Building A Digital Empire w/ Greg Elfrink from Empire Flippers – #12

The Brand Builder Show
The Brand Builder Show
Building A Digital Empire w/ Greg Elfrink from Empire Flippers – #12
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Welcome to this week’s episode of the Brand Builder Show! I got the chance to sit down with Greg from Empire Flippers and talk about all things buying and selling online assets. I enjoyed this conversation a ton, and know it will stimulate some interesting thoughts as you look to grow your business.

Key Topics:

Why there is no aggregator bubble and you shouldn’t panic to sell your business
How brand owners can increase the value of their brand with little-used strategies
How to build your very own digital empire in under 2 years

Connect with Greg and Empire Flippers:

Connect with Us:

Useful Resources:

If you got this far, there’s a chance you enjoyed the episode… if so, please consider leaving a review – we really appreciate it!

Ben Donovan  0:00  
Hey, and welcome to the Brand Builder show. We’re back for another episode. And today’s one is honestly a really interesting episode, I enjoyed recording this episode as much, if not more than any others, I have just to be able to chat about buying, selling businesses, the market, what it looks like, where it’s going. And honestly, some really interesting strategies that you don’t hear talked about much. I’ve been thinking about some of this stuff. And it was really good to be able to chat it through with Greg. And so I’d love to hear your thoughts on some of the strategies that we talked about that are maybe beyond what a traditional Amazon FBA business would look like. And so I’d love to hear your thoughts on that do let me know feel free to reach out by email or any of our social channels. You’ll find all of the links in the description below. But without further ado, let’s get into this episode because it is a real good one with Greg from Empire Flippers.


Also, welcome to another episode of the brand builders show. I’m here with Greg from Empire Flippers. Greg, great to have you on the show. 


Greg Elfrink  0:59  
Yeah, happy to be here. I can’t wait to hopefully add some value to your audience. 


Ben Donovan  1:03  
Definitely. We have a couple of minutes there. And I’m already excited about everything you’re going to be sharing. So exciting times. Tell us a little bit about yourself, though. What you do with Empire Flippers and whereabouts in the world you are right now. 


Greg Elfrink  1:15  
Sure. So I am the head of marketing of Empire Flippers. I lead the marketing team. And a big part of that is actually doing what I’m doing right here: educating the market about, you know, first I’ll tell them, hey, the good news, you can sell your business and the second thing educating them on how to do it in the best possible way, right. As far as where I am currently, right now, I’m in Bangkok. I normally live in Vietnam. But at the moment, I’m in Bangkok, I’m always traveling here and there minus the last couple years has been a little bit harder, but before that, everywhere.


Ben Donovan  1:46  
And I probably should have said as well, what what an Empire Flippers do is if somebody’s gonna ask.


Greg Elfrink  1:51  
Sure! So we help people buy and sell businesses. So we’re the largest curated marketplace in the world now, for people to buy businesses. From a seller perspective, we have the, I’d wager the largest buying pool of any broker to our buyer pool just went above $5 billion of verified liquidity that they can purchase assets with. So if you’re a bootstrap, entrepreneur, Amazon FBA entrepreneur, you’re in a very good market right now. Hopefully, hopefully, this podcast would get you inspired. 


Ben Donovan  2:21  
Yeah absolutely would definitely dive into a bunch of that. So $5 billion, right? And because I think I looked at because I’m so very intrigued with this idea of acquisitions, buying a business and buying websites, etc. And so I’ve signed up to a few different and I think, I don’t know if I did with yours, but you have to you have to kind of upload bank screenshots and get verified to kind of see all the juicy details of the … 


Greg Elfrink  2:43  
Yeah, that’s us. Yeah, but so Most brokers they, they have you do a letter of intent and ally, which we have a form of that too. But in order to like really get, you know, the intimate details of the business, you got to prove to us you actually have the ability to buy the business, which is one of our differentiators. Buyers really hate that, obviously. But sellers love it, because they’re talking to you like quality people all the time. 


Ben Donovan  3:06  
Yeah, definitely. And you mentioned that you are the larger curated marketplace. What specifically does that mean? 


Greg Elfrink  3:13  
Sure. So curation means we decide what goes live on the marketplace. So there are other marketplaces that are bigger, that don’t have any vetting process whatsoever. And that leads to a lot of scammy or low quality businesses, especially if it’s like a valuation less than 100k.


That’s usually where most of the internet scams live in. But for us, we have an entire team dedicated to vetting, that’s their whole thing is they look at businesses to make sure that they’re quality, they’re legitimate, they’re doing what they say they’re doing. We build their profit and loss statements. And it can be as complex as like just fixing some errors to rebuilding it all from scratch, which some ecommerce entrepreneurs aren’t the best with the numbers side of things, and we help them with that. 


Ben Donovan  3:57  
Yeah, we were just saying just before let’s let’s talk about that, because we are saying to you, I’m on your email list, and I saw last week about the FBA business that just got listed for 26 million, and it was like, you know, big talk, and I was talking about it. And then you said it’s actually 30 million now because we’ve corrected the number so how did that happen?


Greg Elfrink  4:16  
So two things, if you’ll pay attention to our marketplace, and it’s a you know, we list new businesses every single Monday at 10am, Eastern Standard Time, USA time on if it’s at the end of the month, there’s a good chance that businesses we listed their valuations may change a little bit because of the previous month’s numbers becoming finalized. So we actually actively update their valuation on a rolling monthly basis of their net profit, right? So in this situation with the $26 million business, it won and had an insane December so that shot up the valuation. So when we did the price update in January, but also like, like I mentioned, there was an issue with the numbers in terms I think it was the cogs if I remember right


So this is something our betting team catches, right? So we were able to see that we helped rebuild their entire p&l from scratch, basically. And that’s what led to that bump. So if the seller was on a, you know, say like an uncurated marketplace, that could have been a very painful thing for them to have to learn when they go to sell, they would have missed out on an extra $4 million there.


Yeah.


Ben Donovan  5:25  
Yeah, no, that’s, that’s crazy. I don’t know how much you can talk to us about that business. But just from what’s on the listing? It’s, I think it was nearly 800 skews based in the UK, right?


Greg Elfrink  5:36  
I believe so. Yeah, I haven’t I actually haven’t deep dived into the business. Funnily enough, I that business came as a shocker to me. Because I like usually we get told, like sales team alert my team, when we have a big listing, and so we can give it like some extra love and like, make sure to follow it. You know, there’s a bunch of marketing stuff we do on the back end there. But this time they forgot. So it was like, Oh, wait, What? What?


They were just too sticker shock themselves, I guess.  I haven’t done a super deep dive yet into the business. But once it sells, which we’re pretty confident it will sell because it’s pretty high quality one, we’ll definitely be hearing from my seller if they’re open to it to come on to our podcast. 


Ben Donovan  6:16  
So good. Yeah, no, that’d be amazing, if they do. Please give them my details as well, because I’d love to. 


Greg Elfrink  6:21  
I will, I will. I’m sure she’s gonna be very excited. So she should be very happy with the deal we get for her. Oh, boy.


Ben Donovan  6:28  
Amazing. Female business owner as well, which is amazing. Great to see. Yeah. Yeah, it’s really good. You, you talked about the size of it. Does that change the buyer profile, the process at all from a $2-3 million business? How does it work? 






Greg Elfrink  6:44  
Yes, so um, I would say even up to the 5 million mark, you might end up still getting someone who’s like, what I would say they’re ultra high net worth individual buying that business. But when it comes to a business this size, that’s really when you’re starting to get into more private equity and family offices, or in the FBA space aggregators, which are basically very similar to a search fund mechanism in the FBA world.  I You’re probably not familiar with a search fund, or you do a search finance. So an aggregator an FBA, FBA aggregator is, in a lot of ways, a very fancy version of a search fund, in my view. So a search fund is basically like, I graduate from the Wharton Business School. And instead of wanting to go into high finance, I want to become an entrepreneur. So they will go to private equity. They’ll get money from the private equity. The private equity will pay them say like 70-80k a year to go hunting for business opportunities, to go buy a business, and then the private equity funds that acquisition and that student who’s now an entrepreneur through acquisition owns a chunk of that equity, though actually ever using any of their own money. So that search fund is basically like kills two birds with one stone for the private equity because they don’t actually run the businesses, right? And aggregators very similar in that fashion, obviously, a lot of differences. But in the, in the mainstream that like, that’s kind of what their function is. Right? So those are the kind of buyers you’d be looking at as aggregators, search funds. Maybe a high net worth individual, but much more rare. 


Ben Donovan  8:16  
Yeah, right. Right. And because you guys would, because my initial thought was you would only sell to private buyers, but you would put the deals out to aggregators as well, and you’re not sort of biased in that sense.


Greg Elfrink  8:29  
 Oh, for sure. I mean, in a lot of ways, this is gonna sound a bit weird. But I often joke with my team that the aggregators are like our children, because we are the ones that help them get all their traction, right. A lot of people don’t know this, like everyone says their ICO is the first one. But their ICO was the first successful one. Like we saw them back in 2017 and 2018 and they were not very successful. They had not figured it out, like their ICO did. So, through ICO is like the first successful one, they bought tons from us, and basically still buy tons from us. So they bought millions and millions from us. And all the aggregators basically do.  In newer aggregators, they often come to our marketplace first, because they don’t have any deal flow yet, right? Because it’s very hard to get private deal flow, it’s very competitive space. So pretty much all of them use brokers. And as a seller, like so if someone who’s your audience, I highly recommend you’d like it doesn’t have to be us. But I highly recommend you use a broker in this environment. Because a good broker with good relationships with the aggregators is going to actually let you sell for way more because the broker knows how to make the aggregators compete for what you have. 


Ben Donovan  9:32  
Yeah. So would you, you would call yourselves as somewhat of a brokerage?


Greg Elfrink  9:37  
Yeah, we’re an M&A firm. You know, we’re an M&A firm that happens to be positioned like a marketplace, right? But that like once you get above say, especially like above 200,000 in terms of valuation, we’re very much more similar to an M&A firm than a marketplace. Like we’re building your P&L. We’re doing the valuations. We’re negotiating: we’re even migrating the asset on your behalf; we’re managing your earnout payments, stabilization payments, you name it. We’re a full service, I mean, a brokerage. 


Ben Donovan  10:06  
Yeah. Right. And what would you say to the people that if they’re thinking about selling their business, they think, well, you just sell it to an aggregator, I could just go to the …


Greg Elfrink  10:16  
So this is an excellent, I’m really glad you asked this actually, this was a pre planned questions, just so y’all know. I love this question, because this is a very important question. So there’s something I call the the off market fallacy. And this is this really trips up entrepreneurs a lot, especially in the high end when you’re dealing with an aggregators, because the stakes are so much bigger. So the off market fallacy is this idea, like, “Okay, I’m not going to go to a broker because I don’t want to pay a commission, when I can just go to say the aggregator and not pay a commission.” And the logic makes sense on the surface, but it’s only surface deep, because when you go a few inches down, the buyer, say the aggregator absolutely loves it that you’re thinking this way, they want you to think that way, because that means they’re going to get a way better deal. And the reason why they’re going to get a better deal is because selling a business is a highlight event. It’s not something entrepreneurs doing every single day, we do it every day, right? An entrepreneur, they might do it if they’re super prolific maybe once every two years because it takes time to build up a big business. Right? So that means they’re already operating as a unsavvy seller to an extremely savvy buyer. You’re like aggregators, their financiers, the acquisitions managers, these people have done really big deals much bigger than anything we’ve seen in FBA space, for the most part, like these are high finance wizards, they know exactly how to acquire, right? So you’re already at a disadvantage. And what happens here is that aggregator will then use a marketing skill called urgency and scarcity, right? Say, tell you what … I will give you $1.4 million right now, no questions asked, you have three days to say yes. 


Like as an FBA seller, like holy shit, I’d love to become a millionaire. If I just say, Yes, this is a ton of pressure, right? Versus if you came to a broker and you ate the commission, you’d probably make way more money. And in fact, we have a story of a guy he did get offer that $1.4 million with like a three day timeline to say, yes, he came to us for a second opinion. We told him, well, you are worth way more than this. And we sold it for 2.1 million a few weeks later, with 1.8 million upfront, so just his upfront amount was bigger than the entirety of the deal. So that’s why I call it the off market fallacy. Because it sounds so good till you look deeper into it. And you’re playing right into the buyers hands. Yeah. 


Ben Donovan  12:33  
Yeah, that’s so true. So true. And you know, it’s a massive, massive deal. It’s going to be a life-changing thing. So you want to make sure you get the best for sure.


Greg Elfrink  12:41  
 It’s extremely stressful, even the smooth transactions very stressful.


Ben Donovan  12:45  
Yeah, absolutely. There’s you mentioned about the, you know, the market and everything is there’s a lot of buzz around it. Even scarcity, you know, do you feel like this is going to be something that is going to last in terms of the valuations growing the buzz? Is there a bubble that’s gonna burst? How do you see the next few years going?


Greg Elfrink  13:04  
 Sure. So I don’t think we’re necessarily in a bubble. So if you look at online businesses, I’ve been with EF for almost six years. And when I first started, the main business we sold were content sites. And we still sell a lot of content sites, like affiliate sites and so on. We sell apps, we sell pretty much anything, right? So I’m business model agnostic from that standpoint, but it gives me a very interesting point of view in the sense that, like, it’s not just FBA businesses that have risen in value, it’s also a content sites, e commerce stores like Shopify businesses, they’ve risen in value, SAS businesses have risen as well. So I think what we’re seeing, especially in the non SAS business models is this, this level of parody that’s starting to happen. So if you looked at like an offline business, say, like a lot, your local laundromat or industrial warehouse or something like that, the multiples that they got were extremely bigger than an Amazon FBA business back in 2016 and 2017. It’s just like, no contest, even though the FBA business is printing far more money than that industrial warehouse. That’s likely, right? Like it was like actual net profit. It’s just like, you can’t even compare the two, the Amazon FBA business spends every time almost. But what we’re seeing now is those traditionally, offline businesses, their multiple advantage no longer really exists. And the online businesses have been around long enough that people have enough trust in these things that that is adding to that valuation. So that’s why I don’t think we’re necessarily in a bubble. Now. There was a huge spurt of growth in the last two years, because COVID, but that growth was already going to happen. It was just going to take 10 years before COVID. COVID sped it up, is all.


Ben Donovan  14:41  
Lots of investment in the you know what, 13 billion or something raised for aggregators, like is that going to continue? Do you see changing the way the whole aggregator space works, or what do you think about that? 


Greg Elfrink  14:52  
I think there’s going to be I think, I think I just was listening to a podcast that there’s probably maybe another 500 billion added to the funding for aggregators over the next couple of years. So I think it’s, I think that’s the liquidity that they’re looking to get into the market. Yeah, to grow them. So I never could be wrong. This is just a podcast I was listening to yesterday. I’m terrible with numbers off the top of my head, but it was insanely good number. 


But, uh, but yeah, so in terms of what I see happening, I see a lot more aggregators coming to board that’s going to make a lot more competition. And the really like, innovative aggregators say, like a Thoracio, for example, are going to do what they’re already doing: they’re going to start buying outside of FBA into like, they’re still going to buy FBA but they’re also going to start buying DTC ecommerce brands. And in fact, if you look at Thrasio, they’ve already started doing this with 20% of their growth coming from DTC acquisitions. And then you also see the other aggregators doing what I call it, buying the whole vertical ecosystem. So they’re buying not just FBA brands, but also warehouses. They’re buying SAS tools, they’re buying anything around the entire ecosystem itself to own it, right, very similar to like how Apple does things right, where they own their whole ecosystem. So that being said, some of them, a lot of them are going to fail in the next two years, and a lot of the successful ones are probably going to be buying those ones. That’s what I think is going to happen. 


Ben Donovan  16:22  
Yeah, no, that’s crazy. You must see quite a spectrum of standard of aggregator, but we were impressed too much into that. In terms of Amazon sellers, listening now that kind of on their journey, what would be some of your top advice for them to get a business ready to be sellable to take advantage of this new trend? 


Greg Elfrink  16:45  
Yeah, so the first thing I would say is that even though this is an extremely hot market, like you could not have asked for a better time to sell your FBA business, I would really not allow that to cloud your judgment as the entrepreneur, there’s a tendency that we do in investing or in selling a business, like I kind of sell at the ultimate, ultimate mark. Right, the ultimate highest price. Right? And that leads us to trouble, timing the market, right? So it’s bad advice. So I always suggest the first step is outline where your personal and business goals are. And that sounds pretty whooey but I think it’s extremely important that you understand why are you selling the business? Like, what does this get you to how does this accomplish something in your life, so that’s the first step.


The second seconds knowing what you’re actually valued at. So get a act like, Do an Exit Planning call, you can do one with us or whoever, just to figure out like the basics of what you should do, you should be doing that like about six months before you’re ready to sell ideally, so you have time to actually do something. During during those six months, you should be cleaning up all your documentation, like updating your SOPs, your product launches, all that kind of stuff. You know it, you know, it’s not uncommon, that’s something that you used to do that you create an SOP for you’d like it’s not even possible to do it that way anymore, because the internet changing, right? So it’s good to update all that. Look at your SOP is kind of like the buyer’s manual of your business, right? You want it to be that like detailed and documented. 


And if you’re not using a broker, the best thing you could do is hire an E commerce accountant to do your books. Like we we will do it for you, when you sell your business with us. But if you choose not to use us, this is like the number one thing I can tell you to do. Because a lot of FBA entrepreneurs, as you know, is a very capital intensive business. They do their numbers, and they’re like, “Oh, I’m not making as much as I thought I was”, right? It’s very easy to get into that situation. So we want to make sure that everything was good and like don’t hire like your families that kind of hire an actual e-commerce accountant who understands the business is extremely important. And do it in a cruel non cash.


Ben Donovan  18:47  
Yeah, yeah, that’s good. Yeah, accrual versus cash is so key. Absolutely. Very easy to slip up on there. Yeah.


Yeah, absolutely. Absolutely. Do in terms of like, timeline, what have you? Is there anything any, like, be interested to hear any crazy stories of business sales, regardless of this parameter? But in terms of timeline, have you seen anything, you know, super quick, if someone’s like, right at the beginning of their journey, right now, how quickly could they, yeah, realistically, if they had a good, you know, five to 10,000 to put into first products, something like that? What what are the kind of timescales you think they could be looking towards maybe a seven figure exit?


Greg Elfrink  19:28  
Seven figure exit, I’d say probably at least two years. And that’s a view you’re going pretty fast. Because, you know, seven figures, you’re making around $40-50,000 per month net profit over a 12 month average, right? So we look at everything, usually on the trailing 12 months. So you really want like at least two years of data. And as your business gets bigger, the more timeline you really require. So two years is a good amount of time like a low seven figure business. Maybe you could do it it’s 14, 16 months with the marketing could be as hot as it is. That’s a possibility. But two years, you’re pretty, you’re in solid territory to be able to sell a seven figure business. 


Ben Donovan  20:07  
And then do you see as the revenue top line revenue grows the multiples increase as well.


Greg Elfrink  20:13  
Typically, yeah, so as revenue, and obviously net profit grows, it lends itself to you having a higher multiple. And if you are even, like, let’s say, you’re an FBA entrepreneur right now, and you’re worth, say, $800,000 valuation, and you know, like right around the corner, there’s going to be these big things are about to happen that could push you over that seven figure threshold, I highly recommend that because one, you’re going to get a multiple bump just because of the bigger revenue. But once you are in that seven figure range, that’s when you’re dealing with the aggregators and they love out- competing each other. And that’s going to give you another boost to your multiple. Just them like competing for you. It’s going to help you sell for much higher. 


Ben Donovan  20:52  
Yeah, that’s really good. Yeah, good thoughts. And then I mean, I’d love to talk a bit a little bit about buying businesses with you as well, because it’s something I think people would be interested in for from a number of angles, which we’ll get to, but just in terms of sort of rounding out on the selling side of it. You know, for Amazon, FBA businesses, do you see, like, one thing, I’m sorry to be on the spot here in terms of numbers, butmy strong suit? Sorry, I really should have prepared you for this. But in terms of like, net profitability, because I see on Twitter all the time, it’s like, would you rather have, you know, a million dollar business making 500,000 profit, or a $10 million business making 500,000? Profit? I always choose the bigger business, right? Because more revenue should theoretically mean a higher multiplication. But is that how it works in your space? 


Greg Elfrink  21:44  
Yes. So I would say it like that question really depends on what your goal is, right? Like, if your goal is to sell a business, and the bigger one makes the most sense to have, like, that’s the one that you should sell, right? It’s gonna be way easier to sell. Like, once you get above the, weirdly, once you get above $10 million, in terms of valuation it is actually easier to sell your business. Like, same thing with once you get above a million dollars, like the orphan category is that 500,000 to 1 million? Like that little area is actually like the hardest area to sell businesses, because it’s the there’s the fewest amount of buyers. But yeah, so I would choose that now, if I if my goal was to like, you know, be kind of like what we call portfolio, Paul, where I’m just looking to build like a bunch of passive income streams, the having a bunch of the businesses would make sense, as long as they’re automated, because if one goes down, it’s not a big deal, necessarily. 


Ben Donovan  22:35  
Yeah, no, that’s interesting. Interesting thoughts. You mentioned before we started recording about unique Amazon strategy or tactic that you have. Can you tell us a bit about that? 


Greg Elfrink  22:46  
Sure. So at my I saw an offline this is my clickbait title for this is how to do SEO for Amazon FBA without even owning a website and doing zero SEO yourself. So it’s very simple strategy. So I’ve a lot of friends in the affiliate marketing space, and they’re always looking for a good deal. And most of them use the Amazon Associates Program, right? So if you go to Google, and you type in, like, let’s say we’re selling blenders, let’s you can go into Google and type in best blenders, blenders reviews, the top 10 websites that come up on Google most likely are going to be affiliate websites, and how they make money. If someone clicks their Amazon affiliate link goes to Amazon buy a product, right, they get a commission from that. It was what Amazon causes advertising fee. So what you can do as the FBA owner is you can proactively reach out to all 10 of those sites, and say, like, hey, look, I will give you, you know, 50 bucks to 500 bucks, they’ll probably cost you somewhere between there for them to put you your product on that first result of their product review list and review the product. And you might need to send the product to the I do all that kind of stuff, right, which is fine, as well. But this allows you to basically dominate the top 10 search results of Google for between like 1000 bucks and maybe 5000 at the higher end, and you start getting organic traffic coming in from them. 


And now you can take it to one level deeper by having them actually write a single product review of your product, and all their other single product reviews on their website. You can even pay them a little extra fee to direct that traffic instead to your competitor’s product to that review of your product. So you funnel all their website traffic to your Amazon product listing. And this is something that is actually a very proven way of doing this. If you look at the mattress space, they do this stuff all the time. Yeah, they actually, I have a friend who’s getting paid, I think five grand a month by a mattress company to allow them to run paid ads to his website to his reviews where he still got where he could still earn the affiliate commission, because they just wanted to dominate the first page of Google completely. That’s a hyper-competitive space. But this is something you can easily apply to FBA and it’s a solid winner. 


Ben Donovan  24:57  
Yeah, I heard this guy talking about how I think he’s didn’t lead the affiliate space as well, and recently saying about how he had an article ranked number one for, you know, not only a high traffic search term, but also a high cost per click search term. So the value of clicks on his page, you know, he calculated it was get X amount of clicks, and, you know, people were paying X amount of per click to Google for advertising, as he he just undercut that by 20% said, “Hey, give me X amount a month. And you can have that … You know, and it’s absolutely wild. 


Greg Elfrink  25:28  
This is actually a so affiliates, the there’s some of the best marketers in the world, because they’re operating on such thin margins for what they get. So they can be an amazing source of traffic for you. And they’re always looking for deals if you email them, like, they’re like, Oh, my God, yes, I will gladly take $100 off to do is change out a link and no profit. Yeah. Like it’s, it’s easy for them. Ah, another strategy you can do with those sites, by the way, if they have a Facebook pixel or Google Pixel set up? I don’t know if you can do with Google, I’m pretty sure No, you can do with Facebook, you can rent the pixel from them. So they’re a big content site, you can actually rent that audience for your PPC. 


Ben Donovan  26:03  
Yeah. Wow. Lots of possibilities. Yeah. Do you know much about like, because I’ve heard it talked about how the, if you are sending traffic from Google to Amazon, it’s gonna help with the SEO signals are going to help with your sort of organic ranking on Amazon. Do you know much about that side of it? Or is that a bit too tight? 


Greg Elfrink  26:20  
Yes, yes. No, no, that’s totally true. And I don’t know if Google SEO specifically is like the best form of that. But I do know, sending external traffic to Amazon, especially buying traffic. That’s the key element, people who actually buy your product that sends a huge buy signal to Amazon, like, “Oh, my God, people are interested in this, I love this product. Let’s promote it more, because we’ll make more money.” So like, that’s usually how that system works with external traffic. In fact, some of my friends, their entire product launches are designed around that concept using paid traffic. 


Ben Donovan  26:54  
Yeah, we’ve got a guy in our in Brand Builder University and he’s just recently shot up to do like 300,000 a month in sales. And he’s saying he’s trying to now target his best competitor who’s doing I think half a million a month. And, and one of their big strategies he’s told me is that they are getting, they’re getting ranked on Google for certain buying keywords. And then that traffic is being sent to Amazon, obviously, similar to what you’re talking about, you know, top 10 and then send it to Amazon. And that is really boosting their organic rank. But it is the first time I’ve heard that, obviously, buying traffic that goes through Google and then buys is going to impact ranking. But just purely the SEO alone, the fact that you are ranking high for your Amazon, link, you know, it’s actually an Amazon ranking high in Google. Amazon loves that, because they’re not having to fund that SEO. They’re, you know, they’re not having to pay for anything, you know, and so, I’ve heard that theory, but I just didn’t have.


Greg Elfrink  27:46  
 Yeah, so. So one of the things that might be happening there, too, is SEO tends to be the highest converting form of traffic out there, because it’s so intent based, right. So it could like, it might not even be related to SEO, it’s just the fact that you’re sending so many people are going to convert so that that is causing that to happen. And if you want to take that whole strategy to the next level, like I know, we want to talk about buying businesses, this kind of related. We have people like even aggregators do this sometimes or they’ll look on our marketplace to buy a content. So I’d say about blenders to redistribute all that traffic towards their FBA products. Right. So though buy $500,000, content sites and all that traffic to their FBA listing, yeah. 


Ben Donovan  28:29  
And this is, you know, what I wanted to talk to you about, because this strategy I’ve been thinking about is, you know, rather than take money out of the company, and you don’t have to pay heaps of tax on it, is wanting to reinvest those assets, because I could take money out of my company and buy assets, personally, but a much more tax efficient ways to buy them through the company. And, you know, content size is something that I think is a great opportunity for first time business buyers, let alone but but I think to combine them with brand owners that could buy, you know, buy media, not just website but you know, media assets that you know, are congruent with their brand. I just think it’s like, it just fascinates me. I feel like it’s just such a big opportunity. 


Greg Elfrink  29:08  
Oh, it’s huge, absolutely huge. This is something I talk about all the time is that my friend, I have a lot of good FBA friends and a lot of good SEO friends, but they tend to both get very myopic in their own world, that they don’t see the bigger picture what is possible. But if you combine, say that, say you bought a home and kitchen website, right, and you have this huge audience that is coming through SEO, well, most SEO is they never build an email list is all about rank it and forget it and they never do anything else with like the most valuable traffic in the world. So you could go in and buy that content site, build out an email list build a real brand around that content site. So it goes from what I call a brochure website to a magazine website. So a brochure like you and I are walking down the street, right? I give you a brochure and you have like two things: you will look at it and maybe buy something and then throw away the brochure or just throw it away.


But you’re not keeping it. Versus a magazine that might have inherent value. So you might read it, buy something and keep the magazine because it has value, right? So by turning this content site into a magazine style site, building this huge email list, I always tell people like this is the easiest way, in my view, like if you put in the hard work to build a gigantic ecommerce brand. So you build that home and kitchen website up, and you just pull your audience like, hey, what kind of spatula should we make guys, and they all vote, and you put that on Amazon? Guess what? You’re going to the outcompete most spatula companies, because you have this horde of people coming in and buying at the moment a product launch that you can tap into any time you want. 


Ben Donovan  30:39  
Yep. And does this kind of thing, great thoughts by the way. Does this kind of thing add into the valuation of a business? You know, if I go out there and buy a content site that’s producing or is worth, say, 100k? And I add it to my Amazon business, that’s worth a million? How does that? Well, the economics?


Greg Elfrink  31:00  
Sure, so when you do that, you do increase your valuation. Now, all this is going to be extremely case by case basis, right? It’s not going to be, you know, like it just an extra 5x or something like buffalo EBITDA. I didn’t want to look at it. But what it does is it does several different things that improves your valuation. And I could talk about in a general way. So one is traffic diversity, right? So of most businesses we sell are mono-traffic, so they have one channel, and that’s pretty much it, like Amazon, organic Amazon, PPC, or maybe Amazon or Facebook ads to their Amazon product, right? So if all their traffic is coming from Facebook and Facebook, like shuts down their account, they don’t have a business anymore, right? Their traffic is gone. So by doing this, you’re creating in that extra safety of diversity, one channel goes down, you’re still gonna be good. So that creates an extra moats that makes your business more valuable. It’s harder to copy. And it just builds a better brand and better brands always will get better valuations. 


Ben Donovan  31:59  
Yeah, no, that’s really good. Yeah. Good. Glad to be of like confirmation. Just some things I’m thinking about. Yes, I think there’s this, you know, because so many Amazon sellers, they just focus on Amazon, and they won’t do the hard yards on other aspects. And I think there’s so much more value that you can add and build equity. And yeah, diversification, I think there’s so many benefits to.


Greg Elfrink  32:21  
Oh, for sure, I have so many friends who get lost on that Amazon hamster because the money is so good, right. But then as something happens, like a policy change, or what we saw just a few months ago, with them changing the warehouse, you know, inventory policy, that juggling all that. It’s like, “Oh, I feel the pain now”, on one platform only, right? 


Ben Donovan  32:39  
Yeah. Yeah, definitely. Absolutely. What would you say to like a first time business buyer, if there’s people out there listening thinking would either love to just buy a business to start with? Or what what are the benefits of buying versus starting? 


Greg Elfrink  32:54  
Sure. So in general, and I don’t know this to be true. I feel like I read a study somewhere about this. But in general, I would say starting a business from scratch is way riskier than buying a business. Because you’re starting one from scratch, you don’t have any data, you don’t have a product market fit. There’s no historical proof of earnings, versus buying a business that has all that it’s already done, the traction work, which is arguably one of the hardest parts in business, there’s a common thing, like, it’s way easier to go from $5,000 a month to 10,000, then just go from zero to 1000, right? That’s totally true. From what I have seen so far working at EF. 


So one is safer in that regard. Now, if you’re brand new, you want to set the cards up in your failure, just  because it’s easier doesn’t mean it’s not hard, it’s extremely hard still, right, you could lose your shirt in this business. And this is a high value transaction you want to do. So my advice is start small. Take your budget. So say you have $300,000 to buy a business with, right? If you’re brand new, you might want to split that into three buckets. So 100,000 each, and buy 100,000 or less business. And whatever business you buy, make sure you have like 20% and working capital. So if you’re buying 100k business have 120k to devote for that. So 100k for acquisition 20k If something goes wrong, and that puts in is a margin of error for you. A lot of people, they end up trying to go too big, too fast. And they make a lot of mistakes. 


And because they went so big, like say borrowing a bunch of money, they don’t have the luxury for a margin of error. You want that margin of error when you first begin because you’re probably going to make mistakes, even if you use us right? Well, we’ll coach you on what to do and all that stuff. But obviously running the business like we can’t coach you on that. So like you have to go and do it right and I can make mistakes and you don’t want to put yourself out of the game before you’re able to swing a few times, right? So that that’s some beginner’s advice. 


Ben Donovan  34:45  
Yeah, that’s good. That’s good. You mentioned early on about most deals that are a bit scammy are under 100k. If somebody is looking to, if they do have 20, 30, 40,000 to and they’d like to buy a business, is it still possible? What are the parameters there?


Greg Elfrink  35:00  
Yes, 100% still possible. So if you use us, you don’t have to worry about that like maybe something was slipped through is extremely rare any of that kind of stuff ever slips through on our marketplace because of our vetting team. Now, if you want to go more private direction, it’s still possible to do, there’s just some stuff you got to watch out for that are red flags. So things like fake reviews, you got to know how to spot those, right? This is very common, if you’re buying from, say, a Chinese seller, it is very common for them to burn through Seller Central accounts, with a bunch of blackout reviews, and they just don’t care. So that’s something to watch out for. 


You know, like, do they have products that are not making any money? That’s common, actually, though, included in there, so that, that you’re buying dead inventory, so that 40k business might add like an extra $20,000, a product that’s just not really selling very well. So that’s something to watch out for. There’s also the friends and family problem on the very low level, this doesn’t happen very often FBA, but it does happen in content sites, where basically, all the revenue is actually coming from, say, their friends and family just buying the products over a period of time. And that’s how they do the scam. Because the numbers are technically real, that it’s just a friend or a family. So then they do they sell it to you, right. So that’s one way that they can get you. There’s another thing too.


Oh, you want to make sure, just speaking to friends and family thing, that the traffic their comp that’s coming to the FBA product listing as much as they can tell is actually the buying traffic. So something that could happen is say, say that person is selling the business as a giant content site in their portfolio that’s driving 100% of the traffic to their FBA product listing, like well, does that content site come with the acquisition? Like what happens once I acquire this? Are you just like, removing the promotion like, so like all that all the cells are going to go away? So these are some of the stuff to consider is extremely definitely possible. So 100% possible? You just got to be more careful. 


Ben Donovan  36:58  
Yeah, that’s good, good thoughts. How are people financing this? Is it fully cash or I know, obviously, in America, there’s SBA loans is a common thing for buying these businesses? 




Greg Elfrink  37:09  
So SBA is not as common for us as it is for other brokers. And the reason why is we tend to be able to sell them sell the businesses without SBA, a lot of the other brokers rely much heavier on SBA, and we don’t. So all the best businesses would qualify for, it’s already sold by the time an SBA comes in. That’s why we don’t like doing SBA, it just takes forever, which obviously is not great for it from a seller’s perspective, right? Not terribly great from a buyer’s perspective, but the slow does doesn’t favor really anyone. 


But um, so that does, that is an option. If you’re looking at a, you know, 100,000, or even 200,000, unless you’re looking at all cash, usually, those will almost never get an SBA done. Just because there’s so many all cash buyers, you’re not going to beat them out, like sellers do not like or announce, usually unless there’s like a big benefit for them to take it right. So they won’t just do the all cash offer, like in most circumstances. So in those cases, you have to move very quick to do all cash. So you get above 200,000, then yeah, you’re you’re looking at being able to do some financing, which in our space really comes down to just seller financing. So you have a 500k business you put down, say 350k, and you pay out the other 150k over a period of six months, or based on whatever terms you and the seller agreed to, but it’s usually seller financing. 


Ben Donovan  38:26  
Yeah, now, that’s interesting. Interesting. It’s, I mean, all signs that is a very hot market. 


Greg Elfrink  38:32  
Yes.


Ben Donovan  38:34  
That’s good. That’s good. And and then just final question, before we round up, like, or give you a chance to say anything that maybe I haven’t asked yet, but what kind of strategies do you think might go well, for, you know, existing brand owners? Is it his strength to add to the business buying another brand that they can add to the E commerce portfolio? Or do you think there are other sort of acquisition strategies that existing Amazon sellers should consider? 


Greg Elfrink  39:01  
Yeah, so I’m going to give the most annoying answer, which is “it depends”. It depends on what your current skill sets are. So like, for me, for example, I’m a content marketing guy that’s like, what I live in breathe as content, right? So for me, it would make a lot of sense to do what we were talking about earlier with a media empire strategy, because I know I could probably pull that off. Not many people would go that direction. Now, if the listener in the audience right now is like a guru, the logistics, I would say that becomes your superpower, you pursue more so than the other shiny thing. Look for the boring repetition stuff that you can like, do with your eyes closed. So in that case, if you’re really good at logistics, I would find in FBA businesses really struggling, that they have stock outs, that they have logistic issues with just most of them right now, right? A lot of them are now going through a lot of painful supply chain stuff. If you’re a wizard at that, you can get a discount by that wounded business. He went up and you’ll gain all the equity on the write up. And you can combine it with your current business if there’s synergy, right, between the two products? 


Ben Donovan  40:02  
Yeah, yeah, no, that’s great. Amazing here. No Interesting, interesting thoughts. Is there anything that I haven’t asked yet today? You feel like the listeners should know?


Greg Elfrink  40:15  
So good question. I don’t know, I think you asked some good questions here. I think it’s, I guess I would end it with, you know, just don’t become myopic in terms of thinking only about Amazon, Amazon all the time, like, Amazon, at the end of the day is merely a distribution platform for your brand. So think of it as a distribution channel, just like we would with Facebook ads, if you really want to go super big. And that I think that will serve you well. Yeah, definitely. And you’re pretty bullish on the market, next three to five years, lots more growth to come.


I think so. You know, I’m bullish on the internet. You know, I the like, my life changed completely through internet marketing. Right. I used to be an oilfield roughneck up in Alaska. And now I’m doing this right. It’s all because of internet marketing. So it’s a, I think they’re idling right now has never been a better time to be an entrepreneur, whether you’re on the buy side or the sell side, like valuations have gone way up. But there’s also a lot more deals for the buyers to look at. So there’s a lot more great businesses to buy than ever before. And on the sell side, there’s so many opportunities to make life changing capital, even. And we just went through like a massive black swan event here in the world with COVID. Right? And who like grew his online businesses. So I think the future looks very bright for most digital entrepreneurs, is what I’d say. 


Ben Donovan  41:32  
It’s good. It’s what we like to hear.


Thank you so much. Thank you so much for coming on the Brand Builders Show appreciate your time massively. And where can people find out more about Empire Flippers and yourself if they’re interested to know more? 


Greg Elfrink  41:44  
Sure, Empireflippers.com. You can also check out all our valuation tools, just Google evaluations to Empire Flippers, you’ll find it. That gives you a quick rundown on what your business is worth. If you want to get in contact with me, you can just email me [email protected] or you can find me on LinkedIn. I’m pretty active on there. 


Ben Donovan  42:03  
Awesome. Awesome. I appreciate your time. Thanks so much for coming on. 


Greg Elfrink  42:06  
Thank you. 


Ben Donovan  42:07  
Amazing. Like I said it was a bit different maybe to some of the episodes we’ve done. We chatted about some maybe more random topics than you might be used to. But I think it’s really good as an entrepreneur to look at businesses with a more holistic view. And yeah, real interesting thoughts there that are definitely have affirmed some of the things I was thinking about, and and definitely a little bit more interest in them to continue to pursue on my journey. Like I say, reach out, let me know what you thought. on all social media channels. There’s Instagram, there’s you can find me on Twitter. The Amazon FBA community on Twitter continues to grow strong. And I’m at twitter.com/benDonovan, you can find me there. And as ever, please do feel free to leave a review of the podcast on Apple and Spotify. And if you’re watching on YouTube, subscribe, hit the like button on the video just to help us get these episodes out to more people. The audience is growing and the podcast is gathering a bit of momentum. But any help is always appreciated. We’ll be back next week with another great episode. And so I’ll see you then