[00:03:06] Robert Leonard: What did you focus on for them and what did you learn? Like what were the biggest things you learned there?
[00:03:12] Jacky Chou: I think in the beginning of my career, I worked at three jobs. One was a mobile marketing company, so they like helped apps launch and like helped them get ranked on, you know, the app stores. Kind of like SEO.
[00:03:25] Jacky Chou: And then we did a lot of display ads for them as well. I think my next job was at a hardware company doing growth marketing for them. So I guess that’s a bit more down my lane because I study electrical engineering and then I think six months into that job, I applied for a director of growth position and somehow got it at a photography startup.
[00:03:48] Jacky Chou: So think like Instagram copycat, which was eventually sold. But yeah, I did a lot of SEO there as well.
[00:03:56] Robert Leonard: Is that what your main focus was at the photography startup? Was it just SEO mainly? Is that how you got into SEO or were you doing SEO at the marketing agency too?
[00:04:05] Jacky Chou: No, SEO at the marketing agency.
[00:04:07] Jacky Chou: SEOat the hardware company and lead generation and SEO at the photography company.
[00:04:14] Robert Leonard: What did you do for SEO for that startup? Like what is a, like, I know you said it’s an Instagram kind of copycat or competitor, so like what does Instagram do for SEO or what did that company do for SEO?
[00:04:24] Jacky Chou: Yeah, so I think it was a lot of stock photography keywords and then we wanted to sell like major brands on stock photography or like partnerships. I think it would be more like Instagram meets Getty stock images. It’s like user generated and they can sell their imagery. And we helped rank for, I don’t know, like kids playing on playground photography or photos, you know, stuff like that.
[00:04:51] Robert Leonard: How did you learn SEO? I know you said you did it at the hardware company, but did you just learn it by doing it hands on there, or did you take courses, read books, listen to people, like what did you do even before doing it at the hardware agency and then at the photography startup? Like what did you do to learn SEO?
[00:05:07] Jacky Chou: I learned everything by just Googling and trial and erroring. I don’t think I had any formal training ever. Actually, even to this day, I’m pretty against courses. But yeah, I think my mind can still be changed.
[00:05:23] Robert Leonard: Why are you against courses?
[00:05:25] Robert Leonard: I kind of am too. Not completely, but a little bit. So I’m curious why you are.
[00:05:29] Jacky Chou: Mostly because I think courses is good for accountability and if you’re a self-starter, like I am, I guess. You can learn just about anything you want on the internet. So look at Harvard with their coding classes or courses online. You have Khan Academy nowadays, you have Duolingo. If you wanna learn something, you can just get out there and do it.
[00:05:51] Jacky Chou: A course won’t help you do that unless you feel like spending money will get you there. But then again, you have like a mindset issue at that point. It’s not so much an education problem.
[00:06:01] Robert Leonard: And I mean, there’s YouTube too. I mean, you can learn Yeah, literally anything you want on YouTube, like anything.
[00:06:07] Jacky Chou: Exactly. Yeah. And I actually, for example, I also learned like finances through YouTube. So I learned how to navigate all that through, I think, yeah, just multiple YouTubers shouts to them, but can’t think of any.
[00:06:21] Robert Leonard: Who did you watch?
[00:06:23] Jacky Chou: I think during the last couple years it was mainly podcasts, but yeah, they’re mostly like, they’re not very.
[00:06:33] Jacky Chou: No, they’re not very educational, but I would pick up terms they use and then just Google them. So it would be mostly like my first million all in podcast and then just doing deep dives off of like things they mentioned, but I don’t have any knowledge in. And it’s just a way of sparking interest for me.
[00:06:49] Jacky Chou: And I just do go down the rabbit hole.
[00:06:52] Robert Leonard: So today, I know you have Indexy and which does a couple different things, and then you also have far and away you might have some other stuff. So that I’m not aware of. So what’s everything that you have going on right now in terms of business?
[00:07:05] Jacky Chou: Business? So I have a portfolio of content sites.
[00:07:08] Jacky Chou: We call ’em niche sites. And I have a newsletter, like a marketing newsletter, and all that falls under Indexy, which is the holding company for that. And also have a productized SEO service and all that combined is probably my largest revenue source. And then I have far and away as well, which is like a direct to consumer dinner or a brand.
[00:07:31] Robert Leonard: Is that the only e-comm you’re doing right now?
[00:07:33] Jacky Chou: Yeah. I think we got burned in the past with a couple F B A businesses, mostly because of our lack of knowledge, not so much of the platform issue. But yeah, as of now I have a couple like smaller brands, like an online interior design company, if you count that as e-comm.
[00:07:52] Jacky Chou: Yeah, I think that’s about it.
[00:07:54] Robert Leonard: For far and away. I wanna talk a little bit about e-comm. So for that brand far and away, how did you get your very first customer, you have this idea for an e-comm business. How did you out and get your first customer?
[00:08:05] Jacky Chou: Yeah, so we had to prove out like a product market fit first and foremost.
[00:08:09] Jacky Chou: And we did that actually through dropshipping. So we had a seven figure drop shipping store between my last job and now a lot of it actually is because of the success we found in dropshipping. We did that via Shopify and we sold dinnerware from China and we quickly scaled. It was crazy. Like I remember our first 10K a day. And my co-founder and I were like jumping up and down, cursing out Warren Buffett saying we’re coming after him. Immature, stuff like that. We were ready to take on the world, but then Facebook algorithm destroyed us. So we got like banned on several Facebook accounts because we were drop shipping. So shipping times were long and iOS update happened.
[00:08:54] Jacky Chou: So what that means is you’re unable to track. Across different devices. For example, if you see on mobile and purchase on desktop, Facebook used to be able to track that, but now it’s not the case anymore. So you lose like conversion data, which disables their ability to, or hinders their ability to optimize.
[00:09:15] Jacky Chou: So we scaled up to 300 K a month. We did like 2 million a year or something like that, and eventually tanked down to a hundred K a month. We were sad and down in the dumps and eventually exited to private equity for a crappy multiple. But we did do one thing, which was prove out the business model, saying there is a demand for luxury, didn’t wear goods.
[00:09:38] Jacky Chou: So we took that cash. My co-founder and I decided we’re gonna do things right with far and away. So we went straight to Portugal where there was a long standing history of ceramics. Visited, like, went across the country for like two weeks, went to like 14 different factories and ended up with a family owned factory.
[00:09:59] Jacky Chou: And we’ve been partnered with them and it’s been a lot of ups and downs, I’ll say that. Yeah, it’s a lot of work. Covid destroyed us with logistical issues. Shipping prices went up. During that time we were questioning if this was even a viable business anymore. But now that things have settled down, we’re at a solid like profitability and we’ve opened up new channels of revenue.
[00:10:23] Jacky Chou: So that’s pretty exciting.
[00:10:25] Robert Leonard: So you already had product market fit, but like what did you do to get your customers? Did you just get the customers through? Did you just throw up Facebook ads and wait for them to convert? Like what did that process look like? How’d you get your first customer?
[00:10:36] Jacky Chou: First customer?
[00:10:36] Jacky Chou: What we did kickstart our campaign actually. The beauty of Kickstarter is you don’t need to fork up much cash. You don’t have to hit the MOQs for the factory. All you have to do is go to the factory, shoot some beautiful videos and imagery and launch on Kickstarter, and we were able to get, I think it was something about a hundred K US dollars all in from our Kickstarter campaign.
[00:11:02] Jacky Chou: And we use that to launch pay for a first batch of inventory. Make sure everything worked and yeah, I guess the rest was history. How’d you get the people to the Kickstarter campaign? We used various agencies and also like Kickstarter is a different beast, right? So you would use a lot of Facebook ads and also organic Kickstarter is extremely powerful.
[00:11:24] Jacky Chou: So it’s like a, almost like SEO. So if you rank at the front page of Kickstarter, it’s like a guaranteed six figure campaign. So, you just have to use Facebook ads and various agencies is email lists and it’ll push it upwards. And that’s what we did. We also built our own list with our own Facebook ads, but it turns out the agencies, because they have a very mature pixel of Kickstarter backers, so they just simply do a retargeting and they take like a fat fee.
[00:11:51] Robert Leonard: You mentioned that the Facebook algorithm kind of went away for you guys with that, the drop shipping business. What happened there? Like, why did you guys get banned? What ha what changed with the algorithm other than just the iOS update? What happened?
[00:12:03] Jacky Chou: So exactly what happened is if Facebook knows you purchased something from their ad, if you fired a Facebook conversion pixel on their ad, They’ll pretty much show they’ll ask you in a couple weeks how you found the brand, like what did you think of it?
[00:12:19] Jacky Chou: And if you’re dropshipping in a couple weeks, no one has received their products. So they’re probably, they’re like giving you negative reviews. And if you get too many of those Facebook just bans you, so your ad ratings are low and you get completely clapped.
[00:12:33] Robert Leonard: How did you learn about Facebook ads? I know you said you don’t have any like formal training in SEO.
[00:12:38] Robert Leonard: Is it the same with Facebook ads? And if so, what did you use for informal training? I know you were probably Googling, but like what things were you Googling? What resources did you find? Were you watching YouTube videos? What websites were good? Like how were, how did you become a Facebook ads kind of expert?
[00:12:52] Jacky Chou: I’m actually not an expert. My business partner runs ads. I do for a couple other brands. It’s pretty easy actually. They make it pretty dumbed down for you. I think the key to Facebook has is one test a lot of different creatives. Two, the proper targeting and three is maturing your pixel. So what that means is in the beginning you have to burn a lot of money to get purchase data onto Facebook.
[00:13:18] Jacky Chou: So in the beginning, you’re pretty much shooting from the hip or firing in the dark. And after you get a couple signups or a couple purchases, then Facebook knows how to optimize. And after then it’s just all gravy. And eventually, if you have enough purchasers, you create lookalike audiences from that.
[00:13:34] Jacky Chou: And Facebook is so good at finding lookalike audiences.
[00:13:38] Robert Leonard: When you say burn a lot of money, how much are you talking like a thousand, 5,000, 10,000, a hundred thousand. What? What is the lot in that case?
[00:13:46] Jacky Chou: I think can only speak on the dropshipping side. Albert and I, so Albert’s my co-founder, we both decided to put in five grand each of just like burn money.
[00:13:57] Jacky Chou: And I remember it like it was yesterday, I think we were, we burned eight grand in total. We’re about to pull the plug and then suddenly an ad like just takes off. You just need one, right? You just need one and it pays for everything and more. And from that moment on, yeah, we just cranked it and then, yeah, the rest was history.
[00:14:16] Robert Leonard: It’s funny because I saw a brand that was for sale on a online business marketplace. I don’t remember which one, and I looked at what they were doing. Their numbers were pretty strong. I mean, their margins weren’t great. I. Their gross margins were decent, their net margins weren’t great, but overall they were doing decent.
[00:14:35] Robert Leonard: And I was like, okay. They have no real margin of safety. Like they have no competitive advantage. They, this is something like I could easily do. I’m not gonna buy this business. It’s for sale, but I’m not gonna buy it. Like I can see all their financials, I could see exactly what they’re doing. I could just replicate this business.
[00:14:48] Robert Leonard: So I tried to kind of like work on that and I gave it a couple weeks and I spent some money on Facebook ads and I was kind of surprised because like this company’s website was horrible. I could see their Facebook ads through the Facebook ad library. Their ads were horrible. I had better ads, I had better creative, I had a better website.
[00:15:03] Robert Leonard: Everything was like a lot cleaner than what they had. And I just, no, I spent, I mean, I didn’t spend a lot of money. I think I spent maybe a thousand dollars or so on Facebook ads and I could, I didn’t get a single customer, tons of visitors, but not a single customer. I. And so I just kind of put that project on pause for now.
[00:15:18] Robert Leonard: But like, it’s interesting to me ’cause I know it works. Like I know they’ve proven the market. I’ve seen verified ads or sorry, reviews for them, so like I know what they’re selling works. I know. It’s like I know it can happen. I just was really confused as to like why what I was doing wasn’t working and maybe I didn’t give the pixel enough time to mature.
[00:15:34] Robert Leonard: Maybe I didn’t spend enough money or you know, burn enough money to teach the pixel. I’m not really sure.
[00:15:39] Jacky Chou: Yeah, I think we can go deeper into this. Just live. A lot of the times, there’s two points where you can have, where you mess up, and one is the ad. You have to look at cost per click. If your cost per click is low, that means your ad is good.
[00:15:54] Jacky Chou: Like full stop. We have to check your cost per click. I don’t know what you were at, if it’s, I think it was less than 50 cents. You have a pretty, but if
[00:16:08] Jacky Chou: 10. The websites of the businesses I’ve taken a look at are absolute garbage, and they don’t have proper c r o in place which means like conversion rate optimization. There’s like a lot of e-commerce common practices, for example sticky add to cart button or one click purchase. There’s a lot of common practices that people most of the time don’t follow or site speed.
[00:16:32] Jacky Chou: People take like five, five seconds to load. So it’s a certain percentage of people will always convert, and that percentage of people depends on your website. I think you can always work backwards from there. Most of the time it’s the website. I’m happy to take a look at it afterwards if you want.
[00:16:49] Robert Leonard: Yeah I definitely would like to chat with you a bit more about it.
[00:16:52] Robert Leonard: And the site is definitely not perfect. Like this was the first Shopify site I’ve ever built. I’ve built actually quite a few, like content sites and you and I have talked about that. I would say that the Shopify site itself is nothing like super special. It’s not, definitely not c r o optimize, you know, it’s not optimized for that.
[00:17:08] Robert Leonard: But I mean, I think it’s decent, it’s clean, it’s organized, et cetera, compared to like what I saw this competitor have. And what was interesting too is it might’ve been my expectations because I could see their whole p and l for the last three or four years. So I could see what they were spending on marketing.
[00:17:21] Robert Leonard: I could see, I could estimate roughly their AOV. So I could say, okay, this is roughly probably their AOV given their prices of their products, their revenue, this is how much they’re spending on marketing. I could kind of ballpark a customer acquisition cost. I could roughly ballpark that. So I’m like, okay.
[00:17:37] Robert Leonard: It was like 40 or 50 bucks. So I was like, okay, if I can spend, I should be able to get my first few customers around $40, $50 a piece. And yeah, I spent, I, I have my Facebook ad account up here and I mean, I spent some money on it and it is like a thousand dollars and zero customers, and I’m looking at add cards.
[00:17:54] Robert Leonard: That I’d have to check, but you mentioned the cost per click. So the ones that had a lot, like a lot more impressions were a little bit higher, but I had some that were 40 cents, 51 cents, 55 cents. So these are all different ads under different ad sets. But I had 40 cents, 51 cents, 55 cents, 65 cents, 71 cents, 93 cents, a dollar, 10, a dollar 12, a dollar 19, and a dollar 41.
[00:18:20] Robert Leonard: Not super high, but also not like super low either.
[00:18:24] Jacky Chou: Yeah, I mean those cost per clicks seem decent. Are you only targeting us by the way?
[00:18:30] Robert Leonard: Yeah, that was US only.
[00:18:32] Jacky Chou: Okay. So another thing with Facebook ads is you absolutely need to target conversion campaigns. So conversion optimized campaigns with purchase.
[00:18:43] Jacky Chou: Never anything down the funnel. Like Facebook’s so good at that already. So for example, even if you have zero purchase data, you always click optimize for purchase because then Facebook finds lookalikes from other campaigns and Match tries to match it for you. I don’t know what you’re optimizing for though.
[00:18:59] Jacky Chou: Some people optimize for click.
[00:19:01] Robert Leonard: No, I think it was optimize. I’m pretty sure it was optimized for the sale, not clicks.
[00:19:06] Jacky Chou: Okay. Then you’d have to look down the funnel, for example, cost per view, product, cost per add to cart, cost per initiate checkout, and see where they’re falling off. You can look up like industry norms in terms of like the rate at which they do these actions and you’ll see where the, they fall off. But typically it’s add to cart.
[00:19:29] Robert Leonard: Yeah. I gotta dig into that, that data a bit more. You mentioned that when you sold your brand, your econ brand that was doing the drop shipping, you got a bad multiple when you sold it to private equity. Why was that? Was it just because there was a drop shipping business and there’s no real defendable moat, like I said, with this other company that I was looking at, or was it something else?
[00:19:47] Jacky Chou: And also it was on the decline. So decline declining sites get like awful multiple, if any. So I think it was under two x ebitda, way under, and we had to get like a nasty earnout as well. Which we only saw, I think we only got like 70, 80% of it because the PE firm just kind of ran away and like declared bankruptcy but kind of sketchy.
[00:20:11] Jacky Chou: ’cause they’re still active.
[00:20:13] Robert Leonard: Do you, is far and away built on Shopify?
[00:20:16] Jacky Chou: Yep.
[00:20:17] Robert Leonard: Do you just basically only use Shopify for your businesses? Is there any other like alternative that might be worth considering?
[00:20:25] Jacky Chou: Yeah, I think anyone who suggests otherwise are probably idiots. You need to stick with Shopify.
[00:20:32] Jacky Chou: There’s no other platforms like viable. There’s nothing else.
[00:20:36] Robert Leonard: I also noticed on the far and away website that you have quite a few blogs, blog posts. How do you translate that? SEO traffic and the blog posts into product sales?
[00:20:46] Jacky Chou: So that is primarily for display and affiliate ads and revenue. I tweeted about this before, but I believe all e-commerce stores should open up different channels of revenue or revenue streams, and that would include display ads and affiliate revenue as well.
[00:21:05] Jacky Chou: And the reason being e-commerce is very competitive nowadays. Most of them operate at five to 10% net margins, and with affiliate and display ads, you’re able to bump that up much higher. And I’ve shown that with far and away. I think if your listeners are an SEO, throw that inaudible.
[00:21:28] Jacky Chou: I did that were able
[00:21:29] Robert Leonard: to, yeah, I did that, able to boost. I took the U R L and I put it into SEM rush and I looked at him, I’m like, he’s getting a ton of traffic for an e-comm site. And then I went in and I saw like, wow, he’s got affiliate. I didn’t see your tweet about this, but I was like, wow, he’s got affiliate, you know, sections here, CTAs in these blog posts, and they’re not even for his brand and he’s got some display, you know?
[00:21:48] Robert Leonard: I was like, wow, this is really interesting. I’ve never seen this from an e-commerce platform or company.
[00:21:53] Jacky Chou: I think not many people do this. I think some examples of companies who do this well would probably be epic gardening on the display ad side, but I don’t think they have a very strong affiliate side.
[00:22:05] Jacky Chou: So affiliate actually takes out most of our revenue in terms of the non e-commerce sales. Yeah, my tweet was about like, If we wanna break down the math far and away, maybe I’m giving example numbers out there. It’s not my place to reveal it ’cause I have a business partner, but let’s give an example.
[00:22:22] Jacky Chou: It’s about there 50 K a month and at 10% net margins, you’re only at five K a month. And that’s very hard to grow with five K a month in free cash flow. Or even if you say 10 K a month, right? But far and away right now I can speak on this, is doing probably 4.5 K in affiliate sales. And we’re about to turn on display ads next month, which we will get probably $2,000 a month.
[00:22:48] Jacky Chou: So that’s six 5K in just, or no, that’s seven 5k, six K, six to seven K. Never do public math. 67 K a month in free cash flow just right there. And if you add that to five K a month in free cash flow from the eCommerce.
[00:23:10] Jacky Chou: It relieves pressure off of the core business to have to grow at a sustainable amount, and we’re able to reinvest quicker.
[00:23:21] Robert Leonard: Are you passionate about the products that you sell for far and away? And if you’re not, which my guess is you’re probably not, but correct me if I’m wrong, how do you stay motivated to work on it?
[00:23:32] Jacky Chou: Funny enough, I’m actually pretty passionate about home goods. I’m like a lover of interior design and architecture. I have a, so if you, if I laid out all my content sites for you, you’ll see that a lot of them aren’t actually in the home space. That’s because I actually like it. So I mentioned online interior design.
[00:23:49] Jacky Chou: I have an architecture blog that’s doing very well and I have far away. So there’s like a lot of synergies in between. Yeah, I’m very passionate about it. I think far and away was started because we wanted it to be us doing it right, and not just for capitalism. You know, we wanted to work with family owned factories, wanted to go with products.
[00:24:08] Jacky Chou: We’re happy to recommend to friends and family, but at the cost of our cogs being absolutely sky high compared to if we source from China as opposed to Portugal.
[00:24:21] Robert Leonard: You said in a recent tweet that e-comm sites are favorable right now. Why is that, and do you think e-comm is a good business model for people just getting started with online business?
[00:24:31] Jacky Chou: E-comm sites. The context of that was e-comm sites are favorable on Google because Google sees it, like it’s not a niche site and they’re not just trying to game Google for display ads and affiliate site revenue. But that’s personally what I’ve seen. And I’ve been working with a couple other brands and that’s definitely confirmed and is.
[00:24:56] Jacky Chou: Yes. Yeah, I think e-commerce is definitely the way to go if you want to scale up quickly and you’re able to test. Now with a lot of these suppliers and dropshipping suppliers, even onshore, dropshipping suppliers, you’re able to test very quickly. And what we did for the drop shipping business was if we were able to prove out a product winner, we source it quickly, get it into the warehouse in the us, and using three pls we’re able to fulfill quickly.
[00:25:26] Jacky Chou: That’s it. You use drop shipping to test out products if you find a winner, private label and build a real brand.
[00:25:33] Robert Leonard: How do you think about margins when it comes to e-comm? I know you said that five to 10% net is fairly common, but is there a certain gross margin that you require before you’d consider an idea for a product or service?
[00:25:46] Jacky Chou: Yes. It’s gotta be like 70, 80 plus gross margins.
[00:25:52] Robert Leonard: Sell it for a hundred. You have to acquire that product for 15, 20 bucks, 25 bucks the most, and net 75, $80 per sale.
[00:26:01] Jacky Chou: Yeah, you can get lower, but your ads would have to be so good.
[00:26:06] Robert Leonard: What else do you, you look at or consider when you’re trying to decide whether or not a product is good for e-comm?
[00:26:12] Robert Leonard: ’cause I’m sure it’s not just the margins, is it maybe whether it’s a consumable where you can get the product, how fast you can fulfill the size, weight, shipping, things like that. Like what else are you looking for?
[00:26:24] Jacky Chou: Shipping weight, all that goes into gross margins. We just lumped that all together. And with dinnerware it was such a nightmare because the dimensional weight is so large, but it’s not very dense.
[00:26:36] Jacky Chou: Right? Because we have to watch out for breakages. But now we got some insurance, so it’s actually not that bad. But a lot of headache was went into that because we kept having our dinnerware break, like break during shipping. But what else do we consider? We typically always test that there is a product market fit before launching a new product.
[00:26:55] Jacky Chou: So, for example, we try to launch another Kickstarter, I think it was last year, I believe, for french cent candles. Like we try to do artisanal, you know, this company’s been around since the 16 hundreds served like the king. They have like a sigil. And we told a beautiful story. Tried to launch on kickstart it, Flo so hard.
[00:27:17] Jacky Chou: But it saved us a lot of money, albeit we did spend 20 K like producing the assets on the trip because we got like some crazy Nat Geo videographer, but I guess we got the memories from s it. It was good fun.
[00:27:31] Robert Leonard: We’ve talked a lot about e-comm, but you also mentioned that you have a portfolio of niche sites.
[00:27:36] Robert Leonard: How are you thinking about niche sites right now with AI coming onto the scene? Do you think niche sites are dead?
[00:27:42] Jacky Chou: I think display ads will be dead soon. Display ad driven content sites will be destroyed soon because AI will probably replace the queries on Google, for example. Can dogs eat lettuce? That will be answered in a single line, and no one’s clicking into any sites for that in the future.
[00:28:04] Jacky Chou: But I do see a business case for sites like Best Dog Food or Best Dried Dog Food because people are comparison shoppers on Google, and it’s really hard to get rid of that habit, and people still want to click into links and see the different types of dog food.
[00:28:21] Robert Leonard: So you’ve made money on kind of all three sides with niche sites, agencies, and e-comm.
[00:28:27] Robert Leonard: Which of those three do you think is the best and which one do you prefer?
[00:28:32] Jacky Chou: I would say I prefer niche sites, but I see the argument for agencies and e-commerce is very tough to make do right. Reasoning being niche sites, you don’t have to deal with anyone. You’re kind of, and it works really well for my personality type.
[00:28:49] Jacky Chou: I hate getting on calls with clients, so that scratches out agencies and I just kind of want to tinker and that works really well for niche sites and margins are incredibly high with niche sites. But the only downside is it takes a lot of time to ramp up. So it takes six to 12 months to ramp up an each site.
[00:29:09] Jacky Chou: That’s where agency comes in. Agency is cash right now, and if you have niche sites to prove out your expertise, people love coming to you. And agencies are great for cash flow, pretty decently high margin business and extremely low risk. So the other side of niche sites and e-commerce as well, business can go to zero relatively quickly and it has happened in the past.
[00:29:34] Jacky Chou: So in those times, I’m very glad I still have my agency side. And didn’t go all in.
[00:29:40] Robert Leonard: A lot of your branding on Twitter is about buying online businesses. What businesses have you bought in the past?
[00:29:47] Jacky Chou: Yeah, purchased a lot of content sites and a lot of portfolios as well. I think one in particular, I mean, the largest deal in the last couple years, probably this mid six figure portfolio of niche sites.
[00:30:03] Jacky Chou: And it, it came with custom rate affiliate, Amazon affiliate account. So what that means is most people would get 2% or 3% on home goods if they refer to, if they were refer a sale onto Amazon. But I get 8%. So what that means is, moving forward, any Amazon affiliate site I buy, I’m able to add immediate value three to four times that value.
[00:30:28] Jacky Chou: So I’ve been able to do that, replicate that, and the payback period for some of these sites go down to probably like a year. So what that means also is after everything is paid back, your initial principle is paid back, everything else is just pure profit. And I’ve been trying to do that the last couple years.
[00:30:46] Jacky Chou: And just kind of stacking the M R, how did they get that commission rate? So this is extremely rare now unless you’re Buzzfeed or one of the or New York Times, they don’t really give them out anymore. So this was grandfathered in from the previous owner and they used to be large Amazon affiliate site owners, but then they got clapped by Google and then they bundled up a bunch of crappy affiliate sites and sold it to me.
[00:31:12] Jacky Chou: And I bought it primarily for the rate card and have profited heavily ever since. Are you worried that could go away? Yeah, but I’m a degenerate gambler, so I’m ready for that.
[00:31:25] Robert Leonard: You also, on your site as part of your agency, you mentioned that you sell back links, and I know it’s a bit of a trade secret, so you can’t tell us exactly the answer to this question, but tell us what you can, at least about your process for getting the links that you sell.
[00:31:37] Jacky Chou: Actually, it’s not a trade secret, it’s just a lot of work and you have to scale up a lot of VAs to do this. So what happens is you scrape a bunch of sites and you scrape their emails and you reach out to them saying, Hey, we want to buy backlinks off your site. And there’s a lot of back and forth required.
[00:31:54] Jacky Chou: You have to negotiate. You promise them wholesale rates. Because we’re an agency, we promise them like a lot of sales in the next coming months and we’re able to get it down to a point where gross margins are probably anywhere from 40 to 80% and we just make the spread. How much does that help your niche site portfolio?
[00:32:16] Jacky Chou: I would say quite. I mean, it’s solid because we never have to worry about links. We just take the profits from the link building agencies and our connections there and just build the best ones for our own businesses.
[00:32:30] Robert Leonard: What kind of businesses are you looking to buy now?
[00:32:33] Jacky Chou: Right now, just distressed businesses mostly.
[00:32:37] Jacky Chou: A lot of e-commerce businesses are getting clapped left and right because funding dried up if they’ve ever taken VC funding. They’re all clapped. They’re underwater because e-commerce businesses are not good for vc and it’s been proven out throughout the years. So you’re supposed to run them like a cash flow business.
[00:32:54] Jacky Chou: 10 times out of 10. It’s been proven out with all birds getting destroyed. There’s with Casper get going under or probably getting taken public. may.com was destroyed on the London Stock Exchange. I think they went bankrupt and they sold may.com domain for like 2 million at like fire sale, which is ridiculous.
[00:33:13] Jacky Chou: Yeah, I think they’re just not VC funding funded companies.
[00:33:18] Robert Leonard: I personally like that you do this, so don’t take it the wrong way, but why do you share your income and net worth data? What is the benefit to you?
[00:33:28] Jacky Chou: Hard to find the benefits, but ’cause I’ve been audited like four times now by the C R A, which is a Canadian revenue agency.
[00:33:34] Jacky Chou: If you guys are listening to this, please stop. I pay my taxes. But the reasoning is because in the SEOspace, a lot of your listeners probably won’t understand this, but people in the SEOspace are extremely opaque and having been in the industry for all like 10 plus years. I’ve noticed there’s a lot of grifters.
[00:33:54] Jacky Chou: There’s people who with like no money, pretending like they have money. People who suck at SEO pretending like they do great SEO. And I just wanted to go out and just release all the information and let the people decide like who the experts are. And a lot of people throughout the years have tried doing income reports and they eventually all stop when their revenue started going down.
[00:34:16] Jacky Chou: I was able to, you know, keep on it and it’s it tracks the S&P pretty closely, I must say. Right. Now.
[00:34:24] Robert Leonard: Let’s break down that, that income and net worth data that you share, starting with your income, and then we can talk about what you do with that income. What are your largest sources of income?
[00:34:33] Jacky Chou: So right off the top of my head, I would say Indexy, which is the holding company with a bunch of affiliate sites. Probably 80% of it, but we can break it down a bit more. So the agency side plus productized service, so that means selling the link links, probably majority of it, 50 plus percent typically.
[00:34:56] Jacky Chou: Then we have Amazon affiliates. I think last month I did 45 K Mediavine, which is like a display ads. I think we did like 30 something k. And then I got some like miscellaneous stuff, like short-term rentals income, which is like, I have a short-term rental building in Portugal that does like 10 k a month.
[00:35:16] Jacky Chou: And yeah, just smaller affiliates like Binance affiliates and V P n affiliates that do like three to 5 k a month.
[00:35:24] Robert Leonard: Once you’ve earned all of that income, what do you do with it? How do you break down your net worth?
[00:35:29] Jacky Chou: Well, my net worth. A lot of real estate. I think total equity in real estate is majority of it, and I have a lot of cash right now, which isn’t great, but I mean by cash I mean T-bills or bonds.
[00:35:42] Jacky Chou: We don’t really have T-bills in Canada and a lot of stock, so equities, I guess that’s what your audience is about. But yeah, I’ll probably do a breakdown of what exactly I hold. I have a lot of Tesla. Your audience probably gonna cringe, but a lot of my equities came from me being like a complete degen during like the GameStop days.
[00:36:03] Jacky Chou: And I think I made into the six figures on GameStop calls and I was smart enough to roll them into Tesla stock and I’ve been just writing that ever since. So, just kind of chilling.
[00:36:15] Robert Leonard: You deal with a lot of criticism online like anybody does really with a personal brand or a large following.
[00:36:21] Robert Leonard: Part of the criticism is from sharing your net worth and your income, and part of it is just other stuff. Like I said, that just comes from having a, an online presence. How do you deal with the criticism?
[00:36:31] Jacky Chou: If they’re valid? Fair enough. I’m decently open about criticism if they’re con constructive. I don’t think I get too many just like random hate comments besides, I mean, because I’m so transparent.
[00:36:44] Jacky Chou: I don’t really get that much. But people do notice, like, oh, I don’t fully disclose. For example, far and away the e-commerce side they claim that I’m not fully transparent because I don’t disclose that. That’s a bit weird because I’m not the only shareholder in that company. So it’s not really my place to say, but I think I tend to typically address ’em and.
[00:37:04] Jacky Chou: Try to understand why they are criticizing. See if I can like better myself. If it’s like just full on hate, I typically just ignore or mute. I think muting on Twitter is like one of the greatest growth hack of all time. ’cause what that if you block then your haters won’t be able to comment anymore and you lose engagement on your, but if you mute, they’ll still engage and they’ll still boost the algorithm, but you won’t see it win.
[00:37:30] Robert Leonard: Before we wrap up today, I wanna give you a chance to tell everyone listening where they can go to find out more about what you have going on in your online businesses, your newsletter, your social media profiles. Where do you want people to go to connect with you?
[00:37:43] Jacky Chou: Yeah, I mean, if you want to see my full net worth or revenue breakdowns on a monthly basis, going to marketing letter com and just sign up for my newsletter and everyone can find me on Twitter if you just search my name.
[00:37:58] Jacky Chou: Jacky Chouw and or my at is indexy, I D x Sy, and that’s it. Check on my YouTube videos as well. That’s the plug.
[00:38:09] Robert Leonard: I’ll put a link to Jacky’s resources, social media, YouTube, et cetera, in the show notes below so you guys can go connect with him and pick his brain and learn more about what he’s got going on.
[00:38:18] Robert Leonard: He tweets a lot of really good, a lot of really good stuff that I’ve learned a lot from. So recommend you guys go check it out. Jacky, thanks for taking time outta your day to, to join me.
[00:38:26] Jacky Chou: Appreciate your time. Thanks for having me on.
[00:38:29] Robert Leonard: All right, guys. That’s all I had for this week’s episode of Millennial Investing.
[00:38:33] Robert Leonard: I’ll see you again next week.
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