Jesse Cunningham Explores a Website Case Study

0:00This website sold for $700,000. It's not often you see a video where someone's willing to show you exactly what they sold and how they did it. And Jaden Clark is doing exactly that. So Jaden, here we are. This is the website that you sold recently for $700,000. And luckily, we get to show everyone what it is like. How did you make the money?

0:19What are you doing different now? What's going on? Yeah, I mean, so I'm pretty much doing the same thing in terms of business model, but how I made money on that store, how I then sold that store is selling high ticket products. Okay, so this is a Shopify store that you see here, you can see we work with other domestic brands. So we're essentially drop shipping from these brands that already are manufacturers in the space. And then you can see, we sell to one avatar. So you can see there's a real theme here of outdoor furniture, sort of dream backyard. And then

0:48yeah, essentially, when we're selling products like this, that we retail on our site, you're getting a trade margin. So when you sell that product for say $2,000, a piece of that is your margin, your commission, etc. Now, let's say I want to start an ecom store, right? I'm kind of throwing you a softball here. But like, what is the thing that actually works to make money? Because to get bought for $700,000, you were making sales, and you were actually making that profit. We've seen stores where people make sales, they don't make any money. So how are you actually making profit here? Yeah, for sure. I mean, so firstly, high ticket matters. So if we have a look here,

1:24this is the actual sold listing of this site here. This is the sold listing. And so you can see a bit of a breakdown of the numbers. So we were looking at about 70k in pounds, which is about maybe close to 100k in USD, right? And that's revenue. So that is literally the total sales of when we sell one of these products, that's the total amount the customer pays us. But obviously, that's not what goes in our pocket. So we've got to pay the supply. So these people that you see here, the they have a cost as well, right? So this product that we see here 3400, it might cost

1:56the manufacturer, it might cost them, let's say 2500 to make that product imported into the country, ship it to the customer, etc. Right? So there's, there's a margin there, let's call it, you know, in the region of $1,000 or pounds, we'll just use dollars, even though this was a UK store. Let's say we've got $1,000 in gross margin, right? So when we sell this product, we got to make sure that within that $1,000, that's the difference between what we buy it for, and what we sell it for, that we can acquire a customer, whether that's through advertising, organic, we can serve

2:27that customer and cover all of our costs. And once we can do that, repeatedly, profitably, that's when we start to see a healthy net profit. So you can see the actual figures here, we were running at about 27% gross. So typically, our margin was around 27% of the total revenue. And then our net was just over 18%, right? So within that 10%, roughly different, so actually a little bit less, we have got, that's where our customer acquisition costs come from, where we pay for our advertising, you know, pay our team, whatever it might be. And ultimately, it's all about continually honing our strategies, honing, which products are selling best, which

3:06ads are performing best, which keywords we want to go after. And it's just a massive exercise of constantly getting the data, making the improvements and greasing the flywheel really, so that those numbers are as profitable and as attractive as possible. And then you can see, you actually get a multiple when you sell one of these businesses. And a lot of that is to do with the fact that unlike a lot of drop shipping stores, because we have real reputable suppliers, i.e. the brands we partner with, because we actually build proper customer relationships, you know, we build an email list, we have organic listings, we have a paid ad system that has been

3:40honed over years. There's actually something that a buyer feels very confident buying. And you know, in this case, they gave me a 3.5x multiple, right? So essentially, if this store makes no more money than it already was after I sell it, it's going to take the buyer three and a half years to make their money back and get into profit. Now, obviously, they've bought it on an upward growth trajectory, so they're hoping sooner. But it's just encouraging to know that when you build one of these, right, it's a sellable asset. Interesting. Now you have other tabs open, different websites. Let's keep it rolling. You sold this, now you're working with partners to

4:14do it again. Tell me what we got going on here. Yeah, exactly right. So this store is run by someone called Bill. He was on my channel a little while ago, and he's doing, well, he's three years in, right? And he's done four and a half million this year, and just shy of four million the year before, right? So he's absolutely crushing it. And you can see here, different niche, but same principle, right? So here we're talking generators, we're talking still high ticket products, we can see the price point. But you can see this is a different avatar, my store, we were serving

4:44someone who wants to, you know, be outdoors, they want to have the outdoor kitchen, the pergola, whatever it is, right? This person, they're a different avatar, maybe they're worried about, you know, how are they going to get hit by a hurricane? Are they going to go and live off grid? Are they powering a campervan or a motorhome? Right? So it's a different avatar. But as you can see, it's still specific, it has a specific niche, a specific person it serves, and they're selling high ticket products. And you can see, again, we've got good reputable brands that are US based, because this is a US based store that they're selling on behalf of. So Furman is a good

5:17quality brand, you can see here, if I just jump back one step, we've got Ecoflow, Duramax, Cummins, Anker, etc. So it's the same principle, right? These businesses that you see here, they are excellent at manufacturing really high quality power products, they are excellent at making sure their products serve a need in the market. What they are not focusing on is things like paid advertising, SEO, conversion rate optimization. And this store does a really great job when it comes to conversion rate optimization. Like you can just see right here that you know, we've got reviews perfectly put in there, we've got the ability to pay in installments, we've got this

5:53kind of price beat bit here, we're making it really easy for the customer to get in contact with our team, you know, calling out that it's an authorized dealer you can trust, bundling stuff together to push that AOV higher, and I could go on and on with this page. But ultimately, you can see here, same principle, same business model, they are finding their space in between the customer and the product manufacturer, and they're just doing a great job at acquiring the right traffic and converting it into sales. And you know, this business has a team of six, I believe it is now,

6:24and the business owner is taking a very healthy, multi six figure income out of it, after only a few years. That's probably very valuable. Now you have one more tab open, what is that next econ brand? Yeah, so this one's really interesting, actually, because this is run by someone we have inside our community inside the 1% econ school, which is basically a community where we teach members to do exactly this to build these businesses from scratch. And this is owned by or was owned rather, it's been sold by a chap called Sumanth. And rather interestingly, he was India based. And so he was, you know, basically working a full time job in India,

7:00he built this store in the US, but he built it 100% organically, no ads. And the reason for that is quite simply, you know, the difference in a wage in India and a wage in the US meant that he didn't feel comfortable spending money in the outset on ads. So he went 100% organic, he did a really nice job, and he sold this store for six figures. And now he works in his real passion where he actually builds, like templates, custom liquids, all that sort of thing for the Shopify store. So when you see people like Bill, you know, having these really slick, nice looking pages, this is not,

7:32you know, horribly hard coded through hours and hours. A lot of this is just kind of pre coded components that make it really easy to have really high quality pages that convert really well. So it's a nice example here of where Samantha went from, you know, working a job to building one of these businesses selling it. And then he found a little part in that business model that he loves and sort of use that as his next level his next step, which, you know, is really nice. We've got people inside the community who have built a drop shipping store. And then they've decided

8:01actually, we've got one guy Matt Davey, I think if I come into the winds here, we'll see him pretty soon. Like he and he go there he is, he started manufacturing his own product. So you can see here, he's done a nine K sale there, that's just one individual item. And you know, you can see here, he made six grand profit on that order. And the reason his margins are so good is because he was in the market for a couple of years, he learned what his customer wanted. And so he went and found a manufacturer in China, he manufactures his own product. And now his margins are 60%,

8:32rather than 30%. And that's really leveled up his business. And, you know, this guy made 100k profit in in Q4 last year, you know, he made a very, very good six figure income in just three months. So, you know, there's levels to this thing. But the one consistency is it all starts with this kind of very, very solid and stable business model that, you know, frankly, has been around for years.

8:54And so as drop shipping, and a lot of people associate drop shipping with Okay, I get stuff from China from Ali Express and whatever, and it's really poor quality, and I just got to find a hot product. We're doing the opposite here, we're finding often boring products that have been around for a long, long time with businesses that have been making these products for a long, long time, you know, Furman have probably been around 30 years. But ultimately, these businesses, they're set in their ways, they don't want to keep up with what's going on with AI, what's going on with Google ads, how we're getting traffic from chat GPT, that's our job, right? That's what we

9:24focus on. And that's how we carve a space in this market, so that we can, you know, make the big money essentially. Oh, knowing what you know, and this is really fun, because when someone sells something for a lot of money, I usually find that their appetite increases 700,000 was great, you know, it would be better $7 million. So as you build as you partner, and we are partnering together with Sean with other businesses right now, as we build, what is like the things we can do with AI to make success happen faster? Let's assume I can build outbound power, make it look

9:58like that, which is a skill into itself. What can I do to get clients to get revenue ASAP? So I think let's, let's start with the early days. So obviously, this is an established store, let's imagine we were building this from scratch today. I think the first and most obvious thing is we need a good, high quality looking website, right? You know, I think everyone would agree that you come to this and it looks professional, like it's something that you can, your customers can trust this site with their money, manufacturing partners can trust being a supplier, they can trust that they're going to sell their products, you know, represent them in the right way. So I

10:31think that is our absolute first thing out the gates. And we try and encourage people to choose a niche and build the store pretty quickly, because a lot of people get very, very stressed on this. And actually, you know, to both points of your question, the first thing is that AI can help you hugely here. And inside the 1% ecom school, we actually have in the classroom, you know, loads and loads of prompts of how to choose your niche. And you can see here in niche research, like we've got templates like this, where you can basically use AI and some prompts to have some

11:02really, really high quality. And you can see like all of this is basically giving people the steps to go through to choose their niche to validate it. We have our own tools where we get the data because we want to know, okay, how competitive is this market? How competitive is it selling generators power stations? What are the keywords that we can go after? What are the brands that we can go after? What should we be wary of? So that's the first thing and there is hundreds, if not maybe thousands of really viable high ticket niches. So we've got to find one that

11:30looks really good on paper. And then we've got to dive in. We've got to get skin in the game, because I kind of think of it as a bit of a race to that first sale, because exactly like you said, increases appetite. When you make that first sale, you hear that's Ching on Shopify. And you see, shit, I've just sold something for, you know, $1,100. That is when there's going to be a little moment in your mind that you think, okay, I can I can do this repeatedly. If I can get over that hill once, I can do it 30 times. And you got to remember that if your AOV, which is what we teach,

11:59$3,000, if you can make 30 sales a month, one a day, you got a six figure, seven, well, six figure a month, seven figure a year business, right? That's paying an income that most people would be very happy to live on. So, you know, ultimately getting that niche, getting that store up and then getting suppliers that you can sell on behalf of, that's the big early battle. And there are so, so many ways that AI can help you with that from the research of finding the suppliers for you to creating your logo, your color scheme to creating some of your imagery, some of your

12:29copy, etc. And you know, I think like anything, the more you prompt these tools with experience, the better they get. And that is why we've got specific custom GPTs for doing our keyword research for, you know, specific prompts for niche research, all these sorts of things, so that the process is as seamless as possible. I want to wrap this video up. I wanted to do a tight 10 minute video ish, and we'll do multiple videos. So if someone's watching, they want to learn more about this, just look for the playlist. But right, you have partnerships, we're building partnerships together. Talk to me about dollars and cents and okay, someone has a successful ish

13:07store, they came to you, came to me, came to us. You know, what is it looking like? What do we provide? How are their numbers looking? I mean, partnership, this is the end goal, right? This exit here, because this is where the really big payouts happen. But exactly as you said, we're not necessarily just looking at, you know, mid six figure Xs, this works out, I think about 700k is worth of dollar value. But we want to push that into, you know, seven figures, multiple seven figures. And the thing is, we've got a we've got a playbook for that now. And you know, I ultimately

13:38did this in a pretty short period, two years. But I came from zero when I did this, right? Sure, I invested in courses. And you know, I did things to help me grow on the way. But ultimately, this was my first go at it, I made some mistakes, etc. Now I've done this, I've got three stores at the moment that I'm a part of. And then I've also, you know, consulted on 10s and 10s of these stores.

14:00So I've been able to roll out this playbook across multiple different businesses, see what works really, really well. And basically, where you need to get to as quickly as possible, to start seeing these numbers, you know, 10k plus in monthly profit, that's a great place to get to, because almost every business operator can go full time then, because they're getting 100k plus salary in the bank. So that means they've now got, you know, rather than maybe 10 or 20 hours to spend on the business, they've got 40 plus. But ultimately, we've distilled this down to a really clear playbook.

14:30And then obviously, you know, yourself and Sean, you bring on top that organic traffic growth, which is amazing for unlocking incremental areas that normally take people quite a long time to crack. And there's a lot of headroom there, not to mention, you get really great multiples when your organic traffic is firing, because it's a much more defensible moat. So that's kind of why we've partnered together, because we know that when we come into one of these businesses, we can grow it to this stage, you know, I would say much faster than this two years, because the amount of expertise and skills, as well as AI processes to leverage is, is far far

15:02greater. So really, what we're looking for is really good operators that have got a store running, they've got proof of concept, mainly, they've proved their chops, right, they've proved that they can get suppliers on board, they can build the site, and realistically, they just put the reps in, they show up because we've got the roadmap, we just need them to work with us and repeatedly show up and execute. Because when that happens, you know, I've seen time and time again, how predictable the results are. And, you know, there's no reason why this needs to be the ceiling of an exit, because there's no reason why we don't get it to this stage. And then we say,

15:34okay, great, let's, you know, go and go off the next level of organic traffic, or let's private label a product and let's start to push into the, you know, 20k 30k profit a month and the seven figure valuations. I see the 1% ecom club, the school community as an incubator. And I think the success is not guaranteed, of course, but we are looking for operators who will do the reps.

15:58You know, it's not always going to work out. But we can tell the people who, like you said, build the store, do the reps, do the things, do all the things, have a much higher chance of success. But I want to leave it there. That's a good chunk. I know I called you, I texted you on WhatsApp, I said, Hey, are you available? And you're like, Yeah, man, let's do a quick video. But thanks, Jayden, I appreciate you jumping on. No problem. So I think you're completely right about the reps.

16:20And you know, I think the best thing to do is someone to read through the wins tab in our school community. And it's basically full of people who have done exactly that. They've done the reps, and they've got pretty serious results. So yeah, proof there. There you have it. Thanks for watching to this point. And thank you, Jayden, for jumping on a call at last minute notice. I did I just like texted them on WhatsApp. It's like, Hey, man, you want to jump on a call? Boom, here we are. So thank you, Jayden. And listen, if you're interested in this stuff, I'll have a playlist in the description,

16:45you can check out other videos me and Jayden have talked before, we partner with businesses, we help them grow, right? I have the advantage. He has the advantage. And so does Sean Buckles, who's the third partner, I've seen a lot of websites working with a lot of websites. So if you already have an ecom store, and you want to take it to the next level, join the ecom club. And if you want to start fresh, same thing, right? It's for newbies too. So everything in between, right? But we are looking for operators who are on an upwards trajectory, and they just don't know

17:12how to nail down the SEO, the paid ads, the stuff that actually moves the needle.