Is it Amazon resistant? And I know that’s a little counter to saying are they on Amazon. Is Amazon going to move into that space? Are they going to want to replicate what it is that you’re doing? And on the outdoor brand, it’s more of we joined to them; we couldn’t beat them so we joined them and a good 50, 60% of our sales are on Amazon on that brand. On the suit brand, we’re looking to sell accessories; expand our brand awareness because you can’t sell custom suits on Amazon and it’s unlikely that Amazon is going to get into that realm. So we’re thinking how can we use Amazon to expand our brand awareness, generate some confidence in the brand, and yet not have to; since we’re not able to send custom suits and sell custom suits on Amazon directly so is Amazon a threat to the business is something that we look at overall. Inventory management optimization; so leveraging just in time inventory because anybody that’s involved in an inventory-based business knows that a lot of times your profit can go straight back into purchasing additional inventory. And if you want to realize any profits before you sell the business you’ve got have inventory optimization. Is the current ownership leveraging that inventory optimization? Are there conversion rate optimization opportunities; have they ever even tried it before? I just had a call today for the suit company and this is going to be ultra-specific but it is an indicator of what we’ve done. We launched a new cart in early November and we just ran the numbers and today on desktop for new customers we have doubled our conversion rate which anybody knows that the lifeblood of a business is acquiring new customers. So to do that is pretty amazing. Now on mobile, it was pretty static but we’ve also generated significant amounts of more traffic on mobile to the suit company. So that’s a little bit misleading to say that it’s exactly the same. Well anybody who knows conversion rate optimization and knows how traffic works; if you increase traffic the quality is potentially a little bit lower and so the fact that we slightly beat our previous conversion rate on mobile is a huge win. So are there conversion rate optimization to opportunities in the acquisition? Here’s one that you know is near and dear to my heart, Chuck. What is the current platform; are they on Net Suite, on Shopify, on Magento? Because the one thing I never ever recommend is changing platforms. So can you accomplish all of the things on your list that you want to do on the platform? We use Net Suite as one of them and it is extremely difficult to get changes done but we are not moving. So it’s just something that I think everybody should really consider. Or are you on an archaic platform like at Yahoo stores; something that’s not being updated anymore and there’s seven people in the world that can code to Yahoo stores? Now you’re beholden to them. You have to pay exorbitant rates for their development because they’re the only one that knows it as opposed to a Shopify or a Magento that developers are plenty.
Chuck: If you’re on Yahoo shout out to Rob Snell, look him up if you need help with your Yahoo business.
Mike: There you go. See I didn’t even mean that. That helps. And I think the last thing; us particularly we enjoy custom products, so custom made suits is a really good example or even for the branded products; things that other people makes, turning them into custom products. We really think that that’s a good market to be and again slightly more defensible against an Amazon. And then finally this is my last on my company acquisition algorithm that I’ll share today just I know we’re limited on time is what synergies can you participate in? So if you listen to the last call you heard me talking about a brand that we made an offer on that it was a full price offer, quick close, no due diligence because it was a trusted brand. And before Chuck chimes in, he recommends that you never do that but the reason why we wanted that brand is because it was geared towards outdoor enthusiasts and we have tens of thousands if not hundreds of thousands of outdoor enthusiasts that come to our website every day. So looking for synergistic brands that are out there to acquire and diversify the income and now not only sell other people’s brands but also sell your own brand; white labeling things like that, finding things with opportunities like that, that’s the last opportunity that we’re looking for in our algorithm.
Chuck: Awesome. Alright, so now let’s maybe move into what some of the lessons you’ve learned from the various acquisitions you’ve done. And you had acquired some stuff before Quiet Light as well.
Mike: Yeah. So I think a lot of them are listed on what I just said but I will say there’s; because every time I learn a lesson to me it’s an opportunity for the next acquisition. So again I will buy another business on Net Suite but I wouldn’t have bought the first one knowing what I know now about Net Suite. But now that we’ve had to learn it, now that we’ve had to; our developer is familiar with it now and can make the changes that we need and want, now I’ll buy another one. And so to me there’s an opportunity there, right? It’s harder for people to do that than it is for me. It’s yet another level of expertise. So that’s one thing is a lot of the lessons are kind of listed already in that but there’s one I would say recently and again it’s with the custom suit business, don’t get so caught up in your own expertise. Again we are really, really good at paid search and one of the reasons why is because we’re so return focused. A mistake that we made with the custom suit business is we went straight for a return. If a dollar didn’t turn into five; I’ll just use that as an example, we didn’t spend it. And because of that, we saw sales drop. And I talked to the previous owner about it and said hey we’re seeing this, why? And he’s like well yes cross-device tracking is good however it doesn’t capture everything. And mobile devices; think about who buys suits these days, and it’s somebody with a mobile life. It’s a lawyer that’s always in the courtroom. It’s a doctor that’s always walking about. It’s a financial person that’s not necessarily sitting at their desk, they’re going to meeting after meeting after meeting and where are they searching up for their next suit? Well, it’s probably their mobile device. They find it and then they go on the desktop and they go on and they purchase it. And we had pulled back pretty significantly on the mobile spend because the conversion rate just wasn’t as good. And so that’s one example of us kind of getting in our own way. But to our credit, we were able to kind of step back and say okay we learned a lesson here, let’s get better at it and change our approach. And since then that’s when we now had some of our best days that we’ve ever had. So I like to think of it as a lot of these owners or the previous owners they had levels of expertise; they were doing something right and so it’s our job as experts that are better at it to take the lessons that they’ve learned and apply our expertise to it to just throw some gasoline on it.
Chuck: Alright Mike so one of the ways I like to usually end these things is just to ask if you have any kind of tools that you use on a regular basis; just some things that can either help with productivity, it could even be outside of work. One example the other day I was kind of upset about it because you ordered the chicken sandwich from Popeye’s through Uber Eats so that you didn’t have to wait in line and you didn’t bother sending me one. That’s a great little life hack. So what else do you have? Do you have any tools that you might recommend or any other little things?
Mike: I did the same thing with Amazon two years ago when they were operating like the one-hour delivery and we had a hurricane coming to Florida and I just ordered all the bottled water and had it delivered while everybody else is fighting each other at the store. But now that secret’s out. That’s no longer an advantage but yeah some tools that I like that we use; so for Google Ads, I’ll say if you’re using things like maximize for clicks run we prefer an enhanced CPC bidding algorithm or a target CPA. We always test to see which one’s better. Prioritization, I love Air Table. I got to give a shout out to my business partner Daniel for that. Air Table is a prioritization tool and basically, it can help identify what is the easiest to implement to get the most impactful change that you can make. And so it just really helps to prioritize what it is that you’re doing and the changes that you’re making to the company because obviously, we all want to make the biggest impact as quickly as possible. I love Grammarly for sending emails so that I don’t sound silly.
Chuck: That one saves me all the time.
Mike: It’s so good. I haven’t used their pro version but even just the regular version is fantastic. For the affiliate management company, I got to give a shout out to Mail Shake. We love Mail Shake. We use that very often. It’s a terrific tool. I love Moz. So the Moz toolbar is something that I use a lot. And then I think we use a lot of the things everybody else uses like the Evernotes and Google apps and things like that. So I think the first ones that were probably some of the others may not have heard them.
Chuck: Awesome. Well, I think everybody who’s been listening appreciates your time. I’d love to have you back at another time. We can talk about some more stuff once you’ve hit that next goal of purchase through us we’ll talk about that one. But again thank you for the time today and we’ll talk to you again soon.
Mike: Thanks, Chuck.
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