Building Profitable Websites to Speed Up the Journey to Financial Independence
Jim is the author of the personal finance site Accelerated FI.
Recently I got the chance to catch up with Jim and ask him about his side hustle of starting and growing profitable websites and find out how this side hustle plays into his overall financial strategy.
Zach: For readers who aren’t familiar with you or your blog, can you give us a bit of background about yourself?
Jim: My name’s Jim and I’m from Michigan. I’ve got a wife, 2 kids, and a regular 9-5 job in supply chain which basically means making/shipping stuff you’d buy at Target or Wal-mart like food.
I started to learn about side hustles in 2013 when I Googled “how to make passive income”. I came across SmartPassiveIncome.com and read almost everything on the site which teaches you how to make money online.
I had never heard of it before and was really interested. I came across Mr. Money Mustache about the same time and did the same thing; got obsessed and read every single article on his site.
Putting both of these things together I realized I wanted to retire fairly young (40s when my kids are out of high school or college). To do this I needed to start saving a lot of money and ideally make more as well.
I ended up starting my personal finance site to try to teach people how to do what I do. I saw too many friends talk about side hustles like Uber and Shipt. But the problem with those side hustles is that you’re still trading your time for money.
I was interested in starting a side hustle where my time and money were separate and I could make money while I was out enjoying life.
Zach: You recently sold an FBA business for $40k. Can you tell us how you came up with the idea to start that business along with what exactly that business did?
Jim: Once I started listening to the Smart Passive Income podcast I subscribed to more and more business/side hustle podcasts. Eventually on one of these podcasts I heard about these guys who were making $50k per month selling stuff on Amazon.com. I was intrigued so I wanted to buy their course.
I went in on it with a few friends and we split the cost of the course. The info was actually pretty straight forward and would be a rip off at full price to be honest.
The advice was to find a small item on Alibaba.com, have a factory make you a few hundred, ship it to the Amazon warehouses and watch the profit roll in thanks to Amazon’s huge customer base. So, I take their advice and decide I’m going to sell garlic presses.
Unfortunately a ton of other people jumped on the Amazon gold rush at the same time and by the time I had a factory make the 250 garlic presses and ship them to my house, there were already 100 other people selling the exact same thing. Some of them were even better quality or came with accessories and cost way less than mine.
I instantly knew I was screwed. I spent $1,700 on inventory and over the course of the next few months I recouped about $500 of that money. It was a total flop but I knew the business model was solid.
The total monthly sales on Amazon just for garlic presses back then was over $100k-$200k per month. If I could find a lower competition niche, maybe $20k per month on Amazon, then I could capture at least $5k-$10k per month of that. So that’s what I did.
For my next product I knew I had to start cheaper and buy less of it. So I went to AliExpress.com instead of Alibaba which lets you order smaller quantities but at slightly higher prices. I found some watch straps that were selling for $1.50 and I could sell on Amazon for $10.
There’s also a kit that you need to change your watch strap that was selling for $6 on Amazon. I found it on AliExpress for $0.25.
So I bundled together the watch strap and the toolkit for $1.75 and that same stuff would cost you $16 on Amazon. I priced mine at $12 and things took off.
My sales were growing and I added more colors, sizes, multipacks, faux leather, etc. I went all in on the watches and got up to about $10k per month in sales with a good 20-30% margin.
Over the years I sold everything from fidget spinners to sunglasses. I sold fidget spinners at the height of the mania and at one point I was doing $5,000 per day in sales. I was profiting $1,000 per day. It was insane. Eventually it came to a stop and I was left holding the bag.
My own supplier (and a million others) flooded Amazon with fidget spinners for $4. I was buying them for $7 and reselling them for $25 so I was instantly killed. I got stuck with over $3,000 of fidget spinners in my basement. I give them away to everyone who visits my house now 🙁
Zach: Can you walk us through your decision to sell your FBA business? If it sold for $40k, presumably it was making some decent money for you. Why did you decide to cash out instead of continuing to use it as an income stream?
Jim: This goes back to one of my failed side hustles which was trading options. I had $25k in my Roth IRA that I used for options trading and promptly lost $5k. Thankfully I learned my lesson and gave that up.
I cashed out the remaining $20k and bought 2 websites. These websites were producing about $1,000 per month in income. So I figured after 1 year I’d make $12,000 and still have assets worth $20,000. This was way more appealing than trading options.
At the same time the Amazon world was getting harder. Competition was increasing. My watch straps were being copied left and right and it was a race to the bottom on pricing. My $3k per month profit had dwindled to $1k.
I reinvested and created some new product lines. I found a new niche and had custom products created. This got my sales back up to $10k. Over time my sales continued to decline. I lost my passion for the business and was only spending about 1 hour per week on it.
I decided I’d be better off running websites. It was more interesting and had a larger moat. Unlike fidget spinners where my supplier could instantly undercut me and destroy my business, I didn’t have the risk with websites.
It was a longer term game and I realized with my writing and ability to learn new skills (like search engine optimization), I could make money with this. And it would be passive.
So I sold my business and reinvested it back into my sites. I’ve started new sites and hired some writers. I’m currently building my sites up and reinvesting all of that money back into them. It’s a nice little cycle that keeps feeding itself.
I’ve grown from 2 sites making $1k per month to 7 sites that make about $1.6k per month in revenue. Websites take a long time to grow so I’m optimistic I’ll be able to hit the $5k per month number in the next 12-24 months.
Zach: From reading your blog posts, it seems like you have some prior experience with starting and growing business and websites. How long have you been earning income online this way?
Jim: I’ve had a lot of failed websites along the way. The first 4 or 5 websites I started were total failures. No customers, no income, nothing.
But all those failures taught me what to not do the next time and as I acquired existing, profitable sites, I could learn how those people were doing it. I took those lessons and started applying them to my own websites and I’ve been able to grow quite a bit.
One of the things that drove me nuts was seeing people talk about side hustles then have an income report where they’re making $100k per month. I just couldn’t relate to it. The advice these guys were giving was for someone at the $1 million per year level and that wasn’t me.
I wanted to know what actually worked. What it was like being down in the trenches doing this stuff and going from $0 to $100 per month. That’s why I started AcceleratedFI. Creating these online side hustles was something I really enjoyed and it was something I could share with other people.
It’s a lot easier to do something when you’ve seen someone just like you do it before and share the process along the way.
I’ve got monthly reports going back to when I first started my outdoor website in 2018. In 12 months that site’s grown to over 15k visitors per month and $300 in income.
There’s no magic pill or any shortcut. I’ve got all my steps along the way and people can follow along to see just how slow it is. Building websites takes time and it’s totally normal.
The timeline for all of this is about 5 years. My first couple years I spent bouncing around from shiny object to shiny object. I’d start a site, write 2 articles, then go to the next thing like making a phone app.
After I stopped bouncing around and settled on the Amazon FBA side hustle I spent most of my time there from 2015 to 2017. In 2017 I acquired my first websites and I’ve been focusing almost all of my effort there since early 2017.
Zach: How do these side hustles play into your overall financial strategy? Are you trying to use these side hustles to reach a certain net worth and then take it easy, or do you think you’ll always be building sites and similar businesses because it’s something you enjoy doing? Do you have a specific monthly income you want to reach with your side hustles?
Jim: One of the nice things about creating online businesses as a side hustle is that they can be sold for a multiple of the profits (usually 2-3x yearly profit). So every month I’m making income from my websites. I’ve used that to max out my Roth IRA a couple years and take my family on some vacations.
But then if I want to sell my websites or Amazon business, I can do that and collect 2 years of profits all at once when I sell it. If I wanted to I could invest this money into some after tax accounts but I’ve decided I get a much higher ROI by reinvesting back into my websites.
Eventually if I hit my FI target and I didn’t feel like working on my side hustles, I’d probably sell them and collect the lump sum payment to hit my FI number.
The ultimate goal is to reach $1 million and become financially independent. Right now I’m about $250k so I have $750k to go. To cover that with a website means it would need to be making $30k per month ($30k x 25 multiple = $750k pay day pretax).
I’m a loooong ways off from that but this is a long game so I just have to stick with it. Even if I don’t hit that lofty goal it would still be amazing to have a part time side hustle that makes 4 or 5 figures per month even when you don’t work on it.
Zach: Any advice for other people who are interested in starting an FBA business or who are looking to earn an income online through a website?
Jim: If you’re looking to get started in any type of online business, you have to watch out for snake oil salesmen. There are a lot of “gurus” out there who claim to make millions and will sell you their system for thousands of dollars but those are exactly the kind of people you need to avoid.
I’d go to Udemy and Youtube for starters. Figure out what you want to do and go learn how to do it. Don’t get shiny object syndrome and switch to something new.
If you want to deal with physical products, sell on Amazon and Ebay. If you want to do more writing and search engine optimization, start a website. But stick with it and soak up as much knowledge as you can on Youtube (free) or Udemy (usually $10 per course).
There’s never been an easier time to start a business. With the internet you can have your own factory in China producing custom products or you can sell information products on how to cure back pain to people in Europe while you sleep. Just pick what you want to do and go do it.
I’d also recommend listening to podcasts in the car/at work if you can. Find a subject that interests you and consume as much information as you can.
There are people today making millions of dollars per year doing something that they didn’t know existed just a few years ago. All you have to do is learn and take action.