Empire Flippers: brokering websites for bitcoin
Wednesday 16 September 2015
There are good reasons for taking bitcoin as payment for an online company - which is why Empire Flippers have incorporated it in their business model.
Buying and selling online businesses is nothing new, but there have always been problems associated with it. The internet is a global marketplace, but money tends not to like crossing borders. The same issues that make it harder for customers to access international websites make it tougher for those sites to sell outside their own country.
Read also: Vaultoro - gold for bitcoins
If you want to trade on a truly global marketplace, your site has to be as accessible for buyers in Nigeria as for those in New York
Fast, cheap, borderless money like bitcoin is the obvious answer, which is why Empire Flippers have integrated it into their business. These guys will value and list your website for you, making selling a fairly painless process. (As a starting point, the valuation they use is a 20x multiple of net monthly profit - a reasonable metric, given the fast-moving nature of e-commerce. In other words, if you continue to run the business as it currently operates, the sale price reflects an ROI of 1 year and 8 months. Ultimately other factors like seasonality and how long your site has been around will be taken into account.)
Empire Flippers acts as a broker for sites in all kinds of sectors, from those worth a few thousand dollars up to $1 million enterprises. Justin Cooke, the site’s founder, talked about why he’d recently started taking an interest in bitcoin.
The problem comes down to the difficulties of moving money across borders. Not every border, of course - but the standard payment processors can make life difficult for a variety of reasons. ‘We’ve had problems paying to legitimate sellers in Pakistan and Nigeria (due to terrorist/fraud alerts), issues with capital controls and getting money from investors out of India, Israel, and Vietnam, and other countries,’ Justin explains. ‘It's just not that easy to push money around the world in fiat currencies and bitcoin looks like a legitimate answer to buying/selling businesses online in scenarios like this.’
Given the obvious hurdles, you might think that other website brokers might have had the same idea. Not so. ‘I believe we're the first/only business broker to accept and have processed bitcoin for buying and selling businesses. Our first business sale via bitcoin was done by an American living in the Philippines and we're looking to expand.’
What’s interesting about this is that Justin and the Empire team weren’t already interested in bitcoin. Instead, crypto presents a clear use case and advantage that it made great business sense to explore. ‘We weren't bitcoin fanatics going into this - we’ve simply found that bitcoin provides an excellent alternative to fiat currency when it comes to buying/selling online businesses in situations where the government and bank controls are too restrictive.’ Like many people, Justin only really learned about bitcoin in 2013. 'I didn't really know or think much about it until the run-up (and crash) the following year which was well publicized. We started thinking about the impact it may have in our industry (buying/selling online businesses) in 2015 and implemented into our business this year.'
One of the benefits over traditional payment methods is the 'push' nature of a bitcoin transaction. 'Irreversibility is definitely a benefit in our industry. For the smaller transactions, credit card fraud is a real issue, something we ran up against recently. There is definitely still a need to use escrow between the buyer/seller, but not being able to reverse the transaction minimizes buyer-side fraud.'
Whilst Justin doesn't expect many people to use bitcoin for the upper end of their price range (slippage would be a problem at $1 million, apart from anything else), he does see a sizeable market in the low-to-mid range. 'I doubt we'll get any/many $1M+ transactions via BTC in the near future, but I do think there's a real opportunity for early adopters to trade BTC for fiat-earning assets today in the $10K to low six-figures range.'
If you want to know more about Empire Flippers, take a look at their site or view their listings.
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