Our Q3 Business Report – July, August, September 2015

Justin Cooke Justin Cooke November 9, 2015

Q3 Report 2015 Empire Flippers

While I normally try to ship a report each month, I’ve fallen a little behind with the blog and will be combining three monthly reports this time around.

I’ve gotten more than a few emails about these reports – some wondering whether things were going badly and wanting to know what’s up with the numbers.

In fact, it’s the exact opposite. Things have been going really well and we’ve been crazy busy.

While July was one of our worst months this year, August and September have been some of our best.

Our goal with these reports is to provide a high level of transparency in showing both our successes and failures to help you build and grow your own online business. It also provides us with public accountability. We have a record of what we’re working on and can review, track our progress, etc.

We hope these reports encourage, inspire, and help you as you continue to grow your online empire.

Executive Summary – Q3 2015 (Jul/Aug/Sep)

We’ve had our best quarter ever when it comes to brokered websites. We’ve started the investor program, but it will remain a smaller part of our overall earnings until 2016, most likely.

July was one of our weaker months, but August and September made up for it by a wide margin.

Here are a look at our revenue streams over time:


Q3 2015

Business Data:

  • Total Team: 23
    • Customer Heroes: 12
    • Management: 5
    • Apprentices: 0
    • Contractors: 6
  • Contact Records: 36,951
  • Email Subscribers: 23,630
  • Site Visits: 131,930 – (Jul: 40,924, Aug: 47,844, Sep: 43,162)


  • Brokered Site Sales: $1,379,298.16 – (Jul: $79K, Aug: $535K, Sep: $764K)
  • Brokered Site Earnings: $206,723.56 – (Jul: $11.9K, Aug: $80.1K, Sep: $114.6K)
  • Listing Fees: $11,850.00 – (35 New, 15 Returning)
  • Investor Program Raised: $780,820.00
  • Investor Program Quarterly Earnings: $3,817.99
  • Investor Program Quarterly Revenue: $1,145.40
  • Our Sites Sold: $9,667.20
  • Additional Revenue: $9,947.16

TOTAL Revenue: $239,333.32 – (Jul: $16K, Aug: $89K, Sep: $134K)

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Revenue Breakdown

Now that we have the totals, let’s look more closely at the individual components to see how they played out.

Brokered Site Revenue

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

Marketplace All Time Q3 2015

And our month-by-month brokered site sales:

Marketplace Monthly Q3 2015

We were able to successfully broker 48 sites in Q3, 2015.

  • 2 Largest Sites: $220K, $206K
  • 2 Smallest Sites: $1.8K, $1.9K

This brought our total brokered site sales in Q3 to $1,379,298.16 and puts us at a total of $3.45M for 2015 through September 30th. (Very close to our annual goal of $4M)

As we only earn a percentage or margin from those sales, our actual revenue from brokered sites came out to $206,723.56 for Q3.

We’re very happy with those numbers and attribute much of the growth to three factors:

  1. Attracting and closing on larger, 6-figure sales.
  2. Successful marketing campaigns attracting new sellers.
  3. Improved organic rankings for industry terms/phrases.

Increasing our multiples (i.e. list prices) across the board allowed us to attract larger, higher quality listings. While buyers end up paying more for the sites, the improved quantity AND quality is something they’ve been asking us for and buyers have responded positively.

An interesting note:

Our competitors read these reports pretty regularly. And to be honest, we take a bit of flack for it. From accountants and attorneys to peers and mentors – most think we’re putting ourselves at risk.

I guess it doesn’t surprise me that our competitors read these reports. It’s gotta be interesting to review the numbers and check out some behind-the-scenes from a company in your industry.

What IS surprising, though, is that those companies are reporting to us privately that they’ve seen similar growth and increasing revenue as well. It goes to show we’re definitely in a “rising tide” industry.

I think we have more to gain by focusing our resources on increasing the pie rather than trying to take a piece away from our competitors. While these reports might be giving up some key metrics to our competition, we’re also working towards educating industry pros and newbies alike, which benefits all of us.

Website Listing Fees

We continue to collect new and repeat seller listing fees, bringing in $11,850.00 for the quarter.

  • 35 First-time listings @ $10,395.00
  • 15 Repeat listings @ $1,455.00

New listings are very important for our business. We’ve taken the “if you build it, they will come” approach. Simply listing a wider range of websites and businesses for sale has brought us new buyers.

From both a quantitative and qualitative perspective, having more, high-quality website listings brings in the new buyers.

We tested through a Seller Acquisition Program (SAP) over the last few months and it failed. We were pretty systematic in both targeting potential new sellers and our approach to cold email, but didn’t get any new sellers out of the program. It was discouraging, but this is something we’ll take another stab at, simply because making this work would be extremely valuable to our company.

Investor Program

If you’d like to hear a bit more about this program, I’d suggest listening to this podcast along with this one, or checking out April’s report for more details.

We originally set out to do this with individual investors. While we do have an individual investor on the program, the earnings are much smaller and wrapped up in our “Additional Revenue” section. Here, we’ll be talking about our larger portfolio and laying out the successes/failures that happen.

While this still represents a much smaller piece of our business, we have big plans to expand this through 2016/2017 and beyond. Much of that expansion will depend on the success of this first batch, though, so we’re investing significant resources into making sure this works and is successful.

Investment Raised

We raised a total of $780,820 for the investor pool from 8 investors. They have varying degrees of ownership – from 8% up to 16%, depending on their initial investment.

The idea was to take that investment and buy a diversified portfolio of websites and online assets that our management company can run on their behalf, making this a truly “passive” investment.

Distributions are paid out quarterly and all investors are invited to join us on a quarterly call where we discuss our strategy, the previous quarter’s numbers, and lay out our plans for the upcoming quarter.

So far, we’ve purchased 11 websites and have spent just under $773K of the money raised. This portfolio is expected to bring in nearly $38K per month in profit, of which we take 30%.

Quarterly Earnings

Due to the fact that most of these sites were purchased at the tail end of Q3, there hasn’t been much in terms of earnings to report. There’s also the problem of “projected” Vs. “actual” when it comes to affiliate earnings. (i.e. Amazon) We’re paying out the investors based on actual earnings, so those payouts can be delayed up to 60 days based on the actual payouts we receive from Amazon.

Here are some interesting statistics regarding (weighted) diversification and the portfolio:

Note: These percentages are tied to the investment amount, not the sites owned.

  • Blended Multiple: 20.4X
  • PBN’s Used: 52%
  • Traffic: 64% Organic, 26% Paid, 8% Direct
  • Monetization: 38% Affiliate, 26% Service, 23% Amazon, 12% AdSense, 8% Membership

The organic traffic is a bit higher than we’d like, but there’s quite a bit of diversification in the types of sites bringing in that organic traffic. We’re happy with the diversification of the monetization sources.

Projected Earnings for Q3: $8,255.37 – This is the reported amount from Amazon, AdSense, etc. in terms of earnings for the quarter.

Actual Earnings for Q3: $3,817.99 – This is the actual amount we’ve been paid out on all earnings for the quarter.

Our Plans Going Forward

We see three major opportunities we’ll look to capitalize on with these sites in Q3.

1. Expand the paid traffic services site.

This site makes up 26% of the portfolio and has plenty of room for growth in terms of AdWords optimization. The implementation of exact phrases usage and negative keywords should significantly cut our costs and the fact that we’re only showing up for 30% of current search volume leaves us plenty of room to grow.

2. Integrate our strategic purchase.

A membership site we purchased has some strategic value through Empire Flippers. This purchase shares audience and customers with EF and some slight tweaks should improve revenue.

3. Keywords research + added content.

Our Amazon portfolio has put us up to the 8.5% tier and, in preparation for the holidays, we’ve been adding content to those sites to capitalize on December. This is a pretty standard expansion strategy and one that we’re intimately familiar with.

Additional Revenue

We ended up with $9,947.16 in additional revenue for the quarter and most of that came through random sites we still own, residuals from our sold outsourcing company, and affiliate earnings.

We see no real growth for this section in the coming months, but will continue to report these additional earnings.

Traffic And Audience

Here’s a detailed look at our blog traffic, podcast downloads, and overall audience for Q3, 2015.

Blog Traffic & Analytics

We received 131,930 sessions for Q3, up 4% from the previous quarter and up 55% when compared to the same period in the previous year. (Q3, 2014)


The majority of these gains have come through improved organic traffic, Facebook, and referrals from Reddit, Hacker News, etc.

We paid for an internal SEO improvement project from the guys at pagespeed.io this year and think some of those changes are starting to pay off.

Here’s a look at our traffic sources and deposits for the quarter:

GA Sources Q3 2015

Deposits were at 510 for the quarter, up 3% from the previous period. Most came from organic and direct traffic to the site.

Here’s a look at our referral traffic for Q3, 2015:

GA Referrals Q3 2015

Most of our referral traffic for the quarter came from Reddit, Facebook, and HN.

Here’s a look at our top content for Q3:

Our Marketplace, Valuation Tool, and How It Works page continue to dominate.

Here are our top 3 viewed listings:

Listing #40235 – eCommerce site with $30K/month net profit.

Listing #40230 – (Sold) Services site in the legal/divorce niche making $1.1K/month net profit.

Listing #40216 – Affiliate site in health & fitness niche making $14K/month net profit.

And our top 3 content pieces:

Mapping Businesses In The Marvel Comic World

Here’s How We’re Spending $800K Buying Online Businesses (podcast)

AdSense Account Disabled – What To Do?

Podcast Downloads

We struggled a bit with podcast downloads for the Empire Flippers podcast, pulling in 39,631 for the quarter:

EF Podcast Downloads Q3 2015

We also started a new podcast – The Web Equity Show – that I’ve co-hosted with Ace Chapman. This new show pulled in 6,175 downloads for the quarter:

WES Podcast Downloads Q3 2015

I’ve struggled a bit with consistency on both shows. They take quite a bit of creative energy (and effort) to put on, but I would like to get on a more regular schedule.

So far, we’ve been a bit more open with topics on Empire Flippers, (covering things like Entrepreneurship, building remote teams, etc.) while we’ve been narrowly focused on buying, selling, and investing in websites and online businesses with the Web Equity Show.

We’re thinking about making Web Equity Show seasonal. That will give us more time to put together the episodes for each season and give us some breathing room on the schedule.

If you’re new to one or both of these podcasts, I can make a few recommendations to get you started.

Empire Flippers:

Episode 72: 6 Types Of Website Buyers

Episode 121: Creating Your Dropship Lifestyle

Episode 128: The Lifestyle Larry Guide To Job Replacement Income

Web Equity Show:

Episode 11: How Non-Techies Can Buy Online Businesses

Episode 9: What’s My Online Business Worth?

Emails & Contacts

We ended Q3 with 36,951 contact records and 23,630 active email subscribers.

With how much our traffic has grown in 2015, it might seem a little surprising to see that our email list growth hasn’t kept up at the same rate.

I believe the reason for this lies in our redesign. We felt like we had become *too* marketing focused. Yes, the huge banner on the right side drove opt-ins, but was an eyesore and distraction for our sophisticated visitors. (and customers)

In trying to balance between efficiently capturing emails and a professional look/feel, I think we swung a little further towards the latter than we meant to.

In the next few months I’ll be expanding our opt-in opportunities and looking at creating new offers (and funnels) to capture more emails from our visitors.

Customer Experience

There’s a strong relationship component in our industry (with both buyers and sellers), so tracking our metrics and feedback through customer support is a good indication of how well we’re doing in maintaining/growing those relationships.

Our process or “machine” separates us from traditional brokerages like Quiet Light, but our relationships with our customers separate us from Flippa.

By listening to our customers and improving in areas important to them, we retain an unfair advantage over our competitors and it’s one of the reasons we track this in our reports.

Here’s a behind-the-scenes look at how we’re doing in the customer support arena.

Zendesk Support

Note: I was only able to look at July 1st – Sep 28th due to limitations in Zendesk reporting.

Here’s a look at our numbers for the quarter:

EF Zendesk Overall Q3 2015

With an average first response time of 3.8 hours, we’re doing a MUCH better job of getting back to our customers quickly. This is especially important when it comes to depositors, handling negotiations at the end of a deal, migrations, etc.

Our Zendesk setup is still pretty basic. While we’re able to track first response times, many of our tickets can stay open for weeks or month and have dozens of back-and-forth emails and communications included. What we don’t know is how quickly we’re able to respond to subsequent messages.

We were looking to fix this problem and ultimately found a Zendesk consultant/expert that could help, but our resources are currently stuck in some other high priority areas. Hopefully, this is something we can revisit in early 2016.

Customer Feedback

Out of 2,019 new tickets, 364 replied to our survey with 325 good/satisfied replies and 39 bad/unsatisfied replies.

Here’s a sample of the satisfied replies we received:

EF Zendesk Satisfied Comments

Most of the positive feedback revolved around how quickly/efficiently we were able to answer questions, how professional and efficient our process is, and how quickly we’re able to sell sites. (sellers)

And the unsatisfied replies:

EF Zendesk Unsatisfied Comments

The major issues tended to revolve around the deposit process (8), poor communication (7), and our denying the seller’s listings. (5)

Things are not always as they seem, though. Some of those who were unsatisfied were complaining about things that are “working as intended”, while some of the satisfied customers had more mixed feelings.

We’re taking both the positive and negative feedback onboard and have planned changes to help with some of these issues.

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What Happened In Q3 2015?

1. Investor Program

We finished up the terms, raised the cash, and deployed most of it to get us started in Q3. This is a big one for us – it’s something we’ve been talking (and excited) about for quite a while, but we finally put the pieces together to get this rolled out.

After hiring Kenny (Our Account Manager for the investor sites), he went to work training the team and getting them up to speed on successfully managing/growing the sites in the portfolio.

We’ll continue reporting on our successes (and failures) in future reports.

2. 6-Figure Sites

We’ve been listing (and selling) 6-figure sites since 2014, but Q3 was a breakout quarter in how quickly we were able to get these deals done. We were able to come to terms on two of the deals in less than 30 days, for example.

As it stands, sites under $40K are “automatic”, sites $40K – $300K are “business as usual”, and sites $300K+ are where we’re focused and heading.

3. Vetting/Migration Process

We were struggling and fell behind a bit in the first half of the year when it comes to the front-end of approvals (vetting), and the back-end of closing the deal. (migrations)

Our Listings Manager (Andrew) really went to work on this in Q3 and was able cut the time on both to nearly half of what it was previously.

Currently, we’re at around 5-15 days for vetting (depending on the complexity of the site/listing), and around 2-3 weeks from deal to seller payout.

4. Team Trip To Bali

We accomplished quite a bit in Q3, but also took some time out to celebrate our successes.

In addition to our “workations” where we get together for 4-5 weeks every 3-4 months, we wanted to setup something that was reward-based.

Impressed with what Buffer has done with their work retreats, we setup the following:

  • Silver Package: $200K in sales 3 months in a row – 2-3 day relaxing retreat
  • Gold Package: $250K in sales 3 months in a row – 3-5 day premium retreat
  • Platinum Package: $300K in sales 3 months in a row – 5-7 day luxury retreat

We’re happy to say we hit the “Platinum Package” in Apr/May/Jun and ended up flying our management team down to Bali to stay in a villa for the week:

Empire Flippers in Bali Indonesia

Empire Flippers Team In Bali

We’re looking good for the Aug/Sep/Oct “Platinum package” as well and are looking at taking a cruise out of Singapore this December. Sweet!

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

“New – Business Report for Q3 2015 from the @empireflippers!” – Tweet This!

Have any questions, comments, or suggestions? We’d love to see what your thoughts are in the comments below.

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Leave a comment
  1. Aaron says:

    Hi Justin,

    I am extremely disappointed of how your team treated me as a seller. I listed a site on your marketplace a couple months ago. With no communication at all, you de-listed my site all of a sudden. Now I do understand if the site has gradual declining revenue, it is the best interest of your business to protect the buyers.

    But what about defending a seller? Your team has mucked me around for a couple months with no sales and suddenly delist without any prior notification. I have sent emails and it took 5 days to get a 3 sentences respond. If you are thinking about removing a seller’s listing, why not let us know about it earlier so we have time seeking for other selling means.

    Sure, 28x-35x is nice to have. But what the use of if you can’t get it sold with such high multiple prices? I have turned down many offers from other potential buyers just because I listed on your site. I would rather get a 8x-10x from genuine buyers.

    Just think about it, what will you feel if you are in my shoe. As a seller, we do depend on succeeding website sales as a source of income. You don’t refund us the $97 listing fee for unsuccessful sale either (this is not under your terms of clause). You have ripped me off $97 and most importantly complete waste of time for a few months considering I can sell a site elsewhere. Thanks for ruining my Christmas holidays.

    • Hey Aaron,

      I’m really disappointed to hear this, but thank you for bringing it up.

      I normally wouldn’t mention a customer’s issues publicly, but since you’ve brought it up here I’ll respond with some thoughts and info. If you’d rather not have this public just let me know and I’ll remove so we can continue privately.

      As best I can tell, it looks like your earnings were not just declining, but fell off a cliff. With no reasoning for the major drop in earnings it would make it really hard for us to sell the site for you. Disappointing for us as well, I promise you.

      It looks like our team has responded to your inquiries about being delisted several times, but I agree with you that we could have been more explanatory when we first decided to de-list the site. We weren’t as clear as we should have been and I wanted to apologize to you for that.

      I can’t speak to the private offers you had to buy the site, but I can say that we’ve refunded your listing fee in full. If you had chosen to remove your listing the fee would not be refundable, but since it was our choice to remove, we’ve refunded you.

      I’m sorry you had a negative experience. Please understand that it’s important we do right by both our buyers and sellers. Your site has such a negative hit to earnings it severely impacted our ability to sell it for you. Once that happened we wanted to let you know right away so that you can consider other options.


  2. Philip says:

    Very awesome. Must have taken tons of time to do that report. Good job!
    I have 2 questions.
    1. Are those girls….your employees, gfs, wifes….or….?
    2. What software do you use to create, and publish the report?

    • Hey Philip,

      Lol – both of the girls are our girlfriends. (I’ve been with the girl on the right for 5+ years)

      No software used – written up each time. I follow the same general format, though. The graphs are from a spreadsheet I’ve used to track everything for this report.

  3. You should come to Jogjakarta after Bali.
    It’s a very nice city (province), maybe not that nice for the nightlife experience tho :D

    anyway, congrats for the revenue record.
    just awesome!

  4. […] What’s more, in a recent update, the EF guys announced that along with other people in their industry, they have seen that the industry is actually GROWING. […]

  5. Taylor says:

    Awesome report as usual.

    Like Tung really interested to see the investor program develop.

    Keep jamming :)

  6. David says:

    Congrats on your investor program launch! Just wondering how you managed to purchase at a blended multiple of 20.4x? I wish you continued success with this model.

  7. Tung Tran says:

    This is great guys! Been waiting for an update on the Investor Program.

    Would love to catch up in person again. Haven’t had much time to chat at DCBKK.

  8. Wish you guys all the best. In Bali is expensive? :P

    • One of the great things about Bali is that it can be premium and expensive (Luxury villas, dinner/drinks at the W, etc.) or it can be cheap (Beers on Poppies, surfer communities, etc.) and is readily available to various budgets.

  9. Dom says:

    The deposit just makes sense to me. If you didn’t have deposits, the same people would likely complain that the sites they bought ended up spammed/reverse-engineered.

    • Agreed, Dom.

      I think our challenge is that OTHER brokers don’t charge a deposit, so why do we? There’s an educational component that comes with it for new buyers/depositors, but those that understand or get it are onboard.

  10. Parmood says:

    Whats the difference between contact records and email subscribers?

    • Hey Parmood – thanks for visiting!

      Contact Records include ALL contacts we have in our CRM/database including those that have unsubscribed, partners, contractors, contacts, and anyone else that is in our sphere but not currently actively subscribed to our email list.

      Email subscribers are those that are still currently, actively subscribed.

  11. Great stuff as always guys, very inspiring to read! Wow interesting idea with the team retreats… I wonder how much the staff feel like they can control those outcomes? We have been struggling with goal setting the last few years, seems like an interesting approach. I noticed that many of your bad reviews were about the deposit, is there anything you are going to do about that (or do you consider that sort of idea repelling people a good result?)

    • Thanks, Dan!

      Interesting question regarding whether staff feel like they have an impact.

      We just wrapped up our quarterly strategy meeting last week and, about halfway through it, we hit a wall. We knew we WANTED to set $10M as the goal next year, but it seemed like a really big reach and none of us could do the math to get there – it just seemed like an overwhelming, lofty goal.

      We took a 45 minute break to relax/recharge and, while chatting, started to work through it backwards.

      It turns out that (with our increasing average deal size) we only need to get an additional 3 listings submitted with us per week (on average) to hit our goal. It was a bit of a breakthrough for everyone – we saw the wheels start turning and a ton of ideas presented on how we’d crush that extra listing per week problem.

      No plan to change anything regarding deposits. We view that was “working as intended” even though we take some grief about it from prospective buyers. Ultimately, once we get buy-in from them on the deposit, things run much smoother from there through the sale.

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