Episode # 127 – Creating Millionaires – Greg Elfrink – Amazon Legends
You’re probably great at selling your products, but you’re probably not so good at selling your business. This is a murky, complicated process that few have insight into from the sellers’ perspective. That’s where Greg Elfrink, the Director of Marketing at Empire Flippers, comes in to share his expertise from his experience as a broker working to help sellers get the most from selling their business. Take a peek behind the curtain into the tricks buyers try to use to fool sellers, how to properly evaluate your business, and what you can realistically expect to earn from selling your Amazon company.
- When entrepreneurs go to sell their business, 60% to 80% of their net worth may be tied up in their business which can make the process very emotional for them. Sellers need to disabuse themselves of emotional equity to avoid overvaluing their businesses.
- Buyers are counting on sellers not to understand the process of selling their business and to act irrationally based on their emotions towards their business.
- Brokers help protect sellers from themselves by removing the emotional component from the deal. Because brokers are specialized in these deals, they provide the expertise in the handling of the deal, its terms, and the valuation of the company.
- The types of deals you will get depend on the size of your company. For good companies worth 7-8 figures, they should typically be looking for 80-85% upfront from the buyer. The remainder can be paid as a stabilization payment or an earnout.
- A stabilization payment is, in essence, seller financing. At a base level, it means that payments will be made to the seller, provided that the business stays roughly stable while the buyer becomes integrated.
- Brokers have the fiduciary responsibility to act in the best interest of their clients. They will actually get paid as their clients get paid, even in cases of earnouts, stabilization payments, etc. They will also manage those deal structures for the client.
- Two ways to increase your company’s valuation are to lower your risk by diversifying your products along with your marketing channels and by building out an email list of clients, although the latter can be harder to accomplish through Amazon.
Quote of the Show:
“Most entrepreneurs want to sell, but most entrepreneurs don’t often sell businesses” – Greg Elfrink
- LinkedIn: https://www.linkedin.com/in/gregthewriter/
- Email: firstname.lastname@example.org
- Company website: http://www.empireflippers.com/
- Company Facebook: https://www.facebook.com/EmpireFlippers/
- On Writing by Stephen King
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About the Author:
Nick Uresin is the Founder and CEO of ArgoMetrix, a New York based software and consulting company established in 2013. Nick is an Entrepreneur, Electronics, Communications and Computer Science Engineer, who has a passion for problem solving with technology. Nick built an online retail company with annual revenues of over $10 million. He developed his vision to organize the knowledge and technology he developed to become a large Amazon Seller and provide it as a service to manufacturers and sellers of consumer products. Let's get social! Follow us and get ArgoMetrix's latest updates on Twitter, Facebook or LinkedIn.