• The Entrepreneur Forum | Startups | Entrepreneurship | Starting a Business | Motivation | Success
  1. Join 50,000+ entrepreneurs
    who are kicking butt and
    winning their dream life.

    Unscripted™ Entrepreneurship:
    A Business That Pays More Than Money, It Pays Time.

    "Fastlane" is an entrepreneur discussion forum based on The Unscripted Entrepreneurial Framework (TUNEF) outlined in the two best-selling books by MJ DeMarco (The Millionaire Fastlane and UNSCRIPTED™). From multimillionaires to digital nomads, the forum features real entrepreneurs creating real businesses.

    Download (Unscripted) Download (Millionaire Fastlane)  Register
    Registering for the forum removes this block!

  2. Forum *Official* Book Discussion
    Influence, The Psychology of Persuasion by Robert Cialdini

    The forum has voted to discuss this book. Grab it and let's discuss!
    Buy: Buy | Discuss: Influence: The Psychology of Persuasion(Review | Discuss)

A-M-A $27M+ In Online Businesses Sold + Managing A Remote Team Traveling Abroad - Ask Me Anything!

Discussion in 'General Entrepreneur Discussion' started by empireflippers, Aug 24, 2017.

  1. empireflippers
    Offline

    empireflippers Bronze Contributor Speedway Pass

    Messages:
    33
    Likes Received:
    204
    Joined:
    Mar 1, 2013
    Gender:
    Male
    Location:
    Ho Chi Minh, Vietnam
    Rep Bank:
    $2,118
    Note: MJ Approved

    Hey everyone - my name is Justin Cooke and I run a company called Empire Flippers where we help others buy, sell, and invest in profitable websites and online businesses.

    Along with my business partner, Joe Magnotti, we started building and selling our own websites back in 2009-2010, but eventually pivoted to a brokerage & marketplace where we bring together sellers, buyers, and investors to close deals.

    Our company has grown quite a bit in the last few years - from $200K in sales in 2012, nearly $10M in 2016, and heading towards $20M in 2017 - enough to get us listed in the top 200 on the INC 5000 list two years in a row. To date, we’ve helped broker more than $27M worth of deals between our buyers and sellers. Our team has grown a lot too - we currently have a team of 25 people.

    We built our company as a “distributed team”. We live/travel in various places around the world, getting together for company meetups 3-4 times per year.

    We broker almost every type of online business (Adsense, Amazon Affiliate, FBA, E-commerce, Private Affiliate, iOS apps, SaaS, etc.) and have seen thousands of unique and successful businesses. We’ve seen quite a few online businesses come through our marketplace - you can read more about the 11 popular types of online business models here.

    Feel free to AMA about buying, selling or investing in online businesses, building management teams, starting a podcast, growing our business, interesting niches, living/working remotely, or anything else!

    Edit: Thanks for all the questions! I'll be checking in regularly over the next few days, so feel free to ask any questions you like and I'll do my best to answer.
     
    Last edited: Aug 25, 2017
    Bruh, LPPC, Blaise84 and 36 others like this.
  2. JAJT
    Offline

    JAJT Ha Ha! Business Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

    Messages:
    2,603
    Likes Received:
    13,405
    Joined:
    Aug 7, 2012
    Gender:
    Male
    Location:
    Ontario, Canada
    Rep Bank:
    $66,531
    Assuming people enter correct numbers into your website, how accurate is your projection tool compared to what you actually sell businesses for?

    How quickly do you typically find a buyer for the companies you take on?

    The company I ended up going with for my last sale promised me the moon and a quick sale and I got peanuts delivered by a lethargic sloth.
     
  3. MJ DeMarco
    Offline

    MJ DeMarco Raving Lunatic Staff Member Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

    Messages:
    27,832
    Likes Received:
    91,757
    Joined:
    Jul 23, 2007
    Gender:
    Male
    Location:
    Phoenix, AZ
    Rep Bank:
    $395,644
    Admin Post
    Welcome Justin and thank you.

    Guys, step right up and ask away -- if a liquidation event is a part of your Fastlane plan -- @empireflippers can be a part of it.

    I'll get the ball rolling: What type of patterns or themes have you seen in 2017 with respect to business sales?

    Is see a lot of "dropshipping" websites advertised at Empire... is that model dying? Or alive and well?
     
  4. becks22
    Offline

    becks22 90% coffee, 10% everything else Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass Summit Attendee

    Messages:
    211
    Likes Received:
    537
    Joined:
    Jul 6, 2016
    Gender:
    Female
    Location:
    Upstate NY
    Rep Bank:
    $3,405
    Since selling is my end goal-- what can businesses do to prepare ahead of time to attract buyers? Are remote businesses that can be operated anywhere always the best route?

    Edited to say Welcome :)
     
  5. empireflippers
    Offline

    empireflippers Bronze Contributor Speedway Pass

    Messages:
    33
    Likes Received:
    204
    Joined:
    Mar 1, 2013
    Gender:
    Male
    Location:
    Ho Chi Minh, Vietnam
    Rep Bank:
    $2,118
    Hey there!

    After someone submits a business to us to list, we run it through the Valuation Tool to get a "rough" estimate on the multiple. We then begin the vetting process and, depending on a number of factors, will actually price, list, and sell that business somewhere in that range.

    It's an internal tool that we've modified, made pretty, and now use as a front-end marketing tool. (To drive potential sellers, of course)

    Yeah - less unscrupulous brokers will promise the moon/stars to "land" your listing, only to not find you a buyer and wear you down over time to hopefully take something reasonable. (Or less so)

    Keep in mind that a business is only worth what someone's willing to pay. While we've honed our Valuation Tool and pricing experience over time, we sometimes miss the mark ourselves.

    I can safely say that better than 80% of the businesses we sell sell in the first 60 days. Others, though, can take much longer.

    We sold a $1.7M FBA business (our largest sale so far) last quarter, but it took us 8 months to close the deal. There's a case study on that deal here.

    Hope that answers your questions?
     
    ThirtyOne, JDx, G_Alexander and 14 others like this.
  6. AgainstAllOdds
    Offline

    AgainstAllOdds Legendary Contributor Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

    Messages:
    1,695
    Likes Received:
    9,769
    Joined:
    Dec 26, 2014
    Gender:
    Male
    Location:
    Chicago, IL
    Rep Bank:
    $64,562
    How do offline sales affect multiples? For example, if 50% of revenue is offline, would that increase the multiple, and if so by how much?

    What's the #1 thing besides metrics that will increase the sales value of an online business?

    Can I sell the online portion of a business and keep the offline?


    P.s. I'm currently in Ho Chi Minh. Let me know if you're free to grab a bite to eat.
     
    Greg R, #nowhere, Chazmania and 4 others like this.
  7. biophase
    Offline

    biophase Legendary Contributor I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

    Messages:
    6,267
    Likes Received:
    27,522
    Joined:
    Jul 25, 2007
    Location:
    Scottsdale, AZ
    Rep Bank:
    $185,186
    How do new buyers take possession of the Amazon account? Do you just change the data in the backend or do the buyers purchase the LLC containing the Amazon account? Do you inform Amazon that you are selling or transferring the account?
     
  8. Koen_88
    Offline

    Koen_88 Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

    Messages:
    42
    Likes Received:
    48
    Joined:
    Jun 6, 2017
    Gender:
    Male
    Location:
    Netherlands
    Rep Bank:
    $247
    Welcome!
    Why did pivot? did you see a need or opportunity? And how did you start with bringing the first cliënts together? I'm interested in the start of your brokerage business
     
    Last edited: Aug 24, 2017
    JAJT likes this.
  9. empireflippers
    Offline

    empireflippers Bronze Contributor Speedway Pass

    Messages:
    33
    Likes Received:
    204
    Joined:
    Mar 1, 2013
    Gender:
    Male
    Location:
    Ho Chi Minh, Vietnam
    Rep Bank:
    $2,118
    Hey MJ,

    Since we serve entrepreneurs looking to exit, we're typically 1-3 years behind the bleeding-edge types who are entering new industries/niches, trying out new monetization methods, etc. For example, we saw the slow-moving FBA businesses coming in 2014/15, but didn't get the first listing until December 2015 on our marketplace.

    Also - what gets listed/sold with us isn't necessarily indicative of the market but, rather, our marketing efforts, where we choose to spend our time/focus, etc - make sense?

    That being said - we've been listing/selling quite a few Amazon FBA businesses in 2016 and that's continued through 2017. The best of those have unique/branded products, include the Seller Central account in the sale, and have blended traffic and sales channels. (eCommerce sales outside of Amazon exclusively)

    We list/sell dropshipping sites, for sure. They're typically in our lower-mid range - Mid-5 to Low-6 figures. The business model is far from dead, but I think the shiny object chasers have mostly jumped ship to FBA, Amazon Merch (new), etc.

    You hear a lot about this biz model being dead, that biz model dying, etc. What's fascinating to me are the entrepreneurs quietly plugging away at these "dead" business models and niches - often in boring or at least less-interesting niches - and making quite a bit of money. They continue to bring in sales and cashflow and we're happy to take them on our marketplace.

    It's not hard to speculate, though, that Amazon has come AFTER dropshipping stores in a massive way. They'd love to "crush" them all and put them out of business, to be sure.

    That being said, there are niches (hobbyist niches, in particular) that require really knowing the market, have an educational piece around them that buyers appreciate, etc. These are still doing well today, for the most part, as Amazon doesn't compete well there.

    You've probably seen this before, but here's a very public case study from eCommerce Fuel on the sale of their dropshipping store. I think that's a good example.
     
  10. PhilPhil
    Offline

    PhilPhil New Contributor

    Messages:
    14
    Likes Received:
    9
    Joined:
    Nov 23, 2015
    Gender:
    Male
    Rep Bank:
    $66
    Not calling out anyone here, but are those numbers actual sales(revenue) or transaction? I am guessing its transaction, and getting 10-20% of that transaction is still awesome, but it irks me when brokers use transaction figures as their revenue.
     
    amp0193 and Vilox like this.
  11. empireflippers
    Offline

    empireflippers Bronze Contributor Speedway Pass

    Messages:
    33
    Likes Received:
    204
    Joined:
    Mar 1, 2013
    Gender:
    Male
    Location:
    Ho Chi Minh, Vietnam
    Rep Bank:
    $2,118
    Thanks for the question!

    Here are the broad strokes and then I'll share something that goes into more depth:
    1. Cut unnecessary expenses (Exploratory marketing, unused software/apps, personnel, etc.) - You'll typically be valued based on your Trailing Twelve Month (TTM) average, so cutting those out at some point in the last 12 months before listing is critical.
    2. Document your processes - It may not add much to your valuation/multiple, but it will make your business more sellable. Use Google Docs, Sweet Process, etc. - just make sure you have your daily/weekly tasks in the business documented for quick/easy turnover. May just make the difference between losing a deal and a buyer pulling the trigger.
    3. Cut out your personal work/expertise - Not always possible, but will attract a larger buyer pool (a wider audience could purchase/run the business) and will avoid a lengthy earnout or more involvement on your end post-sale.
    4. Yep, remote businesses are best - You'll have a larger buyer pool.
    For more in-depth points on these broad strokes, check out our guest post on Shopify here.
     
  12. empireflippers
    Offline

    empireflippers Bronze Contributor Speedway Pass

    Messages:
    33
    Likes Received:
    204
    Joined:
    Mar 1, 2013
    Gender:
    Male
    Location:
    Ho Chi Minh, Vietnam
    Rep Bank:
    $2,118
    No worries!

    Those are brokered sales/transactions. We make/earn 15% on the sales. (Along with some additional fees and side projects)

    We go into some depth on our quarterly reports. You can check out our Q2 2017 report here.
     
    Andy Black, MikeSwig, JAJT and 2 others like this.
  13. empireflippers
    Offline

    empireflippers Bronze Contributor Speedway Pass

    Messages:
    33
    Likes Received:
    204
    Joined:
    Mar 1, 2013
    Gender:
    Male
    Location:
    Ho Chi Minh, Vietnam
    Rep Bank:
    $2,118
    We were building and selling our own (small) AdSense sites when we started out. We had many requests from others to list/sell their sites along with ours, but we avoided it for some time, worried that selling their sites (where we only get 15%) would hurt our own sales.

    Over time, our process for building out sites became less and less profitable. Because of this, allowing others to sell through us started to make more sense. We were making changes to our process and the sites we were building, but the brokerage started to take off and became our main focus.

    We ultimately sold or scrapped all other projects (distractions!) to really double-down on our marketplace and serving our buyer and seller customers.
     
  14. empireflippers
    Offline

    empireflippers Bronze Contributor Speedway Pass

    Messages:
    33
    Likes Received:
    204
    Joined:
    Mar 1, 2013
    Gender:
    Male
    Location:
    Ho Chi Minh, Vietnam
    Rep Bank:
    $2,118
    We've had mixed success with those looking to separate (and sell off) their online business only. It's worked in a couple of cases, but in others we either couldn't get the listing verified/approved/sold. It sounds solid, but once you dig into the details, we've seen how integrated (and reliant) the online business is to the offline business, if that makes sense.

    Some sellers think that once they're listed they can let off the gas. NOT a good idea. If your business doesn't sell right away and you've got a declining month...and then another....you'll likely be facing discounted offers, earnouts, etc. from buyers looking to mitigate their risk. Keep pushing until the wire hits your account!

    You're in Saigon? Sweet! - I'm in Binh Thanh District. (City Garden) Heading out for snacks/drinks with friends tomorrow night (Friday) if you want to join? PM me and I'll send you the details.
     
  15. empireflippers
    Offline

    empireflippers Bronze Contributor Speedway Pass

    Messages:
    33
    Likes Received:
    204
    Joined:
    Mar 1, 2013
    Gender:
    Male
    Location:
    Ho Chi Minh, Vietnam
    Rep Bank:
    $2,118
    Great question.

    The best option is to include the Seller Central account. We ask the seller to get confirmation from Amazon and let them know that they're selling the business (and account) to get the OK from them before swapping out the details. They've approved it each time.

    When the Seller Central account is NOT included, it's a little trickier. (And takes more time to migrate the business) We effectively have the seller remove the inventory and have the buyer "hijack" the listing.

    Check out this post on migrating businesses and scroll down to where it talks about FBA.
     
  16. MJ DeMarco
    Offline

    MJ DeMarco Raving Lunatic Staff Member Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

    Messages:
    27,832
    Likes Received:
    91,757
    Joined:
    Jul 23, 2007
    Gender:
    Male
    Location:
    Phoenix, AZ
    Rep Bank:
    $395,644
    Admin Post
    I've heard some horror stories with respect to buying/selling websites, for example, the seller forging data, screenshots, misrepresenting stuff...

    Can you describe some of your experiences and what red flags you've come to notice? Your worst experience?

    Every business has to deal with the fraudsters and it'd be nice to hear some of the pattern tells you guys recognize.

    And again, thanks for stopping by to share.
     
    Midas, Xeon, Chazmania and 7 others like this.
  17. Driven28
    Offline

    Driven28 Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

    Messages:
    50
    Likes Received:
    64
    Joined:
    Jun 22, 2008
    Gender:
    Male
    Location:
    Citizen of the World
    Rep Bank:
    $500
    This may or may not be TMI for you to answer... but I have a question about your marketing strategy:

    Where do a majority of your listings come from?
    I know you have a decent content and referral strategy (I know some folks you work with)... and thus, probably receive quite a few listings that fall in your lap at this point.

    But do you have a cold outreach process as well?
    Do you look actively seek out tired/distressed business owners who might want out?
     
  18. empireflippers
    Offline

    empireflippers Bronze Contributor Speedway Pass

    Messages:
    33
    Likes Received:
    204
    Joined:
    Mar 1, 2013
    Gender:
    Male
    Location:
    Ho Chi Minh, Vietnam
    Rep Bank:
    $2,118
    Thanks for having me - appreciate it!

    Not just anyone can list/sell on our marketplace. We have a strict vetting process in place that requires the seller to work with us so that we can independently verify the earnings, traffic, etc. If we can't verify the information or find inconsistencies that can't be explained, we reject the listing/submission.

    I can't go into as much detail as I'd like around our vetting process, of course. We've thought about this a lot, but it would act as a roadmap for those looking to game/defraud us and our buyers!

    Keep in mind, too, that this is NOT due diligence. Ultimately, that's the responsibility of each individual buyer to do their own due diligence. We're representing the seller in the transaction. We do the vetting so that we can keep the quality of the listings on our marketplace high and avoid the "wading through the trash" problem we'd have if we let anyone/everyone list their website/business.

    We've seen it all, as you've mentioned. Faked screenshots, unverifiable traffic, etc. One thing I'll mention is that (for sites that have traffic) we only allow Google Analytics or Clicky in our vetting process.

    Examples on a few of the more interesting/complicated irregularities:

    1. Seller had multiple websites selling products at the exact same pricepoint. Tried to pass off ALL the sales to only ONE of the websites/businesses.

    2. Seller of the eCom business was also the supplier. This isn't NECESSARILY a problem, but if it's the only supplier at a lower-than-market rate that could be problematic. It's actually an interesting model (A supplier replicating retail shops and selling them off to others to expand sales), as long as the price offered is reasonable, there are other suppliers of the product at a similar pricepoint, etc.
     
  19. JAJT
    Offline

    JAJT Ha Ha! Business Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

    Messages:
    2,603
    Likes Received:
    13,405
    Joined:
    Aug 7, 2012
    Gender:
    Male
    Location:
    Ontario, Canada
    Rep Bank:
    $66,531
    This very thing caused an over 50% devaluation of my business during my sale. I thought I'd be "out" in 30-60 days. Took 6 months.

    I took the foot off the gas, sales started dropping, I stopped re-investing, offers started lowering, buyers kept asking why sales were declining. It was a damn mess.

    I did this with my FBA sale.

    Opened a support ticket, asked what I had to do to sell it to ensure I wasn't tied in any way to the new owner.
    The response I got was "no problem, have the new seller change the bank details", basically. I printed the response, just in case it came back to bite me.

    Sale went through without issue.
     
  20. empireflippers
    Offline

    empireflippers Bronze Contributor Speedway Pass

    Messages:
    33
    Likes Received:
    204
    Joined:
    Mar 1, 2013
    Gender:
    Male
    Location:
    Ho Chi Minh, Vietnam
    Rep Bank:
    $2,118
    Nope - I can answer that! :)

    Since we started, the single greatest marketing channel by FAR has been our content marketing. Primarily our blog content, but also our podcast, guest posts, interviews, etc.

    It started off slowly, but we're paid dividends on the content we create.

    Here's a great interview with Clay Collins from Lead Pages talking about content marketing Vs. building out a sales force. This one resonated with me and has shaped the way we approach our marketing efforts, sales team, etc.

    We've tried (and failed) at cold outreach. We tried a targeted approach using cold (but personal) emails and didn't really get much out of it. Shame, really, because that could have been super valuable to us.

    Something we're ramping up in 2017 (and expecting to continue with in 2018) is our in-person events, conferences, and meetups. We're pretty good with the steak dinners and can throw a helluva party! :) Seriously, though, we've seen some value from that this year and will ramp that up in 2018.
     
    ZeroTo100, Andy Black, ZF Lee and 6 others like this.
  21. empireflippers
    Offline

    empireflippers Bronze Contributor Speedway Pass

    Messages:
    33
    Likes Received:
    204
    Joined:
    Mar 1, 2013
    Gender:
    Male
    Location:
    Ho Chi Minh, Vietnam
    Rep Bank:
    $2,118
    Hey all - it's super late here in Vietnam so I'm going to call it a night for now.

    I'll be back on tomorrow to answer more questions if you have more and find it helpful. :)
     
  22. GuestUser450
    Online

    GuestUser450 Guest

    Rep Bank:
    $
    How often are people surprised by the valuation?

    Are you aiming for a middle ground between flippa and fe or are you aiming for an end of the market?
     
    ZF Lee likes this.
  23. ApparentHorizon
    Offline

    ApparentHorizon Gold Contributor Speedway Pass

    Messages:
    764
    Likes Received:
    2,214
    Joined:
    Apr 1, 2016
    Location:
    Greenville, SC
    Rep Bank:
    $8,492
    How do you manage your remote team? - culture, software, etc?
     
    ZF Lee likes this.
  24. Scot
    Offline

    Scot Ductus Exemplo Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

    Messages:
    2,686
    Likes Received:
    12,232
    Joined:
    Jul 10, 2016
    Gender:
    Male
    Location:
    Florida
    Rep Bank:
    $56,167
    All the good questions have been asked, just wanted to say I'm a big fan of y'all. Have heard you on various podcasts and keep up the good work!
     
    Inuc, ZF Lee, JAJT and 3 others like this.
  25. Paul Thomas
    Offline

    Paul Thomas Bronze Contributor Speedway Pass

    Messages:
    264
    Likes Received:
    329
    Joined:
    Jul 9, 2013
    Gender:
    Male
    Rep Bank:
    $1,848
    Firstly, thanks for doing this! You guys seem like you really know your stuff. From your answers the process sounds extremely similar to massive M&A transactions obviously on a smaller scale.

    Here's my question and background for you:

    1) How many digital products businesses have you sold? Specifically interested in eBook businesses, but would like to hear any other businesses that you may have sold in this space.

    If for example there is a person who runs an eCommerce store selling solely digital ebooks (but lots of them), with a large market - how hard would this be to sell in comparison to a physical product business. Additionally, how does the multiple compare with this type of business to a physical product business.

    Also for this scenario, assume that the digital product business has its own website (platform), with the majority its traffic paid from major sources (FB, Google), with a slow incline of SEO traffic. NOT talking about kindle businesses, but PDF ebook businesses with a large market.

    One more small one questions

    2) Do you go out and pitch businesses like a banker would to sell given how the markets are moving, or do most businesses come to you?

    Thanks! Appreciate any insight.
     

Join 1000s of entrepreneurs who are rewriting life's script and winning financial freedom.

---- ----

You must be a member to join the conversation.

Create Account

Join the community fast and easy!

REGISTER

Log In

Already have an account? Login here.

LOG IN

Share This Page