Justin Cooke

May 19, 2015

April was a pretty surprising month for us.

After barely hitting our Q1 goal with an exceptionally good March, I was worried we’d see a dip in April as we worked on closing out the deals from the previous month.

In an exciting turn of events, we ended up closing $385,432.60 worth of website sales in April – putting us well on our way towards our $900K goal for Q2.

With another great month in a row, this continues to highlight our biggest challenge – inventory. We have to keep up on sourcing and attracting new and repeat sellers if we want continued growth.

As always, our goal is to share with you our successes and failures in the hopes that they help you build and grow your own profitable business. Our hope is that this report encourages, inspires, and helps you as you build your online empire.

We’ll dig into all the details including a breakdown of earnings, traffic, and the projects we’re working on, but first let’s take a look at our overall numbers.

Executive Summary – April 2015

Brokered site sales really drove our revenue for the month. After bringing on our first investor for the investor program in March, we’ve begun acquiring sites in April/May.

Here’s a look at all of our revenue streams over time:

EF Monthly Revenue All Apr 2015

April 2015

Business Data:

  • Employees: 7
  • Apprentice: 2
  • Contractors: 5
  • Contact Records: 30,246 (+1,392 from previous month)
  • Email Subscribers: 19,642 (+915)
  • Site Visits: 36,260 (-1,286)

Earnings:

  • Brokered Site Sales: $385,432.60 (-3,421.11)
  • Brokered Site Earnings: $52,969.18 (+$980.72)
  • Listing Fees: $1,970.00 (-$2,479.00) 5 new, 5 returning
  • Investor Program Raised: $0.00 (-$125,000.00)
  • Investor Program Commissions: $3,750.00 (+$3,750.00)
  • Investor Program Revenue: $0.00
  • Investor Program Earnings: $0.00
  • Additional Revenue: $1,203.04

TOTAL Revenue: $59,892.22 (+$1,910.13)

Revenue Breakdown

Now that we’ve covered the overall numbers, let’s break down each of the revenue streams and dig into the details.

Brokered Site Revenue

Here’s a look at our all-time brokered site revenue:

EF Monthly Sales All Time April 2015

And our month-by-month breakdown:

EF Monthly Sales April 2015

We ended up brokering 12 transactions with the largest at $190K and the smallest at $3K. This added up to a total of $385,432.60 in brokered site sales and brought in more than $52K in revenue for the company.

After closing nearly two dozen deals in March it was great to close half the amount of sites for about the same dollar amount. As we continue to close the larger 6-figure deals, we expect our average deal size to increase as well. This equates to more money for about the same amount of work.

There’s an open question as to whether we should still be listing/selling sites for less than $10K. On the one hand, most of these are relatively fast and simple transactions, especially for AdSense or Amazon sites, and they’re a great way for those just starting out to get their feet wet on a first purchase. On the other hand, we only make $750 on a $5K deal and there’s quite a bit of work that goes into sourcing, vetting, listing, negotiating, and finalizing the transfer of those sites.

We’ve been tracking the numbers on this for 2015 to help us better understand which deals continue to make sense for us. We might be making some changes by the end of the year based on that data.

Website Listing Fees

We saw a drop in listing fees for April, only pulling in $1,970.00 for the month.

  • 5 First-time listings @ $1,485.00
  • 5 Repeat listings @ $485.00

Quite frankly, these numbers were disturbingly low for the month. It’s important that we keep up with supply to meet demand, and only 10 paid listings submitted per month isn’t going to cut it, especially when you consider that a few of those listings will get rejected during the vetting process.

With increased spend on paid traffic and advertising, I’m expecting these numbers to significantly increase in May and beyond.

One of the first things we’ve looked at at would be removing the listing fee altogether, but our thought is that doing so would only open the doors to tons of submissions that wouldn’t pass our vetting process. This would stretch our team’s resources and make us more likely to miss the “good” sites that we should be listing.

The next thing we’ve looked at is adjusting the multiple used in valuations. If we bump up the multiple we’ll attract new sellers that might have been interested in selling their sites at 20X. We’ve already begun doing this and are pricing most of our new listings based on the range given by our Valuation Tool.

Ultimately, we have to continually balance supply and demand to keep a steady flow of quality deals coming in for our buyers and ensuring a good valuation and sales price for our sellers.

Investor Program

I’m not sure I explained this as well as I meant to in the last report, so I wanted to break down what these numbers mean going forward:

  • Investor Program Raised – Any money received from investors that month, to be used to purchase sites.
  • Investor Program Commissions – Any commissions earned on sites purchased for the investor program. This will likely be 15% for sites we source from our own listings, but could be as low as 0% for sites sourced elsewhere.
  • Investor Program Revenue – Total revenue for all investor sites currently held in inventory. (Reported quarterly only)
  • Investor Program Earnings – Empire Flippers earnings on investor sites. (30%, reported quarterly only)

We raised our first $125K for the investor program in March, so we’ll be taking the next couple of months to find the right sites to purchase for this package.

We pulled the trigger in April with our first purchase at $25K for a site from our marketplace. We’ve migrated the site, reviewed the earnings, and have paid out the seller. We’ll be tracking (and paying out the investor) quarterly, so you won’t see much about this on our regular monthly reports.

Additional Revenue

I’ve combined our earn-out from outsourcing, affiliate commission, and AdSense/Amazon earnings here, accounting for $1,203.04 in April.

We should see some growth here as I add in the earnings from the stolen sites we recovered, but this won’t be a major channel for us.

Traffic And Audience

Here’s a peek at our blog traffic, podcast downloads, and email list for April, 2015.

Blog Traffic & Analytics

We saw a slight dip (3%) in traffic from the previous month, down to 36,260 visits in April.

I’m really happy with where are traffic is, especially considering how infrequently I post.

Here’s a look at our overall traffic in April as compared to the previous year:

GA Overall Apr 2015

Here’s a look at our channel traffic and deposits for the month:

GA Channels Apr 2015

It’s good to see a few deposits coming in through our BizBuySell advertisements. No deposits from Facebook Ads, but that’s not too surprising with all of the paid traffic focused on driving sellers.

We tried a little PPC with Google AdWords in April, but we weren’t seeing much in terms of results and the traffic was awfully expensive. I might retry this later, but we’re putting it on hold for now.

Here’s our referral traffic for April:

GA Referrals Apr 2015

BizBuySell came through as our top referral for the month, beating out both Facebook and Reddit. It was nice to see the higher conversions from traffic on the Warrior Forum and our buddy Tung over at Cloud Living has sent over a few subscribers as well.

Our top content in April:

GA Top Content Apr 2015

Our Marketplace, Homepage, Valuation Tool, and How It Works pages received the most of our traffic.

Our Top Listings:

Listing #40197 – Affiliate network making $20K+ per month with both publishers and advertisers.

Listing #40148 – (Sold) Amazon site earning $10K+ per month in the Home & Garden niche.

Our Top Blog Posts:

Monthly Business Report, February 2015

Google’s Mobilegeddon Update

Empire Flippers Case Study

I’d really like to improve our content output in 2015. Inspired by Dan @ WP Curve and Clay @ Lead Pages, I’m seriously considering bringing on a Content Manager apprentice in the next couple of months to help us put out more in terms of blog posts and guest posts. In the meantime, we’ve been working with a few contractors to help fill in the gaps.

Podcast Downloads

We saw a drop in podcast downloads in April, from 18,545 down to 14,510 downloads.

EF Podcast Downloads Apr 2015

We’ve been pretty hit-or-miss when it comes to sticking to a regular podcast schedule, but we do have some excellent interviews and topics lined up over the next few months.

Additionally, we’ve started working on a “stealth podcast” that I’m hoping to launch by the end of June. It’s a completely new show, new format, and I think you’re going to dig it.

Emails & Contacts

We finally broke 30K contact records! We ended April with 30,246 contact records, up 1,392 from the previous month.

OP Contact Records Apr 2015

We ended April with 19,642 active email subscribers.

It’s been a while since I’ve reviewed the emails in our auto-responders. We’re currently in the process of upgrading from Office Autopilot to the new/improved Ontraport and I’ll likely take a look at that once the migration is completed.

Customer Experience

We strongly believe that our customer experience helps set us apart from our competitors and that’s one of the reasons we measure our success (or failure) in this area every month. Keep in mind that the majority of our feedback and comments are overwhelmingly positive, but I’m highlighting the positive and negative equally for clarity.

Here is some of the behind-the-scenes feedback we’re getting from our customers.

Zendesk Support

While we kept our first-response times down in April, the results from our customer feedback survey were the worst they’ve ever been.

Here’s a look at April’s numbers:

ZD Apr 2015

Compared to March’s numbers:

Zendesk Report March 2015

I’m really happy with the first-response time, but there’s an open question as to how quickly we respond to 2nd, 3rd, or 4th responses on open tickets. Due to the way we handle customer tickets/requests, many tickets don’t get closed for weeks and have quite a few back-and-forth responses. I really wish there were a way in Zendesk to track this.

Customer Feedback

Out of a total of 508 new tickets, we had 76 marked as good/satisfied and 11 marked as bad/unsatisfied.

Here’s a sample of some of the “Satisfied” comments:

ZD Feedback Good With Comments

These came from site buyers, sellers, depositors, and others who just had some questions.

There were a total of 11 “Not Satisfied” tickets and 7 of them left comments:

ZD Feedback Bad With Comments

Several of these came from sellers that were disappointed that their site didn’t pass our vetting process. Others were from poor communication and too much back and forth with a depositor.

I was pretty disappointed with our scores and feedback but, in reviewing each of the tickets, I really feel this was an anomaly and not a sign of a drop in our service. For whatever reason, more of the sellers in April that were rejected decided to submit feedback, but there’s really not much we can do about that – it’s working as intended.

One thing we do need to get better about is rejecting sellers/sites earlier in the process. If they’re clearly missing required information or data there’s no reason to continue to push them through to the end – we should reject them right away and save us all some time.

What Happened In April 2015?

1. We held our quarterly strategy meeting.

Every 3-4 months Joe and I sit down for a day with our management staff to map out our long-term strategy and to nail down the goals that will help us get there.

We start off talking about the kind of company we want to have in 4-5 years and work backwards from there. We then nail out the steps we need to take this year, this next quarter, and then each individual month in the next quarter. That gives us short-term “goal posts” we can aim for. In case we’ve set our goals too high/low, we can always adjust each quarter to make sure we’re still on track for the 4-5 year plan.

Aside from being good practice for Joe and I, it’s also a chance for us to sit down with our apprentices to review where we’re going, what we’ve done, and what we plan to do. It gives them some insight they probably wouldn’t have in a “regular job” and gives them an opportunity to voice their suggestions, opinions, etc.

2. We started an on-site SEO project.

When we started this company, we weren’t at all worried about on-site SEO. We hardly did keyword research, didn’t optimize the content, didn’t properly silo the categories, etc. It’s not that these things aren’t important, it’s just that we were writing and publishing content expressly for our readers/listeners. We always knew we could go back and clean up the SEO.

Well, that time has come!

We’ve got quite a body of work when you consider all of our blog posts, pages, podcast episodes, and videos – not to mention all of the content we’ve added around the web on other sites and podcast interviews.

It makes sense to put that content together in a more organized, Google-friendly way. We’ve hired Chris, Nico, and team over at PageSpeed.io to help us see if we can make some improvements in that area. It wasn’t cheap with a project cost of $6K, but we think the long-term benefits will return a positive ROI here.

3. We significantly bumped our marketing/advertising budget.

We’re currently spending around $10K per month on paid advertising. Facebook Ads take up a majority of the budget, but we’ve also hired a few content contractors and have started some exploratory marketing through AdWords, Reddit, etc.

There’s always a question as to “how much” you should be reinvesting in growth. If we were looking to sell Empire Flippers any time in the near future, we’d have to cut all of this out, maximize profits, and make our business look as attractive as possible when it comes to our margins.

But…we’re not planning to sell.

Not any time soon, anyway.

Since we’re not looking to sell and we see a TON of potential in the industry, it makes sense for us to dump money into growth. We’re both happy with what we’re making and the business is healthy, so if we can maintain that and make 2015 a growth year, we’ll be much bigger and in a better position if we DO decide to trim expenses and improve margins.

4. We’re back in the Philippines.

Philippines Island Hopping

Oh yeah, buddy…

Joe, Mike, Andrew and I left Vietnam to head back to the Philippines for six weeks. It’s been a while since we’ve spent some time with our team in Davao and we wanted to join them for some team building, training, and to introduce the new guy (Andrew) so they can all get to know each other.

It’s nice to be back.

Joe and I have spent so much time here that it really does feel like “home” now. I’ve missed the great English, friendliness, and warmth. We’ll be here until mid-June at which time I’ll be heading off to Kuala Lumpur, Joe and Mike will be doing a tour of cities in the Philippines they’ve never seen before, and Andrew will be heading off to Korea for a music festival.

There’s a tentative plan to regroup in Bali in July/August, but nothing firm quite yet.

Overall, it was really a business-as-usual month, which is great considering where we’re at financially these past two months. It’s definitely been busy, but I still don’t think we’ve maxed out the capacity of our team. We still have room to grow, but we’re also looking forward and building out the team to further support growth into 2016 and beyond.

That’s it for this month’s report – thank you for checking it out! Please feel free to share if you think others might find it useful too:

“New – Monthly Business Report for April 2015 from the @empireflippers!” – Tweet This!

So, I’ve got two questions for you:

1. Where do you see YOUR business in 4-5 years?

2. What are you doing this quarter (and this year) to make that happen?


Make a living buying and selling websites
Sign up now to get our best tips, strategies, and case studies
Discussion
Leave a comment
  1. […] our investor program, I’d suggest listening to this podcast along with this one, or checking out April’s report for more […]

  2. […] about this program, I’d suggest listening to this podcast along with this one, or checking out April’s report for more […]

  3. […] If you’d like more of an explanation on this section, I’d suggest checking out April’s Report. […]

  4. […] If you’d like more of an explanation on this section, I’d suggest checking out last month’s report. […]

  5. Stefan says:

    It is always a quite inspirational to read your monthly report because it is more than just only numbers!

    1. More projects, higher revenues but more risk spreading about multiple kinds of revenue streams (e.g. FBA, niche sites, kindle authorship)

    2. Maybe my “side-business” is a little behind what is state of the art but i found out a good structure to build affiliate niche-sites with unique content (images, videos, text) and testing products myself. Furthermore i reinvest all cash which comes from theses projects to expand my portfolio. There is a exact number of revenues i want to achieve this year ;)

    Please go on with providing this valuable insights of your businesses!

  6. Mike Sluyter says:

    Hey —
    I’m new to website buying, but I’ve been listening to your podcasts and am ready to buy, but for a first site I want to start small. However, I’ve been frustrated by the fact that the websites < 10k that have been showing up on your marketplace have been snapped up within hours. Would love to see more inventory in that range.

    Also, how does one join the investor program?

    Thanks,
    Mike

    • Justin Cooke says:

      Thanks, Mike – hope you’re digging the podcast!

      With the Sub-$10K sites, it’s just a supply/demand thing going on. We don’t put much into slowing that down, because selling sites quickly is good for us (and our sellers). Most of our efforts are focused on how to best vet, list, and sell 6-figure sites at this point. The 4 to low-5 figure site sales are pretty automatic.

      We’re definitely looking for more inventory, though! Have quite a few in vetting and released 7 new sites for sale today.

      The investor program is still in private beta. We’ll be testing it out throughout 2015 with a plan to launch it more publicly in 2016 once we’ve got the staff and processes in place to scale.

  7. Woah! monthly reports? I do follow Dan’s (WPCurve) monthly reports and they’re awesome. I just started a productized service by following Dan and it’s growing now :)

    Will follow Empire Flippers too every month from now on. All the best guys!

  8. Raj Sidhu says:

    Hey Justin,

    Really love the detail you go into with your income reports.

    I’m gathering a whole heap of income report data for a regular roundup post on my blog and would love to see your May numbers so I can feature you guys on it too.

    Also, I would love to see your expenses broken down too, do you think you would be interested in including that detail in your reports moving forward?

    Raj

    • Justin Cooke says:

      Hey Raj,

      Working on the May report now – should be out this week!

      After paying ourselves salaries, profit share, etc. we (mostly) reinvest in growth. We have decent cash reserves, but you can assume our profit is zero. (That’s usually the case!)

      If we cut out our pay and all growth/expansion expenses, we’d probably have a burn rate at about $15K – $20K per month.

  9. So Joe’s too cool for the company tee? ;)

    Say hello to the gang at Business Class for me.

    – DT

  10. Chris Goheen says:

    Nice work EF!!! love the team pic. with the brand recognition you guys are creating you might want to consider going into the apparel business too!

    • Justin Cooke says:

      Booyah! :-)

      We really like how the team shirts came out, for sure. My girlfriend had them made when we were in Vietnam and set everyone up here with “pasalubong” (A gift you buy for other Filipinos while abroad) when we got back, heh.

      • Attila Hardy says:

        I agree with Chris, those shirts look superb. They could be a great post-transaction gift for buyers / sellers. Something tangible that reminds you of the successful deal!

  11. Attila Hardy says:

    Keep up the hard work gents – you are clearly on the path here for something big.

    Can’t wait to see the June report. Enjoy the Philippines!

  12. Sidhant Chadha says:

    Okay, let me start by talking about removing the listing fee altogether. I recently paid the listing fee and my site is probably getting vetted, but as a seller, the only thing intrigued me to go ahead with EF was that you guys only accept premium sites. Removing the listing fee would just mean allowing anybody and everybody to use your resources, and frankly, then I won’t be as interested in using EF as I am right now. It does make a significant difference, at least in the sellers mind, and buyers too. Your revenue numbers for April look great. Keep up the good work. I’m sure EF has already started to make its own space and waves around the web, and it’s definitely NOT another Flippa we have around. I feel Flippa is overhyped and buyers and sellers both are very skeptical using their services these days. The listing fee with EF adds this benefit as well that it gives a sense of confidence to its users. And honestly, I didn’t mind paying the listing fee. In fact I was happy that you guys will take good care of this process knowing that a customer has paid for a service.
    Thanks!

    • Justin Cooke says:

      Thanks, Sidhant.

      Yeah – no plan to remove the listing fee at this point. We just KNOW we’d get a ton of crappy submissions and have to dig through them, wasting our resources and taking away from “real” customers.

  13. Josh Escusa says:

    Almost $400k in site sales, holy cow! I still have a few sites i’m debating on selling. I’m holding them for a bit and letting them grow, but I may sell later this year.

Leave a Reply

Your email address will not be published. Required fields are marked *

Have a site to sell?
Sell Your Site

Click here to find out how much your website is worth