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Justin Cooke is the co founder of Empire Flippers, a marketplace for buying and selling online businesses. And today he covers the details of selling your ecommerce business. Justin also dives into some of the specifics surrounding the Amazon FBA businesses that they've sold.

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Podcast Transcript

Intro: Hello everyone, Chris Guthrie here, host of Sellercast. And in today’s episode, I speak with Justin Cooke, who is a co-founder of, an online marketplace for buying or selling online businesses. And we’re specifically talking about selling your ecommerce business focused on FBA.

So, we share some of that experience, the sales that he’s done through his marketplace. And so, if you’ve ever thought about selling your ecommerce business, then you’re going to love this episode.

Before we do press play on the recording, I want to draw your attention to That’s where you can go to find out more about how to get more reviews of the products you’re selling on Amazon. We’ll also demo Salesbacker for you as well.

So, go to if you want to learn about how to get more reviews for the products you’re selling on Amazon. OK, let’s go ahead and start the show.


Chris Guthrie: Justin, welcome to the show. Thanks so much for joining us.

Justin Cooke: Thanks for having me on Chris, appreciate it.

Chris Guthrie: Yeah. So, we were talking a little bit before we started this. We’ve known each other for nearly half a decade now, I guess. I looked back to see when our first exchange was, but—well I’ll let you do the honors. What’s your business, and what are you focused on primarily now?

Justin Cooke: Well first off, I was thinking back about this. I was talking to my business partner, Joe. I think you gave us our first podcast interview. So, since then, we’ve done a podcast of a 150 something episodes. We’re having a second podcast or something. So, we’ve done all these podcast, but I think it was the first time I was ever interviewed for a podcast.

I think it wasn’t a podcast. It was like an interview for like an interview for an insider series or something, but really, really interesting. It was back on 2011, man. It’s so crazy.

Chris Guthrie: Yeah. And so, now you’re focused on—you have your brokerage over at And then, you’re also selling—and that’s what we’ll be focusing on today—ecommerce type business that are in Amazon.

Justin Cooke: Yeah, we run Empire Flippers as a brokerage. And we help people buy, sell, and actually invest in websites, apps, and online business. We’ll do anything as low as, like maybe a $10,000 Amazon affiliate site, up to a million plus ecommerce FBA business, that kind of thing.

So, that’s been our business for the last—a little over three years.

Chris Guthrie: Okay, so about three years now. So, in those last three years, how often have you seen Amazon-specific ecommerce businesses, those that are primarily selling on Amazon, or at least 50% of their businesses on Amazon? Is it a more of a recent type thing? Or have you always been seeing businesses like that being sold?

Justin Cooke: Our first ecommerce sale was in 2013. That was a brokered deal. That wasn’t an Amazon FBA deal. So, this has been recent. In fact, I think we had our first listing in December 2015. So, there’s a lot of buzz in 2015 about the FBA model. A lot of people were doing it.

But we’re trailing the market when it comes to that in terms of buying and selling these businesses. So, the hype was building up in 2014-2015. And at the end of 2015, we got our first listing for sale.

Chris Guthrie: And so, for people that are listening to the podcast for a while, I had another broker on to the show earlier—episode 12, so And part of the reason I wanted you to come on is since I’ve known you for quite a while, and I’ve seen your listings , you newsletters as well, and see what businesses you’re selling or you’re offering for sale, and a lot has changed since that conversation.

It’s been over six months, I believe, since that episode. And I wanted to get some more insight into what you’re seeing on the market, and give some ideas for people that are growing their businesses and are thinking about selling them rather.

So, what is some of the most common traits that you’re finding for these ecommerce businesses? Are they almost, always only Amazon traffic? Or are they doing other types of traffic driving as well?

Justin Cooke: So, for the businesses that we’ve had listed—just to be clear about that—we’ve had eight FBA businesses listed, and we’ve sold four. That’s all since December 2015—so within six months.

For the most part, all the listings that we’ve seen, the fast majority of their traffic is through Amazon only. And they may have a site set up, but it does fairly little traffic or business. But the bulk or majority of the business is actually FBA, It looks like it’s often that the sellers created a site on the side to try and drum up business, but they just found so much success through Amazon directly, that it wasn’t worth their time or effort.

And if they do have a site set up at all, which is limited, mostly that is from a lot of traffic back to Amazon.

In general, you’ll find that a lot of people have private label products. It’s not a requirement. You can sell with a non-private label product. But most of the sellers that we’ve had had a private label product.

Chris Guthrie: I’m assuming that just with retail overcharge, or other types of wholesaling, or those other types of methods, there’s just not as much march in there. And maybe there  are some additional challenges in some of those businesses or maybe they just haven’t come your way.

Justin Cooke: Well, it’s harder. With a private label product, we don’t actually require that the Amazon seller account go with the business. But with a non-private label product, the seller account would be required. And you need to basically include that so you can get that position in the buy box.

We found ways to transfer sites that are private label that don’t require the seller account which is interesting. So, I just think there’s more opportunity if you have the private label product.

Also, the fact that it’s arbitrage,  I think, makes it less interesting for a buyer. It’s less sticky. It’s less insured, so it more of an arbitrage play.

Chris Guthrie: That made sense. So, that’s interesting. I’ve heard of the same thing where you not have to transfer the seller account as well. Can you go into a little bit of the details of that? Or is that some secret sauce that you guys don’t like to go into?

Justin Cooke: Our proprietary process. Actually, it was funny, I was talking to Joe about this. We we’re like, “Woah! It is kind of proprietary.” But I can give you the gist.

Basically, we have the buyer open a new account, and then load products from the supplier. And then, we’ll coordinate it. But the seller will stop selling the product, and the buyer will start. Once we verify that sales are going through, the seller will take the extra inventory, and then send that to the buyer—directly to the buyer’s home, or office, or wherever they want it sent. Then the buyer has to send it back to Amazon. Unfortunately, there’s no way to transfer inventory from account to account.

And during that whole process, while the buyer places an order to the supplier, just to make sure that—well, first they get some inventory, but also to make sure pricing is the same, and everything is smooth there. So, that’s generally our transfer process.

Chris Guthrie: Okay. So, for each of those four transactions, it’s all been like that, and smooth sailing from those then?

Justin Cooke: Yup. That’s right. It takes a little longer than transferring in Amazon Affiliates site and an Adsense site, for example. So, it will take definitely a few weeks. But yeah, it’s been smooth in terms of getting it over to the buyer, and having both sides be happy with the process.

Chris Guthrie: Okay, so that’s great. So, for now, obviously, you’re going to be getting more listings as you go along, and you’ll just continue to sell more. But all the ones that you’ve seen, and you’ve sold so far, what do you think is making the businesses get to the best values?

I mean, obviously the sales, and the amount of profit that’s been generated, but what are some of the other elements? Is it really just pretty much that?

Justin Cooke: That’s a tough question to answer because I can’t speak for all FBA businesses, and how they’re going to decide. I can only speak for the ones Empire Flipper’s has seen, the one’s we’ve listed, and the one’s we’ve sold. But I can tell you some of the things that help sell for more money and sell quickly.

The first would be having a track record. So, what I mean by track record is at least six months of steady earnings. This doesn’t mean you opened the account and started selling six months ago. I mean six months of steady, maybe slightly increasing earnings.

We can sell earnings that are decreasing, but it might be hard, say, it might sell for a lower multiple. So, six months of steady earnings. Twelve months would actually be better. So, you’ve got 12 months, you’ve got a full seasonal cycle, and buyers really appreciate that.

Almost any physical product has some kind of seasonality. So, if you can get the full 12 months, buyers appreciate that.

In general, smaller lighter items with higher profit margins are best. For example, if you are selling weight training gloves, that’s good. Maybe you’re selling training machines, that’s not so good.

When the seller account can go with the sales—so let’s say that they don’t have a ton of other products in their seller account, and they’re willing to turn over their seller account—that’s helpful, buyers appreciate that.

A really important one is finances. A lot of times—and you know this Chris—when you’re starting up a new ecommerce business, or FBA businesses, everything is jumbled up in your finances. It’s like, “Argh! I’ve got this to spend for this.” and it’s just all the same.

But when you’re going to sell your business, you’re going to want to separate that out. You want to keep them clean. So, having a very clean profit loss you can give to us in terms of selling your business will be helpful.

And there’s a really good podcast about this, it’s on the Ecommerce Fuel Podcast. It’s about ecommerce accounting. Andre Deering over there did a really good interview. If you want to check that out, I’d give you the link.

Chris Guthrie: I’ll add it to the show notes.

Justin Cooke: And sellers—the last point that I mentioned is that sellers are willing to train the buyer. They’re willing to stay on it a bit. I mean, FBA’s relatively new, a few years old. So, some buyers maybe had a little bit experience with it, maybe they have none. But giving them that warm and fuzzy that you’re going to stay on board, you’re going to help walk them through the process, and explain how things work can help seal the deal.

Chris Guthrie: That’s good. And actually, you’re bringing up that point, we have another episode,, we had a seller on. So, if you want to hear from a seller’s perspective, he sold two of his FBA ecommerce businesses.

Going back to your point about separating things out, you said that that’s one of the main things that really helps to sell those two that he did. He already had his separate account, and he had Amazon’s approval to have the other separate account. But then, everything was siloed—a separate  LLC, separate bank account, and everything else.

And so, finance perspective, it’s really simple to actually put together that documentation.

So, if you’re listening, and you’re thinking about ever wanting to sell your business and you don’t have things figured out right now, you definitely want to get it together if you’re going to do that.

Justin Cooke: If you’re just starting out with FBA, I wouldn’t say, “Let’s set up an LLC for this and a bank account. Let’s set up an LLC for this.” There’s so much hassle there. First, you need to see if you can even make any money.

But definitely maybe 12 months out before you sell, and you’ve got some money coming—it’s a lot easier to solve problems when you have money, and things are running smooth. So, you can then go back and start serving ads.

It’s a pain in the ass, but I think it might be better than trying to start off separate LLC’s, and bank accounts and all that. That can get a little messy.

Chris Guthrie: Yeah, that’s a good point. And it certainly depends on each individual situation in terms of what capital they have when they’re starting their business and going into it as well.

Okay! So then, those businesses now, what are the multiple? You mentioned a multiple that it’s obviously going vary to be based on the size of business. Also, some of the other element you mentioned like whether or not you’re willing to stay on and help transition and maybe how long you can help transition for.

What are you saying the multiples for the ones that you’ve listed, along with the one that you’ve sold?

Justin Cooke: So, we have—we call it our evaluation tool. And this gives a great objective range. And it’s based on a bunch of factors, like what the earning are—and multiple varies. The multiple depends on a bunch of things, how long the business has been around, where it’s tracking at.

And so, we give that out to people if they want a rough estimate. It will give them a multiple range. We give them an estimate on valuation.

Now, what we do is after they fill out the evaluation tool (or we fill it out for them if they’re listing their business with us), that’s a good objective range. But now we have to take the subjective piece to it too. What does the industry look like? What’s it turning out? Is it a short-lived, one or two year kind of product, or is it long term? What’s the growth look like in that industry? And then, we take our determination, we adjust that multiple to the higher end of the evaluation tool, or the lower end.

So, to talk number with you, on the lower end, you’ll see maybe 22 times, 24 times net profit. So, let’s say that the FBA business is pushing out $3,000 a month in profit. We’re talking $36,000 a year, we’re talking about $72,000  list price of which we take 15%.

On the high end, you’ll see 30 to 35 times, and that for be a longer track record, a solid earnings, growth, that kind of thing.

Chris Guthrie: So then, on the higher side, what type of dollar value would you say that would go to? So, if you take your highest sale, what was the multiple on that one?

Justin Cooke: The biggest FBA business we’ve sold so far is only 102,000. So, we’ve done four sales. We’ve completed four sales. One was for $14,000, which to be honest with you, I don’t think it was worth our time. I’m not sure if it’s really worth the seller’s time for an FBA business. I’d say probably, on minimum, you want to sell an FBA business for $40,000 to $50,000.

So, have it be making $1,500 a month net as a minimum. And then the highest—or the large one we’ve sold so far is a $102,000. We have a few on our marketplace right now that are mid-six figures.

So, I think the multiple ranges—I’m not sure, I have to check this—but it’s 22x to 30x.

Chris Guthrie: Okay. And one thing I’d say too is every seller that’s looking at selling their business can have a different approach. I know from just a standpoint of having sold a few over the past several years in other niches, the new attitude I always had is just if you’re not going to sell for an amount of money that can really make a difference or help you to launch some other business, then it’s almost like, “Yeah, why bother?” It’s going back to the example of the $14,000.

Justin Cooke: Yeah. I just don’t think any FBA business under $20,000 because there are more moving pieces to it. So, it’s probably not worth the hassle for the seller, it’s probably not worth it for us, and maybe not for the buyer as well.

So, I think we got lucky on the $14,000 one. There was someone that was like, “Look, I want to get an FBA. I’d like a product that’s already earning, and making money. I’ll take a stab at this, and figure it out,” someone brand new to FBA.

Chris Guthrie: Okay. Another thing I’m curious about too, as well as—are these businesses, are they—I’m assuming based on the sale price that you mentioned that it’s primarily owner-operated. Any of them have a VA or anything else, helping them out with their business?

Justin Cooke: For our listings, most are owner-operated, and they have some support. Now, that may just be bookkeeping software, it may be a virtual assistant they work with part time, it could be online tools. In one case, it’s a husband-wife partnership.

But yeah, all the businesses we’ve listed, and the one’s we’ve sold have been owner-operated.

Chris Guthrie: Okay. And actually, throughout this conversation we’ve touched on various elements of the selling process. What are the main things that people need to do if they’re actually going to try and sell their business, kind of when we talked about getting their finances together, making sure they have everything set up to be able to transition it.

But are there any spots that I missed I guess along the way? I’m going a little bit backwards I guess. But I want to make sure that people that are thinking about selling their business have a really good sense of what they need to do to be able to move forward with that.

Justin Cooke: Yes. So, let’s say that you’re 12 months out—maybe 9-12 months out from selling—some of the things you’d want to do—and we’ve mentioned already—I’d say, as you’ve mentioned, separate them out.

So, if you have a particular product that you want to sell, separating that out in terms of finances, in terms of Amazon accounts will be helpful. If you don’t want to include your seller account, having that separate LLC will be helpful. Definitely the finances, having those separate.

I’d also say you want to start cutting down on exploratory spending. So, if you’ve got campaigns—ad campaigns or something that you’ve been spending money on, that isn’t really getting you a return—you’re going to want to start cutting that out. Ultimately, you’re sales price will be based on a multiple of profit, not revenue, so all of those expenses.

You could say in the sales process, let’s say you’re getting up negotiations to the buyer, you could say, “Oh, no! That thousand dollars a month wasn’t really needed.” And the buyer is like, “Well, I don’t know that that wasn’t needed, so I’m going to include all of it or let’s negotiate and do half of it.”

You could be losing a lot of value if you’re spending unnecessarily. So, you really want to keep those tight.

Now, you don’t want to cut it so much to where your business starts declining. That’s going to hurt you too. But at least cut the exploratory or non-profitable marketing spends or software spends that you just don’t need.

Chris Guthrie: Okay. And another thing I wanted to actually ask about was we talked about the multiple and the range that you mentioned. Now, when you’re defining this range—and this is going to vary if the business is younger than a year. But if it’s older than a year old, are you typically looking at the trailing 12 months, and then averaging that all together to come up with the net profit for each month, and then multiplying that out?

Justine Cook:So, buyers really want to see 12 months. They really want to see 12 months of history. So if you have 12 months of—now, I’m not talking business history, I’m talking earnings history. So, you’ve got the whole thing. You’ve got the whole season.

Now, we don’t always use the 12 months to base the price on a multiple. So, we don’t always use 12 months. Sometimes, we’ll use three to six months. And the reasoning for that is if there’s a product that is not a terribly seasonal—it’s not a terribly seasonal product—but the growth over the last six to nine months has just been phenomenal, we don’t want to take a 12 months average. I think that’s unfair. It’s unfair to the seller because they’re not getting the value that they’ve built in the last three to six months.

Now, what we don’t do, and what buyers don’t do either, is they don’t value on opportunity. “Oh, within 12 months, I can make this business three times where it is now.”

Well, then you shouldn’t be selling it. That’s help you build it up to three times where it is now. We’ll sell them 12 months, no problem. So, buyers are pretty savvy in terms of not wanting to buy on future promise. But we also protect our sellers in that we don’t want them to be selling short based on what they did 11 months ago.

So, we may take a three or six month history, and base that multiple on that because of growth.

Chris Guthrie: So, it can definitely be on a case by case basis. Really, this depends on what the business is doing, and also, if there’s some seasonality, or where the season fits for the product that might be being sold.

Justin Cooke: Yeah. So, it was January, and they had a huge Christmas, we’re not going to base that on three months. That would be aggressive.  Or if we do, buyers are going to argue, and you’re likely going to sell for less than you list. So, that would be a bad case.

But something that’s not as seasonal, three to six months with heavy growth, I think is optimal.

Chris Guthrie: Okay. And actually, another that I was interested in, you mentioned that most of the sales probably been a little bit lower than you’ve been selling—it was nine listings, and then you’ve sold four.

Of the ones that—if people are looking at trying to really sell for serious dollars, they’re trying to sell for a seven-figure type price range either based on your experience or just what you’ve seen in the market and other spaces, what do you think someone need to do to be able to accomplish that?

Justin Cooke: So, the larger deals that we’ve sold—now we’re talking mid six figures, high six figures—and the one’s that we haven’t, it’s problematic. The larger the sale price, the more skeptical people be on your history, or your trailing 12 months, 18 month, 24 months.

So, the larger the business, the more of a track record you’re going to need to build. It’s not that likely that you’re going to sell your $1.3 million FBA business with only six months of history. That’s just not enough.

And if it is enough to list, it’ll likely be a long time before you can sell—six to twelve months because you’re going to have to build that track record.

So, it’s actually not a horrible position to be in. Let’s say you have nine months of solid earning history, and you have a $1.3 million FBA business, you’ll get listed knowing  just from the get go that it’s going to take a long time to sell, and that you still have to run your business. Does that make sense?

Chris Guthrie: Yeah, that’s a good point. I think that when people maybe have that excitement, especially if it’s something they haven’t done before, maybe they haven’t sold their business before, getting that excitement to have me to sell this, and then it might take a long time for that to actually come through…  

Justin Cooke: It won’t take so long let’s say a $1.3 billion business if you’ve got two years of solid earnings, you’ve got increases month over month, year over year, and it looks great. That’s not going to take a long time. So, yes it’s a smaller buying pool, so generally, it’s not going to sell in a week or two, but those can sell really quickly as well.

But if you have a short earnings history, and a larger sale price—let’s say mid to high six figures or low seven figures—then it might take quite a bit longer to sell because you’re still building that track record.

If you’re thinking I’m going to just dump it after six months of earnings history, that’s $1.3 million, that’s just not very likely. Whereas, if you have 18 months, 24 months, of earning history, and you want to just dump it in a month or two for $1.3 million, that’s definitely possible.

Chris Guthrie: Okay. Yeah, that’s good. And would you recommend that if someone was trying to go for a larger sale, do you think that putting up sale receipts so you have a long enough history—I think that’s a key take away really. But do you think that it’s also worth really trying to get Shopify or some other platform going up so you can start driving some sales.

I know that you mentioned that, a lot of times, the sellers have sites set up, but they’re not really doing any traffic really at all because they’re just driving most of the sales or produce all the money on Amazon.

Do you think that to get a larger sale price, you need some of that diversification? Or do you think that buyers should be willing to go for a larger sale, even knowing that all that sales are on Amazon? Maybe this is something that just from your conversations with buyers and seeing what they’re thinking about.

Justin Cooke: Yes. So, we’re not getting any question—I talked to my business partner about this and our sales guy Mike. And of all the buyers they’ve talked to for FBA businesses, stores are not really concerned for the buyers. That’s not really something they’re looking for. So, it’s not a requirement. Some people have it. It gets less than 3% of their total revenue of the business.

Chris Guthrie: Definitely terrifying.

Justin Cooke: It is very small. It does very little business.

Because we’re basing the sales price on multiple net profits, it’s really best to focus on your skill sets. So, are you better off on adding products because you’ve got great sources or networks in China? Are you great at finding add-on products or selling one?

Whatever your skills set is, building a team of people to run it for you, you should really focus on that. So, if it’s not building a site, and driving organic or paid traffic to your Shopify store, you shouldn’t focus on that because it’s really not going to help you on a sale or whatever.

Whatever your skill sets are that allow you to grow bigger, grow faster, and grow more profitable, that’s where you should be putting you time, and efforts, and energy.

Chris Guthrie: I love that. I think that’s a great, great take away for people that are really thinking about that. And I think it’s almost one of those things where once people get up and they start selling at Amazon—because I talk to a lot of sellers, and this is something that something that comes up, they just feel like, “Hey, maybe I need to start doing this other thing now as well, to help with my business,”—rather than maybe focusing on the things that made them be successful in the first place and just trying to be really, really good at that one thing, that’s great.

Justin Cooke: I would say, Chris, that aside from that, that’s just from a selling perspective. It’s most important to focus on you profit, and use your skill sets to see what’s going to help you best.

Now, when we’re talking about overall business diversification—not having everything on your business through Amazon or something—it’s probably a smart strategy. So, in terms of total business diversification, I’d say don’t do that.

But when you’re talking about baking in the highest value, you’re looking to sell the business, I think really doubling down there is better than diversifying.

Chris Guthrie: Yes, yes. Now, definitely focusing the context of the conversation that we’re having, primarily just on people that are interested in selling, and trying to think about what they need to do next, where they need to be at in this stage to be able to move forward, and make sure they get the best price. So, that’s good.

What else then do you think that the seller should keep in mind if they’re trying to sell? I think we’re pretty much close to the end here where we can wrap up. But is there anything else that I didn’t ask, that we didn’t really get into on the selling side, or even in the buying side I guess—we can touch on that as well because there are people listening that are interested in buying. I figured that most of the people that listen to the show are sellers themselves. But I’d love to hear your closing thought on that.

Justin Cooke: So, we gave an example of a site that we sold recently. It’s in the beverages coffee niche. It was listed in early January, we sold it January 23rd. So, less than a week after it’s listed. It sold for $79,825. The listing number is 40395. I’ll give you a link that you can check out the listing page from where it sold and everything.

But it had five to six months of a steady track record. It was making $8,400 a month in gross, $3,600 a month in net profit.

And funny story, when we sold the business—because it was less than a week—the seller was on an island in Malaysia, and we’re trying to get a hold of him saying, “Look, we’ve sold your business, we’ve sold your business.” We finally did get a hold of him in this really crappy connection, and he was like, “Argh! I’m stuck. I’m in Malaysia. Can we wait a few days?” So, we basically have to wait three or four days so the guy could finish his vacation, and get the deal done.

So, he was very stoked. I mean, he’s sitting on island and just made $80,000 for a quick turnaround. So, it was pretty cool.

Chris Guthrie: Nice! Well, cool. If there’s nothing else, nothing else to really get into, I think what I’ll do is I’ll mention the show notes link for people since there are a lot of resources that we talked about here. to get to this episode. And then also too, if there are questions, people can go ahead and comment there, and then I can maybe send you a note when there’s some questions come through, and you can comment as well?

Justin Cooke: Yeah, man. I’d be happy to answer any questions, comments, or concerns. And also, you can reach me on twitter @EmpireFlippers. I tweet a lot, so come say hi.

Chris Guthrie: Awesome! Justin, thanks again so much. It’s been a pleasure to chat with you as well. And thank you again for coming in the show.

Justin Cooke: Thanks, Chris! It’s been a while, man. We should do this more often.

Chris Guthrie: Definitely. Thanks Justin.

Alright, that was the show with Justin. I want to thank him again for coming on to the show to talk about selling your ecommerce business. is his site if you want to go and check that out.

And I’ll once again remind you that you can go to, it you want to find out how to get more product reviews for the products that you’re selling on Amazon.

Thanks again for tuning in. And we’ll see you in the next episode.