There are many websites and marketplaces to buy online businesses like websites, eCommerce and Kindle Publishing businesses.
For very small SASS Businesses, I recommend Microns and for most other online business purchases I recommend Empire Flippers.
A marketplace for serious entrepreneurs who want to buy or sell their online business in safe hands.
Where to Buy Online Businesses
If you are looking to buy an online business, there are several marketplaces available online where you can find a variety of options. Here are some of the best websites to buy online businesses:
- Empire Flippers: Empire Flippers is a popular marketplace that specializes in buying and selling profitable online businesses. They have a wide range of businesses available, from content sites to e-commerce businesses. In my opinion, they have the highest quality businesses.
- Flippa: Flippa is another well-known marketplace for buying and selling online businesses. They offer a variety of businesses, including websites, apps, and domains. Flippa has a huge selection so probably better for somebody looking for a diamond in the rough or experience with website flipping.
- FE International: FE International is a leading M&A advisor for online businesses. They have a team of experienced professionals who help buyers and sellers throughout the entire process.
- SideProjectors: SideProjectors is a marketplace for buying and selling side projects. They offer a range of projects, from small apps to full-fledged businesses.
- Business Exits: Business Exits is a brokerage firm that specializes in selling online businesses. They offer a range of businesses, from e-commerce sites to SaaS businesses.
- Quiet Light: Quiet Light is a brokerage firm that specializes in selling profitable online businesses. They have a team of experienced professionals who help buyers and sellers throughout the entire process.
- BizBuySell: BizBuySell is a popular online marketplace for buying and selling businesses. They have a wide range of businesses available, from small franchises to large e-commerce businesses.
- BusinessesForSale.com: BusinessesForSale.com is another popular online marketplace for buying and selling businesses. They offer a variety of businesses, including franchises, e-commerce businesses, and small niche sites.
- Exchange: Exchange is a marketplace for buying and selling Shopify stores. They offer a wide range of stores, from small niche sites to large e-commerce businesses.
- Website Properties: Website Properties is a brokerage firm that specializes in selling profitable online businesses. They offer a range of businesses, from content sites to e-commerce businesses.
- Motion Invest: Motion Invest is a marketplace for buying and selling profitable content sites. They offer a range of sites, from small niche sites to large authority sites.
The Buying Process
If you’re interested in purchasing an online business, it’s important to understand the buying process. Here are the steps you should take:
- Determine your budget: Before you start looking for businesses to buy, you should determine how much you can afford to spend. This will help you narrow down your search and ensure that you’re only looking at businesses that are within your price range.
- Research potential businesses: Once you have a budget in mind, you can start researching potential businesses to buy. Look for businesses that are in industries that interest you and that have a proven track record of success.
- Contact the seller: If you find a business that you’re interested in, you should contact the seller to learn more about the business. Ask questions about the business’s financials, customer base, and operations. This will help you determine if the business is a good fit for you.
- Conduct due diligence: Before you make an offer on a business, you should conduct due diligence. This involves reviewing the business’s financial statements, contracts, and other important documents to ensure that everything is in order.
- Make an offer: If everything checks out during due diligence, you can make an offer on the business. Your offer should be based on the business’s current financials and future potential.
- Close the deal: Once your offer is accepted, you’ll need to close the deal. This involves transferring ownership of the business, transferring any contracts or licenses, and ensuring that all legal requirements are met.
Remember, buying an online business can be a complex process, but it can also be a great way to become a business owner. By following these steps and doing your due diligence, you can increase your chances of finding the right business for you.
Valuation of Online Businesses
When it comes to buying an online business, one of the most important factors to consider is its valuation. Valuation refers to the process of determining the worth of a business. This is typically done by analyzing various factors such as revenue generation, expenses, and cash flow. Valuation tools can be used to help determine the asking price of a business, but it’s important to keep in mind that these tools are only estimates and should not be relied upon entirely.
One of the key metrics to look at when valuing an online business is its profitability. A profitable business is one that generates more revenue than it spends on expenses. When looking at profitability, it’s important to consider the monthly net profit of the business. This is the amount of profit that the business generates on a monthly basis after all expenses have been paid.
Cash flow is another important factor to consider when valuing an online business. Cash flow refers to the amount of money that is coming in and going out of the business. A business with positive cash flow is one that has more money coming in than going out. This is important because it means that the business has enough money to cover its expenses and invest in growth.
Revenue generation is also an important factor to consider when valuing an online business. This refers to the amount of money that the business is generating through its products or services. It’s important to look at the revenue generation over a period of time to get a better understanding of the business’s overall performance.
Expenses are another important factor to consider when valuing an online business. This includes the costs associated with running the business such as marketing, hosting, and employee salaries. It’s important to carefully review the expenses to ensure that they are reasonable and sustainable.
In terms of valuations for websites, we usually use L6 or L12 which take into account earnings from the past 6 months(L6) or 12 months(L12). Valuations are usually a multiple of monthly earnings so you will hear people say 35x or 45x which means the price is 35 times the average monthly profit(35x).
From watching the market over the past years, I have noticed that the current trend is for multiples to be dropping. In 2021 you would be more likely to be paying a multiple of 45 for a website but in 2023/2024 you can expect more like 37x
Due Diligence for Buyers
When buying an online business, due diligence is a crucial step that cannot be overlooked. It is the process of investigating and verifying the information provided by the seller to ensure that the business is as described and that there are no hidden issues that could affect its value or performance.
To conduct due diligence, you should start by requesting a due diligence report from the seller. This report should contain detailed information about the business, including its financials, traffic sources, customer base, and any other relevant data. You should also ask for access to the business’s analytics and other tools to verify the information provided.
During the vetting process, it’s important to pay attention to essential metrics such as monthly traffic, conversion rates, and revenue. These metrics will give you a good idea of the business’s performance and potential for growth. Additionally, look for diversity in traffic sources, including organic, paid, direct, social media, and referral traffic.
Another important factor to consider is the quality of the business’s backlinks. High-quality backlinks can significantly boost a website’s SEO and traffic, while low-quality backlinks can harm its reputation and ranking. Make sure to review the business’s backlink profile and identify any potential issues.
Traffic and Growth Potential
When looking to buy an online business, it’s important to understand the traffic and growth potential of the website. Traffic refers to the number of visitors to a website, and growth potential refers to the potential for the website to increase its traffic and revenue over time.
Monthly traffic is one of the essential metrics to look for while buying an online business. It’s important to look for diversity in traffic. The traffic should be a healthy mix of organic traffic, paid traffic, direct social media traffic, and referral traffic. Organic traffic is traffic that comes from search engines like Google, while paid traffic is traffic that comes from paid advertising campaigns. Direct social media traffic is traffic that comes from social media platforms like Facebook and Twitter, while referral traffic is traffic that comes from other websites linking to your website.
When evaluating growth potential, it’s important to look at the current trends in the industry and the potential for the website to expand into new markets or niches. You should also look at the website’s conversion rate, which is the percentage of visitors who take a desired action on the website, such as making a purchase or filling out a form.
To evaluate the traffic and growth potential of a website, you can use website traffic analysis tools like Google Analytics or SEMrush. These tools can help you identify your top site pages, track visitor trends, calculate conversion rates, and ensure your marketing spend translates into an increase in conversions and sales.
Marketing and Advertising
Once you have purchased an online business, the next step is to market and advertise it to attract customers and generate leads. Marketing and advertising are essential for any business to succeed, and online businesses are no exception. Here are some strategies you can use to promote your online business:
Online advertising can be an effective way to reach your target audience and increase brand awareness. One of the most popular online advertising platforms is Google Ads, which allows you to create ads that appear in search results and on websites across the internet. Facebook Ads is another popular platform that allows you to target specific demographics and interests.
Social media is a powerful tool for promoting your online business. You can use platforms like Facebook, Twitter, and Instagram to connect with your audience, share content, and build brand awareness. By engaging with your followers and creating valuable content, you can attract new customers and generate leads.
Building brand awareness is crucial for any business, and online businesses are no exception. You can use various strategies to increase brand awareness, such as creating a logo, developing a brand voice, and using consistent branding across all your marketing channels.
Generating leads is essential for any business to grow and succeed. You can use various strategies to generate leads, such as creating valuable content, offering free trials or demos, and using lead magnets like email opt-ins or free downloads.
Consulting and Brokerage Services
If you are new to buying online businesses, consulting and brokerage services can be very helpful. Business brokers can help you find businesses that fit your budget and needs, and they can also help you with negotiations and paperwork. Consulting services can help you understand the market and the risks involved in buying an online business.
When looking for consulting and brokerage services, it is important to choose a reputable and experienced company. Look for companies that specialize in online businesses and have a good track record of successful transactions. You can also ask for recommendations from other business owners or search for reviews online.
Some of the top consulting and brokerage services for online businesses include:
- Empire Flippers: Empire Flippers is a leading broker for online businesses, with over $200 million in sales and over 1,000 successful transactions. They offer a range of services, including valuation, due diligence, and marketing.
- Quiet Light Brokerage: Quiet Light Brokerage specializes in mid-market online businesses, with sales ranging from $1 million to $50 million. They offer a personalized approach to each transaction and have a team of experienced brokers.
- FE International: FE International is a leading M&A advisor for online businesses, with over $1 billion in sales and over 1,000 successful transactions. They offer a range of services, including valuation, due diligence, and negotiation.
When working with consulting and brokerage services, it is important to communicate your needs and budget clearly. Be prepared to provide financial information and answer questions about your experience and goals. With the right consulting and brokerage services, you can find a profitable online business that fits your needs and budget.
A marketplace for serious entrepreneurs who want to buy or sell their online business in safe hands.
Frequently Asked Questions
What are some reputable websites to buy established online businesses?
There are several reputable websites to buy established online businesses, including Flippa, Empire Flippers, FE International, and Quiet Light These platforms offer a wide range of businesses for sale, and they have established reputations for facilitating secure and successful transactions.
How do I ensure the legitimacy of an online business for sale?
To ensure the legitimacy of an online business for sale, you should conduct thorough due diligence. This may include reviewing financial statements, analyzing traffic and sales data, and researching the competition in the market. You can also use third-party services to verify the authenticity of the business and its assets.
What are the benefits of buying an existing online business?
Buying an existing online business can offer several benefits, such as established brand recognition, a pre-existing customer base, and a proven revenue stream. Additionally, you may be able to leverage existing systems and processes to streamline operations and increase profitability.
What are the risks associated with buying an online business?
The risks associated with buying an online business include the potential for fraud or misrepresentation, the possibility of unforeseen expenses or liabilities, and the risk of a decline in revenue or market demand. It is important to conduct thorough due diligence and seek professional advice before making a purchase.
What should I consider before buying an online business?
Before buying an online business, you should consider factors such as the business’s financial performance, market demand, competition, and growth potential. You should also evaluate the strengths and weaknesses of the business and assess your own skills and resources to determine if it is a good fit for your goals and capabilities.
What are some tips for negotiating the purchase of an online business?
Some tips for negotiating the purchase of an online business include setting clear expectations, understanding the seller’s motivations, and being prepared to walk away if the terms are not favorable. You should also consider seeking professional advice and using objective criteria to evaluate the business’s value and potential for growth. Learn more about negotiating the price of an online business here.