Buying Digital Assets with Upward Exits, Mark Woodbury

C: Welcome to today’s podcast where I am joined by Mark Woodbury. Mark, thank you for taking the time to come on today.

M: Happy to be here Craig, thanks for having me on.

C: So for anyone who’s not aware of who you are and what you do, can you just give the audience just a quick bit about yourself and how you go about making money or what you do day to day?

M: So as you mentioned, my name is Mark Woodbury. I’m a partner at Upward Exits. We’re a brokerage for digital businesses, so a lot of e-commerce businesses, software, other businesses, primarily upwards of half a million. I’m a partner with that. We’ve been doing it for a little over two years with my partner Alex. So we’ve been getting involved in the SEO community and that’s how you and I met at the conference last year, in Chiang Mai. We work with sellers of digital businesses.

C: Buying and selling Amazon websites and various other digital assets is what I’m getting involved in. Chiang Mai for me, opened my eyes up to a lot of that stuff. And meeting people like yourself and I’m sure all the other guys, you’re well aware of who they are. I think there’s a lot of businesses out there that people might not be aware of and as you were saying there, helping people or being a broker for selling websites, upwards of half a million, there’s massive, massive, demand for that type of thing. There’s lots of investors out there who want to buy digital assets and I think it’s only going to grow going forward as well. I mean is that something you’ve seen?

M: Yeah, the industry’s definitely grown. We feel good about where the industry’s going over the course of the next decade, in the future. Each market’s a little bit different. You touched on Amazon, that’s gotten a lot more competitive. We’ve seen a lot of new entrants there in the past couple of years. I observe this space, I was never in it but I’ve just seen the businesses we’ve worked with that primarily sell on Amazon, they’ve had their margins squeezed.

M: Some of them have been knocked off by Amazon. That’s just an ever changing space. The SEO space is always changing. It’s just happening so fast. Rapid changes throughout the sector and e-commerce is no different. Those guys all move to Amazon. Now some of them are trying to move their business back off. But as far as the market in general, there’s more people moving towards self-employment, towards entrepreneurship, towards running some type of business online, which is exciting to see.

C: I think, yeah, that’s the thing we all want, to be our own boss and whether it’s Amazon or whatever, those guys can obviously make a lot of money online. It’s not just about Amazon and I think a lot of people out there who think about buying websites, Amazon‘s the first thing that springs to mind. But I’m assuming you guys are not only dealing with Amazon, that’s a small proportion of their business. What types of other business models do you guys broker deals for?

M: So the ones who just sell on Amazon, that’s a pretty small portion of the business. We’re focusing on, ideally, businesses over $1 million bucks. So we think of the 1-10 range, there’s a lot of value to be added to that clientele and we’re below where the lower, mid-market, investment banks come in. We’re trying to swing out of our weight class when we go up in the $25-$30 million range. We want to stay under 20 and at that range we’re also working with entrepreneurs as well. As opposed to a company with 30, 40, 50 employees. And we’re helping small businesses.

M: Now in that range, we see not a lot of… There are some businesses that just sell on Amazon purely, but we see more OmniChannel retailers. Where they’ll have their own e-commerce storefronts. They might have a wholesale channel and they might sell on Walmart.com and Amazon.com so they have a couple sales channels, traffic channels to their website, et cetera. They’re a little bit more diversified and those also are in higher demand for the buyers. The good e-commerce buyers want more business that’s well routed and has a few different traffic channels a few different ones. So that’s primarily who we’re working with.

C: And for guys who are potentially looking to invest and that type of thing in their business, what is the process involved? I’m assuming they have to contact you. Is there anything you need? What process you have to go through or can anyone do this? Just come to you and say, “I want this specific type of business and I’ve got this amount of money to spend, can you sort it out?”. How does it work?

M: Yeah, we advise people to understand what we do hear from some career changers who maybe they have an engineering background or they work in Silicon Valley, they work for Facebook, they work for Google, something like that. These people have an itch for self-employment and are the career changers. We see some people in that space. In the US we have what’s called FDA loans and some of those people qualify for favourable lending terms to buy a business. A lot of them are realizing that, “Hey, I don’t know what I don’t know. So let’s talk to the broker and try to find something that’s a good fit.”.

M: We advise people to buy something once they understand it. If you’re an SEO guy and you’re buying an affiliate site, you want to understand how it’s ranking, how it’s making money. We don’t want to put money into an asset if they don’t understand how to run, just to get it sold. That’s not going to be beneficial for them. The seller might get out, but that’s going to hurt us in the long term as well.

M: So we will be able to understand what they’re buying. It’s why we always ask those screening questions is, “What’s your background? How much time can you allocate to this? Which parts of this business are you comfortable with and which parts are new?”. If the marketing portion of it’s new, you can hire a marketing firm.

M: We can set you up with somebody and try to make it a more white glove approach instead of just, this one makes X amount, you have X amount of money, combine it. We want to have a little more realistic approach.

C: Interesting. One thing I do want to ask you is, I’ve only really got experience with Amazon, but you know how if I was to sell an Amazon website, you’re going to get roundabout 25 to 35 times the monthly revenue as a sell price. I’m starting to see across the board with e-commerce and everything else, what the different prices are.

M: Yeah. In terms of valuation, you’re right. You looking two times plus for the little associate sites. Now the larger ones, if you had like say an Amazon associate site where you get traffic through social as well as some through SEO and you have a bunch of different money pages, organic links, you’ve been around, you’re an authority in your niche, whatever it is, you’re driving the multiples higher and also you’re probably making more.

M: There are businesses that make $300, $400 or $500k and the businesses that make $4, $5, $6 million and there are some in the affiliate space as well. Those are going to get higher valuations than the smaller ones. In Chiang Mai, there’s a lot of people who have four, five, seven sites going at once and they sell it once it makes $5 grand or $6 grand a month.

M: Those are not people we work with a whole lot. We try to work with the larger businesses that have two, three, four-plus years in business, their own tax returns, et cetera. But those guys I think are selling for two, two and a half times multiple. Or as you said, they have 25 to 30 X monthly. The larger ones we can sell for more than that, but they have that diversified traffic sources, a clean link profile, et cetera.

M: Now, the other part of the questions you asked is the same for other businesses? The software can go… A software business that does $3, $4, $5 million in profit, depending on the industry, depending on is it a B2B piece, is it direct to consumer or is it a business to consumer type of software. Those multiples can get five, six, seven times profit, annual profit.

M: Those are really attractive to small private equity firms. And there are also small investment firms that just buy and run software businesses. It’s really across the board, both on the size of the business, how diversified the traffic channels are, the sales channels. We’re de-risking it by making it more diversified. So those larger businesses have a staff that goes with it. They have their own fulfilment facility if it’s an e-commerce business. So that’s when you get up into higher multiples. So there’s the long answer to your question Craig.

C: Going back to what you said, we met in Chiang Mai and you mentioned there that they’re probably not your target audience, as such. There’s probably a few guys in Chiang Mai that you would probably do business with. So what’re your reasons for going to events like Chiang Mai? You know you’re not going to get big players there in terms of selling big business but I’d be curious to know the reasons behind you attending that. Is it for self-development or is it for business to see if there are any big players there? What was the reason?

M: So we actually just closed the business. We’re moving money here this week from a guy that we met at Chiang Mai, that one’s for over half a million. I was just referring to some of the smaller deals. You met a couple of the guys there where as soon as the business ranks, they might have one money page on it, a couple of PBNs going to it and as soon as it makes $3 grand a month, they put it on the market. Those aren’t the businesses we work with. And those are the ones that are going for 20 to 25 X monthly profit. Those aren’t businesses that we usually take. I know there’s other shops they can go to. I think Empire Flippers does a great job with those guys. They have a process in place to get these things turned around real quick on the market.

M: So we do meet people there who are a fit. We met a couple of guys there who were potential buyers. They run holding companies or small funds of money, they’re unfunded sponsors and they have a pool of assets that they buy and run other affiliate businesses for e-commerce businesses. There were some e-commerce people at the conference. So the rationale is, we want to go… The point of being self employed is live on your own terms, do it your own way.

M: So we enjoy traveling and find a reason to get over there. We’re heading to Bali here in a couple months to do the DMCC, as well. It always makes itself worthwhile just by networking alone. And then whatever value we can bring from talks like yours and I saw my notes for your talk last year Craig and those are all implementable. We need to know the industry that we’re selling businesses in. When buyers have questions, we need to have not just an answer but the right answer and we need to be able to vet the seller side as well.

C: That makes perfect sense. If you’re going at it and you’ve seen that you want your buyers to fully understand what they’re getting into. But also, from a personal point of view, you guys are fully understanding what you’re getting into and what you’re selling. And I think that would make a massive difference. To me, I’d much rather buy from someone like you who understood what a PBN was or what to look for some of the tips that people would maybe do to make a website, make money that can be pulled from under your feet. So money people don’t want invest, money and and websites and the kind of clients you deal with are spending big money and they don’t want to be investing that money on a bogus project or something that’s built on quicksand.

C: So, I think it’s a really good thing that you have done. The other is going out to meet these people and understand what SEO is. I think most people come away from an event like Chiang Mai with some form of knowledge or context or whatever it may be. I can’t speak highly enough about that particular event. And I think Bali is much the same crowd that go there as well. And the lot that went to Bali, I actually asked to speak there but those slots were filled. So I’m not going to make Bali or Chiang Mai this year. But I will be back next year for Chiang Mai for sure.

M: You did the BrightonSEO one a couple of weeks ago, right?

C: Yeah. I wasn’t speaking at that one. I just go to Brighton just more for the networking and just meeting up with friends and obviously meeting new people as well. Brighton SEO is not my target audience in terms of speaking, it’s more of a white hat audience. I spoke at Brighton last year and I actually got a bit of stick for it. My talk was in PBNs and just what they are and be aware of them. I wasn’t saying, everyone has to use them. And I took a bit of stick for it. So certain events are for certain people. But as I see, most of the events that I go to are mainly for the networking side of things. I love to go up and share knowledge and tips on stage if the opportunity arises.

C: But I think just meeting good people and travelling and stuff like that and getting inspiration from other people is massive as well. Just getting ideas and constantly developing yourself. I see it as training for myself when I go to these events and I’m sure you’ve probably felt the same as well.

M: Just to add to the Chiang Mai conference season and we met so many people with just different business models and one guy who just does basically keyword research. Supply and demand arbitrage of eBooks on Amazon. He just researched, what are people searching for where there’s no good content, you pay somebody to make the content, rank it on Amazon.

M: So it’s ranked on Amazon’s search engine as opposed to Google, but he’s still learned about algorithms and he’s probably there networking just like you and I are. But that’s just one example of that. There’s as many business models as there are people there, which is kind of cool. And then stories and people come from all around the world. I’ve gotten into entrepreneurship, new and old and I’d say the networking alone makes it worthwhile. They do a good job of drawing a fun crowd to Thailand, either South Africa, Australia, UK, the US, it was a good group.

C: Yeah, it was insane. I think I met people from probably most places around the world. There was Polish guys and everything within certain areas, Canadians, Americans, South Americans, the lot. That was everything. And yeah, it’s good to see so many guys actually doing their own stuff and as you say, weird stuff as well. Just niching right down into very specific things. So in terms of entrepreneurship and everything else, what made you get into this? Why this business model? What started it?

Getting Started with Brokerage

M: I was in finance previously for my first couple of years out of school and enjoyed the business valuation part of it. I enjoy evaluating stocks and bonds and publicly traded companies, much larger businesses. And then looked at what small businesses are on the market, how are people buying those, understood how an SBA loan works, how real estate, commercial real estate investment works. And then just brick by brick, that built curiosity down the road.

M: And then I started an e-commerce business on the side, normal 9:00 to 5:00 like most of my colleagues did at a time. Started an e-commerce business on the side and realized that’s where my thoughts were. That’s where I was spending most of my time, most of my energy, my enjoyments. And then that was able to replace my normal income. And that’s when I jumped ship. I quit my 9:00 to 5:00, focused on e-commerce full time.

M: Ended up selling that and getting into brokerage, which I had an interest in for a few years previously. And so Alex and I started the brokerage, started Upward Exits about two years ago, a little over. And it was up and down at the beginning. It’s, “Who are you guys? Why should I do business with you?”. And I think people are right to ask those questions.

M: We’ve learned about the business a lot in the first, 12-18 months and now we feel like we’ve got our feet under us and we’re able to go from here. We’re able to pour gas on the fire, so to speak. So we have a third guy who is joining us, more from a finance background like myself and he’s learning the tech side of things.

M: So SEO is somewhat new to him. I think he understands the paid search game and the social media marketing game. But we all come from different backgrounds and I think that’s what’s exciting about it. It’s trying to put this puzzle together. We all have challenges in entrepreneurship and trying to get from where we’re at to the next level. Whether that’s getting started or whether that’s getting from a $100k a month to a quarter million a month.

M: Everybody’s trying to solve this puzzle of how do I get to that next level? How do I add people to my team? How do I add one connection or one new strategy, one new technique. That part of it is really exciting to me. Just all the possibilities and the creativity you can employ when building a business. It’s something that I really get excited about. And so I love what I do. It’s still bumpy, we’re still in the early stages where it’s a huge quarter and then nothing for a little bit and another huge one and nothing. And yeah, you probably know the ups and downs of that with a new business.

C: Yeah.

M: But it’s exciting. I love it. There’s nothing else I’d rather do.

C: I like the fact that you get excited about it and a lot of people who start off in a business venture, actually and my experience, feel it. They’re scared to make mistakes and they’re scared to try new things or whatever and you’re excited by the whole thing. For anyone who is looking to get out of the 9:00 to 5:00 job and maybe start out on their own, you came from a finance background and someone may go, “Because he’s a finance guy, he may have a better understanding of business.” but you’ve got guys like me who have also started the business that have never been in finance in my life.

C: I actually hate the finance side of the business. So it’s good that other people that are tech guys and stuff in the back, then join up with you. You don’t have to have a finance background to then start your own business. For people out there that are starting business, they’re always fearful and think they can’t do it. What advice would you give to someone starting their own business? Do you need to have a good strong finance background or is it just go with it and see what happens? What kind of advice would you give?

M: Yeah, that’s a good question Greg. I appreciate you bringing that up. That’s one thing… I find questions from my colleagues, from people I went to high school with, went to college with is, how do you start in doing business online? And you gravitated towards SEO and don’t like finance. There’s as many different business models online as you could want.

M: We talked to some guys who, one of them was a data scientist and then he had a kid, he and his wife got pregnant and he realized he didn’t want to work 60 hour weeks. I’m going to take what I understand about data scientists. He’s an engineering type, analytical mind and I’m going to go into online business and he went into selling on Amazon and found a way to make it successful there.

M: He didn’t have a finance background, but he’s a qualitative thinker. He’s an engineer type of mind, who was able to do good keyword research, find which products aren’t being offered and build a business. I want to say he makes $30 or $40 grand a month profit, in year two just because he tried and most people don’t.

M: It’s so fearful. What type of business do I try and I don’t know anything about that. You’ve got to at least put your toes in the water. So at least try something on the side. If you’re working a 9:00 to 5:00, maybe you love it, maybe you don’t. I do think that most people have some entrepreneurial itch that they want to scratch.

M: And so I’d encourage those people, whether they’re taking a course on SEO from one of your colleagues who have those courses or whether they take a course on e-commerce or selling on Amazon, if they could have something going on the side and it doesn’t need to be their full time income right away. But that’s how it begins is find something and if you have a little bit of interest in it, maybe you’ll lose a couple thousand bucks. If you’re able to afford that, then really that’s all you need, that and some time. You start it on nights and weekends you’ll end up learning a tremendous amount.

M: Sooner or later, if you stick with it and you enjoy it, you’ll end up turning a profit. And at some point when you scale on what works, double down on what you’re having success on, you’ll end up making a full time income from it. Now, I guess you and I are fortunate enough to rub shoulders with people who have done it. It sounds easy once we meet these people at the conference who are making $30, $50, $100 grand a month.

M: They didn’t get there overnight. And I think it’s intimidating to a lot of people to talk to them and to realize where their knowledge is at, where their skillset’s at, they didn’t get there overnight either. Everybody had to start somewhere. I just encourage people to just research it on the side. Find one thing that you find interesting about online business and use your skillset. If it’s not finance, if it’s not a real quantitative mind of understanding how algorithms works, that’s fine. Find something else you’re good at it.

M: There’s a lot of people with great marketing skills who are building Facebook ad agencies. That’s a business model that we’ve seen grow over the past few years in the space. So I think there’s a space for all different type of people. As long as you’re willing to step out of your comfort zone, at least try entrepreneurship a little bit and see where it goes from there. There’s never-ending hurdles to overcome with entrepreneurship, but brick by brick, the successful people that you and I meet at these conferences, have built it over the course of years. It’s not done overnight.

C: Yeah, nothing good happens overnight. There’s no such thing. But in terms of starting out and you’ve been there for two years and there’s always a rocky road at the start with any business, is there anything that you would tell someone not to do? Something you’ve done that you would advise them not to do going forward starting their business?

M: Yeah. One thing I see a lot of people do, we have the benefit as brokers of seeing under the hood of a lot of businesses, some people will try to do everything too fast. Well, they want organic traffic and they want social media and they want paid search product listing ads and they want to sell on Amazon. Just do one to start. When you start your business, find one traffic channel that works. Don’t spend all your budget on social media ads at the same time you’re trying to run search ads. Find one thing that works for you. So if your audience is mainly SEOs, find a SEO that works for you. Then add one thing from there. Once you’re ranking and you understand the SEO portion of your business, then add search traffic and then add social media from there.

M: You see too many people trying to do too much. They want to be the expert in each field and they end up being just mediocre in all of them. So I would say double down on what they’re good at. Allocate their budget there, allocate their time there, then once they’re making a profit in that field, if they choose to do e-commerce, they choose to do lead gen or rank and rent, whatever it is, then they can expand from there. Then they could add other skillsets, but I’d say pick one when you’re getting started.

C: I think that’s something I massively fiddled with at the start of my career in digital marketing. I wanted to have 20 websites, all different niches, dominating everything. And I launched all the 20 websites but they were all fairly mediocre attempts at trying to rank in all 20 different niches and yeah, it just doesn’t work. You spread yourself way too thin. So I can totally relate to that particular thing.

C: In terms of a positive, obviously we don’t always want to look at the negative, what were the pitfalls? In terms of positive things, is there any things that you can share with other people that were positive, that they can quickly fix within the business when starting out? Even just bits of advice like get a good accountant or delegation or how did you scale up? How did you get more staff? How are you managing time within the business? What kind of things are you doing that you would recommend to other people that they could learn from you?

M: We have good success on HubSpot. That’s automated a lot of our workflows, saving emails as templates because we have a lot of back and forth with potential buyers and potential sellers. As well as knowing, if you’re a partnership and I as many of these people are just solely self-employed, I have two business partners, but knowing who handles what and on what days, so we know what the other person’s handling. Things don’t fall through the cracks.

M: We know what our responsibilities are and when they get taken care of. It allows you to double down and focus on just a couple roles inside the business as opposed to trying to do everything. And I think it’s the same, and correct me if I’m wrong, Craig, was the same for somebody like yourself who’s self employed, don’t have partners but you don’t like the accounting side of the business? My guess is you just hired an accountant to handle that. Right?

C: I’ve got an agency and I do have a business partner. So when he deals with all of that kind of stuff, I position myself. A lot of people think I work on my own or whatever because I’m the guy that’s on stage, but I do have people in the back then. But it was one of the biggest things I’ve ever done in business was, as an ACO set my first business up and I was the main man in the business. I was the salesman, I was the sole owner, I was the salesman, I was the SEO guy, I was the office manager and everything else and I would not delegate or hire any staff. I wanted to run everything and became very possessive over the business and that, in fact, was a way to the business not being able to go and scale because you can’t do everything.

C: So the next time out I was lucky enough to find a business partner who is more of a sales and account management type of role. Which suits me well because then I was allowed to get back on with what I was good at. Would you advise people to go into business with partners or be the sole owner? For me, I would always say to someone, “Having a business partner is certainly not a bad thing. Especially when you can delegate and pass responsibility on to other people.”

M: I think in both of our circumstances it sounded like we did it ourself before having a business partner. I think it’s wise for people who are just getting started to understand every facet of their business. They at least need to understand how an income statement works. Even if they hate accounting. They need to understand how the business makes money, what comes in, what the expenses are and how to turn a profit on it. I think they should make their own logo on their first website or their first e-commerce business, whatever it is. They need to be the one who’s discussing with suppliers, if they’re an Amazon business. You need to know your business intimately and the only way to do that is to do all the roles yourself.

M: Then once you grow, you can outsource some of those. Customer relationships is the first one that seems like people outsource just because it’s a pain and it’s easy to outsource with customer management. So I think both you and I probably started and learned a lot from running our own business and having a go at it ourselves.

M: For me, I’m real fortunate, my partner and my skillsets as well as what we enjoy doing about the business, is in different areas. He loves to travel, he loves to network, he meets new people, it seems like a daily basis. People who are in this space just from networking and we’re here in Los Angeles, with a big entrepreneur community. He meets a bunch of people doing that. I like the analytical side of stuff. I like the financing, ranking down valuations and justifying them. I like making sales packets. I like getting in front of buyers and private equity firms and some of the people who are in the industry who have in-depth questions about the business. I’m more of an investment banking role and that’s what I enjoy. He doesn’t like that that much.

M: So it just meshes well in terms of what my skillset is and what I enjoy and what his skillset is and what he enjoys. We work well together. Got to trust one another, so if people are getting into business with somebody they don’t know, I’d be hesitant to advise that. I think it should be somebody you know and there are friends that are like, “Hey, they just don’t work well together.” And they might like each other and be great friends, but it’s not going to be a good business partnership. Like I say, in Alex and I’s case, it’s been great. I don’t know how yours is doing but probably pretty good as well.

C: Mine’s is good. I was fortunate enough to do business with this person prior to getting into business with them. So it wasn’t a case of me going out and saying “I need the business partner.”. We got together previously and probably over the course of a year or two and got to know him better, understood and seen the value that he could bring for me.

C: And he was a sales guy, wasn’t an SEO guy. He doesn’t mind chasing up invoices, doesn’t mind client management. And I thought, “Why?”. Because the guy was basically outsourcing his work to me and I’m like, “Why don’t we just join forces and be done with it?”. And luckily enough it’s all panned out for the best.

C: So I wouldn’t suggest that people go out and randomly just get someone they don’t know or whatever. I think you’ve got to find the right fit. But I hear a lot of guys I talk to (certainly in entrepreneurship) that they don’t want to share businesses with other people. They see it as lost money. I would always see as potentially getting more money. But it seems that everyone’s got their opinions of how that works. But what’s really real for me, and is working very well for you. So I would say to anyone, “Don’t discount an enemy if there’s someone out there who can add value or cover gaps that are in your business.”.

M: I think it’s especially true for your audience, the SEO guys. A lot of those people just want to do SEO. They don’t want to deal with clientele. So partnering up with a sales guy like you did and there’s a lot of people who would rather build relationships, would rather be in sales and marketing and have the upside of owning a business as opposed to just being as a sales guy for somebody else’s company. I think a lot of those relationships can be built between the sales community and service, business type community like yours. So even an analytical career like SEO lends itself to networking for that reason.

C: Yeah. I think there’s even potentially a career or another business opportunity for salespeople to go to SEO guys and be that same function and probably earn a lot of money. But yeah, I’m sure there’s probably a lot of people already doing that out there, to be honest with you. But no, it’s all very interesting stuff and it’s great to hear how other people of came together to network and build a business and stuff. Sadly we are out of time. But for anyone who wants to talk to you, Mark or talk to you about brokerage or talk to you about business-, how do they get in touch?

M: I know the SEO community’s on Facebook. I’m already friends with a lot of this community on Facebook. Feel free to find me on Facebook. It’s just Mark Woodbury or UpwardExits.com. You can reach us through the chat forum or you just hit me on email, it’s Mark (at) UpwardExits.com. I’m always interested to hear people’s backgrounds and just a chat business as well.

M: If people are just looking to get into entrepreneurship, I’m happy to share some resources that have helped me out along the way, point me in the right direction. I think the best value we can bring to those people is Alex and I are in a privileged position to see behind the curtain at a lot of these businesses that are already working. So we get an inside look at what’s working and what’s not in space. How are people building successful businesses? We’re always happy to share that for people interested in reaching out.

C: That’s massively valuable that you do have that extra insight. So anyone, give these guys a shout and they are firsthand dealing with all sorts of businesses. People like me can give you my own experience, but you’re doing it with multiple businesses. Thanks, Mark, thank you for taking time to come on today, it’s been a pleasure.

M: Appreciate it. Thank you for having me on Craig.

seo profile image

Craig Campbell

I am a Glasgow based SEO expert who has been doing SEO for 18 years.

  • social media icon
  • social media icon
  • social media icon

Online Courses