063: Building an E-commerce Powerhouse with over $7 Million in Combined Annual Revenues (w/ Michael Jackness)

The Business Generals Podcast | Helping You Maximize Your Entrepreneurial Dreams - Every Single Week

Michael Jackness is the co-founder of colorit.com, creators of top-quality coloring books for adults. He is also the CEO of terrain.com which focuses on domain investing, ecommerce, SEO, PPC, and affiliate marketing. He is also the co-host of a popular podcast called Ecomcrew Podcast.

Michael has been involved in the online marketing world for over 10 years. Since running one of the largest poker affiliate networks in the world with over 60 employees, he now runs a network of ecommerce websites generating over $7 Million in revenue annually.

Period in full-time business

He started in business for himself when he was 18. He was graduating high school and he didn’t have much to look forward to because he wasn’t going to go to college due to his poor grades and lack of attention in school. So he got a box of business cards and a pager then started computer consulting because he was very good with computers. He would go into people’s homes and help them with their computer needs for $20 an hour. That was back in 1998

Core revenue streams

He says that over the last 4 years, they have been immensely focused on e-commerce. In 2017, their projected revenue is $7 Million and in 2018 he projects $15 Million in revenue. They have been growing at 200% to 300% per year and the only thing that slows their growth is lack of enough cash.

They currently have 4 brands. The first one was www.treadmill.com. He has been investing in domains for a long time and says they are like real estate. He ended up starting an e-commerce business with www.treadmill.com and then sold it at the beginning of 2015 after which he purchased another site called www.icewraps.com which offers hot/cold packs for different parts of the body.

From there, he developed www.colorit.com which offers a brand of colouring books geared towards adults. They also have www.tactical.com which offers information on gear, camping, hiking, hunting, DIY, food, and more. They have a new brand called “Wild Baby” which they recently launched exclusively on Amazon and are currently developing its website.

They also have the Ecom Crew which consists of a blog and podcast about e-commerce. His background before e-commerce was affiliate marketing and from his e-commerce experience he learnt that he would need to talk about e-commerce through developing different valuable content. They have been looking into monetizing the blog and podcast.

Tip: There are a lot of ups and downs in business, everything you start isn’t going to be successful but it’s all about identifying those that can become successful

Domain investing

Michael does speaking engagements on e-commerce and business in general. He says that domain investing comes down to being at the right place, at the right time, and knowing that domain names are illiquid assets and that they cannot be sold on a moment’s notice. He never really chooses to pick a particular domain name because he mostly gets opportunities to buy them from different people. He may sometimes resell the domain names or choose to develop them like he did with www.treadmill.com and www.tactical.com.

Tip: You have to be prepared for the fact there is only a couple of people in the world that can purchase these mid-6-figure or high-5-figure domain names

Affiliate marketing

He got into online poker affiliate marketing in 2004 and that’s where he made a lot of his money. That was during the growth of online poker and being an early adopter of that, he had affiliate sites that were not just about content because he did several unique affiliate marketing-based things. When he got out of that in early 2011, he started doing the keyword domain investing with his focus being on affiliate marketing.

Michael later realised that Google was shifting away from allowing such affiliate sites to rank because there were too many unscrupulous affiliate marketers who didn’t provide any value. He therefore decided to build a site that would provide a lot of value while also having a store, and that has been their strategy ever since.

ColorIt

He says Color It was created from an accumulation of being in e-commerce for several years and refining a business plan. Running www.treadmill.com taught him a lot of valuable lessons about e-commerce and the major one was that he did not like running a drop shipping business (Drop shipping is when you take an order, you don’t have the inventory and you are relying on someone else who does have the inventory to ship it for you).

Drop shipping presented so many challenges which pushed Michael and his partner to finally sell the treadmill.com site. They therefore started Color It based on a product that was light, easy to ship, that they could inventory themselves, that had no expiration date, that didn’t have any technology component, and much more. That’s how they also got www.icewraps.com.

They also decided to be developing their own products instead of selling other people’s products; to be selling products that had some type of consumerability so they could resell to the same customers over and over again; and to be selling products that people would be passionate about so they would automatically promote them by word of mouth. That is the case with ColorIt.

The ColorIt idea was created by Michael’s cousin who is his partner in the brand and she is the face of the brand.

The viability of ColorIt

Michael was confident that the idea would work because from his experience in e-commerce, he knew that they could launch a successful brand in that niche.

Getting the first clients for ColorIt

He says today it’s easier than it used to be to launch a product. One can just launch it on Amazon with relatively little inventory and then do PPC (Pay-Per-Click) advertising. That enables someone to test their product in the market without wasting money on advertising. The same applies for Facebook because once can target people who are looking for particular products.

Big advertising budget at the beginning

He says his philosophy has always been that his advertising budget is unlimited as long as he is getting a positive ROI (Return on Investment) on an ad campaign. That’s how they have run all their e-commerce businesses. Unlike in TV ads which are very expensive and have no guarantee of success, advertising on Facebook, Google PPC or Amazon PPC can be as affordable as $5 or $10 to launch an ad. They also enable someone to quickly know if their idea will succeed or not.

A $100 advertising budget hypothetical

Michael says that if it’s on Facebook, he tries to spend at least $10 for any one ad. If he had $100, he would try 5 or 10 different ads just to try to get the best imagery and the best audience to target. Through that he would know which ad works better.

Identifying his specific niche on Facebook

One the things they look for before launching an e-commerce brand, is a one-to-one exact match type of audience. Different brands have their audiences, so when creating Facebook ads for example, one can go into Facebook ads manager; and look at the different audiences and how big they are. For example, for baby-related brands, there is an audience of people who are expectant mothers. Knowing in advance that an audience exists assures Michael that there will be people looking for any particular product they want to offer and those people will also make spontaneous purchases. Some products are harder to target on Facebook because one cannot figure out which audiences would be more interested in the products.

Once a person has a couple of thousand customers, they can then create a look-alike audience which becomes even more powerful in expanding the audience.

Differentiation in the market

Michael says they re-invent products with really great packaging, great messaging; and original designs developed by their in-house artist.

Tip 1: To differentiate yourself in a competitive market, don’t make any other product; you have to make it better. This depends on the industry you are getting into for example, you cannot reinvent the shirt

Uniqueness of their products

He feels that he only needs to focus on what he is doing and not what everyone else is doing because he cannot have 100% of sales in any one industry. He tries to grow his business relative to what he does. He considers anyone who copies him as just another competitor. They focus more on building a brand and loyalty. ColorIt for example has a very strong loyal customer base on Facebook.

The Wild Baby idea

He says they bought the domain name www.wildbaby.com for $1,500. The idea fit all the criteria they consider before launching an e-commerce site so they went into it.

Manufacturing lessons

They typically find a manufacturer first before designing or prototyping a product. They go to the Canton Fair which is the largest trade show in the world and it’s every April, May, October, and November. There are always so many manufacturers there but the difficulty is always in finding those that care about quality.

Tip 1: Make sure you are going with a reputable manufacturer who makes high quality products. East Asian manufacturers don’t particularly care about quality the same way an American manufacturer does.

Tip 2: People don’t want low quality stuff

Tip 3: Do your best to expand your relationships with the reputable manufacturers.

……………

Book recommendation for entrepreneurs:

1. Who Moved my Cheese – Spencer Johnson M.D.
2. Plain Talk: Lessons from a Business Maverick – Ken Iverson

>>>

Best way to connect:
www.ecomcrew.com – Michael’s Business Blog and Podcast
[e-mail] – Michael’s Business Email

@mjackness – Michael’s Twitter Handle

For more info including show notes and resources check out www.businessgenerals.com

Thanks for tuning in!!

-Davis
#TheBusinessGeneralsPodcast