Today, we have a great conversation with Ian Bond!
Ian has been in wealth and asset management for decades. Over the last few years, he’s been buying eCommerce businesses.
Ian and Michael talk about dropshipping stores and what Ian has been seeing over the last few years.
Learn more about Ian at Professional Website Investors
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This episode is sponsored by with the main magnet newsletter, subscribe to our weekly newsletter on domainmagnate.com . To learn about what’s happening in the industry, and today, we have an exciting guest, Ian bond, who acquired over a couple dozen drop shipping and ecommerce stores and operates nine of them now. Hi, Ian. Hey, Michael, where are you calling from?
I am in Abu Dhabi, which is the capital of the United Arab Emirates, the middle of the desert.
And I am based in Thailand. So we are both in these really exotic locations. Yeah. So you mentioned before that, that you had a curry on Wall Street, and then you moved into the, into the online stuff and start acquiring different businesses and also teaching. So let’s start with how did you actually get into online business? And just share out your previous career? Yeah,
yeah, sure. So So you know, I started on Wall Street 1980. So it’s over four decades now. And in my day job I look at I have looked at literally every asset class that’s investable for both institutional investors as well as individual investors. And after the financial crisis, I realized that my very large compensation package was not going to, you know, return, that by my SAT, my compensation package would not return to the pre financial crisis levels, and that my corporate income would what would end and you know, hopefully, because I could make it and before my need for income would end and so I started to look at online assets back in 2013, and 2014. And since I have my superpower would be looking at, you know, all different types of asset classes, which I do in my day job, you know, I kind of went through methodically kind of all of the different monetization models in in the online asset world, and kind of, you know, started to evaluate them back in those days, you know, the information wasn’t as easy to get. And there were a lot of issues, or a lot of trust issues back then more and more so that now. And, and so. And then, of course, I, you know, looked at my own skill set and tried to figure out, you know, what would fit me best? Yeah, it’s
very good. So, yeah, people often ask me, How do I get started? How do I acquire my first business? And that’s usually my recommendation exactly like that. Yeah. You just started looking at what what are you good at? What is your skill set? What is your budget? What kind of what are some business models, like learn about the industry? And that’s exactly what you did, right? And so how long did it take you from, like, the first time you started looking at acquiring an online business until you felt that you already know until you actually qualified still.
So I would say that in earnest, you know, the end of the 13, I started, kind of really, you know, kind of accumulating the information I read, I actually relocated to Abu Dhabi from New York City where I live for a dozen years, in 2014, that freed up an enormous amount of time, I was traveling 130,000 miles a year, in my day job, I’ve built businesses on four continents in the wealth and asset management and private banking business. And so, you know, moving Java Dobby back in September of 14 freed up an enormous amount of time. And so that’s when I really kind of bit was able to dig into it deeply. And, and what I did was, you know, I kind of bought every course on how to build these things, as many as I could, because I kind of figured that, you know, if you’re going to be an older an owner, and I have kind of more money than time, you know, given my circumstances as a full time employee, that, you know, I really needed to understand why things were built the way they’re the way they’re, you know, being offered for sale. And so, you know, I kind of got into the weeds as much as I could, in terms of, you know, you know, why things are built, the way they were built with the intention that I’d be an investor and a buyer and not a builder, because I don’t have the time for it, etc.
Quite, very good. So, yeah, so how long would you say it took you like, a year or two years before you got well, this business?
So we bought our first couple of websites at the end of 2015?
Okay, how big do they like what?
Oh, yeah, these are in the $25,000 range back in the day. So yeah. So and then, you know, one of those sites, you know, kind of just exploded, and so there have been many, many months since then, where we earn more money in a month than we paid for that store. So, so, revenue in that in that store, you know, generally hovers around, you know, kind of a million and a half to two and a quarter million dependent on what’s going on? And you know, obviously, I think when we bought it was a $300,000 revenue kind of a store.
So very good. And who is V? Did you have to do hire some people? Did you partner with someone? How did you like management that the writing those businesses?
Well, I have, I’m lucky there because my partner is my wife, and she left the job on Wall Street and joined me in the summer of 2015. Here, and we decided made a decision for our family of two children, they are now 13 and 15. And we decided that she would not look for a job here, she left a career on Wall Street to and that that we would build, you know, kind of our online empire together. And so she kind of has the, you know, very different than a, she has the kind of operational side as her skill set. And she’s very linear. And you know, when you mix that with the fact that I’m kind of all over the place, you know, it makes for an interesting marriage sometimes, but at least we have complementary skills.
So that’s perfect. You’re the deals guy, and she’s the one managing things.
And she’s the one telling me to slow it down, we need to get this under control. Yeah.
That’s interesting. And what brought you to Abu Dhabi, though,
there was a, there was a fantastic opportunity here to build a wealth and asset management business for the second largest bank here, and a lot of the wealth assets here are managed outside the country. And from my experience, when I worked at Goldman Sachs, where I was the guy flying into countries in Latin America, taking asset, investment assets out, I knew that ultimately, the local banks, would you end up dominating or at least get their fair share of, of these assets. And so when I saw this opportunity, I said, you know, I’ve seen this movie, it works out really, really well for the, for the big local players. And so I was fortunate enough to get an opportunity with some people that, you know, kind of knew by background. And it’s been just an absolutely wonderful experience. I love what I’m doing. But I am retiring next June, and hopefully joining you in Thailand.
Okay, very cool. So you bought those two first websites? Well, through commerce stores? And by the way, how did you decide on the commerce? What did you basically decide to target only e-commerce businesses? And why did you choose a commerce?
Yeah, that’s a great question. And what I did was kind of, you know, look at the kind of the skills needed to, you know, how to be successful in the various monetization models, and you know, high ticket dropshipping seem to fit, you know, kind of my skill set. So I think high ticket dropshipping gets a bad name for it gets a bad rap for a couple of things. Number one, people think it’s really complicated to, they’re really complicated to operate. And given my background, and given my in managing lots of people and my wife’s background, you know, we’ve put in systems and processes, and it’s, you know, it’s allowed us an enormous amount of freedom, we’re, you know, we’re never, you know, really kind of watching what’s going on, while the the you know, while that while the day is, you know, kind of people are doing things during the day in the United States, obviously, we overlap a little bit with the United States in their mornings and our evenings, but we had to build, you know, that our businesses so that they would run without our intervention. So, you know, so, so, I think that that was that that fear was overrated, and, you know, so, you know, we built the, the processes and systems, and now we scaled it, and, you know, quite frankly, you know, we can easily scale beyond the the nine that we’re, we’re running, and I suspect that we probably will, you know, when I when I, you know, have more bandwidth myself. And so that’s kind of route number one on high ticket dropshipping, which is, I think it’s misunderstood for the operational aspects. And, you know, there are there are some positives in terms of dealing with suppliers, you know, I’m an old salesman, and don’t have any problems getting on the phone, not that I do it very often, but I don’t, and I actually enjoy getting on the phone and talking to people. So that’s not a big deal for me, if I have to do that. And then then they, you know, kind of the other thing is that the margins in dropshipping are relatively poor, if you look at, you know, versus other businesses, other online monetization models, but we found a way to increase those by combining kind of the strategies that kind of the guys that are focused on content do so you know, we, you know, publish well over 100,000 You know, words of content across I think three of our sites You know, every month, and you know, we’re you know, we’re using affiliate strategies, we’re using ad strategies, we’re driving an enormous amount of organic traffic to our sites, I learned real real early on that spending money on Google ads, which is kind of the typical way to dropshippers drive traffic to their stores, is a is a very short term fix. And that you have to you have to build a strong organic profile. And I credit Matt diggity for that idea, he but I was at an Empire Flippers retreat, it was a third one, I think it was 2018. And he gave a success story on ecommerce, and, you know, it, you know, the the affiliate world where, where they can’t really afford any kind of paid traffic, and the high ticket dropshipping world, which never looks at content, you know, there was just a perfect marriage to be made there in terms of combining the strategies, which is what we’ve done over the last, you know, call it three years. Very interesting.
So, tell us a bit more about the high ticket dropshipping what, what is a high ticket? Like? How big are the items? So what type of items are you selling?
Yeah, so you know, lunches, like, yeah, yeah. So so any, any, you know, anytime you come, you know, look around the house, you see somebody with a hobby that, you know, is expensive. You know, it’s an opportunity. And podcasting equipments pretty, pretty, pretty, you know, pretty, pretty low, low budget these days. But I mean, look, you know, you know, the, the, yeah, the big the big site that I mentioned earlier, we sell bathroom vanities. So in the last, what, five or six years we’ve sold, you know, 10,000 bathroom vanities, okay. Well, you go into your bathroom, and there’s a sink, and there’s a faucet and there’s a cabinet. And you know, in in the United States, people are crazy for remodeling, and they buy everything from 36 inches to 108 inch bathroom vanities when they remodel. And we sell we have three dozen brands. Probably more, I haven’t looked at the site lately. We’re that we sell. And these sell for, you know, 1000 to over $3,000. And you can’t get in the Carmichael and go see any relevant selection anyplace. So they have to be bought online. I mean, just really not possible. In that world. The competition is people like Home Depot. And you know, quite frankly, we can we can be better at providing expertise, we can be better at providing selection, we can be better at providing customer service than than the competitors. And that again, so yeah, so that’s kind of
so the commerce store earns you mentioned like a million million a million and a half in annual revenue and what kind of margins to get on high ticket items. So
yeah, so So in that in that store, the opportunities on the content side are fairly limited. So that, you know, like the 15 to 17% range, net margins. It’s very variable, depending on shipping. And actually right now, we’re doing very well, because well, freight is expensive coming into the United States, suppliers have raised their prices, but freight into the United States has not it’s not that expensive. So where are we at this time of year in the fall going into Christmas, particularly Christmas freight rates go up a lot. And it’s it can be difficult. But but it’s been a it’s been a fantastic year so far this year, you know, knock on wood and hope it continues
that good. So that’s as a business Matthew acquired in 2014 for just $25,000. And it’s now earning like a million million and a half in revenue we’ve mentioned like 15% or more percent margin. So that’s pretty good. So that’s yes, that’s probably worth a million dollars now right
now, I don’t think I don’t think it’s probably worth that much. But you know, I you know, I met who knows? Yeah, so yes, we acquired that in November of 2015. And yeah, so you know, look, the values are definitely going up. I you know, the higher price dropshipping stores tend to tend to be more difficult to sell. So, yeah, you know, they just take take longer, the smaller ones where people you know, can you sell at higher multiples because people don’t want to want to kind of, you know, get a Starter Site. And there aren’t aggregators, you know, in in drop shipping like there are in it. Yeah, you know, like FBA or content sites, so, so multiples aren’t quite as robust, you know, drop shipping,
and what’s it like to operate? So you don’t really deal with physical items, right? You just have the manufacturers who handle that. So I understand you just accept the payment from a customer, maybe through PayPal, or stripe, and then you have you fill in the order with the manufacturer, and then they ship it right in your name.
Yeah, yeah. So So yes, in six years, we’ve never seen a product, okay. Except that we had a supplier in the UK, try to seduce us to carry his, his brand. And he sent us one here, though, it wasn’t one of the wasn’t one that we sold anybody? Yeah, we’re middlemen. And so if there’s a problem with something, it’s damaged, or something, we either arrange for a return or negotiate a, you know, a settlement between the buyer and the supplier. But we don’t, we don’t ever touch any of these physically, not in NAV vertical, at least, we have taken some inventory and some other verticals occasionally, but we prefer not to do it, the way that we do fatten our margins, because, you know, I’m always looking for that opportunity is we’ve worked out arrangements with arrangements with several of our suppliers, where we can pre purchase inventory for them and get like a kind of an 8%, or 9%, or 10% reduction in our cost. So if you take something that might have a 17% margin, and, you know, basically, you know, increase that by 50%. You know, that’s really a quite efficient use of capital, not at all adverse to putting capital into the business. I just want to see my capital return to be really quickly, which is one of the reasons that for example, you know, we didn’t, you know, you know, go into FBA, I mean, that’s, that’s a has very bad capital is very, very bad capital efficiency compared to drop shipping, drop shipping, drop shipping is incredibly capital efficient.
Okay, good. And so what’s this like to operate the business? Do you just do it by yourself, yourself and your wife? Or do you have some people helping?
No, we have, you know, numerous VA that work for us, you know, everything from people that are doing customer service, every we have a bookkeeper, we have people doing have, I think two or three people, two people doing Pinterest pins for us, you know, kind of all manner of things that people will work for us. And then, you know, I have right now, at least I’m thinking at least three agencies, everything from one man show to real agencies that, that, that produce content for us that are, you know, kind of our partners and producing content. So, you know, we have we have, yeah, anytime we need any kind of code inserted or something like that. We’ve spent, you know, well into six figures on Upwork over the years. Probably, yeah, probably, you know, probably closing in on out on Fiverr. To,
have you found most of the people that you work with through for pork, or in other fields.
Yeah. Yeah, I mean, back, you know, kind of when we were doing a lot heavier duty building. So I mentioned before, when we were chatting, that we’ve probably purchased two dozen sites, or more, a lot of those were smaller sites that we, we aggregated, so we wanted access to suppliers. Suppliers are the real gold in this business. So when you when you when you see a site, that’s a young site, and maybe it may or may not have any revenues, but it has a supplier relationships and you don’t have the suppliers. So it’s actually very valuable and the seller probably doesn’t know that.
The difficult part is finding a supplier. So is it setting up a relationship?
Well, you know, being in the in the Middle East, yeah, it’s it’s, it’s it’s finding speaking to establishing the relationships, you know, there’s only so much time in the day and so that’s, that’s a way for us to substitute money for time. I know.
They’re not online. Now. Those suppliers really not. They don’t have much online presence.
They you generally need to have an interview with them, have them get to know you, you have to reach out to them that’s just more work than I want to put into it. We actually now have a couple of virtual assistants that are regularly reaching out to suppliers so we’re doing it you know, we are doing it ourselves. But back in the day early on, the fastest way to do it was to acquire you know, kind of smaller sites.
Okay, that are good and for this website do have a lot of suppliers for this ecommerce drop shipping business.
Yeah, I mean, depending on the niche Yeah, I mean, we can’t, you know, we have, we have kind of one store, that’s our kind of one of our smaller stores, that probably has a half a dozen. And then, you know, the one that I just mentioned, probably s3 does. So it kind of depends what’s available in the niche. It will also depend, you know, obviously, things with higher price points, you know, we saw some things that are, you know, over 10,000. And as high as 20, I think 21, or $22,000 was the highest order that I remember seeing. So, you know, in, in the really higher end things, you’ll probably generally have fewer suppliers. And then there, there’s some where there’s a plethora surprise, you know, bathroom vanities happens to be one where there’s lots of suppliers. It’s a, it’s a horrible niche. If you’re, if you’re inspired by this, don’t don’t go into it. We learned we learned the hard way. That and you know, and we do quite well, but I wouldn’t I wouldn’t wish this on anyone else.
Very good. And so how much time would you say you spend yourself on the website, the bathroom vanity website, you and your wife.
So if you look at all nine of our stores, my wife spends, you know, maybe a few hours a day, working on the stores, mostly managing our virtual assistants and answering questions, or maybe doing some research, you know, at the most, as you as you know, as I just mentioned, I have a full time job. So my kind of joy in life is looking at the analytics and the numbers and the, you know, kind of the balance sheet, but you know, the income statement. And, you know, kind of thinking about the strategy. And, you know, kind of pursuing the kind of the intellectual piece of this, and I don’t really consider that work to be honest with you. I mean, I enjoy that. So, but, you know, I have the freedom to do that, when I want to do it. I don’t there’s nothing that you know, says it has to be done at seven o’clock in the morning or seven o’clock at night. So, you know, that cannot kind of get done on you know, you know, it’s time and location independent. So yeah, that I mean, that’s the way I would, I would frame it for you. So
yeah, that’s perfect. That’s that’s how I look at that as well, I, I love looking at numbers and spreadsheets and just looking at like understanding how a business works. Looking at all the different processes, seeing what what can be improved. I personally don’t enjoy the the implementation at all, like actually going and changing things and then making sure they run and managing them. I don’t like that. But reviewing details numbers, that’s, that’s fun. Yeah.
Yeah, for like, in my day job, I mentioned that, you know, I’ve literally looked at I think of every investable asset class. I mean, yesterday, I was lucky enough to be introduced to a guy that has fish farms, salmon farms, and I think a dozen countries. And he was here speaking to one of our sovereign wealth funds. And, you know, I got to spend, you know, an hour talking to him about his business and how it works. It’s entirely fascinating. And fish for this. Yeah, says salmon sent, yes, very profitable. Salmon farms are very profitable, because to fly the salmon from where it is to where people want to consume, it is actually very expensive. And so salmon farms, you know, not only allow local control of the food supply, but also allow, you know, a fairly exotic kind of meal to be served to so it’s, yeah, it’s, it’s fascinating. So, you know, I’ve looked at kind of all of these asset classes, and I enjoy it. And I love the stories too. I love meeting people that have actually done it. Yeah, yeah. Love
it. How does how does the the Simon business compared to a dropshipping store in terms of like, returns? And
you like, first of all, yeah, first, you know, yeah, so first, first of all, I mean, these are, these are passive investments, as opposed to, you know, we’re actively involved in our business. And so, you know, the first thing you have to understand is, when you when you kind of invest in a fund that, you know, he’s raising money in a fund structure, you’re going to be locked up for, you know, eight or nine or 10 years and that fun, and you may get some, some, some distributions back, but you’re not going to be involved in the business. So, you know, kind of, you know, I went when I look at the economics, you know, their institutional quality economics, very attractive, certainly double digit types of IR Rs, but they’re not for me and my capital because I’m looking, I’m always looking for the asymmetric payoff. Okay. So I mentioned the $25,000. You know, store that, you know, on many occasions in the last six years has earned $25,000 in any given month, right? So, so that’s an asymmetric payoff. And I’m looking for those kinds of those kinds of bets. And not not even the, you know, kind of the double digit IRR.
Yeah, absolutely. That’s, that’s what I love about online business as well. You, you can you can do that with content sites with some SAS businesses with anything and through us many of these smaller deals that that have potential, but, of course, they all require a bit more work than, than maybe most first time buyers realize and, and some sort of skill center, planning things through. Yeah,
yeah. Yeah, look, I’m, you know, I’m the first one to tell you that, you know, we, you know, we got kicked around a lot, the first couple of years that we were, that we were owners, and we made all the mistakes that rookies make, and the, you know, by the way, you know, as much as we expected that it wasn’t, it wasn’t any fun, you know, we, we didn’t, we didn’t expect to be, you know, overnight successes. But we also didn’t expect it was going to be you know, kind of as as maybe as as painful was, but you know, on any given day, you know, if you have if you, if you, you learn how to problem, you learn something, and you woke up the next day, and you’re, you’re smarter, and, you know, you’d be you know, the old adage, which is, like, you know, 1,000% true zeal, people overestimate what they can do in the short term, and they underestimate what they can do in a longer time. And so, I have a mentoring and coaching program at professional website investors, where I, you know, help people that you know, kind of essentially 50 years, 50 years old and older, you know, kind of, you know, kind of learn this business, you know, for the same reasons that I did, which is they want to exit the corporate job, or they want to add, you know, an income stream, and that’ll allow them to retire earlier, or to retire like I did when they want to, but still still have income. And, you know, it, you know, it’s it’s incredibly seductive to to kind of see these kinds of returns. Right now. It’s a, it’s an amazing time that we’re living right now. Yeah. Okay, that
a good, so tiny bit more about the other deals you’ve done. So you mentioned too, that you did back in 2014 15. Yeah. And all the past six, seven years, but what was the biggest deal you you acquire, though,
I think the biggest deal we have acquired, you know, I’ve tried, I’ve tried to acquire businesses that are, you know, they kind of it’s, we’ve been ratcheting up in terms of the deal size. And so, you know, right now, we’re looking at deals that are kind of 50 to $100,000. For our own account, I do have a number of people that have have wanted to invest along with, along with me, and I, you know, have a kind of a small cadre of folks that have said, you know, I’ll pitch in with you, I haven’t done that yet. But, you know, probably the largest deal that we’ve done is in the kind of the 60 to $70,000 range. And, and that still allows me what I think is an asymmetric payoff. Payoff, you know, because I think, you know, you know, when we were looking at deals, we’re looking at things were kind of, there’s a massive impact that we can have, you know, kind of, you know, improving, improving kind of the, you know, several of the levers that I mentioned,
and are they all drop shipping stores,
yeah, they’re all drop shipping. So, yeah, the, the, the core of the business is drop shipping, and then we add, we add content, to drive traffic, not only to our products, but then you know, also informational content, to drive traffic to the store and an informational content to drive traffic to to Amazon, typically, Amazon and other affiliate programs, since we’re have a fair representation in household items, you know, things around the house, you know, you know, Amazon’s a pretty good place. We’ve looked at you know, we have a profile on share a sale and a couple of other affiliate programs, but Amazon’s really the, the major, the major place. And so what we’ve tried to do is is and actually have one store that you know, you know, we really have tried to focus more on using the high ticket drop shipping, you know, kind of advantages and but leveraging the the revenue to be more affiliate and more ads. Now, the advantages of a high ticket dropshipping for store, you know, relative to just a pure affiliate site Is that by virtue of the fact that you may have, you can have hundreds of products, you’re going to have typically rank for a lot of keywords. And if you look at, you know, kind of any e commerce Store, I mean, a, you know, e commerce Store that doesn’t do anything, doesn’t write any content can rank for 20, or 30,000 keywords really easily. And there’s a number of those out there, and I’m scouting for them every day. And, and, you know, looking at those niches, because I think that, you know, those those can be bought, and content can be added to them. And those can be, you know, you know, three to 5x, or three to 10x, two to 10x, you know, fairly easily, you know, if they haven’t taken advantage of content, and you know, so the dropshipping, typically is the primary source of revenue. And then, you know, affiliate and ads come after that.
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