Empire Flippers Selling Review
Selling a business that you start from scratch is as much of an emotional decision as it is a financial decision, and after seven years of starting and running my business, I was ready to sell.
This is my Empire Flippers Selling Review, where I recently sold a website for over $300,000.
Why I chose Empire Flippers:
I chose Empire Flippers because I trusted them and their platform and knew that potential buyers trusted them as well.
This trust works both ways and reduces what you must do to prove your business to potential buyers. Empire Flippers vets your site for weeks before they let you list it. They ensure that your profits are legitimate, which puts potential buyers at ease. Empire Flippers also verifies potential buyers’ funds to ensure they can afford your business. This acts as a great filter and eliminates buyers that aren’t serious and will end up wasting your time.
How Much Does Empire Flippers Take of the Sale?
Selling Fees are generally what will give a seller the biggest pause before listing their site for sale, and while Empire Flippers does not charge a listing fee, they take a cut of the final sale price.
Empire Flippers Commission:
$700,000 and under: Empire Flipper’s Commission is 15% of the sale price.
$700,000 to $5 Million: Empire Flipper’s Commission is 8% on the amount above $700,000 and below $5,000,000.
Over $5 million: Empire Flipper’s Commission is 2.5% on the amount above $5,000,000.
Empire Flippers Listing Fee:
How Long Does it Take to Sell on Empire Flippers?
Depending on your type of business, this process can take a while. My site took about six months to sell, mainly because it was a dropshipping site in a unique niche which limited the number of potential buyers.
The selling process is usually much faster if you have a more passive site, like Affiliate, FBA, etc. Either way, I recommend you start preparing your site to sell about six months before you want to sell it.
Get Started At Least 6 Months Before You Want to Sell
The first step is to get in touch with Empire Flippers and set up an initial consultation. This is free and will allow you to ask questions and let someone from Empire Flippers look at your site to ensure it is a good fit and offer suggestions.
Get your books in order
Once you list your site, you must submit your financial information to the vetting department. This means you should have a P&L (Profit and Loss) that makes sense and that all your numbers are accurate.
All funds should come in and out of one bank account. This wasn’t the case with my business, and it took some extra work to get my figures vetted, so if you’re thinking about selling your business, start simplifying things now and make your books as clean as possible, one bank account, one credit card, etc.
Empire Flippers also has a P&L form that you will need to input all your information like SKUs, Units Sold, Income (Amazon, Woocommerce, Stripe, Affiliate, etc.), COGS (cost of goods), and other expenses.
If you don’t already have this information documented, start doing it now, and this will make the sale process much faster and smoother.
How Much do Businesses on Empire Flippers Sell For?
Website Valuations get calculated by a multiple of monthly profit, generally ranging from 25x – 50x monthly profit, and will depend on what type of site you’re selling, whether it’s growing or declining, and whether it’s a Niche Site or an Authority Site.
What Multiple on Empire Flippers is Good?
You want to be happy with the multiple of monthly profit that you sell your site for. If you can only get a 24x multiple for your site, you might want to consider running it because you would have made all the profit from the sale in two years, and you still get to keep your site. But if you can get a 48x multiple for your site, that’s four years of income up front!
Selling has a lot of other intangible benefits besides just the big payout. It can free up your mental space so that you can focus on other projects or use the cash towards another website, house, etc.
Empire Flippers Website Valuation Tool
Empire Flippers has a valuation tool that you can use to get an estimate of what your site is worth.
What Types of Businesses does Empire Flippers Sell?
Empire Flippers accepts many different kinds of online businesses like Affiliate, FBA, Kindle, Subscription, Drop Shipping, etc. If you have a legitimate online business, then odds are you can list it for sale on Empire Flippers. However, they have some criteria like no adult sites, gambling sites, scam sites, etc.
Also, the type of business you list will help determine how much it sells for and how long the sale process takes. For example, SaaS and Affiliate Sites generally get the most significant multiples and sell the quickest because they don’t require shipping of any physical goods and are more passive than something like a drop shipping business. FBA businesses are also in high demand and can usually sell for more.
My dropshipping business took about six months to sell, while I saw other more passive companies sell in less than a week.
Selling a Growing Business vs. Declining Business
A growing business will attract more buyers than a declining one, so do everything you can to have a strong business before you start your listing. Your listing price will also be updated every month based on your monthly profit, so if you can show growth and increase profits, this will attract more buyers and increase your selling price.
When to list a seasonal business
My business was seasonal, with higher sales and page views in summer and lower in winter. I listed my site in the summer, which was the height of my best sales season, but because it did not sell quickly, I had to go through a winter period where the numbers naturally went down due to seasonality.
If I had to do it again, I would have listed my seasonal business for sale at the beginning of the spring, when my sales and site traffic was going up.
Type of Business Niche
Potential buyers need to be able to see themselves running your business, so keep this in mind while you’re getting your website ready to sell.
My business was in a very particular niche in the food and beverage industry, so I had fewer buyers interested in it.
So even though my profit was increasing every month, which was increasing the sale price of my business, because fewer buyers were interested in my particular niche, I had to lower my multiple to attract more buyers.
Like starting a business, the only way to know your product’s demand is to get it in front of potential buyers.
What if My Site Doesn’t Sell?
Empire Flippers has a 71% success rate selling businesses, so most of the time, this works out, but it also means that 29% of the time, a business doesn’t sell.
My site took six months to sell, and during this time I kept running my business, saving my profits and making my site better and better if you are patient and continue running your site the best you can, then you will give yourself the best chance of a successful exit.
Does Empire Flippers have an Exclusivity Period?
They generally ask for a two-month exclusivity period where you aren’t supposed to list your site on other brokerages. This is because they put in a lot of work vetting and listing your site, so giving it at least two months is reasonable.
You can see more details on the FAQ Page here.
Empire Flippers Selling Process Review
The selling process was straightforward, and Empire Flippers was there every step of the way to ensure things went smoothly.
Once your site is listed, buyers can “unlock” your business, giving them details like your URL, Google Analytics Data, Profit and Loss Statements, etc.
If the buyer is interested in moving forward, they will generally schedule a call or, in some cases, make an offer for the business immediately.
As the seller, you’ll then be able to accept, counter, or decline the offer, and once the offer is accepted, you’ll start with the Empire Flippers Migration Team, who will ensure that all the assets transfered to the new buyer.
Once your business is live on the Empire Flippers platform, potential buyers can “Unlock” your site. Unlocking your site will give the buyer detailed access to your listing, including your URL, Google Analytics Data, Social Media, Ahrefs, etc.
But for a potential buyer to unlock your site, they must verify that they have enough money to buy your site. Empire Flippers does this verification, and this is another huge benefit over other platforms like Flippa because it ensures that you are only getting qualified buyers who have the means to buy your site.
Once an interested buyer unlocks your site, they can schedule a call with you and eventually make an offer on your site.
Once you get an offer, you can accept it or make a counteroffer. Before accepting the offer, you want to ensure that it is a number you will be happy with. You also want to iron out all the other details like inventory and sales terms.
Generally, offers come in at about 90% of the asking price, and some terms are usually attached. For example, 75% of the payment is upfront, and the other 25% is in three months.
If you are happy with the offer, you can accept it, and then the sale will move into the migration phase.
I touched on this earlier, but remember that you will be updating your profit numbers and submitting them to Empire Flippers every month. This will change the final price of your business and you can take these profit figures as an example:
The January 2021 profit of $8,000 will be replaced by January 2022, and the sale price will either increase or decrease depending on if the new total monthly profit is higher or lower.
So if the profit from January 2022 is $9,000, then your new total will be $112,000/12 = 9,333 x 40 = $373,333
A $1,000 increase this month will result in a $3,333 increase in your final valuation.
Essentially, every month, you are competing against your last year’s numbers.
The migration phase comprises 4 stages; The Pre-Inspection Phase, The Inspection Period, The Post-Inspection Phase, and the Payout Phase.
This process is excellent for the buyer but not ideal for the seller because all of the profit from the business will start going to the buyer as soon as the offer has is accepted. This means the seller will run the company for about three weeks for free.
This is my most significant criticism of selling with Empire Flippers, but it wasn’t a deal breaker. I used this time to show the new buyer how to run the business.
This is another thing that helps build trust with the buyer, who is the one who will ultimately be making the payment to you.
The Pre-Inspection Phase: This is when the revenue-generating assets transfer to the buyer. Including payment processing accounts (Stripe, PayPal, etc.), affiliate links, incoming bank transfers, and anything else that generates revenue for your business. Once the buyer has all of these in place, the inspection period can begin.
The Inspection Period: This is a 14-day period where the buyer can check for any gross misrepresentations of the business. Your site must generate at least 50% of its expected revenue during this period. So, for example, if your site makes typically $20,000 in revenue per month, then your site will need to generate at least $4,666.67 in revenue during the 14-day inspection period:
$20,000 * 50% = $10,000
$10,000/30 days = $333.33
$333.33 x 14 days = $4,666.67
If this criteria isn’t satisfied, the buyer can cancel the sale.
The Post-Inspection Phase: This is when any remaining assets transfer to the buyer, like social media accounts, logo files, SOPs, Google Drive, etc.
The profits and expenses for this period will be calcuated, and once the buyer confirms that they have all of the assets, it is time for the Payout Phase!
The Payout Phase:
Before you get to this point, you should have already uploaded your banking details to Empire Flippers. Their accenting team will also reach out to you by email and make sure that they have the correct banking information on file. I chose to get my payout sent by wire transfer and I received it within hours of the accounting team sending the payment.
Make sure that you double-check your routing and account numbers so that everything runs smoothly. For most sellers, this will be the most significant single bank transfer to your account, so you will want to ensure there aren’t any hiccups!
Fees and Taxes from Selling with Empire Flippers
Empire Flippers will act as an escrow for the sale. They will get the initial payment from the buyer and transfer this amount (minus their commission) to you after the migration phase.
They also only take their commission on what has been paid by the buyer. For example, if a buyer buys a site for $200,000 but agrees to pay 50% now and then 50% in 6 months. Then your first payout from Empire Flippers will be $100,000 – $15,000 (15% commission) = $85,000, and 6 months later, you will receive the second payment of $100,000 – $15,000 (15% commission) = $85,000. Basically, Empire Flippers only gets paid their fees when you get paid.
They also don’t take out any taxes and leave this for the seller to sort out. The final amount of taxes you pay will depend on many factors, such as your home country, your income during the year you sold your business, the duration of the business, etc. In the US, sellers can expect to pay about 15% in Long Term Capital Gains Tax as long as they have held the business for more than a year. I am not an accountant, so please speak with one for more detailed information about your specific situation.
Empire Flippers Selling Review Summary
All in all I had a positive experience selling my website on Empire Flippers, and they handled everything very professionally. If you have a business that you want to sell, I recommend that you start getting prepared six months to a year before you want to sell. Things always take longer than anticipated, and you don’t want to be stuck running a business you no longer care about or have the energy to run successfully.