If you are thinking about investing in websites, congratulations! You are an investment pioneer. Believe it or not, for as long as websites have existed, not many people know that they are a commodity that can be bought, sold, or something you can invest in. Just like any other business opportunity, investing in websites comes with risk along with potential reward. Doing your ‘homework’ and researching various websites can go a long way to reducing that risk and bettering your chances of success and profit.
Below we outline an extensive list of where you can locate legitimate websites on the market.
Even if you are not ready to pull the trigger on a ‘buy’, the list below is a fantastic resource for researching what’s available out there, from what kinds of websites are available for purchase to how to pick out the legitimate ones and avoid low-quality or scam sites.
Getting into this market can seem a little intimidating at first. The trick is knowing where to start. The good news is that this first phase does not require any interaction with the seller. This list of websites help you get over that initial hump.
Once you think you have a good target, you have the option to reach out to the seller or broker. Most should be happy to share access to Google Analytics data. Quick note… ironically most internet brokers prefer phone calls instead of emails since it helps screen out data miners.
Another good tip for those starting out in website investing is to know your price range and research accordingly. A three thousand dollar website does not require the same kind of due diligence as one for sale at two hundred thousand dollars. Obviously, you will want to look harder as the price goes up. But there are also legal and tax implications for that level of purchase.
What are website brokers?
Just like other brokers, website brokers link potential buyers and sellers and make the search and purchasing process go much more smoothly. On the seller’s side, website brokers help establish a website’s market value as well as help advertise and attract potentially interested buyers. From the buyer’s perspective, brokers help sort out which websites on the market best fit a buyer’s needs and price range. They can help you negotiate a better price and even help you become more familiar with your newly purchased site.
How do website brokers sell websites?
Instead of always waiting for a buyer to approach them, website brokers maintain databases of qualified buyers, which includes the buyer’s interests and price range. When a website comes up for sale which matches one or more of their buyers’ specifications, website brokers will present these buyers with the initial offer. They will also usually negotiate with the seller on behalf of the buyer until an agreed upon final price is reached. They then make sure the contract process goes smoothly and that the website ownership is transferred correctly. Brokers on both ends use a number of payment options for their clients convenience.
Website brokers make money via commission. As a website seller, this means you don’t have to pay a broker anything unless a sale is concluded. Usually the commission fee is between 10 and 15 percent of the total sale. This system helps guarantee that the sellers achieve the maximum profit possible. On the other hand, buyer brokers work hard to pull down the price to a level that their client can afford so that they can earn commission on the sale.
What are the factors in choosing a website broker?
There are a lot of website brokers in the business. Choosing which one is best for you can be a challenge. Below are some key factors that can help you pick.
First and foremost, a website broker should be legit. Look for his or her company to be a member of the International Business Brokers Association (IBBA). Next, look for an actual physical address and a phone number. You can also search the web for client reviews.
A website brokerage should have a fair number of websites currently up for sale. Having several clients is a good indication that the company is not fly by night or brand new to the game. A good ‘inventory’ is also a good sign of established credibility.
A genuine broker sets realistic levels of valuation. Websites generally sell for 2 to 3 times their annual profit as an average. If a broker tries to tell you he or she can sell your site for over this amount, they are probably just trying to lock you in as a client.
These days, confidentiality and security are major issues. You want a broker who has a proven track record of keeping their clients’ identities confidential.
Finally, while having a lot of websites for sale is a good indicator on one end, having a relatively small list of qualified buyers is preferred on the other. You want a broker with a verified list of qualified buyers vs just a large list of names who may or may not be serious.
Who are the best brokerages for buying and selling websites?
1) Empire Flippers
As an Inc. 500 company, Empire Flippers is one of the fastest growing website brokerages in the US. Its success is founded on the premise of making buying and selling websites as simple as possible. Over a period of three month, it sold over 90 percent of its listed inventory. These websites ranged in value from $5000 to over $60,000. Its current inventory includes websites valued as much as $2 million.
2) FE International
FE International won the IBBA title “Deal Maker of the Year” in both 2015 and 2016. Since its beginnings in 2010, FE International has grown rapidly in both size and revenue. This brokerage touts a 95% sales success rate and a quick sales turnover with over 85% of its website inventory being traded inside of 2 months. With innovative marketing and website valuation. FE International promises safe and secure transactions for both buyers and sellers.
3) Flippa
Flippa has the distinction of being the first website and online business brokerage firm. Its sales to date total over $204 Million. It has a whopping eight hundred thousand users and well over two million websites for sale. Flippa also deals with applications, Shopify sites, and domains.
4) Exchange
Exchange serves as Shopify’s market for ecommerce ‘storefronts.’ Users can search businesses by price, type, staff picks, and partner store affiliations. Exchange’s handy valuation tool can recommend selling prices to buyers and sellers by taking into account numerous characteristics, including a ‘store’s’ web traffic, social media followers, email subscribers, and revenue. Exchange utilizes an escrow account to securely transfer funds to the seller while ensuring the ‘store’ is properly transferred to the new owner.
5) Digital Exits
Digital Exists specializes in brokering deals for internet businesses that have up to $10 million in annual profits. Digital Exits analyzes growth trends, age, business model, website traffic, net profit, competition, and niche when calculating value. Currently Digital Exits is listing sixteen businesses for sale with a range of asking prices between $450,000 and $5,300,000. Digital Exits can value a client’s business in 48 hours.
6) BizBroker24
BizBroker24 focuses on internet business and websites with values anywhere from $150,000 to $20 million. For clients looking to buy, BizBrokers24 helps with every facet of the process, including due diligence, financing resources, valuation, market trends, and other other aspects of buying. For its seller clients, BizBroker24 can help determine a business’s worth, create marketing plans. BizBroker24 has some serious clout as well. If you need to sell in a hurry, BizBroker24 has the ability to purchase, with cash, a business valued at up to $2M.
7) Latona’s
Latona’s is a small website brokerage firm which specializes in domain portfolios, SaaS, lead generation, websites, and ecommerce including Shopify and Amazon. Beginning in 2008, Latona’s evolved from premium domains to web companies. Currently Latona’s deals with e-properties with annual profit levels of $20,000 or more and at least one year’s worth of positive trading.
8) Quiet Light Brokerage
Quiet Light Brokerage has an established track record of dealing with profitable e-companies.
Eighty-five percent of its inventory within ninety days. Currently, Quiet Light currently has forty businesses in inventory with values ranging from $87k to $20m.
9) MicroAcquire
MicroAcquire provides a marketplace for startup buyers and sellers and helps both sides with due diligence, legal issues, financing, and taxation. MicroAcquire offers premium memberships which provide notifications for new listings, access to sellers, and in-depth financial analysis.
10) BlogsForSale.co
As its title implies, BlogsForSale.co specializes in selling blogs. BlogsForSale.co also sells ecommerce business, and smaller, more specialized online assets. Its inventory includes long-established blogs and new up-and-comers. BlogsForSale.co provides several free resources for its clients including valuation, due diligence, an investor’s club, and gains and losses reports.
Off Market Opportunities
Just like buying a house, you don’t need a real estate agent, or in this case, a website broker. If you see a website that interests you, you can reach out directly to the website’s owner and ask if they are interested in selling. By cutting out the middlemen, both you and the seller can increase the money that stays in your pocket. With this comes some potential pitfalls. You’ll need to be very careful while doing your own due diligence research.
But the advantages of buying ‘off-market’ are many.
Since the seller can avoid brokerage feeds, it can lower the website’s valuation in the favor of the buyer.
You never know when a website owner would be thrilled to unload their website. Like a boat owner, they may just want to get rid of it at any price that lets them feel like a ‘win.’
Many sellers are not as hung up on valuations and may be more willing to negotiate down.
So where can you start looking for buying opportunities outside the normal brokerage channels? Below are some ways you can locate great buys on your own.
Use your business network
If you have relationships with the online business community, check in with them regularly. Lots of entrepreneurs, especially those in the web industry, can become bored easily. Their need to find a new exciting project can mean that many are looking to unload their old ventures.
Facebook Groups
Browsing Facebook groups dedicated to online businesses is a great way to find hidden gems. If you track these groups, you can uncover owners’ interest in selling their e-business or website. They may not mention selling directly, but may ask the group for recommendations about a broker etc. Reach out to them directly and ask if they are looking to sell. This is a low-risk, potentially high-reward technique, especially if they are familiar with you through the Facebook Group.
Forums
Like Facebook Groups, there are tons of online business forums and chat boards where you can search for potential sellers.
Outreach
Outreach is kind of like pulling up in front of a house you’d like to buy and ringing the doorbell. But there’s not a ‘for sale’ sign in the yard. Except just sending an email or calling the website owner is way less creepier than randomly knocking on someone’s door. If you think a website is a great buying opportunity, contact the owner. The worst that will happen is they decide not to respond.
International Business Brokers Association
The International Business Brokers Association (IBBA) is a great place to start looking for an online brokerage firm. The IBBA does a good job of ‘policing’ the industry and helping those thinking of entering learn what to watch out for in potential online brokers.