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EFP 113: Dirty Little Secrets from Website Brokers

Justin Cooke October 20, 2014

It’s easy enough to talk about the benefits of using a website broker to help you sell your site, but what are they NOT telling you?

Inside the Weird World of Online Business Brokers

This week, Joe and I sit down to discuss some of the hard truths about our industry and working with brokers in general. We’re laying down some truth you’ve gotta hear if you plan on selling your site.

Check Out This Week’s Episode Here:

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Topics Discussed This Week Include:

  • Sellers get more love than buyers
  • We take no responsibility for the success/failure of your purchases
  • Our incentives are in getting the deal done, not in making both parties happy
  • You might get a website for less than list – you just have to ask
  • Contracts are only as useful as they are enforceable
  • Cherry-picking the best deals


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Wondering anything else about brokers and their dirty little secrets? Join the comments below and let’s start a discussion!


Justin:                   Welcome to the Empire podcast, episode 113. It’s easy enough to talk about the benefits of using a website broker to help you sell your site, but what are they not telling you? This week, Joe and I sit down and discuss some of the hard truths about our industry and working with brokers in general. We’re laying down some truth you’ve got to hear if you plan on selling your site. You can find the show notes and all the links discussing this episode at All right, let’s do this.

Ad:                         Sick of listening to entrepreneurial advice from guys with day jobs? Want to hear about the real successes and failures that come with building an online empire? You are not alone. From San Diego to Tokyo, New York to Bangkok. Join thousands of entrepreneurs and investors who are prioritizing wealth and personal freedom over the oppression of an office cubicle. Check out the empire podcast. And now your hosts, Justin and Joe.

Justin:                   Dirty little secrets, Joe. That’s what this episode is all about, man. We’re going to lay it down. We’re going to lay the smack down. We’re going to talk about the things that most brokers don’t talk about. When you get into quite a few points, what you think about that.

Joe:                        I was just worried when I heard about dirty little secrets. I’m like, “I know we’re transparent business guys, but I dunno how transparent I got to be.”

Justin:                   How far are we going to go, man? What was your first thought when you heard about this episode? Were you like, “What did he write up? What are his notes on this episode? What were [crosstalk 00:01:23]

Joe:                        I cringed a little bit for sure.

Justin:                   It’s good though, man. But these are the types of things that we talk about publicly and we’re going to lay down some of our behind the scenes incentives and the types of things that we’re looking to do, that may or may not align with our customers. I think it’d be pretty interesting. There is a value proposition for using a broker and I should say that, and we’ve argued dot and plenty of other episodes, but this one, we’re going to give you some dirt. I think understanding our motivations and incentives is going to help you work with your broker or work with us in the future. If you are not looking to buy or sell a website, I still think you can take some of these points and apply it to your industry or other industries. Think about motives and I’d really like to hear your feedback and where do you think we’re spot on and where we’re off the mark. So do let us know in the comments.

Joe:                        I think it’s interesting from a perspective of a buyer or a seller hearing these type of introspective into the broker business and see if that turns anyone one off where turns anyone on to working with us.

Justin:                   All right bro. Let’s take a quick break to pay the bills and look at hot money’s featured listing of the week. What’s you got buddy?

Joe:                        Talking about listing number 40,082, it’s actually owned by a friend of ours. He is living right downstairs from us right now in Chiang Mai, but it’s a travel site based on living and getting started in Bali. It derives its revenue from a book that he personally wrote and the affiliate program behind that book. It’s making about $750 net. It was created back in August of 2010. It’s about 8,000 page views and we’re asking just over $15,000 for it.

Justin:                   The cool thing about this book, and someone asks a question about that is, do I have to keep up with it? Do I have to be living in Bali to know all the details? Our buddy will actually pass along a writer that’s currently living in Bali, that we’ll do some of the work and keep the book updated for you. You don’t have to be involved. You’d some interest probably in Bali. But anyway, it’s a really cool book. It’s a really interesting niche site and that’s in the interests you … I definitely recommend you take a look. I like it and I think it’s in sell pretty soon.

Joe:                        And it site, he’s pretty passive too. So there’s really not much upkeep needed. Like you said, they comes with a writer. So if you did want to add content, that’s not a problem.

Ad:                         Now for the hand of this week’s episode.

Justin:                   We’re going to go through this and seven major points. The first one is, here’s the fact, Joe, we give way more love to sellers than we do buyers. And there’s a good reason for this, right?

Joe:                        Yeah. We need more sellers than buyers. That’s just the point. That’s the facts, as it is right now. I think that sellers are basically giving up 15% in order to sell with us, so we definitely have to make sure that they’re comfortable selling on our platform.

Justin:                   I think this is a common problem with any marketplace, where you’re going to have one side it’s harder to pull them than another. In our particular situation, sellers are more in demand. We have to give a bit more love to sellers, and more of our marketing efforts go into finding sellers than buyers. Once we have the inventory, the buyers come. I think we’ve reached at least a critical point on the buyer side. People know they can come by sites from us, but we need to do more outreach to make sure we’re driving the sellers and because of this we’re willing to make it a bit harder for buyers.

                                We’re willing to put up a few more barriers or roadblocks as in deposits. Not showing the URL, that type of thing, than we are with the sellers. With the sellers, we were able to meet and let them through the door and give them a bit more red carpet treatment in terms of trying to bring them on board. We do things like, set or fixed pricing, and we definitely represent the sellers and the deals more than we do the buyers. We’re on the seller’s team trying to get the maximum value.

Joe:                        I got that question today at the little a workshop that we did. It was interesting, they said, “Who do you really represent? The sellers or the buyers?” We definitely are in interesting position where we’re not just completely brokers for the sellers, but we definitely lean on that side.

Justin:                   Definitely. The second point we’re gonna talk about is that, we take no responsibility for the success or failure of your purchase.

Joe:                        This is true. Any broker out there, any marketplace out there, it was always buyer beware.

Justin:                   There’s any claim by any broker saying that they are going to guarantee any type of success, it’s just not possible. Our vetting process, we do have a vetting process in place to weed out the crap, what we consider crap. But it doesn’t necessarily mean that a site isn’t a good fit for you. We use our best judgment to cut out the site to where we think we’re putting up the sites of buyers are looking for, so they have a shot at it. But the truth is, is that the due diligence is still ultimately absolutely on the buyer.

                                Even though we have a vetting process in place, it’s a responsibility of the buyer to make sure it’s the right site for them. Here’s the other thing too. Once a deal has been finalized, it’s completely up to the buyer what they do at the site, the success of the site. And what we mean by finalizes, it means that the buyer has to have made the payment, full payment to us, we’re holding the cash. We go through the process of transferring the site from the seller to the buyer. The buyer verifies payment, and then we release the funds to the seller. Once those funds are released, that’s it. Deals done. We can stop deals in the middle. We’ve actually done it with two separate deals, where the site didn’t work out or it wasn’t as planned, that kind of thing. But it’s very rare and once the money has been transferred to seller, that’s it. Good luck. Buyer beware.

Joe:                        It’s definitely completely up to the buyer at that point, what he’s going to do with the site. A lot of times buyers do silly things like not renewing the domain name or you know, let the hosting account go into a cancellation.

Justin:                   Their marketing strategy fails or they get a Google update, there’s a change the affiliate program, that’s the buyer’s problem. They got to deal with that. That’s just the way that it works and that’s the way it works on any market place or any brokerage, but … Everyone’s like, “Oh.” We’re trying to make sure everyone’s good, but ultimately it’s on you. It’s on the buyer and we’re not held responsible for that.

Joe:                        Especially when there’s a site that requires a little more work, like customer service or adding content, we definitely try to make sure that the buyer is capable of doing this, but if they say, “Yes, I can do it all, I can do it,” and they’re willing to pay for it, at the end of the day, that’s all on the buyer.

Justin:                   Here’s a crazy situation for you, Joe. This is wild man. There’s a guy here in Chiang Mai right now, sold the site to a buyer that is also here in Chiang Mai right now, the guy ends up doubling the revenue. Now he is, that guy, the buyer has now listed that site for sale with us again, a year later. It’s pretty crazy, man. A pretty small world here in Chiang Mai, it’s going around. But anyway, my point is is that if someone buys your side as a seller and they double it or triple it inside of six months, too bad, so sad, that’s it. That’s all on the buyers. There is nothing we can do for you as a seller. Maybe you should have held onto the site longer. That’s it.

                                The third dirty little secret I want to talk about, is that our incentives as brokers are in getting the deal done, not necessarily in making both parties happy. We only get paid on successful transactions. That’s when the deal actually goes through, both sides get what they’re looking for. But that’s different than the level of happiness that a buyer or seller may have with the deal.

Joe:                        One thing I always try to tell people is that we have a vested interest in getting the deal done. That’s obviously true, and that’s something that everyone should be aware of when they deal with a broker.

Justin:                   That’s why we go to lengths to come out with creative structuring, so that we can make sure the deal gets done, because it gets us paid. The best scenario is when both parties are happy, the buyer and the seller are really happy with the deal. Worst case scenario is both parties except the deal. They’re like, “Not exactly what I was looking for, but I can do it.” Either way we get paid on either of those deals. I prefer happier parties on both sides, but we can do deals without it.

Joe:                        I think it’s just important to remember that a lot of times when the deal gets complex and may not be everything you want, and I hope that you’re at least happy about it rather than just accepting it.

Justin:                   The fourth dirty little secret. You might get a website for less than list. You just have to ask. You can negotiate with us too. We’ve got that question there, we were like, “Can I only buy at full price?” Not necessarily, although it regularly happens, I don’t know what percentage of our sites are bought a full price, probably more than 50%. There is some room for negotiation, especially if the site’s been around for a while.

Joe:                        I would say 70, 75% definitely go at or close to list 19, 20x, something like that. Maybe there’s some small discount for one reason or the other. The other 25% tend to fall into a legitimate reason why the seller is willing to sell for a discount. Maybe the site’s been up for a while for sale, maybe the site has recently taken a little bit of a downturn, the site is seasonal and is entering a down period, these kinds of things usually happen. Especially when we work with earnouts or other types of financing situations, we get at or close to list.

Justin:                   I think with us there’s less room for negotiation in general, because we’re closer to what the true market value is. Sometimes brokers do inflate their numbers a bit, but they are looking for deeper discounts, bigger negotiations. But we don’t have quite as much of that, I think, as some of the other brokers in our industry. Another thing too is that we advise the sellers based from our previous experience. If someone comes in with some low ball offer, four days after the site’s been listed and they’ve got a bunch of inquiries, that ain’t going to happen. If it’s been months and they come in with a somewhat reasonable offer, okay, it’s a good negotiation point, a good starting point. We can start to work from here.

Joe:                        A good starting point. That’s what I like.

Justin:                   A fifth dirty little secret for your contracts are only as useful as they are enforceable.

Joe:                        I feel like this is the slogan of the day today. I think we reviewed this question a couple of times.

Justin:                   We talked about this with the Drop Ship Lifestyle crowd today, but basically with … The international borders and the legality questions, just forget about it. It’s ridiculous because if you’re buying a 70 $80,000 site, unless you have any idea on how you’re going to go after someone in another country that purchased in different, dollar amounts or the Australian dollar, from a U.S seller, it’s ridiculous. You probably aren’t going to be able to enforce contracts. The only thing we think contracts are good for is to bring clarity to both sides of the table. That can usually be handled via email. We have done with contracts, but it’s really more of a feel good move. We make sure we let both parties know and understand that because it’s … Relying too heavily on a contract is going to be silly in this type of scenario.

Joe:                        The one time or a couple of times that we did do a contract, it was a real back and forth hassle of editing and editing and small little line items that honestly never would have come up anyway. The 1% things that if they did come up, is the physical contract really enforceable.

Justin:                   The same thing holds true though. When you have one American seller, one American buyer, even though they’re in the same country, are you really gonna go after and forcing that contract? Is that contract so rock solid, they can’t get a lawyer to weasel their way out of it. It gets really messy. So we’re not big fans of contracts. We just don’t see the need other than we already … And really an email and acceptance by both parties generally does the job.

Joe:                        That’s usually the better way to go. I think that really the dirty little secret here is that, if you’re working with a broker or somebody else that is big about contracts, that’s what I would bring up, is the enforceability of it. What’s the reason behind that? Is the reason behind it for clarity sake? Okay. Then you have something valid, but it shouldn’t be done in legal speak then.

Justin:                   Because here’s the thing. From the broker, and I’m trying, I’m saying, “Yes we should definitely do a contract.” It might be just to make you feel at ease so I can get the deal done and get paid. That’s not speaking the truth though. It may be really difficult to enforce that contract.

Joe:                        Or maybe some boilerplate contract that the broker has come up with, that fits his needs and his legality, his liability requirements.

Justin:                   If you see a broker trying to push the contract on you. I think this does apply. Obviously we’re talking about much larger acquisitions, million dollar plus deals, where you are going to get attorneys involved, you are going to have accountants looking over the books, that’s a little different. But if we’re talking about a $50,000 website, $150,000 website, I just don’t think that it applies. That’s a dirty little secret from the broker side.

                                On a sixth one. We as brokers might cherry pick the best deals for ourselves. The truth of the matter is most of us that are brokers are in the website brokering industry, got into this business based on our own experience of buying and selling. We’re familiar with the market. We know which sites are more valuable than others. We know which sites have a better opportunity than others. Many in our space are actually in the buying and selling space themselves. So the fact that they’re brokering, they may take some deals, do on the side, either never hit the marketplace or it will be up there so short and automatically get sold because they’re the ones buying. We haven’t done this yet, but we are reserving the right to Joe’s. We’ve been talking about doing some buying and selling. We’ve never actually done it. I do think it seems a little awkward to be competing with our own customers. I don’t know how we’re going to pull that, but we do know for a fact that other brokers do this on a somewhat regular basis and we never have told you that.

Joe:                        I don’t think it’s really that big of a deal. I don’t think we would really be competing with our own customers and-

Justin:                   Unless we’re highlighting the listing, “Hey check this one out, this one’s really good, you’ll want to buy it.”

Joe:                        As long as it’s in the mix and it’s still the regular place and we use all the same negotiation standards and the same migration, everything else, we don’t give an editor a preferential treatment. I don’t really think it’s competing. I think we do have to be careful about building up a huge library of sites for some reason of that we’re just cherry picking the best sites to buy. Our audience might not love that. They would prefer to get some of those good sites as well.

Justin:                   The other interesting thing is, what exactly is a best deal? Let’s say that we found a site that fits our model or whatever, that just fits us best. It may not fit the next buyer best. They want a drop shipping site they can play with. And this happens to be a lead gen site or it’s outside of their box. I don’t know if there is a best. The best for you are characteristics that make us a better bat, but there is not necessarily a bat. I’m not sure that you can cherry pick the best all the time. It’s just the ones that are in your wheelhouse really.

Joe:                        Agreed. There’s always some sort of risk with carrying a portfolio of sites rather than selling them. And if you’re in the buying and selling space, then holding maybe not one of your fortes.

Justin:                   We are talking about wheelhouse, that brings us to dirty little secret number seven. We put more time into deals that are in our wheelhouse and or make us more money. The average size deal, if you’re on the lower end of that brokers average size deal, you can expect a bit less attention or love. I think recently our average size deals around is 20,000, 25,000, so if you’re significantly less than that, you’re gonna expect less love. If you’re above that, you can expect more. That’s why you’ll see, let’s say Quiet Light Brokerage for example, they have some of the smaller deals they do. They just can’t afford to put as much time into it because their average deal is, several hundred 300 $500,000 or something. They can’t afford as much on a $50,000 site.

                                It’s not just about the size of the deal either, Joe. It’s also about the limited hustle. If there’s a deal that’s overly complicated, even if it’s a larger deal and we think it might be a good … it might actually work for us, if it’s not be way too much work, we’d rather close three deals that are relatively straightforward, than put a ton of time, effort and energy into a deal that’s just way too complicated and too messy.

Joe:                        I really think that this is a broker thing. Most brokers would rather have that nice smooth peg that fits into their hole, rather than trying to bang on that square peg for the round hole. Trying to get that deal done is just … it hurts your sales cycle, it hurts your sales funnel, it hurts all the time and effort and energy and your bottom line, because there are other deals out there that are more perfect fits for you.

Justin:                   All right buddy, enough about brokers’ dirty little secret.

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Justin:                   We’ve been having a crazy time here in Chiang Mai, buddy. There’s just a ton of people, there’s a vibe, there’s an energy in Chiang Mai right now that is awesome. I can’t go anywhere without running into other people that are in the space, that are hustling, that are building businesses. It’s really, really cool. We actually did a workshop here in Chiang Mai, the Shangri-La hotel, earlier this week. Today, Thursday, we just wrapped up a meeting, a presentation, with the Drop Ship Lifestyle crew, and Anton over there had a blast doing that. They were really responsive and energetic audience, it’s really exciting.

Joe:                        Yeah, it’s pretty amazing. From what I understand it’s not always like this and Chiang Mai, but there are definitely a lot of digital nomads here. It’s very cool to be able to go out to dinner with them, lunch, see them at the coffee shop, that kind of thing. It helps in keeping you motivated and having some friends around, some colleagues zone, around that know exactly what you’re up to and what … We could talk shop.

Justin:                   I’m really excited. Next week we’re taking this road show on the road once again. We’re heading up to Bangkok, we meet with a bunch of people in Bangkok and then Vegas Baby, Vegas and LA. We do in the workshop there, and our brody and weekend, we’re doing a workshop in LA. I’m really enjoying this, man. It’s great to, in person, sit down and when people talk about our experiences, have dinner and a couple of beers, the shoot the shit a bit more about business in general, hear about their businesses. I’m really enjoying it. I love this roadshow idea and I hope we can continue it throughout the year.

Joe:                        I think we can, we may not be able to fly international business class, that’s for sure, but it’s going to be interesting to see how it works out. I definitely think that the broker business is a relationship business. It’s great to go out to press some skin, get some handshake deals done and that’ll help in going along way to promote our business and see what people’s real needs are out there. There’s just something about face to face business that goes a long way. Something you can’t do through email or phone.

Justin:                   [inaudible 00:19:51] relationships, man. How’s your relationship with Justin Gilchrist and see Sam finish his book.

Joe:                        Sorry Justin. I keep trying to start it [crosstalk 00:20:00]

Justin:                   I’m a little over a third of the way through. I’m going to get through it, but it’s really good. It’s basically explains to people that are interested in buying or selling websites and online businesses, how online businesses work. Talks about like the due diligence process, talks about what we should look out for and gives you a model you can use to help find the right business for you. If you’re in our crowd or if you’re in the buying and selling space, you should know Justin Gilchrist. He runs the blog over a flip filter. He’s a partner of some jerk, super sharp dude. Some of his blog posts, there are a bit dry sometimes, but they’re so good. I’ve shared the shit out of his moods, flip filter stuff. I definitely recommend you pick up this book. I haven’t finished it, so I can’t give you the all the details, I will soon. I definitely recommend picking it up, if you’re in the buying and selling space, I think worth a read.

Joe:                        We’ll have a link to some free offers.

Justin:                   If you check out the link over empire there will be some ways for you to win a free book from Justin Gilchrist called digitally wed and we’d be happy to hand those out to you. Alright buddy, let’s get into our listener shouts or indulgent ego boosting social proof segment. First of, we’ve got Thomas over on Twitter said, “Are you guys into holding any events during December?” We might be doing something in Ho Chi Mihn. I think you’re going to be heading to Saigon. I’m probably going to be in Saigon in December. We might even bring our apprentice Mike out there, so might have a nice happy Christmas in Ho Chi Mihn.

Joe:                        I think we’re going to take November off, because we definitely have done a lot. Then maybe it will be back at it in December. So yeah. Ho Chi Mihn.

Justin:                   Tim Moon on Twitter said, “I love the way you guys level up the website. Empire flippers greater than Sign flipper. Thanks Tim, I appreciate. When we started doing as many deals as flipper does, I’ll feel the same way until then. I think we still got a long way to go.

Joe:                        Wait till you see the new listing pages. They’re going to below Flippa of the water.

Justin:                   Zendesk. We’ve got Bob, first time seller of $4,000 sites, a great support. I really appreciate the constant feedback and updates of how the sales are going. Everyone I’ve talked to is very nice and professional. Keep up the good work. Thanks Bob. I appreciate your trust in us, allowing us to help you sell your site. Hope you come back to us for your second. We’ve got another Zendesk support ticket. It wasn’t a good one. It was a negative one, Joe. I’m not going to mention the name on this one, but the person sent an email saying that he wasn’t looking to sell the site, but he’s been up for three years or site’s been over three years, it gets 5,000 visits a month. Wants to know how to spread the word with marketing other than paid marketing. Vinson replied and said, “Guests posts some niche relevant audiences.”

                                That’s really good. You can set up a landing page and drive them to capture emails. Then this person replied saying, “Thanks, now I have to figure out how to do that. Not exactly sure how. The reason why I said that is, I’m not a tech person, so I was looking for a more detailed answer. I created my website as a resource and information website to help people with all issues. I give away so much information for free. I personally feel like I can’t get a direct answer on a lot of these sites. My apologies, but that’s the way I feel.” I don’t know what to say to those. The person is asking for traffic strategies, “Not looking to buy or sell websites. I am on traffic strategies.” Vincent responds with one and says, ” I don’t know how to do that. I don’t know how to guest blog on niche relevant posts. Is it too specific? This adventures of like, really broken it down and said, “What’s your industry? Let me …

Joe:                        I think [crosstalk 00:23:25]

Justin:                   I think it’s just so. Are we supporting someone for free? Is it free customer support for something we’re not offering?

Joe:                        You can’t please everyone. This is definitely not in our wheelhouse anymore. This is something that, we’re not the builders and the traffic generators anymore, so I think that he’s asking the wrong guys and he probably got a little bit of what he felt to be a dismissive answer.

Justin:                   It was a real answer. Actually, that is a valid [crosstalk 00:23:50]

Joe:                        It is a valid one, but maybe he wanted it to be a little bit more detailed.

Justin:                   Okay, don’t take this site, this isn’t your niche. Let me take a couple of hours and research your space and find your competitors and, “What, you think [inaudible 00:24:00] want to know.

Joe:                        I think that’s what he wanted. Yeah.

Justin:                   I know, man. I don’t know what to do. We got an interesting mentioned overall our reddit. There was someone complaining about Flippa charging without authorization. I don’t know what this thread was about, but it said that … They knew that there was a Flippa chart, and they got charged way more money than they were expecting. That doesn’t sound right. I know there is, “I got some problems with the Flippa marketplace, but it’s definitely not them overcharging. They were charging even stuff that they’re not supposed to charge that.” That was something probably confusing.

Joe:                        I think they probably confused. I could definitely say that the Flippa invoice and billing system is a little bit messed up, but usually they send you an invoice and the invoice is open until page. I’ve never heard of automatic billing on Flippa.

Justin:                   It was weird. Anyway, someone mentioned us as a fairly bad alternative and I was like, “What?” So I went in there and commented and got some feedback and said, “Hey, I’m one of the partners over there. I’d be interested to know why you think we’re not a great fit.” Anyway, their argument was that we need to be much less vague in our description. I have looked through some of our descriptions. I just have for that and I was like, “Wow. Yeah, we’re a little vaguer than we need to be.” Yes, we’re protecting URLs and the very specific niche, but we can be much more specific in the written documentation. We don’t have to mention the exact keywords or anything, but we have to … We should give people an idea before they have to pay a deposit. That’s really good feedback. That was helpful and we’re going to give more so we can really entice interest. Get buyers more interested and actually paying a deposit. [crosstalk 00:25:25] I appreciate that feedback, was good.

Joe:                        Like I said before, we are going through a redesign of the listing pages. I’ll be meeting with John Myers and Bangkok next week, we have some ideas on how to make these things better. The descriptions, we’re going to get a little bit better at writing them. But thank you for the feedback.

Justin:                   There’s also an interesting core thread. Someone had $30,000 was looking to get $100 a day and someone gave us a recommendation. You can check out the empire flipper marketplace, and you might be able to get something. Unfortunately with $30,000 you’re only going to get about $50 a day. Someone came back and commented and said, “Yeah, but that’s your job to grow it. You guys got started with 50 bucks a day.” Honestly, with $30,000 and getting $100 a day back in your investment in the general investment world, that’s ridonculous. That’s just not going to happen. That we could even get 50 is pretty cool. Anyway, I appreciate the mention or the feedback on reddit and the mentioned on Quora. Appreciate it guys for getting the word out there.

                                That’s it for episode 113 of the Empire podcast. Thanks for sticking with us. We’ll be back next week with another show. You can find the show notes for this episode and more at Make sure to follow us on Twitter @empireflippers and we’ll see you next week.

Joe:                        Bye bye, everybody.

Ad:                         Hope you enjoyed this episode of the Empire podcast with Justin and Joe. Hit Up for more. That’s Thanks for listening.


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