EFP 144: How To Find Amazing Deals (And Avoid Hunting Unicorns)

It’s worth spending some time hunting down great deals, but if those deals don’t pay off you may end up spending tons of time/energy with nothing to show for it.

Both new and experienced buyers can find themselves “hunting unicorns” – spending way too much time looking for deals that just don’t exist.

Narrowing Your Focus to Find Profitable Website Opportunities

In this episode for buyers, we look at how buyers can narrow down their focus without getting TOO narrow, maximize their value by looking for strategic deals, and putting your baked in skillsets and advantages to work in the dealflow process.

If you’ve spent a bit more time than you’d like shopping for the right online business to purchase, this episode is for you!

Check Out This Week’s Episode:

Direct Download – Right Click, Save As

Topics Discussed This Week:

• Not All Brokers Are Equal
• The Best Deals Are Strategic
• Looking Beyond The Multiple
• Have A War Chest (Cash In Hand)
• Is It A Good Deal For YOU

 Mentions:

• Listing # 40286 eCommerce Site In The Apparel Niche
• Matt Hagens on Twitter @matt_hagens
• Empire Flippers Valuation Tool
• Interesting Article on Residual Incomer

Spread the Love:

“Good brokers provide amazing value.” – Joe – Tweet This!

“Having cash on hand allows you to act on a deal when it becomes available.” – Joe – Tweet This!

Are you struggling to find the right deal? Think you might have been hunting unicorns? Let us know in the comments and we’ll see what we can do to help!

 

Justin:                   Welcome to the Empire Podcast Episode 144. It’s worth putting some time and effort into finding an amazing deal, but only if there’s some payout in the end and the deal actually exists. In this episode, we’re going to help you spot the elements of a great deal while stealing you away from hunting unicorns. You can find the show notes and all things discussed in this episode at empireflippers.com/amazing … All right, let’s do this.

Speaker 2:           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:                   Okay, Joe, there’s a bit of a chicken-and-egg problem when it comes to new buyers. They want to take their time and take plenty of time to make sure they’re getting a good deal, but they often spend so much time looking for that next deal, looking for that amazing deal, that when they do actually find it, it’s not so good. They have to take into account the hours and the time they spent looking for the deal, doing the due diligence, and also the fact that they may walk away empty-handed by never finding the deal at all.

This is a bit of a concern, I think, not just for new buyers, but also for experienced buyers that start to get a little too picky, start to dig a little too deep, so the question we want to answer today is how do you spend your time wisely looking for good deals, but making sure that you’re not chasing unicorns with the process?

Joe:                        We talked about this kind of thing before and I think it’s important, especially when you’re looking at maybe two similar sides, one that makes a thousand dollars, and one that makes a thousand fifty a month, and you spend an excruciating amount of hours deciding which one is better for you, and at the end of the day, the difference is they’re both basically the same, so you didn’t really make a whole lot more money by choosing the one that made fifty dollars more a month.

Justin:                   I think this is particularly relevant right now because we find ourselves in this situation, right? We have the investor program and we’re looking to source deals and it’s a bit of a concern. We want to make sure that we’re not spending a bunch of time looking for deals that either don’t exit, or just would take so long to find that it’s just not worth it.

I think, to kind of a larger point, this is an argument for spending your time searching for larger deals. We’ve kind of debated whether you should do small deals, whether you should do a bunch of small deals, or you should do larger deals, and I think, after you’ve done that first or second deal, maybe those are smaller because you just want to get your feet wet, and understand the process. I think it’s an argument for moving up the value chain.

If you’re going to be spending a bunch of time looking for the deals, finding the deals, doing your due diligence, and actually closing on those deals, you need to make sure they’re large enough to make it worth your time.

Joe:                        Agreed. I think we realized that with our first go-around in the beta testing of the investor program. We were buying small sites, and we were realizing we were spinning our wheels a lot by just doing a lot of the admin work and double-checking everything on such a small site when we could do the same kind of work on a much larger site.

Justin:                   Yeah, that’s actually something the investor brought up to us, look guys, I know you’re spending a lot of time and effort and energy on getting these deals and it’s just not that big. I want to make sure that this is worth it to you, and we said, look, we know it’s not worth it to us right now, but that’s okay. We’re just trying to work this out and make sure it works, and be careful. We were, I think, getting close to the problem I’m talking about, which you’re spending way too much time on deals that just aren’t worth it.

Now, in this episode, I think it’s generally just better for us to speak the truth about the real deal and give you real information rather than worry about dogging out other brokers or potentially hurting our own business or ability to sell sites. We want to give you the honest truth from the buy side which may not be aligned, or may be, at times, at odds with our goals as a broker, but I figure it’s better to lay it out straight anyway.

Joe:                        Well, when you have the marketplace, you have to represent both sides sometimes.

Justin:                   All right, buddy. Let’s do our featured listing of the week. What you got for us, buddy.

Joe:                        We’re talking about listing 40286. This is an eCommerce site, created only in April 2015, but it’s in the apparel niche, and it sells custom T-shirts and accessories. It it relatively new, but I really like the way the site has been performing and it’s definitely all about the Facebook advertising.

It uses paid advertising to drive this traffic and that’s why they were able to ramp up so quickly, and that’s really the major item that you’re buying here is the way that they approach advertising.

Justin:                   It’s interesting. This is a really new site. I mean, I don’t think we generally don’t even list sites this new, normally it’s six months or older and typically more often than not a year or older, so this is kind of an odd one for us.

Joe:                        Definitely an odd one for us, especially at almost a hundred and seventy thousand dollars, but it is making very good net profit every month, and it does have a consistent record of increasing those profits every month.

Justin:                   Awesome, man. Great feature listing of the week. Let’s dig into the heart of this week’s episode.

Speaker 2:           Now for the heart of this week’s episode.

Justin:                   Today we’re talking about how to find amazing deals while avoiding hunting for unicorns, and I should probably define what I mean by a unicorn. Everyone has this ideal, perfect business in mind when they’re looking to buy a business and it may be in a particular niche, it may have a particular trajectory, it may have particular profit margins. That would be their perfect business.

By unicorn we mean that this business just doesn’t exist, so they’re going to spend months, years, hundreds or thousands of hours of their time looking for this deal that isn’t to be and instead of passing up on all these deals that could have been fantastic for them, they’re wasting all their time looking for these crazy deals that just don’t exist.

Joe:                        The one we hear a lot is I want to make $5,000 a month and I don’t want to have to do anything, and I want the multiple to be under 10.

Justin:                   Yeah, that’s your unicorn. We’re going to talk about multiples, we’re going to talk about what is particularly a good deal for you, but we want to just define what it is we’re talking about and what we want you to get out of the show.

What we want you to get out of the show is that there are other ways to find good deals and what you didn’t consider a good deal might actually be one in your particular circumstance. Let’s get into it, man. We’ve got five points.

The first one is not all brokers are equal. I think this is a fallacy that new people get into the business and they’re like okay, well, a broker’s a broker’s a broker. As long as they’re putting up deals and I can vet them and check them out myself.

The problem is that not all brokers are equal. They’re not all the same. You have brand new brokers that are just getting started that may take any deal that comes across their lap, so they’re just trying to make a name for themselves, they’re trying to work on some deal flow. They don’t have a whole bunch of deals being delivered to them in terms of sellers bringing them deals so when they actually find one, they cling to it. They’re like, “Well, I might not do this later, but I’ll do it now so I can at least start doing some deals,” and that’s a really bad thing for buyers.

Joe:                        Yeah, we definitely see that with people that are new to the business. They think of us as just middle men that are making a mark-up on businesses, but that’s not true. Good brokers do provide value.

Justin:                   One of the benefits of working with a broker is that just across the board you’re going to find less scams. Often scammers want to work alone because they know that brokers aren’t going to take their deal on. The other thing is your not going to be chasing unicorns.

When you’re working with a broker, generally the deals are, they’re going to be a bunch of real deals. Now they may or may not be amazing deals. They’ll generally be pretty good, but brokers are particularly good at pricing deals so you may not get this amazing multiple that you would get, let’s say, if you’re trying to source it yourself, so I’d say that’s one of the downsides of working with a broker is that they’re, generally, they’re going to be properly priced.

That’s not always true with brokers, though, so you’ll have some brokers that take the approach that, look, I’m going to put a ridiculous multiple on this. I don’t really care if it sells, and their goal is … here’s the goal.

If I have a seller come to me and they’ve shopped around to reputable brokers, brokers that do a lot of deals or whatever, and they say, “Here’s the price you’re going to get for it,” and they come to me and they say, “Hey, I want more,” there’s a tendency, especially if I’m new, or if I’m unscrupulous, to just say, “Hey, look, yup, we’re going to list for whatever it is you want. Yup, we’ll take your deal.”

So we take their deal. We put it up. Three to six months later it still hasn’t sold and now, as a broker, we can start wearing them down. “Okay, you need to start accepting deals like this. You need to start accepting these kinds of offers.”

You’re so deep in the hole that you’re just willing to take it. So you will have brokers that have sites that are overpriced, you’re going to have brokers that may be slightly underpriced but, if anything, you’re leaning towards overpriced with brokers.

Joe:                        Yeah, and that’s just what I was talking to a seller on the phone today. We talked about that and he had seen a lot of that kind of action before coming to Empire Flippers, so the wrong kind of broker could absolutely try to price you high and then wear you down through this process of, “Well, you’re overpriced, that’s why no one wants to deal with you.” So as a seller, finding the right broker is important.

Justin:                   I think this is kind of interesting because I’ve always thought, and just kind of generally believed, that the best deals are the ones you’re going to find directly. The best deals are the ones you’re going to find outside of a broker. It’s where you work directly with a potential seller or the business owner, and you work out a deal, but we’ve been doing a seller acquisition program where we reach out to a whole bunch of site owners and business owners to see if we can get them to sell directly, and talk about a real time waster.

I mean, we’ve spent so many hours doing this, and it’s not terribly fruitful. We’re still testing and tweaking it, so we can’t say it’s not working quite yet, but it’s not promising, Joe, right?

Joe:                        No. I mean, we’ve definitely spent about 60 man-hours so far, and really haven’t found a gem in there, so it’s very interesting that the kind of people that want to sell their site are the kind of people that [inaudible 00:10:22], are the kind of people that are serious about buying sites, are the kind of people that search out brokers, so you wonder if the best deals are really done through brokers out there.

Justin:                   Yeah, I think it’s a fair question and you’re kind of riding a fine line if your hoping that you can reach out to a seller directly and find a business for sale and do business. You’re heading into unicorn territory, so I’d definitely try it, and if you put together a process that works and is effective, then by all means run with it.

It’s just that, I don’t know, I question that process. I question whether that’s really a great way to find the deal, so we’ll see, and we’ll report more on that over the next couple of months as we continue to test out our own process in trying to do that.

All right, man. Second point I want to make is the best deals are strategic. Joe, you agree with that?

Joe:                        Yeah, I mean, here’s the thing. If someone who’s a strategic buyer is probably going to pay a higher multiple for your site, and then on the buy side you can probably find deals where maybe the guy wasn’t looking to sell, but it’s some sort of strategic deal you can work out with him because he knows there’s more value in it for him in a strategic deal. So, yes, I agree. The best deals are strategic.

Justin:                   There’s no guarantee that you’re going to get a higher multiple on a strategic deal but, in general, a good strategic buyer would be willing to pay a higher multiple, right? So that’s, I think, interesting, and the real value, from a buyer’s perspective, is that there’s instant added value.

Either they can take the products and services that are being offered by the business they’re selling and immediately sell a lot more to their current audience or customers, or they have products and services that they can immediately turn around and sell to the business that they’re buying, those customers.

I think there’s also an advantage where you’re dealing with economies of scale. If you’re already in the space, you’ve already, let’s say, got a team in place that understands the industry, understands the customers, you’ve got processes in place, and you can simply plug that new business into your process and have it running. You don’t need to hire a whole new team. You can already take advantage of the fact you’ve got the people on board already.

Joe:                        That economies of scale is just so key. I mean, we’ve seen people, portfolio buyers especially, take a big advantage of that.

Justin:                   I also think, with strategic deals, due diligence is going to be easier, faster, and better, and the reason for this is because you’re dealing with a business or an industry or a niche that you already know and understand.

You’re already in the space, and so for you to dig through that business, it’s going to be a hell of a lot easier than just your typical portfolio buy. It may be harder to find that strategic deal, but when you do, you’re going to be able to quickly evaluate it and I think there’s value there.

Joe:                        Yeah, I mean you would hope that they would understand you as a competitor or as somebody that’s in the space. It definitely seems to me it’s something where the due diligence would be a lot faster.

Justin:                   One of the things we talked a lot about throughout this podcast is the value in reaching out to and being connected to your competitors, that coopertition approach, right? I think this is just another great argument for it, is that if you are connected to your competitors, and you talk on a semi-regular basis, and you do have some established relationship, if they are looking to sell, they are more likely to let you know about the deal.

If you are just closer to their business, you’re gong to see when they’re actually looking to sell and you may be able to jump on an opportunity that you wouldn’t have seen or had presented to you if you weren’t connected to them.

Joe:                        Agreed. I think it’s always better to keep those guys close at hand.

Justin:                   The third point I want to make is that sometimes it’s important to look beyond the multiple, and I think it’s easy for any of us to fall under the trap of all businesses are the same, assuming everything else is the same, multiple comes into play. How many months of net profit am I going to pay for this business? Is it going to be 18, is it going to be 30, and I’m going to judge one business compared to the next based on that multiple.

The problem is that all of the things are rarely equal, so it’s hard to compare one business to another to another and say, “Oh, everything’s generally the same. Let’s just look at multiple.”

Joe:                        We recently started varying our multiple greatly, too. One site we have listed at 15x right now, another site we have listed at 30-plus, so a lot of multiple depends on some of the objective facts and figures of the company, but when you’re deciding what’s good for you, a lot of subjective things need to come into it.

Is this a business you know something about? Is this a business you would like to run? Is this a business that you really can afford to run both time and moneywise? Those are things to consider that are beyond the multiple.

Justin:                   I also think, too, if there’s a particularly low multiple applied to the sales price of the business, my first question, and the first thing I wonder is, what’s wrong with this? Why are they selling it for so little? There’s got to be something wrong. It’s a big of a red flag to me.

Joe:                        Yeah, it’s a bit of a red flag but then, again, some people just need a cash injection of money quickly, so we do see those things happen. There are good deals that happen at low multiples, but they are rare and I wouldn’t stress yourself out looking for these really low multiple purchases. You’re probably better just lowering your budget overall.

Justin:                   I think you need to compare other things aside from the multiple to really get a true picture on whether that business is going to be worth it to you, and we’re going to talk a little bit more about that in a couple of points later, but I think that getting too caught up in the multiple is problematic when you’re shopping for businesses.

The other thing is, too if it has a higher multiple, there’s probably more negotiation room. Not always, sometimes sellers are strict. They’re saying, “I will only sell at this price. That’s it.” But there’s a bit more wiggle room with sites that have larger multiples, so you can start to look for a deal or a discount there.

Price it based on the multiple that you think is fair, and make an argument for it. I think some of the best buyers come in and say, look, I know that you’re listing this at 30 times net multiprofit, here’s my argument on why it should be 26 or 28 or 24, or whatever it is, and make their case.

I think that’s a much better negotiation tactic then coming in and saying, hey, I’ll give you this, because there’s no reasoning there you run the risk of potentially offending the seller  and you have a problem, so if you can kind of reason your way through it, then you’re, I think, in a better position to negotiate a price.

Joe:                        I totally agree with that, and we’re seeing more and more negotiation on things outside of money as deals get bigger and bigger, so things to look at are training, having the owners or sellers involved long term, that kind of thing really comes into play outside of the multiple as deals get larger. Because there’s just more money, you’re able to do it. It makes more sense.

Justin:                   And there are things that are important to the buyer and seller that are outside of money, and you as a buyer can take that and use that to your advantage. If you happen, in your conversation with the seller, you see a sticking point on them, you can use that to win over other points that are important to you.

The fourth point I want to cover is, and I think this is really important, is to have a war chest. If you have cash-in-hand, you’re going to be in a better position to snatch up those great deals than your competitors, and I think that’s a good way to think about it.

You have competitors, so there are other buyers out there that you’re competing with, so if you have cash-in-hand, you’re going to be in a better position. It’s important to note that most of the best deals are going to have multiple interested buyers. That’s just a fact.

Joe:                        This is the Warren Buffett approach. I mean, he says exactly this, that having cash on hand allows you to act on a deal when it becomes available, but if you don’t have that cash on hand, you can’t do that. I mean, this is a guy that brought a train company for, I don’t know, $20 billion, or something like that, because they had the cash on hand, and they were able to do it. And they got a great deal out of it. I think having that kind of war chest available to you is something that you should absolutely think about.

Justin:                   Keep in mind that not needing a loan, you’re not looking for an SBA loan, and not needing to liquidate funds can just make you more attractive to the seller or to the broker that’s trying to close the deal. If there are multiple interested parties, and you’re the one that may take a few weeks to liquidate some assets, or you need to apply for and get approved for a loan, that’s just not as big of a sure thing.

From a broker’s perspective, and keep in mind this is not always the seller’s perspective, but a broker’s perspective, they want to close the deal, right? And, so, if it’s even selling for less, that would be more in their interests. It isn’t necessarily aligned with the seller, so you do want to be an attractive buyer to the broker and the seller if there’s a broker involved in the deal.

Joe:                        Yeah, and just just having cash puts you in such a great leverage position. You can say, “Look, I can close quickly on it. I can go ahead and pay cash, all up front. You don’t have to worry about me getting approved by the bank or anything like that.” I think that’s a huge advantage.

Justin:                   Moving quickly after due diligence, I think is a great point, Joe. If you’ve done your due diligence, you’re sure this is what you want to buy, and you move quickly, you’re less likely to lose the deal. Maybe they would have backed out if it took three weeks to close, or six weeks to close, or something, but if you’re able to move quickly because you have cash, you might be able to just knock that deal out.

I think, in general, what we’re saying here is it’s important to be a solid buyer, and what I mean by that, and this is a neat trick, is that you can turn the seller’s agent, the seller’s broker, into your agent, and the way you do that is just the fact that brokers would rather close deals than goof around back and forth and waste all this time and try to worry about all these negotiations. They’d rather just get the deal done, so if you get known in the space as being a buyer that closes deals, you’re going to get a lot of love.

You’re going to have brokers that are willing to work with you and it brings up that whole double-sided marketplace thing where if you’re some new, potential buyer with a broker that they don’t really have a track record with, okay, they’re gong to work with you and try to get you the deal, but if you’ve done 10 deals and you’ve done multiple six-figure deals with them, they’re going to know you’re legit, and so they’re going to work with you more than I think they would otherwise, and that applies to us or any other brokers in the market right now.

Joe:                        Especially brokers that have multiple deals listed. They definitely want serious buyers, serious repeat buyers, because they’re the kind of guys that they’re willing to go the extra mile for, walk them through all the options, make sure that they have all due diligence materials. I know because we do it. Repeat buyers and serious buyers, so definitely the way you can make yourself a more solid, attractive buyer will make you a more attractive target for more brokers.

Justin:                   The fifth thing we want to talk about is not so much whether it’s a great deal, but is it a great deal for you. Some of the things you look at are what skill sets are you bringing to the table? What can you add to this business that is going to make it more money, that is going to have you step in and run it smoothly, operate it smoothly?

I think these are really important, and if you can play to your strengths, you’re going to get a business that may have been just an okay deal for me, or a great deal for you, Joe. It might be ana amazing deal for this particular buyer based on their skill sets.

Joe:                        Absolutely. This kind of goes back to our other point about looking beyond the multiple. Is this deal good for you, not just in a financial sense but in a sense of where you are in your life, what your skill set is, that kind of thing. Really, those subjective points need to be taken into consideration. Put it down even on a piece of paper to make sure that you’re getting the right deal.

Justin:                   As I mentioned before, you are in competition with other buyers, and who you’re competing in front of are brokers and the sellers that are doing the deals. So one of the great ways to find a great deal is to consider your competitive advantage.

What deals are you wiling to do that most others aren’t? Are you wiling to do deals that, say, are penalized in Google, for example, because you have a way of fixing them? You’re going to get a lot of those deals because a lot of people aren’t interested in those.

Are you wiling to do a legal site out of South Africa? Divorce Leads, or something, out of South Africa? There’s a whole bunch of buyers who just aren’t willing to deal with that. They don’t know the South African market, that’s not an issue to them, but if that’s not a sticking point for you, you’re going to be able to get a much better deal on that.

The reason is because you’re separating yourself from the competition, and that’s a competitive advantage you have, so it may be an amazing site, but because there are some tricky things with it, there’s just not as much interest, and you might be able to negotiate a better deal for yourself.

Joe:                        That said, don’t make yourself the [Jonah 00:23:24], the race car guy, because it might be tough to find a site.

Justin:                   The [inaudible 00:23:31] race car guy. One of the other things that I think you can add is if you understand the eCommerce business and you’ve got employees in place, everyone wants that unicorn deal where there’s no work involved, and it just magically pays you every month, and that kind of thing, but what you can do is not shy away from the deals that require some customer service, that require some manual input.

You’ve already got a team. You’ve already got that under control so, again, that’s your competitive advantage, and I think that can really separate you from other buyers and allow you to purchase deals that other people aren’t looking at, and if there’s less competition for that deal, you can generally get a better price, and better terms with the seller.

Speaker 2:           You’ve been listening to the Empire Podcast. Now some news and updates.

Justin:                   All right, let’s get into some news and updates. First up, a bit of bad news. This last Monday I was on a call with Joe and our team, and I heard what sounded like a kind of a loud thunderclap, and I didn’t think much of it. 15, 20 minutes later I was on the balcony, I saw 10, 20, 30 emergency vehicles go by. Turns out there was a really bad bombing in Bangkok about five minutes walk from where I was staying, so it looks like 20-something dead, a little over a hundred something injured, really sad situation.

It was pretty scary, too, because my girlfriend walks right by there to go food shopping for us, and it’s a corner we’ve been by a lot, so it’s actually really sad. Our thoughts are with Bangkok and the Thai people as they deal with this horrible tragedy and everything like that going on. It’s really personal because it’s so close to home where I was staying in Bangkok. It’s kind of freaky.

The second point of information I wanted to mention is that we finally wrapped our first raise for our group investor program. We got right around $8000 in. It’s great to be able to finally just shut that off and start actually doing the work, the operational work, that’s going to be required to acquire the sites and do all the work to make all the sites work and pay off for both ourselves and our investors, so really excited to get to work on that, basically.

Another bit of information is we had an amazing June, a not-so-great July, and what’s turning into be an amazing August, so we had a bit of a bad month. I think it’s just under a hundred thousand dollars in sales in July, so we’ve been doing three, four hundred thousand dollars a month, and to have a fall off month sucks, but it wasn’t terribly surprising. I think we’re gong to be able to make up for it in August, so things are looking good there.

Last bit of info is we are setting up our next team retreat. We’ve been doing this thing where every three to four months we get our management team together for four weeks, five weeks. We’re all in the same location. We all work together, closely together and get a lot of work done.

I think it helps build camaraderie. It helps us focus and double down on some of the things that we need to do, and it’s just kind of a fun thing to do . It’s great to get the team together and working closely together, so we’re going to do that again in late October through late November.

We’re going to do it in Thailand and, in a addition to our management team, we’re also thinking about bringing out our developer, our content editor, and we’re going to have quite a few people, so it will be quite the party. Hopefully we can get quite a lot of work done and it will be really exciting to have everyone there and everyone working together again.

Next, let’s get into our listener shouts, also known as the indulgent ego boasting social proof segment. We’ve got a brand new, five star, iTunes review. It comes from Rozza617.

He says, “Absolutely love it. These podcasts are super informative and entertaining. I want through a few and am excited to keep listening to more. The awesome part is that I’m actually enjoying listening to these podcasts, unlike others I’ve listened to before on other websites which were informative, but had me falling asleep. Good stuff Justin and Joe.”  Rozza, thanks man. Glad we can keep you entertained and educated at the same time.

Got a couple of mentions on Twitter. We had Matt [Hagens 00:27:10] reach out. He said, “Hey, Justin, do you think it takes longer to sell a site on your marketplace if I use an analytics package other than Google Analytics?”

Well, the truth is we only allow Google Analytics, or Clicky, so you wouldn’t be able to sell on our platform unless you’re using one of those two. In general, though, if you’re using an analytics package that people aren’t terribly familiar with, they may just pass on the deal. So you’re going to want to use something that is very familiar that people are used to digging through for due diligence. They know exactly where to look. It’s to make it easier on the buyer, and when you’re selling a site you want to reach out to the largest amount of buyers. You want the biggest buyer pool possible, and the best way to do that is to use Google Analytics, or Clicky.

Yes, you still may be able to pitch or sell your site, but you’re probably gong to have a smaller buying audience so it’s best to have that bigger buyer audience so you can get better deals a lot faster and get more money.

Another mention on Twitter from [Eldudarino 00:28:01], who says, “Enjoy your posts and podcasts but that price calculation seems crazy for businesses that can easily manipulate measurable data.”

We’ve been having a lot of questions, actually, about our evaluation tool lately, whether it’s on Facebook, or paid traffic, or whatever, and Eldudarino brings up the point, well, what if I put in fake data?

Well, what if you do? You’re going to get a fake evaluation. I mean, that’s not terribly helpful, and you’re going to get bad data in, bad data out. So it’s not like you’re allowed to put in that information and then we just automatically list your site for whatever you want it to be. You put in a million a month, we’re going to list it for some crazy evaluation. It’s just a tool for you to use to get a rough evaluation yourself to get an idea on what the site’s worth. If you actually submit it to sell, we’re going to go back and you’re going to have to verify that information.

So, yes, you can manipulate whatever you want on the evaluation tool, you know, but when rubber hits the road we’re going to be verifying that information. If it doesn’t add up, you’re not going to be able to list and sell your site for that price. Just keep in mind, it’s just a tool for you to get a rough evaluation while you’re determining whether or not you want to list and sell your site, and you can get an idea on how much it’s worth.

Last thing I’ll mention is we got an interesting mention over on an article over on Residual Incomer, and it talked about the cost associated with building sites versus buying sites. He gets into a site that was on Flippa for around $6,000 and he shows how the content on the site, and the work on the site, would equal out to be about $6,000, so to save yourself all that time and effort you might as well just buy the site.

While I agree, kind of, with his point, I think he’s missing a bit, as well. You could spend $6,000 on all the content, do everything the way that it’s supposed to be done, and not have the same success that the site has today, the one that you’re planning to buy.

There’s a failure rate that comes with building sites that can suck, so you may fail one out of five times doing it the exact same way, so there’s no guarantee that if you spend that $6,000, you’re going to get a nice quality earning site out of it. I think you have to take that failure rate into account, and that failure rate’s going to depend on on your style and how you build the sites, but it is definitely there.

It’s not like, you know, it’s a $6,000 option and you just save the time. It’s $6,000 and the risk. If you buy a site that already has earnings, those earnings are already happening. You can take that over ane run with it.

That’s it for Episode 144 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 empireflippers.com/amazing. Make sure to follow us on Twitter at Empire Flippers. See you next week.

Speaker 2:           Hope you enjoyed this episode of the Empire Podcast with Justin and Joe. Hit up empireflippers.com for more. That’s empireflippers.com. Thanks for listening.