Why We Changed Our Commission Structure
The only constant in both business and life is change (well, and taxes).
For several years, when we were AdsenseFlippers, we were known as the “20x Guys.” Now, that has changed significantly.
We rebranded to Empire Flippers and started giving higher and more accurate valuations of businesses using our automated valuation tool that goes off actual past sales data.
We have since sold businesses with multiples of 20x+, with the highest multiple sold at 52x. Even though we changed how we did multiples at Empire Flippers, we were still known as the 20x Guys, as if that was the only price you could ever get with us.
Reputations can take a while to change, but over the last two years, most people know we are no longer the 20x Guys.
And now we’re changing another well-known aspect of our business—our commission percentages.
We’ve always been the best value for the money compared to other brokerages for both buyers and sellers, and we have always been firm on charging a 15 percent commission.
Do other brokers charge less? Some do, but few can match the value that we bring to the table. We have entire teams in place for every step of the sales process unlike our competitors.
Our audience is the biggest and we have one of the most well-read blogs in the industry. We’ve also been able to hit the Inc. 5000 list two years in a row (going on our third year right now!). All of this means we have one of the largest groups of buyers and sellers in the industry, which tends to lead to faster sales and acquisitions for our customers.
Because of this, we felt the 15 percent was more than justified and the majority of our customers have agreed with us.
However, we decided it was time to…
Adapt to the Realities of the Mergers & Acquisitions (M&A) World
We started off selling tiny niche sites that sold for $3-20k per site. Nowadays, our lowest-priced listing live on our marketplace is $27,816. And that will likely be sold before this post is actually published on the blog.
Our average deal size right now is in the $115-130k range, and we are starting to see a slew of seven-figure listings going live on our marketplace. Because the value of our businesses on the marketplace is growing, we decided to change our commission structure to reflect the current state of our business. By making this change, we can still be the best-valued M&A brokerage in the online business space that is as attractive as possible to entrepreneurs of all sizes.
Our New Tiered Commission Structure
Our new commission structure works on a sliding tier system based on our valuation of your business:
- 15 percent for any business under a $1 million list price
- 12 percent for any business between a $1 million to $2 million list price
- 10 percent for any businesses between a $2 million to $5 million list price
- 8 percent for any business above a $5 million list price
While the majority of our businesses currently listed won’t be affected by this change, bigger businesses can rest assured we are the brokerage for them now.
This is also part of our growing strategy as we hone, refine, and expand our processes to meet bigger business demands.
We are currently the largest team in our industry, and with over $50 million worth of businesses sold on our marketplace, we are also one of the most experienced teams.
We believe this change is going to benefit our clients as we continue to grow.
Our listing price will remain $297 for first-time sellers and $97 for repeat sellers just like always. At the end of the day, our new commission structure will hopefully inspire you to keep on striving to build a more valuable asset.
Remember—when you do decide to sell your business, we will be there throughout the entire process, taking the friction out of having a profitable exit.
Are you ready to sell your business? Click here.
Photo Credit: Maxisports