If you like the idea of selling a website for hundreds of thousands of dollars or buying a website that is making thousands of dollars a month, then you’ll definitely want to hear this awesome interview with Justin Cooke, one of the founders of Empire Flippers.
Justin Cooke and Joe Magnotti went from selling their own websites to creating a multi-million dollar website marketplace in just a few short years.
In this interview you’ll learn why their journey has been so successful and what they do to make Empire Flippers a safe and supported place for buying and selling online assets.
Plus you will get some great insights into the kinds of websites that sell best. And at the end you’ll hear a hot inside niche tip…
Meet Justin Cooke – The evolution of Empire Flippers
Liz Raad: Today we have a very special guest, Justin Cooke from Empire Flippers.
Justin Cooke: Thanks for having me, really appreciate it.
Liz: And what we want to do is find out a bit more about Empire Flippers and how the marketplace works, and also a bit about how you got started and how you’ve ended up where you are today. Because you have had an incredibly successful journey through this process.
Matt: Also, we should mention Justin, you founded Empire Flippers with your business partner Joe Magnotti.
Justin: Yeah, so we started building small niche websites. Over time, that process for our creation of sites got worse and worse. It was less profitable. So, we allowed other people to sell their websites on our platform and that’s when we really kind of turned into the marketplace that we have today.
Liz: And now it’s grown a lot since then. How many listings do you sell now per month?
Justin: Yeah, so when we started off we were selling $5,000 – $6,000 websites. Now we’ve moved into seven figures and we’re starting to do mid-seven figure deals.
Abundance of website buying and selling opportunities in today’s marketplace
We do about 22 to 30 deals a month right now. We’re aiming for a deal a day. We fall a little short of that, but we’ll probably do around 260 to 300 deals this year.
Liz: And that’s good for people to know. This is an abundant marketplace. There’s a lot of websites for sale out there.
Justin: Yeah, at any one time we probably have around hundred listings ranging from $20,000, up to mid to high seven figures. And then as we’re regularly closing these deals, we’re also sourcing new deals. So, every Monday we put up new listings and that range from 3 or 4 up to as many as 10.
Creating a leading website sellers marketplace driven by customer demand
Liz: So when you set up this platform, what was the focus? What was the goal? For the end users what did you want to provide for them?
Justin: So originally it was scratching our own itch. We built a platform that we wanted to sell our own websites. We were building our own small sites and we needed somewhere to sell them. So we built it out for ourselves and we built it a way that we thought would be attractive and interesting and helpful to buyers. And so, that also helped us build it up.
It’s challenging because we have a dual-sided marketplace. We have to sell to both buyers and sellers, and it helped that we built up the buy side first. Now, we had a bunch of hungry buyers looking for websites and online businesses for sale and then we had to turn around and go find the sellers.
Empire Flippers offers profitable vetted websites
One of the really attractive things about buying on the Empire Flippers marketplace is the fact that we have dedicated teams. So, it’s not just a “list it and forget it” thing. When sellers are looking to list their website with us, we have a vetting process.
“We have to verify the earnings, the traffic, and make sure the seller’s legit. We go through a pretty strict process before any business can list.” – Justin Cooke, founder EmpireFlippers.com
We also help throughout the sales process. We get on the phone with the buyers and sellers when they’re having conversations, because we’re experienced and do this on a regular basis. When the seller has to try and sell their own website, sometimes they’re uncomfortable with it and haven’t done this before, and maybe they’re a little protective about it. It’s a little more awkward than having our guys who are trained and skilled who do this regularly.
Empire Flippers actively get involved in the website sale process
So, we help with the actual sales, with the negotiations, and migrating the website after you purchase it. Because as a buyer, you may not know how to transfer a website to someone else, whereas we do it regularly. So, we will actually hold your hand and walk you through the process of migrating the website at the end. So, it’s really a full-service shop in terms of we’re there all the way, and we have dedicated teams to help with each part of the process.
Liz: So, it is a very supported website sales service which is great for our guys to know. And that’s good for a seller to know as well – that you are bringing in good buyers, who will be able to follow through on the deal.
Justin: Yes, that’s really important to sellers, because they’re concerned that “I don’t want to deal with the tyre kickers, I don’t want to deal with time wasters.” And so, we have a large buying pool of people that have legitimate money.
Verification of website buyers…
One of the big things with us is that we require a deposit. So, if anyone’s coming to look at the website for sale, we hide the information behind a deposit. That way you don’t have some kid in his parent’s basement looking for business models to copy. Our website buyers are specifically looking to purchase, and they have access to some amount of capital to potentially do that. So that really helps verify the buyers.
We also do some pre-vetting so some of the initial questions, we have our team answer before they even get to you. So, that means if you’re dealing with a potential buyer, there are real detailed questions that we need answers from the seller. Or we have you get on a potential buyer-seller call. Around 20 to 25% of buyer-seller calls result in a deal. So, it’s a pretty high close rate. As a seller you know if you get on the call with the buyer there’s a higher likelihood that you’re going to end up with a deal with the buyer.
Trusted website sales platform
Liz: That’s awesome to see. You’re at a stage now where your platform has reached that critical mass. You now have lots of buyer, lots of sellers, and you’re putting them together in a way that they can transact the deals and feel safe doing it.
Justin: One of the things that really helps with our platform is that we’ve done a lot of content marketing. We’ve been in people’s ears, or they’ve seen us, or they’ve been reading our stuff for a number of years (almost a decade) now.
These are people who really know that they can trust us. So, it’s not that we have to sell our buyers on our platform and that we are legitimate and that we’re looking to do good business. Most of that we don’t have to do. It’s more of trying to match the buyer with the right sellers for the deal.
Critical key – really know your seller
Liz: That’s really interesting. So, you guys (and the Empire Flipper brokers) will actually get to know the buyers and the sellers. And you’re able to put together the right people, based on their experience and their monetary level etc.
Justin: Yes, and this is on both sides. Because on the seller side, we call it peeling back the onion.
- So the buyer’s going to say, “Oh, why do you want to sell?”
- “Oh, I just want to raise money for another business.”
- And then we say “Okay, well what kind of business are you doing?”
- “Oh well, I want to get into this business because I’m more passionate about it.”
- “Well, what kind of business is it?”
- “Oh, it’s for helping kids on the spectrum.”
- “Well, why is it important to you?”
- “Because I have an autistic child.”
That’s something real. That’s something we can use in the sales process to really get the deal done. And that’s the real answer. It’s not just “I need money for another business” which is a common answer.
What makes a website valuable?
Liz: So, we’ll get some juicy details now from you Justin! Are there any interesting trends you’ve seen in the marketplace, or any types or styles of websites that you’ve seen sell really well?
Justin: Yes, in general if you want to sell at a higher multiple there’s a bunch of things that go into that. And we’re probably not going to take the time to run through each of those here.
But in general, have it be more trustworthy, and have it be less risk for the buyer. And by less risk, we mean have it be older, have more stable traffic sources, more diversified traffic sources, have a low cost per acquisition for customers, higher lifetime value, recurring revenue etc. This makes it super valuable.
Also, recurring revenue will really boost your multiple.
So, if it’s safer and less risky for the buyer, you’re going to get a higher multiple. And the reverse is true too. If it’s riskier, you’re likely to get a lower multiple.
Justin’s Hot Tip in the digital marketplace – what website’s are selling hot right now…
One thing I’ve seen do really well are the lead gen sites, and they’re monetized by Campus Explorer or QuinStreet (affiliate program). And typically, they’re for-profit educational institutions often in the U.S, but you can target geographical regions. So for example, it’s a lot easier to do the SEO, to get ranked in Omaha than it is nationwide. So, they’ll target say dental technician schools, and people looking for that in a particular region get that ranked and then drive those leads and they get paid anywhere from $20 to $40 a lead.
Now, I’ve seen most of those sites sell, they make somewhere between $1,500 up to $8,000 to $10,000 a month, but they’re super solid and they sell quickly when they get on our marketplace. So, that’s a pretty cool model we’ve seen over the last few years.
Matt: That is really cool because we actually teach that strategy here in Australia through our courses at the eBusiness Institute.
Justin: That’s great. They’re solid businesses. One other thing that’s interesting, is a while back QuinStreet would buy up the sites that got bigger. So, when these websites were making around $15,000, $20,000 a month, QuinStreet would buy those sites directly.
They did the same thing years ago for personal finance sites and blogs. So anyone that had a personal finance site around credit cards, QuinStreet would buy them out and then hold them under nondisclosure agreements, and they would keep running the site for a couple of years as if it was theirs. QuinStreet actually owned it.
I don’t know if they’re doing this for the educational lead spaces. If they’re doing that, it wouldn’t surprise me at all Because that’s the model they used for the personal finance space. So, it’s interesting.
Matt: Awesome. Great tip, thank you. We may or may not have had dealings with QuinStreet.
Liz: It’s a really good affiliate program they have. So that’s really interesting that you’re noticing they’re selling really well on Empire Flippers.
Justin: The other cool thing is QuinStreet has a barrier to entry, because it’s harder to become an affiliate for QuinStreet. They don’t make it easy.
Matt: You’ve got to buy your way in.
Justin: Yes, you can’t just go and quickly sign up like any other affiliate program. So, that’s great because it keeps some other people out. So, you have to go a little further to get signed up, but that’s good because you want some barrier to entry.
Standard affiliate sites and drop shipping websites, have a challenge. It’s so easy, that people can go copy you rather than buy your business. You want them to buy your business and see that as the fastest route. But if it’s just so easy to copy you that could be a problem.
Matt: And education leads are worth a fortune. Anywhere in the world but especially in America with the QuinStreet program.
Justin: Those schools get paid. I mean, they make so much money, they’re paying QuinStreet a boatload of money, and have a budget to pay all the content producers.
Liz: That was happening here in Australia too and it was even government funded.
Justin: Oh wow yeah. Well, a lot of money flying around there!
Matt: That’s an awesome tip for our readers.
Liz: Yeah, thank you. So, thank you so much for being here with us Justin. It’s great to get an intro into Empire Flippers. If someone would like to find out a bit more about Empire Flippers or get onto the marketplace, then just go to the website? Or is there a specific person that they should contact?
Justin: Sure. Check us out at: EmpireFlippers.com. From there you can schedule a call with our team.
You can also check out our Empire Flippers podcast. And then if you’re interested, we’ve got a show called the Web Equity Show. I work with a guy named Ace Chapman who’s great and you guys should talk to him if you haven’t already. But Ace Chapman and I do a show on buying and selling website businesses and it’s been a really fun podcast.
Liz: Awesome. And then there will be some more interviews later with Alex Champagne from Empire Flippers as well.
Justin: That’s our guy! He’s our closer. He runs the sales team that helps get all these deals done. So, he’s the driving force behind that machine.
Liz: He’s awesome. So to our readers – you’ll see some website showcases with Alex and see the sort of listing that Empire Flippers have. And we’ll take a peek inside and see what sort of thing they’ve got on their books.
Thanks so much Justin. Awesome to have you here and we can’t wait to have you back again some stage soon.
