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Empire Flippers Review: Selling a 6 Figure Website
Selling a business that you start from scratch is as much of an emotional decision as it is a financial decision and after 7 years of starting and running my business, I was ready to sell. In fact, I was burnt out and needed to sell in order to get my life and sanity back.
This is a review of a website that I sold on Empire Flippers for over $300,000 USD.
Why I chose Empire Flippers:
The main reason I chose Empire Flippers was because I trusted them and their platform and I knew that potential buyers trusted them as well.
This cuts down on the amount of work you have to do to prove your business to every potential buyer. Empire Flippers vets your site for weeks before they let you list it. They make sure that the numbers you’re claiming are legitimate which puts potential buyers at ease. Empire Flippers also verifies the funds of potential buyers to make sure they can actually afford your business. This acts as a great filter and eliminates buyers who aren’t serious and will end up wasting your time.
Empire Flippers vs Flippa:
Before listing my website on the Empire Flippers Marketplace I shopped around and even listed my site on Flippa. Flippa has a lower fee of only 5% of the sale price vs Empire Flippers’ 15% so I thought it was worth a shot.
My business got a lot of attention and at first it seemed like Flippa was going to work out, then came the stupid questions.
Buyers kept asking questions that are clearly listed in the description like:
“what’s your monetization method?”
“I have a full time job and can’t spend any time on the business, is it 100% passive?”
“who is your biggest supplier?”
After weeks of answering stupid questions it became painfully obvious that the buyers on Flippa weren’t serious, and even worse, they might even try to copy my business. The valuation they suggested was also lower than the Empire Flippers valuation which would have resulted in me receiving about $50,000 less after the sale.
Empire Flippers Selling Fees:
The fees are probably what will give someone the biggest pause before listing their site with a particular broker and while Empire Flippers does not charge a listing fee, they do take a cut of the final sale price:
Empire Flippers Listing Fee: Free
$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.
Flippa Selling Fees:
Flippa takes a smaller commission than Empire Flippers, only 5% of the final selling price for larger sites and 10% for smaller sites. But they charge you a fee just to list your site which ranges from $29.00 to $499.00. I paid $128.00 so that I could have an NDA & Confidentiality agreement attached to my site. Otherwise anyone on the platform can see your URL and other business details.
Also, like I mentioned above, the quality of the buyers on Flippa is much lower than on Empire Flippers. From my experience, Flippa is better for listing low value sites (under $10,000) and Empire Flippers is better for high value sites.
Empire Flippers Selling Process:
Depending on your type of business, this process can take a while. My site took about 6 months to sell and this was mainly because it was a drop shipping site in a very unique niche which limited the amount of potential buyers.
If you have a site which is more passive like Affiliate, FBA, etc. then the selling process is usually much faster. Either way, I recommend that you start preparing your site to sell way in advance of the date you actually 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 give you a chance to ask any basic questions you have as well as let someone from Empire Flippers take a look at your site to make sure it is a good fit and offer any suggestions.
Get your books in order
Once you decide that you want to list your site then you will need to 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 the figures can be accounted for.
Ideally, all funds should be coming 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 use to input all of 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 clearly documented, start doing it now and this will make the sale process much faster and smoother.
How much do businesses sell for on Empire Flippers?
Valuations are based on a multiple of monthly profit generally ranging from 25x – 50x monthly profit. Empire Flippers has a valuation tool that you can use to get an estimate of what your site is worth.
What Types of Businesses Sell on Empire Flippers?
Empire Flippers accepts a lot of different kinds of online businesses like Affiliate, FBA, Kindle, Subscription, Drop Shipping, etc. and if you have a legitimate online business, then odds are you will be able to list it for sale on Empire Flippers. However, they do have some criteria like no adult sites, gambling sites, scam sites, etc.
Also, the type of business that 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 largest 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 right now and can usually sell for more.
My business was a drop shipping business and it took about 6 months to sell while I saw other more passive businesses sell in less than a week.
Selling a Growing Business vs. Declining Business
Obviously a growing business is going to 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 increasing numbers this will not only attract more buyers, it will also increase your final sale price.
When to list a seasonal business
My business was seasonal with higher sales and page views in the summer and lower ones in the 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 in the beginning of the spring, right when my sales and site traffic was naturally 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 which meant that I had less buyers interested in it.
So even though my profit was increasing every month, which was increasing the sale price of my business, because there were less buyers interested in my particular niche, I had to lower my multiple in order to attract more buyers.
Similar to starting a business, the only way to really know the demand of your product or business, is to get it in front of potential buyers.
I touched on this earlier but one thing to keep in mind is 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 in 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.
Once your business is live on the Empire Flippers platform, potential buyers will be able to “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 in order for a potential buyer to unlock your site they will need to verify that they actually 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 will be able to schedule a call with you and then eventually make an offer on your site.
Once an offer is made, you will then be able to accept it or make a counter offer. Before accepting the offer, you want to make sure that it is a number that 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 there are usually some terms attached. For example, 75% of the payment upfront and the other 25% in three months.
If you are happy with the offer, you can accept it and then the sale will move into the migration phase.
The migration phase is actually made up of 4 phases that all need to be completed before the seller can get paid; The Pre-Inspection Phase, The Inspection Period, The Post-Inspection Phase and then finally, The Payout Phase.
This process is great 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 been accepted. This means that the seller will end up running the business for about 3 weeks for free.
This is my biggest criticism of the Empire Flippers selling process but it still wasn’t a deal breaker for me, I used this time to show the new buyer how to run the business.
This is another thing that helps build trusts with the buyer who is the one who will ultimately be making the payment to you.
The Pre-Inspection Phase: This is when all of the revenue generating assets are transferred over to the buyer. This includes 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. During this period, your site also needs to generate at least 50% of its normal revenue. So for example, if your site normally makes $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 these criteria are not met, then the buyer has the right to cancel the sale.
The Post-Inspection Phase: This is when any remaining assets are transferred to the buyer like social media accounts, logo files, SOPs, Google Drive, etc.
The profits and expenses will also be calculated for this period and once the buyer confirms that they have all of the assets then 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 there aren’t any delays. For most sellers, this will be the largest single bank transfer to your account so you will want to make sure there aren’t any hiccups!
Fees and Taxes on Selling an Online Business
Empire Flippers will essentially act as escrow for the sale. They will get the initial payment from the buyer and transfer this amount (minus their commission) to you once the migration phase has been completed.
They also only take their commission on what has actually 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, 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.
Final Thoughts: Selling a Website on Empire Flippers
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 6 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.
How to File Your US Taxes from Taiwan
If you have moved abroad to start a business or teach English then you might be tempted to forget about all the bureaucracy in the US and not file your taxes. While this probably won’t matter much in the short term, in the long term your unfiled taxes could come back to haunt you.
Filing keeps Uncle Sam happy and you should still file even if you don’t make or owe any money. Another benefit is that if you select direct deposit for your refund, then you will get your refund AND stimulus checks fast. I didn’t even know the latest House Bill had completely passed and I already had the $600.00 stimulus check automatically deposited into my bank account.
How to File Taxes as an Employee or English Teacher in Taiwan
If you are working in Taiwan as an employee of a company or an English teacher then your employer should take care of your Taiwan taxes for you. You will also be paying some tax in Taiwan depending on how much you make and how many days you stay in the country so you will not owe any US taxes on this amount (unless you make more than $107,600 USD/year).
This is due to the Foreign Earned Income Exclusion which allows your to “exclude” up to $107,600 USD in income from your taxes (updated for 2020).
How to File Taxes for Freelancers or Business Owners in Taiwan
Things get a little bit more complicated when you are not an employee and you are living abroad but don’t lose hope yet! If you are in this situation then it is even more important that you file your taxes and declare all of your income (and in some cases your bank accounts). This is because self-employed people generally need to self report their taxes and are sometimes held under greater scrutiny by the IRS because it is easier to under report your taxes if you are self employed.
The first thing to make sure of is that you qualify for the Foreign Earned Income Exclusion,
You can do this through either the Bona Fide Residence Test OR the Physical Presence Test.
Bona-Fine Residence Test: This basically means that you are a resident (not citizen) of the foreign country you are staying in. So in Taiwan this means that you will have an ARC (Alien Resident Certificate). If you are running a business and living in Taiwan, then opening a Branch Office (Representative’s Office) in Taiwan is the easiest and cost effective way to do this. I’ve been doing this for 4 years and it has helped me save on both my US taxes Taiwan taxes and has given me access to Taiwan’s National Health Insurance, contact me here to learn more.
Physical Presence Test: This means that you have been physically present in a foreign country or foreign countries (other than the US) for at least 330 full days during a 12 consecutive month period. The 330 days do not have to be consecutive but time spent traveling (flying between countries) does not count so you really need to double check your travel itinerary and make sure that you don’t spend too many days back in the US.
Remember, you only need to qualify for 1 of these tests. So if you are a Bona Fide Resident, you don’t need to qualify for the Physical Presence Test and you have some more leeway with your travel plans and time spent back in the US.
If you don’t qualify this year then just file your taxes as a regular US Citizen.
Because as far as the IRS is concerned, you are still living there and need to file taxes.
If you do qualify for the Foreign Earned Income Exclusion then you will need to make sure that you fill out Form 2555 so that you can declare your foreign earned income.
You will be able to deduct up to $107,600 USD of foreign earned income for this years taxes (2020) and it usually goes up by a few thousand dollars a year to keep up with inflation.
There are two common mistakes people make when filing the Foreign Earned Income Exclusion:
The first is forgetting about the “earned” part. This means that you need to be doing work to “earn” your wages. You can still do this as a business owner but it cannot be through passive investments.
The second is not paying self-employment tax. If you are an English teacher or employee of a Taiwanese company who derives all of their income from their employer, then you shouldn’t have to worry to about this. But if you are a business owner then you will most likely need to pay self employment taxes.
Filing Your Taxes from Taiwan
No matter if you are a digital nomad with no income or a business owner running a seven figure FBA business, filing your taxes will keep the IRS happy, helps you get your stimulus checks faster and can benifit you if you ever decide to move back to the US. Filing can also be done for free and if you’re an employee then it should be pretty quick and relatively straight forward.
Owning your own business will make your taxes a little more complicated but you can still file for free or enlist the help of a CPA.
I have paid accountants in the past but have filed my own taxes with E-file the past couple of years. E-file is authorized by the IRS and free for the basic option.
I am not a certified public accountant and the opinions expressed in the Blog are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific tax strategies. It is only intended to provide education so always do your own research and consult with a certified public accountant.