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A Unique Deal Teaches Me the Benefits of Humility in Business & The Financially Sweet Taste of Humble Pie

I had an experience over the last couple weeks that I hope by me sharing others will be able to learn from.

With my focus on selling my FBA business other unique sales opportunities have presented themselves.

Let me tell you a story about what happened with one (eventual six figure deal)…

An opportunity came up to sell one of my affiliate sites strategically with the idea that they(startup company) would improve the site and based on the strategic nature of the purchase would be able to increase the value of their business significantly.

After some initial discussions it was clear the amount of cash available in the business was too low to be able to acquire the site at market value (let alone the premium that usually goes with strategic acquisitions).

Deal Dead?​

It would have been had I not been recently working with some clever private equity types who had been looking to creatively structure FBA acquisitions.

So what deal can we strike when the business will be worth more in the hands of the acquiring company but the acquiring company doesn’t have funds to purchase the site?

Our clever solution was…A domain/website lease agreement which included a modest % of any increased earnings paid to me with the purchase of an option to buy the site in 1 year for a premium price, along with an agreement on minimum standards for the site and a few rules about what they couldn’t do to the site. The domain and website stay in my control until the option to purchase is exercised.

Benefits to Me:

  • Premium purchase price for an affiliate site (30x)
  • If option isn’t exercised I will still own an improved website
  • Upside % during lease agreement

Benefits to Purchaser

  • Use their knowledge and connections to greatly improve monetization of site
  • Able to show revenue growth with minimal capital outlay (increase value of their business greatly & raise funds at a greater valuation)
  • Able to grow total size of business (increase value of their business greatly)

How Not Being Humble Almost Cost Me Six Figures!

I GREATLY overestimated my skills! With this site I spent minimal time on it but thought it had been reasonably well set up from a monetization standpoint.

The one way the deal wouldn’t make sense to do is if they were unable to improve its earnings then I would get none of the upside and it would take away their incentive to exercise the option to purchase the site.

I contemplated not doing this deal because I doubted if the improvements would make a meaningful difference – I WAS WRONG!

How Did They Improve The Site?

  • Better looking layout
  • More focused on the primary offer
  • Pop-Up to take visitors to the primary offer
  • Improved usefulness of the content

Bottom line – nothing crazy was done and I had to eat some humble pie that even with some pretty straightforward changes they were able to make substantial improvements to the click through rate and eventual earnings of the site!

Why Share This Story?

I think it was a unique deal and the more times people can read about unique solutions to problems the more likely they will be to recognize when a unique solution may exist.

Plus, I like to share all my failures and wins…although this is certainly a win it is very clear I had failed at monetizing this site to the best of its ability!

What Did I Learn from This Deal:

  • Creative deal structuring can make deals happen when simple deals aren’t possible
  • Strategic sales make the pie bigger!
  • Being humble and knowing that no matter what you think you know everyone has something they can do better than you and learn from them.
  • There are areas in my business if I spent more time would result in substantial earning improvements!
  • I need to improve my monetization skill set

Hopefully me sharing this deal will help you consider different solutions on problems in the future.

About the Author Jon Haver

I am a 31 year old husband, father of 2, engineer and a huge fan of developing systems to build useful and profitable websites. The reason I build online businesses is to provide financial independence for my family and yours. I am not a GURU but just a regular guy who is grinding out 12+hr days to build a life for my family on terms.
Jon Haver, Online Entrepreneur

Leave a Comment:

14 comments
Konrad Braun says February 22, 2016

Congrats on the deal Jon. Reminds me of a fantastic book I read last year called “No Cash? No Problem!”
I too need to learn more about optimization. Thanks for the reminder 🙂 and thanks for sharing your “humble pie” moment.
Konrad

Reply
    Jon Haver says February 22, 2016

    Thanks Konrad, its great when the humble pie tastes this delicious!

    Reply
brian says February 22, 2016

would be great to share the conversions or layout concepts you have learned for possible best practices…

Reply
    Jon Haver says February 22, 2016

    Hi Brian, this is definitely the most requested comment and I will do that but do so in a way that doesn’t jeopardize the details of the acquired site… I will try the improvements on one of my sites and then share them here.

    Reply
Tyronne Ratcliff says February 22, 2016

I’m happy you were able to strike a deal and generate some income. Now you can use that income for bigger and better projects.

Have an awesome day

-Tyronne Ratcliff

Reply
    Jon Haver says February 22, 2016

    Thanks Tyronne, the income isn’t in my hand yet but thanks… it will definitely be helpful for some other projects when the option is exercised.

    Reply
Travis says February 22, 2016

Sounds like it turned into a great deal for everyone involved!

It would be nice to see a few articles that expand on your last two bullet points (what you learned, action plan to improve your business, and the results of the changes after a month or two):

– There are areas in my business if I spent more time would result in substantial earning improvements!

– I need to improve my monetization skill set

Reply
    Jon Haver says February 22, 2016

    Awesome Travis, I will definitely expand on these items. Thanks for the comment and giving me some questions that I can answer and be helpful!

    Reply
Jason says February 22, 2016

Eating Humble Pie is an excellent way to learn and I have had my share of that pie before 😉

Congrats on a very progressive deal. Could you write about the strategies that they added and how you are applying that to your affiliate or amazon sites? Of course stripping the personal information.

Thanks,
Jason

Reply
    Jon Haver says February 22, 2016

    Jason, thanks for the question and based on the few other people asking the same question I will be sure to write a post about another one of my sites that I apply the same improvements to.

    Reply
Garrett says February 22, 2016

Hi Jon,

Great post, was this an Amazon affiliate site (review based) or a different type of affiliate site. Maybe a good content upgrade to this post would be more specifics of what they did to increase conversions and monetization.

Reply
    Jon Haver says February 22, 2016

    Hi Garrett, I am obviously leaving it pretty vague but I will try and use another one of my websites do similar upgrades and share the results so people can get the same benefit you are after. Thanks for the comment.

    Reply
Carlso says February 22, 2016

Can you give us some details of what this type of “strategic partnership” consists of. Feel free to use a different niche… let’s say “cat training”.

I don’t understand what the other party’s product is? They just “improve” your site to increase conversions and all of a sudden they have a proof of concept to show investors? Are they some sort of ecommerce plugin? A conversion consultancy?

It’s just hard for me to envision how your FBA site becomes so valuable to them — couldn’t they just put up an affiliate site and work their magic with that? That would be enough for them to prove our their tech/model, wouldn’t it?

Reply
    Jon Haver says February 22, 2016

    Hi Carlso, thanks for the question, this actually isn’t my FBA site but one of my affiliate sites. So the way this increases value for them is that imagine if you had a website that talked about IPhone reviews making $100k/month and then you sold it to Apple at 30x monthly earnings…it would hit their books and increase the value in their business similar to the Price/Earnings ratio which is high (say 100x annual). So as the sites get rolled up into larger businesses they actually increase in value. So if a business that is getting valued at a large multiple rolls up an affiliate site in line with their business their business valuation goes up substantially. Hope this explanation makes sense.

    Reply
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