How do you get higher appraisals on FE International or Empire Flippers?

Joined
Nov 5, 2014
Messages
653
Likes
448
Degree
2
So, I exited once and got a 3 year multiplier for an affiliate site. From browsing EF, I see that people are getting higher multipliers. How do you increase your multipliers? For example, let's say an affiliate site gets 3x. If you make it a white label product that you sell in-house, it goes to 4x. If you have hundreds of five star reviews on TrustPilot and a customer service/support staff to go along with the in-house product, it goes to 5x. Is this right? If anyone can shed light on this, it'll be great.
 

Ryuzaki

お前はもう死んでいる
Moderator
BuSo Pro
Digital Strategist
Joined
Sep 3, 2014
Messages
5,490
Likes
10,653
Degree
9
I did some research on Empire Flippers in the past 2 weeks.

They'll list at like 55x and not get the sale till they drag the multiple down to the ~36x range, give or take, like normal, despite the narratives out there that admittedly had me fooled.

Here's from Empire Flippers own mouth:

iHbkIA8.png


Dealfeed.io (The Website Flip's thing) scrapes all the brokerages and runs numbers on them. Here's what they say right now for Empire Flippers:

a24tbhL.png


63 of the 71 listings that have been sitting there for over 3 months (because their valuations were too high) have had their valuations decreased. 32 of them have had that happen by dropping their multiples. I suspect they all have their multiples decreased ultimately.

Here's all their numbers from day one:

mok3FY2.png


#3 is the key: Average multiple of all listings is 31.29x. You could argue that multiples have increased lately and this number is skewed, which is fine. That means the average multiple is even lower than 31.29x then without the skewing.

For the types of sites many of us build:

tUkXBiE.png


That means e-commerce and others are even lower. And you gotta pay a 15% commission.

I'd expect 36x as the baseline, and go up a little if you have an upwards trajectory with sub-par monetization, or lower if you have a decreasing revenue trajectory. If you have a stable site doing nothing and you've squeezed every penny out of the monetization, expect a 36x.

I know I didn't answer your question, but I've wanted to share this info and this is a good place to do it.

I sold with FE International a bunch of years ago for 36x.
 
Joined
Nov 5, 2014
Messages
653
Likes
448
Degree
2
I did some research on Empire Flippers in the past 2 weeks.

They'll list at like 55x and not get the sale till they drag the multiple down to the ~36x range, give or take, like normal, despite the narratives out there that admittedly had me fooled.

Here's from Empire Flippers own mouth:

iHbkIA8.png


Dealfeed.io (The Website Flip's thing) scrapes all the brokerages and runs numbers on them. Here's what they say right now for Empire Flippers:

a24tbhL.png


63 of the 71 listings that have been sitting there for over 3 months (because their valuations were too high) have had their valuations decreased. 32 of them have had that happen by dropping their multiples. I suspect they all have their multiples decreased ultimately.

Here's all their numbers from day one:

mok3FY2.png


#3 is the key: Average multiple of all listings is 31.29x. You could argue that multiples have increased lately and this number is skewed, which is fine. That means the average multiple is even lower than 31.29x then without the skewing.

For the types of sites many of us build:

tUkXBiE.png


That means e-commerce and others are even lower. And you gotta pay a 15% commission.

I'd expect 36x as the baseline, and go up a little if you have an upwards trajectory with sub-par monetization, or lower if you have a decreasing revenue trajectory. If you have a stable site doing nothing and you've squeezed every penny out of the monetization, expect a 36x.

I know I didn't answer your question, but I've wanted to share this info and this is a good place to do it.

I sold with FE International a bunch of years ago for 36x.
Thank! I just sent them an email with this exact question. I'll let you know what they say, if anything.

IMO, the task for vertically integrating a business isn't that hard. With 6 months more work, you can add an in-house support staff, fulfillment staff, and other stuff. If this increases the multiplier, I see a new business for myself.
 
Joined
Mar 27, 2015
Messages
674
Likes
1,046
Degree
3
Remember that a decrease in price can be due to a reduction in revenues and not necessarily a reduction in multiple to get it shifted. They update the price on a rolling basis as each months data updates.
 
Joined
Oct 8, 2019
Messages
18
Likes
8
Degree
0
I like F E International and Thomas the boss there is a really down to earth guy, they are very professional.
 
Joined
Nov 5, 2014
Messages
653
Likes
448
Degree
2
I contacted EF and they guided me to the evaluation tool. I played with it and, for both a service website and an affiliate website, the multipliers are the same. The thing is, if you vertically integrate, your margins are higher.

So, let's say you run a weight loss review website. The website reviews weight loss books. If it gets 100 sales a month and you get $20 per affiliate sale, you make $2,000/month. Let's say the multiplier is 36x. That's $72,000 at EF's marketplace.

Now, let's say you run the same weight loss review website but also published your own weight loss book and reviewed your own book. Of course your own review would say that your own book is really, really good. Now, for the 100 sales a month, 30 of them bought your own book. So 70 are affiliate signups at $20/sale and 30 are your own book sales, at $40/sale. Together, that's $1,400 in affiliate revenue and $1,200 in book sales. You made a total of $2,600 that month. At 36x multiplier, that's $93,600 on EF's marketplace.

So, in conclusion, if you are able to vertically integrate, you should. It'll increase your profit margin and increase the final sale price of your business but it won't increase the multiplier you get.