How Jon Payne Achieved 7-Figure Exits With Two Different Businesses

This page may contain links from our sponsors. Here’s how we make money.

Building a business and selling it for seven figures is an impressive accomplishment, and Jon Payne has done it twice.

But what makes Jon’s story so interesting is that he’s experienced with several different online business models. His first seven-figure exit was an agency, and his second was an Amazon FBA business. Jon also has extensive experience with content-based websites, so he has a very well-rounded perspective.

In this interview, Jon provides extensive details about his background and experience building several successful businesses. He also explains his reasons for focusing on e-commerce and Amazon FBA in 2024 and his approach to growing valuable digital assets.

I think you’ll find Jon’s story to be incredibly inspiring and his insight to be practical and helpful.

Tell us about your background.

When I went to college in 1999, I decided to major in Business/Marketing.  This was in 1999, for some context.

As it turns out, the school I went to (Towson University) had just started an E-Business program, and so that grabbed my interest. I had liked to play around with HTML just for fun, and practically, as a student, I reasoned that I would be able to move up in my career more quickly if I went into marketing on the internet since it was so new and few professionals had any experience in that area.

I then went on to have two internships in the internet marketing space and then soon after graduating, I started doing some freelance consulting which then turned into an agency I ran for about 10 years before selling.

When you started your agency, Ephricon, how did you get your first clients and reach the point of being able to go full-time?

So, I started Ephricon when I was 22 years old, just a couple of months out of college. I had been interning at a small marketing agency at the time, and that was a lot of fun—getting to learn about different businesses. I also took on a couple of very small web design and website maintenance clients on the side just to make a little extra cash and learn a bit.  

My intention was to find the ideal full-time job after graduation, but I was pretty picky and never found it.  I did, however, find a few more clients, and eventually, it was enough that I didn’t need to look for a job anymore.  

I think it was my third client that made the real difference.  It was a small non-profit that needed someone to manage its website – design, updates, maintenance, etc.  I quoted them a monthly block of hours that was just about the same amount as my monthly rent.  $780 per month I think was the amount.  I landed the account and gave them my best work.  Securing that account was huge for me early on.  I had very low personal expenses so it only took a couple of clients to get to a breakeven on my living expenses.

I had two main methods of trying to land those first few clients – cold calling and search engine optimization.  

For the cold calling, I mostly sent unsolicited emails politely telling companies that their websites were outdated and that I could improve them for super cheap. A few times, I even made in-person cold calls. That’s so difficult. I only recall one actual client I landed that way.  

Search engine optimization was the real golden ticket for me. Again this was 2003 so “SEO” wasn’t even really a term then, and there were lots of search engines that mattered other than Google at that time. 

I started learning about how to rank in the search engines in order to try and sell my web design and website maintenance services.  A lightbulb went off for me one day when a guy in California called and asked me to design him a website.  I was in Maryland, so like 3,000 miles away.  I had just been cold pitching prospects with no success and here some guy calls me and is interested in hiring me.  Within 30 minutes I had a new web design client for like $1,500.  Something clicked there.  

Now, it turns out that I wasn’t all that good at web design, but I was really good at SEO and getting leads for web design.  So for a year or two, I partnered with a local web developer where I got the lead and managed the project and he actually built the site.  And by then I had also started selling SEO services as its own offering.  I had a lot of luck with great timing here – I was very early to the party regarding SEO so my website had lots of age and content and ranked quite well for itself.

From that point forward basically all of my clients came from SEO. That or referrals that came from clients who originally found us from SEO.  It was the best selling point in the world.  If they wanted proof that we knew what we were doing we could just ask them how they found us.  “That’s exactly what we’ll do for your website” I would say.  It was a convincing argument.

Why did you decide to sell Ephricon?

I think there were 3 reasons why I decided to sell.  They all played a part and I have a tough time prioritizing them according to which was the most meaningful.  So here they are:

1. I was really stressed out. I also grew reactively and never proactively, so I grew the agency very “flat” with low overhead. We had 15 staff, 14 of whom were focused directly on client work. I did sales, staff management, bookkeeping, IT, and guided client strategy. It was too much. I was working too much. And I had 2 kids at the time (3 now) and needed a change.
   
2. I had concerns about the future of SEO.  I know it sounds silly now in hindsight but this was just after the first Panda and Penguin updates.  Lots of sites got hit.  We were spending more time doing link disavows than building links.  Almost every prospect I spoke with had their site recently penalized.  I was pretty sure there would still be a role for an SEO agency, but it seemed like the role wouldn’t be any fun.
   
3. The money sounded really good.  When you’re growing a business, you often make a lot more “on paper” than you actually take home.  That’s because you need to keep money in the business to fund growth, cover payroll, etc.  I had managed to save some along the way but I felt like I was a little behind where I wanted to be in terms of retirement savings, saving for my kid’s college, etc.  In one day I was able to pay for all three of my kids’ college tuition and also put nice chunks into savings/investments and charitable contributions.  That was pretty impactful for me.  I don’t think this would have been reason enough on its own, but combined with #1 and #2 above it was compelling.

How did you sell Ephricon?

This kind of parallels how I started the agency, in the same sense that it wasn’t so much a firm decision as it just sort of evolved.  I didn’t decide to sell the business at first, I just decided to get a professional valuation done. 

I reached out to one company that gave me a valuation range that was not very helpful – the high end of the range was like 3x more than the low end.  So then I reached out to a local broker, Viking Mergers & Acquisitions, and they gave me a valuation range that was very tight where even the low end figure looked pretty good to me.

I hired Viking as my broker, and immediately, they brought several interested buyers to me, whom I started to meet with. But how we found the actual buyer was a bit of a fluke.  

I was doing a Google search one day on the keyword  “SEO agency.”  This was a keyword that Ephricon ranked for and so I liked to monitor our position and the competitors.  I saw a company that I had never heard of called Straight North, who was running paid ads on this keyword.  I clicked and visited their site to check them out – not with my “sell the business” hat on but more in wondering who this new competitor was.  

As I was clicking through their website I noticed they had a page called “acquisitions”.  I clicked that.  It had a paragraph that said they had acquired several other smaller agencies and then it had a form to fill out if I was interested in discussing an acquisition with them.  I filled out the form.  A day later I spoke with the CEO on the phone.  Viking checked them out and they seemed legit.  Within another 2-3 days they had several people fly into Charlotte from Chicago to meet with me.  

The whole thing happened pretty quickly, I think we had a signed LOI within 2-3 weeks of the first contact.  The CEO of Straight North was very experienced in buying businesses so they knew what they were looking for and were ready to move when they found it.  They also put several people on their end on this full-time.  

The most time-consuming part was due diligence.  I can’t recall exactly how long that took but I think it was like 45-60 days.  Due diligence is not particularly fun.  But we got through it and I felt like they treated me more than fairly.  

I rarely consider whether selling was the right decision. Financially, it would have been better for me to have run the agency another 3-5 years and then sold it. But I was really burnt out. I needed a break. And there is no guarantee that I would have found a buyer then, particularly at the larger size.

As per the transaction details, I’ll just share a couple of vague statements. It was a low 7-figure deal, and the value was based on a fair market multiple of my Seller’s Discretionary Earnings, which is essentially like Net Income plus the owner’s salary plus other relevant add-backs. As part of the deal, I agreed to stay on for one year to help integrate the two agencies.

How and when did you get into E-commerce and Amazon FBA?

After I sold the SEO agency I was looking for what was next.  I had made enough from the sale that I wasn’t really worried about exactly when the next paycheck was coming, so I wasn’t looking for a job or anything like that.  But at the same point, I didn’t make enough from the agency sale to never work again.  Maybe if I was super frugal, but I’m not!

I had a Non-Compete Agreement with the buyer of my agency, so I couldn’t sell SEO services.  I tried maybe half a dozen different things (all online) and Amazon FBA was the one that took off!  

I found out about Amazon FBA from a close contact I had in the SEO space who had started selling on Amazon.  We met over lunch.  He told me two things that made all the difference for me:

First, he said that Amazon was basically a search engine. People search it and buy products. But it’s even better than Google because with Amazon, they’re more likely to convert—Amazon already has their credit card on file. And it’s a closed-loop system with perfect tracking. This was 2014. He said it was like doing Google SEO in 2004. It was early. That was powerful.

The second thing he told me was how to see how much revenue certain products were doing.  Without this, the whole business model would have been a nice conceptual idea but it would have been too risky.  But with this tactic, he showed me that I could actually know how many units a given product on Amazon sold each day.

This was before tools like Jungle Scout and Helium 10 existed. He showed me the “999 trick,” where you add 999 units of a product to your cart and start to check out. If Amazon has fewer than 999 units, Amazon will adjust your cart and say something like, “I’m sorry, but the seller only has 547 units in stock.” Then, you can check back a day later and do it again to see how many they sold.  

I took this idea and ran with it.  I love little nuggets like this.  I had spreadsheets upon spreadsheets manually tracking sales of probably 100+ potential product targets!

My first product went live on Amazon.com in early 2015.  We then added related products from there.  Eventually, we created a second brand and then bought a third brand.  We also expanded to other Amazon marketplaces in Canada (which worked well) and the UK (which was kind of a dud for us).  I sold this business and its 3 brands about 7 years later (2022) to one of the big Amazon Aggregators in another low 7-figure deal.  Collectively the brands were doing around $5 million in annual revenue.

How do you market your e-commerce brands/products? Do you focus on SEO? Any other specific strategies?

After I sold the first group of product brands I bought a small brand in a different niche and started another brand as well.  I’ve tried pushing sales through a Shopify site with Google traffic and also spent a bit of time building out an Etsy store.  I’m sure they can work in certain spaces, and with great execution.  But for me, I’m 100% focused on Amazon as our sales channel.  I like fishing where the fish are.  

A lot of people will say this is risky and we should diversify.  If there was another platform that had 50% of the volume that Amazon does then I would diversify.  But almost every Amazon-focused seller I’ve spoken with who has spent significant time and money on other channels says it has not been worthwhile.  

So instead I diversify within Amazon – different products, brands, etc.  And then I also have an agency that helps established brands and manufacturers sell on Amazon.  That is enough diversification for me.  I don’t want to be a jack of all trades but master of none.

How did the sale of the Amazon brands come about? Did you approach the aggregator, or did they find you?

For that sale, I approached the buyer myself.  I basically just emailed a bunch of the big aggregators as there were many at the time and they were actively looking to acquire Amazon-centric brands.

I think we first spoke with the eventual buyer in October of 2021 but my numbers weren’t quite where I wanted them to be.  We took a big hit during COVID, even though most FBA brands did quite well.  Our main product line was something people use in the office so obviously that wasn’t doing as well when everyone was working from home.  But by early 2022 we had recovered and were starting to once again hit all-time highs on our monthly sales numbers.

So when we reconnected in early 2022, the buyer was impressed with our recent growth and the trend.  And at this time most other FBA brands had leveled out or were coming back down from COVID highs.

We finalized the deal in June or July of 2022.  This was a few months after the financing had started drying up for all of the aggregators so our deal barely got done.  Had I sold a few months earlier I might have secured a higher multiple.  But had it been a few months later I suspect the deal wouldn’t have gone through at all.

What do you like about working on e-commerce as opposed to other business models?

I’ve done basically every popular online business model – agencies, e-commerce/FBA, niche content sites, affiliate, dropshipping, etc.  So I feel qualified to speak about this!

Both e-commerce and niche content sites are scalable, and in both cases you’re in control of your time.  An agency is the opposite–as you grow sales you have to grow your staff and you have to be responsive to clients on their timelines.  

But of course agencies have immediate positive cash flow.  So the floor for agencies is better, but the upside is more limited too.

Between e-commerce/FBA and content/niche sites, I think they are quite similar with similar risks.  The difference would be that in e-commerce you have money tied up in inventory too whereas in niche content sites it’s mostly your time and whatever you spend on content and marketing.  So niche content sites are cheaper and easier to start.  But because of that, there can be more competitors too.  With e-commerce, there’s less competition when you get into more expensive goods. 

Both have platform risks. You are either depending on Google or Amazon.  At least the way I approach them.  For me, the main reason why I like e-commerce/FBA more right now is that I think in that scenario we have less platform risk because at the end of the day when we sell products we make money for Amazon.  But with Google, niche content sites are mostly siphoning traffic from Google and thus are costing Google money.  They’re getting clicks that Google would rather go to their paid ads.  I think that is why these sites have been hurt by the recent algorithm updates.  

Has your approach to SEO or preferred business models changed at all over the past year or so due to Google updates or AI content?

Yes, definitely!  

Google updates are probably my bigger concern than AI. Roughly two years ago, when I sold my e-commerce company (mid-2022), my plan was to shift my focus from e-commerce to niche sites. I bought a couple of smaller ones and spent some time building one I created from scratch many years ago. By mid-2023, things were growing nicely but just not quite to the volume I wanted, so I was on the hunt for another acquisition of a niche site.

I almost bought a website for mid-6 figures in September 2023, right when the “Helpful Content” update hit. Thankfully, I got out of the deal—just barely.

The site I found was great—the best “affiliate site” I have ever seen listed for sale. It had great links, great content, and great design. I was actually under contract the day before the Google update rolled out, having just wired the money.  

Literally the next day, both traffic and sales fell dramatically.  It was my worst nightmare and the worst possible timing!  I was super anxious and almost sick about it.

I found the website on Empire Flippers.  Fortunately, their standard agreement had an out clause that accounted for this situation, and I was able to cancel and revert the agreement if revenue fell by 50% within two weeks of the sale date.  The numbers fell just slightly more than that threshold, and I canceled the deal.  That was a big relief for me, but I’m sure it was a big stressor on the seller.

It’s my opinion that Google is now no longer optimizing its algorithm to show the best search results for the user.  Instead, I think they’re optimizing their algorithm for their shareholders.  So I just no longer trust the business model of running an affiliate or ad-driven website that generates the majority of its traffic from Google organic search.  These sites are essentially competing against Google in their own search results, as Google would prefer to send those visitors to the ads instead.  That’s just too risky for me.

So instead I’ve shifted my focus back to e-commerce.  I bought a small Amazon-focused brand in 2023 and also started a new one.  It’s the same type of single-platform risk but I think it’s less volatile as in this business model when we sell products we make money for Amazon.  Plus we run a lot of paid advertising on Amazon too.  So we’re helping Amazon, not fighting directly against them.  

There’s still platform risk, but I think with Amazon, the worst-case scenario is less likely, and there are more ways to diversify the risk than with Google dependence (for a content site). If I were especially skilled with social media or email marketing, then perhaps I might feel different.

I still do some SEO work through my agency. We have a couple of SEO clients and also run a few of our own sites, but it’s not a growth area for us. 

Instead, my main focus is back on the Amazon e-commerce space.  Again, we do so both for clients and our own brands.

Please tell me about what you do with Vocational Media and Illuminated Goods.

Sure. Vocational Media Group is my digital marketing agency. Our main service is helping brands and manufacturers increase sales on Amazon. We also do a bit of Google-focused SEO and PPC for some select clients. I have a small, highly experienced team that runs the day-to-day for our clients while I personally oversee the strategic direction.

Illuminated Goods is my e-commerce company, which owns our product brands, which we distribute primarily through the Amazon marketplace. Our two current brands are Wardrobe Hackers, a line of functional clothing accessories, and Candleology, a line of candle-making kits and supplies made from natural beeswax. My agency handles almost all aspects of running this company, and I personally focus mainly on new product development.

I have also recently taken an interest in helping other business owners exit their businesses through my work with Viking Mergers & Acquisitions, the firm that helped me sell my SEO agency roughly ten years ago. So, if someone reading this is interested in possibly selling their business or even just understanding what their business is worth, please don’t hesitate to reach out to me.

What are your plans for the future?

I’ve been doing both SEO and e-commerce for a while now.  While I enjoy them both, I’m ready to move upstream a bit and spend more of my own individual time at a strategic level.  

As I mentioned above, I’ve also recently begun doing some fractional CMO consulting for one of the largest business brokers in the Southeast, Viking Mergers & Acquisitions. It’s been fun learning more about the M&A space through this work. And I think it can be really rewarding, personally, to help small business owners with a life-changing event like selling a business.  

So I’m not exactly sure what the future holds, but it will likely be some blend of my current interests:  M&A in the digital space, e-commerce, and/or marketing consulting.  I’ve got a nice list of ideas and we’ll see which of them sticks 😉

Interested in being featured on Flip My Site? We’re always looking for entrepreneurs with great stories. If you’ve bought or sold a website or online business, please contact us about being featured.