Sold! We Got the Winning Offer – Project Go White Hat, Part 11

May 2017 was a weird month for me.

Huge mood swings.

My 15 year old dog, Brodie, was dying of cancer.

I was also in the middle of the biggest financial transaction of my life.

I remember walking Brodie one morning, like we do every morning — rain, shine, or subzero temperatures.

He was getting slower and slower. Barely wagging his tail.

Then, I’d see a Skype notification from Rob about a interested buyer or a new offer for our niche site. People were really interested in the site, and that felt good.

In this update, you’ll learn:

  1. Why we were very nervous about what the site was worth
  2. The offer we so GLAD we didn’t accept
  3. The offer we accepted

By the way if you haven’t read the other 10 parts of Project Go White Hat, start here.

The Timeline

  • May 1: Site is listed with Empire Flippers (see the listing) for $275,340, a 33x monthly multiple.
  • May 16: Offer received for $250,320, BUT it’s a bad deal. It’s $125,160 upfront and an earn out that’ll take years to pay off. (see other offers in the last update)
  • May 18: Another interested buyer interviewed with Rob and seemed interested.
  • May 19:
    • We received an offer overnight for $200,000 with $150,000 upfront. Not great.
    • I know Brodie isn’t doing well in the morning. He can barely walk and doesn’t want to stand up so I know it’s time — he’s letting me know.
    • My wife and I took Brodie to the vet in the afternoon to put him to sleep. We’re devastated.
  • May 23: Another interview, another offer for $180,000 with $135,000 upfront.
  • May 25: We get the winning offer.
  • May 30: The full sale price is in escrow.

Yeah, ups and downs.

One of the tough parts with Brodie was that I’ve worked from home for several years, even for my corporate job.

I’ve literally spent about 20 hours a day with him, everyday, for the last six years. That’s more time than people spend with their spouses or kids.

Okay. I know you’re here for the Go White Hat Case Study so I’ll get to it.

The Winning Offer

I got this message from Rob:

So he didn’t give me 10 minutes, but I was a-okay with his decision!

We formally accepted the $235,000 offer which was paid in full, all upfront, no payout plan.

One of our biggest issues with the offers we got was the big component of a payout, usually based on earnings of the site.

That’s a HUGE risk for us as the sellers.

  • We have no control over what happens to the site once the new owner takes over. They could add a bunch of bad links or get kick out of the Amazon Associate program for another site they own.

Thinking about selling a 6 or 7 figure business?

You should be aware that you may get offers that have a significant payout component. It’s rare for people to have that much cash, even investment groups.

An investment group is definitely trying to limit their risk, and buying a website is riskier than, say, buying real estate.

Just getting to a point where you have a six or seven figure business is amazing. But if you’re planning on selling, then you should be aware that things might be different than you expect.

We got several offers in the $200,000 range, up to $250,000. The issue was that long payout component which is seller financing. It’s not unusual for sellers to help finance the deal with large selling prices, but that’s really not what we were looking for.

We came really close to countering (and maybe accepting) the offer we got on May 23 for $180,000 with $135,000 upfront. That was just two days before the winning offer came in.

The Transition to the Buyer

One of the great things about working with Empire Flippers is they handle all the transition from the seller to the buyer.

So the transition is easy!

They handle the migration from your hosting to the buyer’s hosting account. They update the affiliate links to the owner.

Waiting

The new owner takes over the site, but we didn’t get the money yet.

The $235,000 sits in an escrow account while the new owner verifies two things:

  1. Traffic on the site.
  2. Earnings on Amazon.

The verification period is short, about one to two weeks.

So May was a tough but exciting month. It was great to get the winning offer, and of course, really tough to lose Brodie.

In the NEXT UPDATE, Part 12:

  • I talk about why we sold and didn’t grow the site.
  • The new owner gives us an update on the verification.
  • The escrow is released.

Check out my YouTube Channel for tutorials and demos.


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31 comments… add one
  • Carlos

    CONGRATULATIONS DOUG!!!

    I’ll be going over the whole series from Part1 and hopefully learn a few more things.

    Well, learning is not the problem its the doing and taking action part that’s hard 🙂

  • I’m sorry for your loss…I can totally relate to you when you said your dog was letting you know it was time 🙁

    I’m also very happy you guys got the offer you wanted, CONGRATULATIONS!

  • Naveen Kulkarni

    Congrats Doug and Rob. Looks like you guys nailed it. And very sad to hear about Brodie:-(

  • Congrats doug… This is a huge one

  • Sergey

    Hi Doug,

    So how much was the site making every month?

    • Sergey, on average over $8k.
      But that was after the Amazon commission rate changes…

      Actually, I need to calculate how much we made through income over the years. That’s over 6 figures…

      • Sergey

        Was it just Amazon or all income sources?

        $8K doesn’t sound that much if you promote the right affiliate programs.

        • It was just Amazon.

          It’s all relative…so $8,000 is actually a lot for some people including me!

          And $235,000 is a lot for anyone.

          I’m not sure the point you’re trying to make here… You don’t have nearly enough information to say that with any kind of authority.

  • Jibran

    Congratulations on the site sale and sorry to hear about your dog. Don’t worry, he’s in a much better place now 🙂

  • arun

    Hi Dough,

    Is it possible to sell a website for 200K in 1 year continously? And congrats man its a awesome news

    • Hey Arun, Yes…you could do that. It’d take time to build up to that, but sure you can do it.

  • Doug, condolences on Brodie. May you always feel his presence around you. He will be waiting for you on Rainbow Bridge. Congrats on the sale of the site. What a way to finish strong! I enjoyed the lesson’s learned along the way. Thanks for always being transparent and creating teaching opportunities for your website visitors and students. Love and light, Deborah

  • Matt a

    Killed it Doug! Congrats.

  • Been reading the series and learning as much as I can from your experience (you and Rob) making changes to the site you just sold. Congrats Doug.

    • Phil, thanks for checking it out!
      And be sure you see all the coaching videos from back in the day with Rob.

  • Wow Doug, congrats! That’s impressive. I have to say I never would have imagined you could get a $235k sale price on a $8k/month earning site. $8k is a lot per month (IMO), but to be able to trade off that unreliable income and get it all upfront is huge!

  • Matt

    Congrats Doug and so sorry to hear about your dog. My dog sits with me about 15 hours per day, so I know how you feel.

    I recently sold a site through EF, but the evaluation period was a big mess. Happened when Amazon lowered their commissions so I got nailed….site lost a ton of value. Started out as a 6 figure site and then dropped to mid 5’s because of the commission change. In the end though I was able to work on a deal with EF.

    • Matt, thanks about Brodie.

      And that sucks about the valuation period. That was devastating for us, and I know how that feels first hand!

  • skad

    First off all, congrats on the site sale Doug! Well done to you and the team. It shows that applied knowledge and hard work really pays off.

    Second, I’m so sorry for your loss Doug. I too lost my dog not long ago,and I too also work at home (health is wrecked, it’s why I’m trying to make a living online) So I was with my dog 24/7 more or less.

    I actually think I’m more bummed reading about Brodie than I am happier for your sale. Anyway, my condolences. Stay strong, all the best!

    • Skad, thanks for saying that. Yeah, Brodie was a great dog… I was more upset about him feeling bad than being excited for the sale for sure.

  • Hi Doug!

    Sorry about the pooch but well done on the sale!

    How are taxes taken into account with the $235k?

    I assume you’ll have to pay Fed Biz tax of some sort depending on how the site was structured?

    Can you use the $235k to buy more sites?…and thereby not pay any taxes?

    Thanks!
    K

    • Thanks, Keith!

      Taxes are complicated and suck— BUT you have to pay them. I know you’re just asking about creative ways to pay less.

      So generally, you have to pay on the profits out of the sale, for most people it’s about 28% + your state taxes if you have them.

      If you have a corporation, then it’s different.

      You can assume it’s about the same tax rate as a normal job or so…about 35% go to taxes.

      I’d rather spend time doing fun stuff that I enjoy to earn more, than figure out how to not pay taxes which isn’t a fun thing for me.

  • Wow. Sounds like a good deal Doug! This was a very interesting read! I wish I knew about this. Would love to check this whole series. Is the next one out already? 🙂

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