Hey, thanks for tuning in to another Partner Interview at EcomBalance. At EcomBalance, we’re all about creating win-win partnerships where we are able to grow with other companies in the eCommerce space.
In this exclusive interview, we interview Greg Elfrink from Empire Flippers the largest curated marketplace in the world for buying and selling profitable online businesses.
Greg joined Empire Flippers in April 2016 originally as their Content Manager. Now, as Director of Marketing, he manages everything from the content to the marketing automation, to vision and goal setting, all the way down to the implementation. His big goal is to take Empire Flippers more mainstream as a M&A brand, and to help investors see the power of digital assets, while helping sellers have life changing exits. Gregory was born in Anchorage, Alaska where he worked in the oil fields and now travels the globe networking, speaking and for pleasure. He loves fiction, science and in his free time he moonlights as a novelist.
We hope that you enjoy the interview and that it brings value to you as an eCommerce business owner.
Connor: Hey Greg, thanks for taking the time to chat with us here. We love getting to know our partners better so that our community can benefit from what our partners are offering and doing in the industry. To get started, can you give us a high level overview of Empire Flippers and how it got started?
Greg: We’re the largest curated marketplace in the world for buying and selling profitable online businesses. That ranges from Amazon FBA, DTC ecommerce brands, content sites, SaaS and more.
We actually got started way back in 2011 when we were building then selling our own sites. Our blog cataloged our entire journey and we ended up building a big audience from that. Eventually, our audience started asking us if we could just sell their sites for them, and that is when our brokerage truly began.
Connor: That’s awesome! Can you dive a bit more into the products and services that you offer? I’m sure our audience would love to know exactly what problems you could solve for them.
Greg: We’re a full service M&A brokerage that helps entrepreneurs navigate their exit. Exiting and selling a business isn’t something an entrepreneur is doing every day, it’s something I call a highlight event. It is not uncommon for a buyer, especially at the higher levels, to have a lot more M&A experience than the seller.
We help the seller even that playing field by helping them with their profit & loss statement, polishing up their business for sale, actively helping in negotiations all the way to the actual transferring of the asset to the new owner. In addition to that, we also will help our entrepreneurs manage any earn out payment and help them enforce the agreed deal structure between them and the buyer.
Connor: Jumping off of that…if there was one problem you’d say that Empire Flippers solves best for your clients, what would it be? Why?
Greg: We make selling your business streamlined. It can be a chaotic process, and most sellers simply have never done it before. Our M&A firm is highly processed out versus other brokerages that can be a bit random with how they do things.
Because of this, sellers know they’re getting the best possible valuation and sales process that has helped us now create over 70 millionaires at the time of exit.
Connor: As the company continues to grow over the next year, what are your plans for expansion? Any new services or offerings or enhancements to your current buy and sell services?
Greg: We’re looking to dive deeper into the education space. There’s a ton to know about buying and selling businesses, so we’re always looking to grow the market through high quality content. One of the things we’re looking at is a course, but the thing I’m most excited about will be an actual community dedicated to buying and selling businesses so people can network and learn from each other.
Connor: And how specifically would you say that Empire Flippers and your team is different from other website brokers in the eCommerce industry?
Greg: One of our main differences is that our entire brokerage is specialized into a variety of departments. At other brokerages you have the broker doing everything at once from marketing to sales to actually vetting and prepping the business for sale.
At Empire Flippers we have this segmented out into specific departments. There is an entire marketing team, there is an entire seller-side and buyer-side sales team, and an entire operations team that handles vetting to migrations.
This makes it so every time someone uses us, it is the same feeling and quality because unlike other brokerages, we are fanatical about systems.
Connor: What made Empire Flippers decide to get involved in the eCommerce space specifically? What’s your starting eCommerce story? From what we’ve found, a lot of business owners in the space have fun stories of how they first started…
Greg: We got our start serving ecommerce businesses because we kept growing our brokerage to be more than just affiliate sites. Also, we were the first brokerage to really sell Amazon FBA. Most people didn’t even know that was something you could sell.
At the start, Amazon didn’t even know you could sell them and we weirdly had to educate them on why a 3rd party seller could sell their business.
In many ways, we were first mover in the space and it allowed us to own the space in a big way.
Connor: Love it! Talking more about the eCommerce industry, where do you see it going in the next 1-2 years? Any unique predictions that you could share?
Greg: I think ecommerce is in for a rough ride over the next 1-2 years. Between all the global events happening right in 2022, and a likely continued stress put on supply chain, I see many brands struggling to maintain the growth they had from 2020 to 2021.
Now, it’s not all doom and gloom. Entrepreneurs who are fiscally frugal, who keep a healthy war chest of liquidity, and are in it for the long term will stand a very good chance to come out of these various storms stronger than pretty much anyone else in their niche.
And for that, their businesses will likely be worth a huge valuation when they do finally decide to exit.
Connor: Giving you an open mic for a minute, what is something you’d want the EcomBalance audience to hear?
Greg: If an ecommerce entrepreneur is going to sell their business, the biggest warning I can give them is to not fall for the Off Market Fallacy – which means to sell your business privately versus using a broker. Sounds self-promotional, but it’s really not.
It’s a trap. Specifically, a trap that a buyer wants you to believe.
On the surface it makes sense, you don’t need to pay any commission to a broker if you go private. A savvy buyer will call you smart for that, but what many sellers don’t realize is that the buyer might be playing the seller in the end. The buyer doesn’t want a seller to go with a broker because they know the vast majority of ecommerce entrepreneurs have no clue about what their valuation really is.
Also, since buyers tend to buy businesses more than sellers sell one, they have a lot more M&A experience than you.
The only benefit a buyer gets from not using a broker is the opportunity to buy you for far less than what you’d get with a broker. The buyer might tell you that’s just the broker premium that is absorbed by fees, but it’s empirically not true.
For example, off the top of my head I know an FBA seller who got an offer for $1.4 million that we ended up selling for $2.1 million. Another seller I recently met at a conference got an offer for $600,000 and we ended up selling that same business for her at $1.6 million.
Sure, they paid a commission, but they also got a lot more money in their pocket at the end of the day.
Connor: Changing gears a little bit…When it comes to bookkeeping and accounting, what do you think the biggest pain points for eCommerce business owners are? We’d love to hear your perspective as someone that helps eCom businesses to sell.
Greg: The P&L is often the biggest challenge for ecommerce entrepreneurs. They’re often wrong, outdated or just in the wrong format. Many entrepreneurs use a cash basis accounting when they really should be using accrual, this is especially the case if they decide to sell their business.
Just that different system can be the difference of hundreds of thousands of extra dollars when they go to an exit.
In general, many ecommerce entrepreneurs are not wildly well trained with their books, which can often lead to them thinking they’re making a lot more money than they really are. Many aren’t familiar with doing accounting by individual SKU either, which can be a huge benefit when deciding on their inventory forecasting strategy.
Connor: As we close this out, I just have one more question. Where is the best place to find and follow you and the company online? Also, if you have one, is there any special offer that you’ll be offering to the community today?
Greg: The best place to find our company is just https://empireflippers.com.
If people want to connect with me personally, they can shoot me a message over on LinkedIn: https://linkedin.com/in/gregthewriter
