EFP 138: Strategic Website Acquisitions

Justin Cooke

June 5, 2015

Joe and I are big fans of the CNBC show, “The Profit” with Marcus Lemonis. Each week he finds himself walking into a new business to review their business, check their financials, and see if he’ll be willing to make a major investment to help turn that business around. With more than $14M invested to date, he’s definitely had a few duds, but he’s also had some breakout successes.

The 3 Keys to Successfully Acquiring Profitable Websites

While helping to renovate the business he looks at three things: People, Process, and Product.

In today’s episode, we wanted to look at strategic website acquisitions through the same lens. How can we use the three P’s to determine whether there’s a value in a potential strategic acquisition? For fans of the show and others looking for ways to expand their strategic acquisition opportunities, this episode’s for you.

Check Out This Week’s Episode:

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Topics Discussed This Week:

  • Product:
  1. Direct Product Match
  2. Parallel Products
  3. Unrelated products that appeal to your customer avatar
  • Process:
  1. Can plug into your system
  2. You want to plug into their system
  3. Technology
  • People:
  1. Acqui-hire
  2. Economies of Scale

Mentions:


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 Spread the Love:

“A good strategic website acquisition is more likely to be valuable.” – Justin – Tweet This!

“Strategic purchases can add value immediately.” – Justin – Tweet This!

“If it’s a strategic purchase, the potential is easier to evaluate.” – Joe – Tweet This!

So – what did you take away from this episode? Have you ever dealt with credit card fraud? Let us know in the comments!

 

Justin:                   People, product and process, the three pillars of a successful business. Today, we focus on these three things when it comes to strategic website acquisitions, and how you can leverage specific strategic advantage to your benefit and for profit. You can find the show notes and all links discussed in this episode at empireflippers.com/ppp.

                                Alright, let’s do this.

VO:                        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:                   Strategic is a funny business word, Joe. who doesn’t consider themselves strategic? It’s almost like asking people if they’re bad drivers. No one says they’re a bad driver, right? So of course your strategic. Yes, I’m strategic in my decisions. But is everyone?

Joe:                        No, I definitely think people are more tactical in their decisions than strategic. They don’t look wider and further than just the next move, and I think that that’s definitely a problem that a lot of entrepreneurs have.

Justin:                   But here’s the thing too though, not all website purchases are strategic, and they don’t need to be. Some people are buying just to add to their portfolio because it’s a good portfolio buy. The fact of the matter is that a good strategic purchase is more likely to be valuable, like extremely valuable to the buyer. The difficulty is that they’re harder to find.

                                I like strategic purchases because they can add value immediately. Either you have a business where bringing their product or their process or their people in add value to your business, or they have something in their business that combining the two can bring a ton of value to yours.

Joe:                        It’s definitely a one plus one equals three kind of position. That’s the kind of stuff we’re talking about here. And it doesn’t always have to be on a big brand level. You don’t have to be Twitter or Google in order to pull off a strategic purchase.

Justin:                   Yeah. A lot of times you hear about these acqui-hires and these crazy acquisitions for $3 billion of whatever new app that came out. That’s not what we’re talking about. We’re talking about five-figure, six-figure, maybe low seven-figure businesses. And these are real businesses that people like you and I and and our listeners are building. So I think that there’s some interest, I think some value in talking about it.

                                One thing from a buying perspective is that when you’re looking at a strategic acquisition, multiples become less important. So because they’re less important to you, because the business inherently has more value to you than a portfolio buyer, you’re going to be able to outbid a portfolio buyer. It’s simply worth more to you, so you’re willing to pay more for that business.

Joe:                        I think that’s one of the huge advantages of this situation is definitely you’re not that focused on the multiple. You’re more focused on potential, which it can be risky at the same time, but definitely if it’s a strategic purchase, the potential is easier evaluate than it is if you don’t have any strategic value in the acquisition.

Justin:                   Thinking about this too, if you’re up against the portfolio buyer, let’s say, that’s offering 90% of the value of the sales price, and you come in as a strategic buyer and you say, “Look, I’ll pay you 70% upfront right now, and I’ll pay you 50% over the next 6 or 12 months,” you’re giving me 120% of their ask. It’s way more than the portfolio a buyer’s giving. It’s definitely worth more to you, and still you’re putting less cash up front. So there are some, I think, interesting deals you can come up with when you’re a strategic buyer.

                                The real reason we’re talking about this today is that we want to help our listeners find strategic acquisitions that might not be as obvious. If I sell boxing gloves, and there’s another company that sells boxing gloves, and I buy that boxing glove company, that’s pretty straightforward. Of course that’s a strategic purchase, of course there’s value there. But that’s not the only way you can make a strategic purchase. There are really interesting ways that we’re going to get into in this episode that I think will probably expand your search criteria and give you more options.

Joe:                        Yeah. From my perspective, the reason why I want to talk about this today, Justin, is because definitely some of the higher end sites that we have on our marketplace, I think are primed for a strategic purchase. It doesn’t mean that the owners haven’t tried themselves, but it’s definitely something I think as a broker we could do for them as well.

Justin:                   Yeah. I think when you’re looking at a strategic buy, you’re not always looking at where you are, but at where you’re going. So there may be some technology, there may be some people, some process in place, that isn’t where your business is today, but that will help you grow into the business that you want to be two, three, five years down the line. And that’s why I think it’s important to have that roadmap or that plan to where you’re going.

                                Alright, man. So we’re going to look at strategic purchases through the lens of people, product and process. Before we do that, we’ve got our featured listing of the week, which is listing 40233. Let’s talk about it, Joe.

Joe:                        Yeah. So as you know, Justin, I love me some packages, and this listing is full of packages. It is four different sites in the service niche, specifically around cleaning services. So I really think that this is the kind of one that could diversify a portfolio. They have advertisers that are paying directly on a pay-per-call basis. The calls are provided through organic search, so it doesn’t get a heck of a lot of search in terms of the traffic, but it does rank very, very highly for its keywords.

Justin:                   Yeah. Of the four sites, on 90 days traffic, one of them has just under 3,000 page views, the other one has 5,000 page views, one has 4,000, and the last one has 2,000 page views. Those are all over a 90-day period. So yeah, not a ton of traffic, but they’re getting paid on a per-call basis on a per-lead basis.

Joe:                        Yeah. So I really think that’s interesting from someone who’s looking to diversify away from something like the AdSense or the Amazon strategies. This definitely gets them into a different category. It does still depend on organic traffic, but it doesn’t mean you couldn’t expand via some other ways of getting traffic. And it makes about $1,900 a month in net profit. We have it listed for just under $38,000, so I do think it’s one of those kinds of purchases that could do well for the type of guy looking to diversify his portfolio.

Justin:                   Yeah, the seller’s only putting in about two hours a week or so, and there are four sites, so I think that’s pretty interesting. If someone’s interested in that, they can take a look at this listing.

                                Alright, buddy. Let’s dig into the heart of this week’s episode.

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

Justin:                   Alright, Joe. We’re big fans of The Profit, which is a show on MSNBC, run by a guy named Marcus Lemonis, which some people say you look like him, maybe an older version.

Joe:                        Older version? Wow.

Justin:                   I don’t know. You look a little bit like him.

                                Anyway, this guy goes around and looks at failing businesses, looks at struggling businesses, and will invest in them, and ultimately own a piece of the business. He looks at the three different pillars of their business people, product and process. So we want to look at strategic purchases through the same lens today.

Joe:                        Yeah. For me, I think it’s better than Shark Tank, because it really takes it from a small business point of view, and it goes to show you that some of these big business strategies and tactics can work on a small business wavelength. I think we were talking a little bit about that here in terms of strategic purchases, and it’s something to keep in mind.

Justin:                   Alright, man. So the first one, the first leg or pillar we’re looking at, is product. The first one’s really clear. There’s a direct product match. Same industry, same niche. And this is a situation where my current business sells e-cigarettes, my competition or strategic purchase sells e-cigarettes, and we’re going to combine the companies. I want to basically buy them out, and it gives me the opportunity to add a couple of brands that I’m not currently listing or selling, and expand my customer base.

Joe:                        This is the one that everybody thinks of when they think of a strategic purchase. You’ve got to offer the same sort of products or services that you offer in order to make it work.

Justin:                   There’s going to be some overlap. Maybe some of their customers are already your customers, but you can look at it as adding to your customer base. You might be doubling or even tripling if they’re larger than you, and you’re going to add new product lines to your company, and basically over time, integrate the two. So that’s the first when it comes to products.

                                The second one is to look at parallel products or parallel industries.

Joe:                        And I love your example here.

Justin:                   Yeah. Let’s say for example that you and I, or Dan and Ian, our buddies over at tropicalmba.com, let’s just say that we sold cat furniture. So we’re cat furniture vendors, we’ve got the coolest cat furniture in the biz, and there’s a company that sells cat clothing. So you know those crazy little cats where they got the little sweaters or whatever, and [crosstalk 00:08:48]?

Joe:                        Somebody spends way too much time on YouTube.

Justin:                   Yeah, man. Yeah, the little little cat sweaters or whatever. There’s a company that sells those. That would be an example, I think, of a parallel product in a parallel industry. So we’re both dealing with cat products. It’s not a direct competitor, but it’s definitely something that I can see our customers being interested in, the cats being interested in that. There’s some value there.

Joe:                        Yeah. You can market these products to your existing list. You can market your products to their list. Obviously, it’s a way for you to expand the product catalog without having to do a lot of product development, which is costly.

Justin:                   That’s exactly right. So you’re already buying up what you know are successful products in a parallel industry, you’re just expanding your SKUs on products that have already proven.

                                The third example we want to give when it comes to product would be unrelated products that appeal to your customer avatar, the perfect example of your particular customer. So an example of this might be, we run a company that sells apparel, let’s say clothing or jackets or whatever, to 25 to 45-year-old, the soccer mom demographic, let’s say. So that’s our target customer, that’s our audience, the people that we sell to.

                                There’s a site that we’re looking to purchase that sells really neat or cool gift ideas for 25 to 50-year-old husbands or boyfriends. Right now, the products are a different demographic. They’re actually being delivered to different demographics, but the people that are buying them are in the same group. So we’re specifically targeting the soccer moms. We now have another product that we can sell to the soccer moms. It’s not the same product, it’s not even in a parallel industry, but it’s a site that we can definitely help cross-promote to our current audience.

Joe:                        Yeah, I think this might be one of the most valuable types of product strategic buys. It takes a little outside the box thinking. You might have to change the marketing of the acquired product, but if you can get it to work, it could be extremely valuable.

Justin:                   Well, I think you’re right, but probably not for the reason you think. I don’t know. We’ll see.

                                I think you’re right in that it can be the most valuable, but I think more clearly a direct product match or a parallel product is the clear option, and probably apple to apple, I’d rather have one of those. I think why this third one, the unrelated products that appeal to the customer avatar, why this one is more valuable, is because there’s just a wider range of potential targets.

Joe:                        Exactly.

Justin:                   They’re easier to find. If I’m always looking for … if I saw cat furniture, and I only want to deal with things that are sold to cats, good luck. I might be five years before I find a good target acquisition. Whereas if I’m looking at my customer avatar and I’m thinking about the other things they’re purchasing, I have a much better chance of finding those deals.

Joe:                        Yeah. I also think the seller is not going to view you as so much of a strategic buyer. Sometimes if you come at it, if you’re another cat furniture company, and you’re acquiring a cat clothing company, the seller might say, “Hey, I know why you want my company. I want more money.”

Justin:                   “I want more money.” Or, “I’m scared to turn over my analytics to you. I’m scared to give all my numbers to you, because I know you’re either a direct competitor or a close competitor.”

                                Whereas yeah, I think you’re right. If it’s an unrelated product, they might not clearly see the connections. They might be more forthcoming in sharing that information, and you might be better off getting a good deal.

                                Alright, buddy. So we talked about product. Let’s talk about process. The first type of strategic acquisition we want to talk about here would be when you can plug their business into your system. So an example of this would be when you already have, let’s say, standard operating procedures for keyword research and for content for Amazon sites.

                                I have people, there’s a particular process they follow to find the keywords to expand the content. I think if I can then bring in another site where I already have the processes laid out to do that, I can easily add that process with slight modifications to this other business I’ve just purchased.

Joe:                        Yeah, I love that. And I think it’s very applicable to the kind of people in our audience that generally have these type of sites. If you have a good way of expanding sites, content-level sites, then acquiring other type of content sites is a good strategic acquisition.

Justin:                   Another example, I think, is let’s say I have customer service VAs, and they have a particular process for handling complaints, handling returns or whatever, and I run an e-commerce company. I’ve already got a fulfillment house, and I’ve got processes in place to ship the orders, make sure that they’re fully stocked. Buying another e-commerce business just takes advantage of the fact that I’ve already got those processes in place. So slight modifications to that process, I can bring in this other business and simply plop my process on top of it and have an advantage, especially in situations where the company I’m buying does not have those processes in place.

Joe:                        I think this is probably one of my favorite ones, because I’m the cost-cutting kind of guy, and I absolutely see that as … some of these sites that we look at that we sell, I see a lot of overhead in there, where if I had a lean, mean machine on the backend that I could just take and run their business, immediately I would increase margins just by putting my advanced process in there.

Justin:                   Yeah. Let’s say that they are paying for customer service agents, and let’s say college kids in the US are paying $10 or $15 an hour now in LA, [inaudible 00:14:04] or whatever. Let’s just say I’m paying some college kids to do the customer service there. But I’ve got processes, and I know that adding an FAQ is going to reduce the questions by 22%, and I know that by putting a phone number on there, people will feel more confident and less will actually call. I can add all these things in place and save myself some costs. I’m not going to have to pay that person $15 an hour to do the things they’re doing now, because that work’s no longer around.

                                The other thing you can do is you can cut owner time. So we’ve seen this, Joe, where … what was that business that the guy was just creating out of his garage, he was folding things or painting things or something? He was literally painting things in his garage or something. It was ridiculous. He was putting so much time into the business, and it’s sellable, but the person buying is saying, “Look, you’re spending all this time doing all the work yourself, I’m going to have that done for me. I’ve already got a process in place where people can do this work. I’m just going to do that.”

Joe:                        Yeah. We have a business for sale right now, the elasticbandco.com, which is a great site, but the owner does do primarily all the work himself. And I think that could very easily be trained or outsourced to a $10 or $15 an hour minimum wage person, and you could pump those out without any owner involvement whatsoever.

Justin:                   I just talked to him recently on a cell interview that we’ll be publishing soon, and I asked him about that. I said, “Why haven’t you done that?”

                                And it’s kind of like, “I don’t know, I just have an eye for design, and I think I can do it.”

                                I don’t know, man. I think that should be taken away. And I think that whoever ends up buying that site absolutely should do that instead of creating themself some job where they’re sitting around doing that work. I think definitely. And offer a discount based on what you think it would cost to get that done. I think there’s opportunity there.

                                The second example when looking at strategic purchases under the process section is you have a situation where you want to plug into their system. An example would be that they have SOPs for, let’s say, finding, hiring and training writers, which you need for your other businesses.

                                So we have a situation like that for sale right now. We have a site for sale where they have a great process in place for finding the writers, bringing those writers on, training them, getting them up to speed, and they’ve got really quality writers because of it. So the people would be the writers themselves and the skill sets they have, but I think a process for bringing them on is valuable too. That’s good intellectual property that you’d like to have with your other businesses.

Joe:                        Extremely valuable. But I would say that this method is very rare. We see this very rarely. And if you’re looking for something like this, a way to improve your process through a strategic buyer, it could happen, but you’re really going to have to look for it.

Justin:                   Yeah, you’re probably more likely to have better processes than they are. I think, especially when you’re talking about a $40,000 site, it’s not likely. Probably neither of you are likely to have good SOPs in place, probably because it’s at that level where it’s not really worth it yet. But I think when you get into the six figures and low seven figures, you’re more likely to find something like this.

                                I think another example would be a situation where they have a process for sourcing products, whether that’s overseas in China, or they have a process for finding other good Amazon sites that you can build affiliate sites off of. I think this is a little closer to the types of sites that we sell. I think there’s opportunity there.

                                The last example I’ll use for plugging into their system is they have a solid lead gen process for acquiring customers in your niche. So say, for example, that you’re buying a site that is an affiliate site for Virtual Staff Finder. They get a piece of the commission when you go there, explains how Virtual Staff Finder works, you click through, pay Chris Ducker’s company, he gets paid.

                                So let’s say I have an outsourcing company. I might want to buy this Virtual Staff Finder affiliate company so that I can just plug in my own business. They’ve already got the process for driving the leads. I’m basically just buying a lead generation machine.

Joe:                        Yeah, I love that example, Justin. That’s a great one. And I think that there’s a lot out there. For people that are in the product business, acquiring some type of Amazon or other type of lead site or affiliate site, and driving that to your service or product-based site, is a great idea.

Justin:                   I’ve been looking to this for Empire Flippers. There’s a bunch of, I’d say kind of crappy sites out there that give you a valuation, and it’s based on your Alexa ranking or whatever, not based on anything in terms of earnings. I was thinking, look, they’re getting some traffic, they’re ranked for keywords. If we could buy those sites, plug our valuation tool into them, I think that’d be really valuable.

                                Problem is they’re not terribly responsive, or they have delusions of grandeur and they’re going to be a eight-figure business next week, and I don’t know, it’s not [inaudible 00:18:37].

Joe:                        Well Mike and I were going through the whole strategic purchase process today, actually.

Justin:                   Which is new. Our listeners probably don’t know about that. What’s the strategic purchase?

Joe:                        You could do a whole podcast on the strategic purchase process, but there are definitely ways to isolate people and get ahold of them and contact them and approach it in a certain way that you don’t get the cold shoulder.

Justin:                   Yeah, we’ll talk about that on an upcoming show. I think that’d be really interesting, create a process to basically reach out to people that don’t know they’re potential sellers, but we’re hoping they’ll be potential sellers, and see if we can get them to sell and list with us, and we’ll let you know the results and how that’s going, but we just implemented it.

                                The third example we’re going to talk about under process comes down to technology. And the example you gave before the show, you were talking about Empire Flippers acquiring a better custom marketplace. So we have a marketplace that tracks everything that it does. But it’s not the best. It’s what we built, it’s what we came up with. If we found one that was significantly better, we might buy them just for the technology. We don’t care if they have customers, we don’t care if they have anything else, it would just work for us.

Joe:                        Yeah. I think when people think about technology acquisitions, you think about huge, multi-million dollar, multi-billion dollar companies trading hands. But it doesn’t always have to be that way. They could have some sort of limited-scope technology that’s advantageous to you, or even just a better integration of two pieces of technology that to recreate, to hire the people, the consultants, the engineers, the software developers, would be expensive, it might cost you $50,000 or a $100,000, whereas to acquire this business would cost just as much. So you get a revenue generating property plus their technology. That’s nice.

Justin:                   Yeah. Here’s the funny thing. So I’m going to go back to the other side and say, “Well, the seller says my business is worth at least $100,000, because I spent $100,000 building out this technology.”

                                No.

Joe:                        No.

Justin:                   Just because you spent the money doesn’t mean it’s worth that. Now, if a buyer comes along and says it’s worth that to them, it’s then that valuable. But that’s pretty rare. That’s a hope and a prayer of that people will find the money you spent on it valuable. So you can’t count on that when it comes to valuations. But a buyer can valuate that based on their projections on what it would cost.

                                Now there’s some downside. Anther example actually would be a company that has integrations where you don’t have to recreate the wheel. It’s attached to Zendesk and Fusionsoft, and it’s got all these things already set up and technology in place and processes in place that you can plug into.

                                The downside here is you may be dealing with bad code. Maybe they didn’t design it well, maybe they didn’t develop it well, and so there’s a bunch of different problems. The other downside, I would say, is that you’re not customizing it at all. You’re basically plugging into someone else’s system. You try to bring a designer or developer in there to take a look at it and see if they can make adjustments for you, you may be feeding the beast there. That may not be good for you.

Joe:                        It definitely can come with some downsides. Buyer beware.

Justin:                   There’s some interest though for guys like us, right? Because you and I, we’re not great when it comes to development project, costs a lot of money, we don’t do it right. So we would rather adapt our process to the technology than try to adapt the technology to our process. We’re much more comfortable in terms of setting up processes than we are in paying and getting development work done.

Joe:                        Unfortunately, have to agree, but I agree wholeheartedly. Yes.

Justin:                   Sometimes I talk to people, and they’re like … the Ontraport guy for example … he’s like, “Oh, we can bring a developer and they can help with this.”

                                I was like, “No, no, no. We’ll just adjust our process to meet the tool.”

                                I understand that as a very large organization, we couldn’t do that, but we’re still flexible enough where we’ll adjust. No developers. How can we do it using the system as laid out?

Joe:                        Please, no more developers.

Justin:                   So the third section we really want to cover was people. And generally when you’re talking about buying businesses for people, you’re talking about much larger businesses, you’re talking about billion-dollar companies, but we want to share some examples of how that can be done, I think, on a much smaller scale.

Joe:                        Yeah, I don’t think you should just exclude this. There are definitely ways for you to acquire five-digit or even six-digit type businesses and get good people that you could add to your business.

Justin:                   Alright, so the first one’s pretty, I think clear, is the acqui-hire. And this may be a situation where the company you’re looking to purchase has one or more employees or virtual assistants or writers that you could immediately put to work in your main business. We have a site like that right now that’s for sale for about $140,000.

                                Now they have the process in place to bring on the writers, for you to hire the writers, train the writers, but they also have the writing staff in place as well. And so acquiring that business, you may be able to pick up some writers that you can then apply those people and their skillsets to the other businesses that you already own.

Joe:                        Yeah, I could see this being the kind of case where you have a collection of content sites, and maybe you’ve outsourced the content in the past, you want to bring that in house, and you pick up a site, maybe for a little bit higher multiple, but it does come with a good staff of writers. You could use that for not only the business that you’re acquiring, but your other businesses in your portfolio. So yeah, there’s definitely a value there.

Justin:                   Or VA customer service staff that you want to … and they didn’t want to go through the process of trying to find them on oDesk, hire them, train them. You’ve already got a trained staff, you can then apply those people to your other businesses as well, and get some benefits there.

                                The other thing you can look at is when the seller is willing to stay on for 6, 12, 18, 24 months, or even on a permanent basis for some amount of pay. So they sell you the business, don’t retain equity, and are willing to stay on as long as you’re paying them to write the content. We had a business like that where the person liked writing the content for the website, and so they were looking to sell the website, but willing to stay on and receive pay for continuing to write that content.

                                Another example, or very similar example, would be where you let the seller retain some equity, maybe they keep 5%, 10%, 20%, and they stay on in an advisory role. So you’re hiring them because of the skillsets they’ve learned in building that business up, and you’re getting on let’s say a monthly call, and they’re helping you continue to grow this business and the other businesses that you have. So you can use them as an advisor basically, and keep them on that way.

Joe:                        Yeah. I think the thing with these kind of aqcui-hires, the low end of the spectrum, low end of the pricing spectrum, is you have to be a little clever with your approach, and you have to be able to think outside the box in terms of how you’re going to structure the deal.

Justin:                   One of the other things I like is the opportunity for future partnerships or cross promotion with the seller in the future. If you’re dealing with a seller that’s built up a popular and profitable e-commerce store, they may want to do other e-commerce ventures, they might want to do other ventures. There may be opportunities for you to work with that seller.

                                So when you’re buying these websites or buying these online businesses, look at other opportunities that you can work with a seller. You’ve already done business together, they know they can trust you, you paid the money, everything went smooth there. What’s their next project? How can you get involved in that? How can you guys work together? There’s potential for that project to be synergistic with your other current businesses.

Joe:                        Yeah, I love that idea, Justin. Definitely, if you’re going to do business with a person one time, doing it the second time just makes it easier.

Justin:                   Yeah, because it’s a big trust factor when it comes to doing business.

                                The second point I want to mention on our people is economies of scale. So let’s just say for example, on staff right now, I have a great pay-per-click guy or a great Facebook advertising guy, and I can use that pay-per-click or that Facebook advertising to expand the purchased site. So I’ve got staff already on hand, and I can use that staff, and I can look for very specific sites that fit the mold of that traction channel that I have success with already.

Joe:                        I think this is especially true for portfolio buyers that already have a staff that do certain things, whether it be customer service, PPC, SEO, whatever it might be. Adding sites into your skilled people and your processes is going to be an extremely valuable piece, because you’re going to be able to cut costs, you’re going to be able to get better efficiency than the current owner gets.

Justin:                   Yeah. I think if you have people that already have those skillsets in place, you don’t have to look for an exact match in terms of product or parallel product. You can look at things where you can use the skillsets of your people and look for a much wider range of sites. Again, this is one of the advantages, is that you’re not so limited in focus, you’re not going to be looking for the next five years, you can find sites today that can use the skill sets that your people have to expand those businesses.

                                Alright, buddy. Enough about [inaudible 00:26:55] some news and updates.

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

Justin:                   So the first thing, buddy, we got some good news, man. We’ve done three months of $300,000 in sales in a row.

Joe:                        Woohoo. Get me paid.

Justin:                   Yeah, Buddy. Getting paid.

                                So we promised our team a first class trip. This is kind of how we did it. We said $200,000 or more, three months in a row, will get an economy class trip. $250,000 or more, three months in a row, business class trip. $300,000 or more, three months in a row, a first class trip. So we’re going to take the management team out for a baller week, I think, in Bali is what we’re looking at right now. So we’re renting out a crazy villa and set up a bunch of events and things to do while we’re there. I think it’ll be really fun.

Joe:                        Yeah, I think it’ll be really fun too. I’m really looking forward to that, and getting away a little bit, doing that kind of thing, blowing off some steam. Definitely. It’s been a tough three months, but it’s been a very valuable three months. I’ve seen what it takes to be successful in this business, and it’s just not something where you can let your foot off the gas pedal.

Justin:                   Yeah, except for in Bali. But yeah.

                                No, I think it’s good though. It allows our team some bonding time and some relax time. Everyone’s been working really hard, and I think this’ll be a great opportunity for all of us. The other question I’ve had recently is can content marketing be a scalable marketing channel. Now you hear a lot from the pay-per-click guys and the Facebook traffic guys. They’re like, “Look, you know you need to go paid traffic, it’s way more scalable.”

                                But I’ve been thinking about that and questioning that right now. I think that content marketing can be scalable. I was really impressed with some of the interviews I’ve seen recently. I just today talked to Dan Norris from WP Curve for a future podcast episode, and we discussed this in depth. I think he’s been doing a really good job there. So we’re rethinking our marketing spend, and can we instead turn it towards content marketing? Is there value there?

Joe:                        Yeah, I absolutely think content marketing can be scaled up just as good as PPC, especially when your guys like us that have a big headstart on that.

Justin:                   Also, it is pull marketing. You’re getting people to raise their hand and say, “Yes, I want to do business with you.” Whereas pay-per-click, it’s kind of pull, but they don’t know anything about you. Yes, they check you out, but I think it takes longer. They can get into your content and they find out exactly what you’re all about. It’s a much easier way to do business.

                                Alright, man. Let’s do some listeners shouts also known as the indulgent ego boosting social proof segment. First up on Twitter, we had Elevated X, said, “Hey, great show this week. So what is really stopping you from jumping into adult?”

                                So this is based on our previous podcast, where we talked to an adult website broker. Elevated X actually runs adult CMS software. And as we talked about that business a bit, I talked to Bruce about it, and I actually looked into it a little bit, and there are quite a few like SaaS companies and product and service companies that work specifically in the adult website industry. And there was a whole industry of supportive services around it. It’s really interesting. Fascinating stuff.

Joe:                        Yeah. Fascinating stuff. But I don’t know, I just think the gambling and the porn, there’s just plenty of other types of businesses and ways for us to make money that don’t go to that level.

Justin:                   Yeah. Two things for me. Number one, it’s not really the same business. So their traffic strategy is significantly different, the monetization is different. So in terms of brokering those sites, it’s a bit more problematic. The second thing is like, I don’t know man, I think you can hurt your brand. It’s something we’d necessarily want to do at Empire Flippers. I like the fact that there are other people out there doing it. I think there’s definitely a niche and a need for it, so I’m glad Bruce is doing it, but I don’t think it’s something that we’ll be doing.

Joe:                        Yeah. Like we’ve always said, from a personal standpoint, we curse, we smoke, we drink, we watch porn and we gamble. But doing it as a business …

Justin:                   Yeah. I remember that for the outsourcing company, we had someone ask, “Hey, can you set appointments for our escorts?” That was one of the offers we had.

Joe:                        I remember that.

Justin:                   We thought about it. We were like, “Oh, I think we could do that.” It was like in the UK, right? We’re like, “Yeah, I think we could do that.”

                                And then we started thinking about it. We’re like, our agents are going to have to be fielding those phone calls, those chat requests, and that gets a little awkward, man. I don’t know. There’s plenty of business out there.

Joe:                        Really. There’s plenty of business.

Justin:                   In response to someone asking about where to sell $10,000 sites other than Flippa. Our buddy Dylan Hassinger said on Twitter, “Sounds like a job for Empire Flippers.”

                                It was telling That Lee Guy. So hey, Lee Guy, yes we can help you sell websites that are $10,000, $20,000, $30,000. That’s actually kind of a sweet spot for us, so we can definitely help you with that.

                                Lean Green Media on Twitter, said, “Empire Flippers was very informative. Interested in your new asset management program discussed on the Russian scam episode too.”

                                That’s something that we’re looking at, we’re rolling out. We’ve got our first investor, and we’re currently acquiring the sites. We’ve got a couple other investors we’re talking to bring them on. We’re rolling this out slow and steady. It’s not fully public, it’s not fully out there. We’ve got a couple of people that we’re talking to and in discussions with, and I think we’re going to take this slow to start. You might see it start picking up toward the end of the year and into 2016 if everything’s going smoothly.

                                Joe, buddy, you had a nice interview over at the Smart Bitcoin Investment Podcast. You were talking mergers and acquisitions and buying websites with bitcoin.

Joe:                        Yeah, buddy. I really liked the interview that Marco did over there. It was quite good, and we had an interesting discussion on using bitcoin to acquire online properties and to borrow bitcoin at reasonable rates in order to buy online properties. So any of you guys out there that own a lot of bitcoin, have been sitting on it and waiting for it to go through the roof, if you’ve got it at a reasonable level, under $100, I think now is the time to move and really start to launch that into a real property.

Justin:                   We should do a whole thing on this. We need to start talking about this more. But right now, if you go to Empire Flippers, look at a listing, you can actually go and buy websites from Empire Flippers via bitcoin. So you can pay us in bitcoin, no problem. We just convert it to cash.

                                But one of the benefits here is if you bought that Bitcoin at $20 or $30 per, and you’re now spending it with us at $240, $250 per bitcoin, you’re going to get a cash USD earning property for significantly less than you would have otherwise. So you’re basically just looking to diversify some of your bitcoin investments into online cash generating properties. That’s really fascinating.

                                That’s it for episode 138 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/ppp, and make sure to follow us on Twitter @empireflippers. See you next week.

Joe:                        Bye bye, everybody.

VO:                        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.

 


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Discussion
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  1. Jeff says:

    Hey Guys,

    In the podcast you mentioned your ZenDesk Ratings and you seemed to actually track these as a metric.

    Do you use a 3rd party app for reviews or the ZenDesk Default? I find it very hard to share reviews with my team using the ZenDesk rating system.

    Any advise on how you do this would be helpful.

    Thanks.

    • Justin says:

      Hey Jeff,

      We use the Zendesk defaults, although they’re not quite as clear or intuitive as I’d like. Have you found any interesting 3rd party apps that are helpful for reporting purposes?

      I know Joe’s currently talking to a couple of guys about doing some ZD consulting for us – reviewing our processes, reports, etc. to see if there are any improvements to be made.

      As an aside, here’s a business idea we would DEFINITELY pay for:

      Create a “WP Curve” type offer for Zendesk. Have agents that can do small tweaks/changes for us and charge a monthly recuring fee. :-)

      • Jeff says:

        No 3rd party apps for us, I could not find one that did the job.

        And yes I would pay for a 3rd party app no question. If you come across anything let me know, I will do the same.

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