Friday, October 2, 2009

How much was Tim Ferriss really making from his supplement business?

1/20/2011 -- Update/Request: For some reason, this post is attracting a number of readers from Australia. If you have plans to be in the Perth area in the near future, would you mind dropping me a note via this form? Thanks a lot.


The figure I remember from the book was $40k per month. In this thread on the forums of Tim's Four Hour Work Week site, commenter "Kamakiri", who apparently has launched his own knock off (Game Brain) of Tim's former supplement business (BrainQUICKEN), says the facts suggest Ferriss couldn't have been generating anything close to those revenues from his supplement business. Some excerpts from Kamakiri's analysis:

Page 8 & 16 mention 40k, page 7 mentions 40% profits. No referencing of either together or in relationship with BrainQUICKEN (which he sold earlier this year). Read closely and Tim also mentions 30k, 60k, and 70k in other places.

Heck, if you were making a half a million a year at 40% profits, a normal business offer would be 10 years profits plus assets. That would value BrainQUICKEN at well over a mil and a quarter. Who in their right name would pay that for a business that Tim tells how to copy?

[...]

Bodybuilding.com has over 8,500 products. 1.2 million members with a 10% conversion rate (a gift there, should be about 2-3%) makes 120,000 purchases.

120,000 purchases /8,500 products = 14 sales for BQ off that site.

The hits to Tims's old site are easily conformable. This is the internet here people. Do the math yourself, and anyone can quickly see that BrainQUICKEN does not generate anywhere near that income.

[...]

Bodybuilder.com is pretty straightforward. Go to the site and pull the numbers off the top page. Simple math tells you he isn't making much there. Check the page views per month on BQ. Those numbers just don't add up to anywhere near 40k.

[...]

Having that many references, 30k, 40, 60, 70k... with out being more specific hurt his credibility in my opinion. It is carefully worded each and every time he mentions a figure. As it is written it is straightforward, but it does lead people to believe that Tim made 40k in income every month from BQ. Even a cursory view of easily verifiable numbers shows that this can't have come from BQ (not to mention zero spending on google ads).

[...]

I also researched the heck out of the business model in developing GameBRAIN. That is when the cracks in Tim's muse story came from. They say imitation is the sincerest form of flattery, but after imitating BQ to a certain extent, it was like an onion. Lots of good layers to dig through, only to find a few rotten ones.


At this point in our discussion, I asked if it were possible if Ferriss could have generated $40k per month in sales if that were mostly from retailers buying his product in bulk. This was Kamakiri's response:

The idea of buying in bulk from the site doesn't work because it never had that option. Besides, it is harder than hell to get retail space. An example of this is Mana Potions. Those guys do something near BQ by selling an energy drink for gamers. They have a serious team of salesmen, campaign girls, convention booths, and even a treadmill hooked up to WoW with timed runs from point to point across Azeroth (sp?). They have a tough time getting into stores, and the market for those products is tiny. Compare that to the supplement market (8,500 products on bodybuilding.com alone), and you can imagine the sales force that he would have to compete against. Retail profits are also nearly non-existent. You are looking at a few dollars in margin as opposed to the $60 or so he makes from the site.



That aside, outsourcing 10,000 bottles a month just doesn't work. 500 cases of 20 @v $4 profit a bottle. The logistics are out of the scale of anyone working less than 40 hours a week.

18 comments:

JK said...

Interesting. I already took for granted that there was some measure of exaggeration in 4HWW. Tim advocates some tactics that make entertaining reading but you'd have to be quite shameless to pull off in real life. I'd bet a good amount money from reading accounts of people who have interacted with him that he has a psychotic personality (the clinical definition that applies to 1/300 people, not the pop culture depiction of a sadist murderer).

The blog post below this one on Tim was pretty good too. I laughed at this part: "I knew there were cool people to hang out with after my panel, though, and I knew he wasn't one of them."

Kamakiri's supplement business is an interesting niche. I'd like to speak with him about how he went about manufacturing his supplement. His site looks too Wordpress-y though.

DaveinHackensack said...

Exaggeration is one thing, but if Kamakiri is right, Tim probably wasn't making a tenth of what he intimated he was making with BrainQUICKEN, and maybe even less than that.

Kamakiri's site looks Web 1.0 (e.g., narrow).

JK said...

Web 1.0 sites can still be effective, you don't need Flash and AJAX to effectively sell products. I just think the Wordpress format is worn out and it screams "amateur". This especially hurts him in marketing a product ostensibly supported by "loads of scientific research". He needs to ditch the Arial 12 font and hire a professional copywriter to pitch his material, IMO. I'm suprised to see such poor copy from an effective forum poster. Perhaps his natural skepticism dampens the enthusiasm that should exude from the pages of his own website. I can imagine Ben Stein reading that copy. "This is where Game Brain plays a key roll." wonk, wonk, wonk. yuck

I also find it hard to believe that enough people care enough about gaming to take a brain supplement for the express purpose of improving their gaming abilities. I would think QUICKENING YOUR BRAIN! would sell itself.

DaveinHackensack said...

By Web 1.0, I don't mean the tech, but the look of it. Wordpress sites can actually look good for static sites, if they are designed professionally. That's what I'm going to use for the Launching Innovation site (just a couple of pages, really) and the new blog. It's not worth paying my developers thousands of dollars to create a site that doesn't require any real functionality. Agreed about the copy writing, but honestly, I can't think of a way to write that pitch credibly.

Anonymous said...

I have to say that I've seen gamebrain.com and it has nothing to do with quickbrain.com.

I'm not surprised at all that "Kamakiri" didn't be succesfull. The components inside his formula are not usefull at all to increase concentration and memory in short-term.

The only components inside gamebrain that do something noticeable to mind, are L-Tyrosine, L-Glutamine and Folic Acid, but they are long-term components. Gramebrain claims that "guaranteed results within 60 minutes of the first dose". That's absolutely false. There aren't any component inside that can do something to the brain in 60 minutes. It's a lie.

But, brainquicken has some active componetes that work fast, like Huperzine A and Vinpocetine.That's really activity components that works in less than an hour.

So I guess that *any* of the "Kamakiri" customers are a repeating one, because it has no noticed effect. Des somebody knows actually how much profit had Kamakiri? I guess that not too much

I don't want to say that brainquicken is good (comparing it with other really cheap supplements, it doesn't deserve the price), but taking a look at the components it could boosts mental activity en 60 minutes, and gamebrain don't.

Brian Smith said...

While this does really call into question Tim Ferriss's credibility, I don't think it's all bad. For the average reader who doesn't have a $40k per month income, the 4HWW lifestyle becomes more attainable. That income stream supposedly came from all of the work Tim put in prior to embarking upon the 4HWW lifestyle.

If this is really true, he'd be doing everyone a favor by coming out and telling the truth. More readers may attempt the 4HWW if they weren't discouraged by the fact he's got $40k per month padding.

It's too bad that the entire premise of his book is likely a fraud: http://bit.ly/7XTWfo

DaveinHackensack said...

Brian,

"For the average reader who doesn't have a $40k per month income, the 4HWW lifestyle becomes more attainable."

Not sure I follow. I don't see how the 4HWW lifestyle becomes more attainable if Tim Ferriss really didn't have a successful muse with his supplement business.

I think you're also missing the big picture here. Tim started with money and connections: he grew up in East Hampton, NY, went to one of the most exclusive prep schools on the East Coast (the same one JP Morgan went to), and then to Princeton. Those connections probably got him the publishing deal as a first time author. But Tim, to his credit, promoted the hell out of the 4HWW. The book is his real muse. It's probably his first truly successful one.

The other big secret of the 4HWW "lifestyle" is that a certain subset of young people have been living a version of it for years. They used to be called slackers. When you're not concerned with saving money for the future (to buy a home, raise a family, take care of yourself in your old age, etc.), you don't need as much money in the present, particularly if you move to a cheaper city. That's not a new observation.

Andrew said...

You didn't consider other forms of marketing. For instance, direct sales or magazine ads (which he mentioned multiple times in the book). He obviously didn't drive all the sales through his website, he even mentioned in a few places an exclusive deal with the retail store GNC. So extrapolating the number of website visits is misleading. I also disagree that $40k/month (500k/year) revenue is impossible to obtain. How else would supplement companies afford to pay a few employees, cover product costs, and still make a profit?

Anonymous said...

Unsourced claims On page 12 of the book[1], Timothy Ferriss claims that:

* he is a National Chinese Kickboxing champion
* he has been a Cage fighter in Japan, vanquisher of four world champions
* he is Advisor to more than 30 world record holders in professional and Olympic sports

The cage fights are not substantiated by Ferriss and appear in no MMA databases. He provides no year for he when was a National Chinese kickboxing champion, and expert researchers have turned up no results in any database, neither online nor offline.

Many more unsubstantiated claims are made. For the above claims, there are no records anywhere outside of Mr. Ferriss's own book. There are no footnotes, nor links to any websites, nor photos provided, nor video, nor any supporting materials whatsoever. In addition, Mr. Ferriss provides absolutely no details as to names, locations, times, or cities.

Anonymous said...

You haters - cynicism, lies and outright jealousy are what this page is all about. Are you all unemployed high school students, or have you just been unsuccessful in life?. You do not have access to his bank account and none of you have worked for Ferriss. What right do you have then to speculate on his earnings, past or present? The problem with the internet is that it gives ALL OF YOU a voice; one which should not be heard on the grounds that opinion does not pass for fact, and speculation does not pass for truth. You are the reason that this country is going to hell in a handbasket. For shame people, for shame. When I move overseas and leave you all behind I will laugh gently at your demise, for it is you that is sinking this great ship. Think about what you say (or write) before you actually publish it on a blog site, comment or story. Hold yourself accountable to a higher standard in life, pleaes for the sake of humanity.

-Disgusted

ivanhoe said...

The problem here is that all of these are pure speculations. I have to agree with Brian, it's totally secondary if he has or hasn't made as much as he claims. He advocates an approach, not that you literally copycat his business (which is sort of stupid anyway, as you need some selling point over the existing product first... and honestly gamers niche? They are geeks, not obsessed with their bodies the way martial art or bodybuilding ppl are... they might try it, but will they care to buy it again? Doesn't look like a good business idea to me...). So if you come up with a new idea, than it's anyway just you and the market, Tim Ferris' company and earnings are totally unrelated to your own success or failure. just like with any self-help book, you should pick interesting ideas, give them a try and see if it works for you. That's what self-help books are for, they are not prescriptions to success, there is no such thing as guaranteed formula for making money.

MikeMike said...

very old thread I understand that. I just read the book. I own a supplement company on BB.com

Kamakiri's math is way off. I am surprised that BrainQuicken was only bringing in 40k a month. We are almost 3 times that amount with profit after all expenses of over 50K

LPricester said...

MikeMike, I hope you do not mind me asking how you were able to get in BB.com?? I own a supplement company as well. Will you be willing to give me advice?
Thank you!

LPricester said...

@MikeMike, I hope you do not mind me asking how you were able to get your company into BB.com? I will greatly appreciate your advice!
Thank you!

Anonymous said...

I've owned a number of businesses, and for years I operated a multi-million dollar online retail business. I know marketing like nobody's business.

Do I believe Ferris generated anywhere near $40k a month from his supplement business? Absolutely NOT. Period.

When his book first came out, and he still owned that business, I did some digging around to see if it added up. I'm firmly convinced that business was very minor league and little more than facade.

Ferris made his real money later, selling fantasy.

Anonymous said...

Some of the comments here are clearly rigged by Ferriss himself or his "virtual assistants".

Ferriss has done this on every blog everywhere it seems and on his own Amazon products.

I don't see negativity here on this blog. What I see is fake positive comments promoting Ferriss.

Most of his success is down to that - faking reviews and comments.

Anonymous said...

Hi ,

This is very informative topic.

I want to share my experience in suffering stress. I experience alot of stressful life last year. But Thanks in BrainQuicken at Brain Research Supplement cause its helps me a lot.

Anonymous said...

You people really did not read the book if you are putting stock into the Bodybuilding.com part alone.

Tim mentions in great detail about his own website for BQ. Then made mention of smart distribution and positioning...go back and re-read.

Nice try to drag someone down in order to get traffic to your site...why not just try what he teaches instead of bitching about it.

I used Tim's advice to start a kid toy company online...BOOM. I don't work 4-hours a week, more like 4-hours a day...but I created a lifestyle design that I could not have done working for someone else...and doubled my income.