So you’re thinking of buying an online business? Congratulations! This can be a very lucrative decision, especially if you do your homework and buy the right online business.
This comprehensive guide will walk you through buying your own online business. We’ll start by discussing what to look for when buying online businesses for sale and then move on to a list of websites where you can purchase one. Finally, we’ll give you some tips on making the purchase.
Are you ready? Let’s get started!
The Best Websites for buying an online Business
You could use many different online marketplaces when buying an online business. This list should give you a good starting point:
1. Flippa
Flippa is the most popular marketplace to buy and sell online businesses, with over 300,000 businesses sold.
It is an auction website in which sellers post their businesses up for sale, but buyers can also buy directly from them. You can also use their “Buy It Now” feature to purchase businesses that are not auctioned off.
Before any transaction may be completed on their platform, both buyers and sellers must complete identity verification.
Flippa offers an easy buying interface that allows you to view all the listings, filter them by type of business, profit generated per month, or industry and search for specific keywords.
Flippa’s main advantage is its vast selection of businesses to choose from, but this can also be a disadvantage as it can be challenging to find the right established business for you amongst all the listings.
Another great advantage is that buyers can buy the “Flippa Due Diligence” service which will do a full review of the business for you. This usually costs between $1,000-$2000.
Many of their listings are presently e-commerce sites, with the next most popular being content websites.
Pros:
- They provide information for their buyers on their website listings (e.g., Verified Google Analytics, extended due diligence information from Alexa, SEOMoz, etc.)
- It has many different online businesses available at various price points, so there’s something for everyone.
- They have pretty extensive search options.
- Buyers can negotiate directly with sellers before making their purchase!
Cons:
- The bidding process can be time-consuming if you’re not familiar with it.
- Flippa is a buying platform, so no other services are offered, such as website management or marketing.
- There are mixed reviews on their customer support services.
2. Empire Flippers (EF)
Empire Flippers is an online buying and selling marketplace where buyers can purchase an existing online business for sale from sellers directly without bidding on them first.
They have been in operation since 2007 with almost $400 million worth of transactions under their belt!
Users must verify their identity and provide evidence of funds through their platform.
Pros:
- Empire Flippers is a company that specializes in offering high-quality online assets and has tight quality control procedures to guarantee that each offer on its marketplace is viable.
- You can purchase businesses directly from sellers without going through a bidding process.
- They handle everything to do with transferring the website to a new owner.
Cons:
- You can barely find any deals below $30K.
- As a buyer, you’re searching for bargains. If Empire Flippers has already completed the necessary research for you, there’s a smaller chance of discovering those hidden gems and making a significant profit.
3. Shopify exchange marketplace
Shopify is, as you probably know, a popular eCommerce platform. In the Shopify exchange marketplace, users can buy and sell online eCommerce websites built on the Shopify platform.
This can be an advantage because it means that you’ll have access to a wide range of businesses with different niches and industries, as well as those that are already optimized for sale.
All businesses listed on the Shopify marketplace have been verified by their team, so you know that they are legitimate businesses.
The Shopify marketplace offers buyers a wide variety of services, such as escrow service, website management, and legal assistance.
Pros:
- Shopify provides a buyer’s guide will be provided for free. It will educate you on all of the trade regulations.
- Gain access to actionable insights like traffic, demographics, profit margin, and more.
- Shopify properly scrutinizes online businesses to derive accurate analytics and traffic details.
- It comes with free valuation tools to help you put the correct price tag on your business.
Cons:
- Some of the e-commerce stores are crap.
4. FE International
FE International is a website broker that helps businesses sell online businesses. They have a high conversion rate for sales because of their specialists and the support they give throughout the sales cycle.
SaaS, eCommerce, and content websites are the primary areas of focus for FE International.
As a buyer, it’s important to know that all of the properties they sell go through due diligence, so you can be confident that only verified and established locations will appear in the market.
They offer a wide range of services such as website valuation, Due diligence, Marketing & PR, and more.
Pros:
- You’re buying an already established online business with an existing customer base and revenue stream.
- The company has extensive knowledge in brokering online businesses and can provide valuable insights to the buyer.
- They offer a wide range of services that cater to the needs of buyers and sellers.
Cons:
- The company is not as big as others on this list, so fewer options may be chosen.
- You need to have a certain level of financial liquidity to purchase a business through FE International.
- Limited business listings and generally have a very high price tag.
5. MicroAcquire
MicroAcquire is a startup acquisition marketplace that helps entrepreneurs buy small businesses. You can Filter startups by category, price, revenue, profit, and more to find the best match.
You can measure a startup’s past and projected performance using key success metrics, including monthly recurring revenue (MRR), customer lifetime value (LTV), customer acquisition cost (CAC), and many more. Estimate your ROI and make better acquisitions.
The negotiations are conducted directly between the seller and interested potential buyers. You have complete control over the process.
This may be frightening for a first-time buyer who is unfamiliar with the industry. This, however, is something that experienced buyers and sellers can appreciate.
Pros:
- Instantly connect with founders to evaluate critical metrics
- Great resources for the micro acquirer community (eg, valuation calculators, webinars, Facebook community)
- Get non-dilutive acquisition financing from Pipe (SaaS) and eCommerce Lending (eCommerce)
- MicroAcquire doesn’t charge any commissions, and it’s free for both the buyer and seller.
Cons:
- You cannot see more details on the opportunity if you do not subscribe. This service costs $290 per year.
6. SideProjectors
SideProjectors works for any online business, including eCommerce stores, content sites, SaaS tools, and more.
Pros:
- Search for projects by category, stage (an idea or established business), location, and more.
- Get in touch with online business owners directly to learn more about their business model and how they’re doing it.
- You get real-time project deals on Slack.
- It promotes high-quality business listings on the homepage, newsletter, blog, Twitter, and Facebook.
- You can contact the sellers directly.
Cons:
- Some of the businesses listed are not verified, so you need to do your due diligence before buying.
- The website doesn’t have a lot of data for each business listed.
- You need to have a certain level of financial liquidity to purchase a business through SideProjectors.
7. Acquirebase
Acquirebase is a newer marketplace for free buying and selling online businesses.
The buying process is simple; just browse through their listings and offer the business you’re interested in.
Pros:
- 0% commission on successful sales
- Unlike other marketplaces, it doesn’t ask you to pay for unlocking offers.
Cons:
- There are fewer businesses available on Acquirebase when compared to other websites, so your options might be more limited.
What is an online business that is profitable?
One of the first things you’ll want to consider when buying an online business is what type of business is profitable.
The best way to figure this out is to do some research on your own and look for businesses that have a proven track record of profitability.
There are many types of profitable online businesses to choose from:
Blogs
Blogs (or other content publishing websites) that make money by displaying ads or affiliate marketing links to drive traffic to their website to increase revenue; these include news sites like Huffington Post for example. Buying a blog will be a quicker route than starting your own blog.
eCommerce Store
An eCommerce business that sells products directly on their site instead of through an external marketplace like Amazon; examples include Shopify and Etsy shop owners who run successful online stores selling handmade goods.
Mobile apps
They can be a highly profitable online business if they solve a problem or fill a need that isn’t currently being met by any other app on the market.
Saas Businesses
Software as a service businesses are becoming increasingly popular. They offer a recurring revenue stream that is typically relatively high.
Once you’ve decided on the type of online business you’d like to purchase, it’s time to start doing your research.
What Should You Look For When Buying an Online Business
Once you’ve decided on the type of online business you want to buy, there are a few things you’ll want to look for before making your purchase.
Here are some key factors:
Monthly Traffic
How much traffic does the website generate each month? This is a good indicator of whether or not the business is healthy and has growth potential.
Also, be sure to look at where the website is generating traffic from (traffic sources):
- How much traffic is organic (meaning people found the website through search engines) or
- Is it paid traffic (meaning they are buying ads)? The latter can be a red flag, as it could mean that the business is not profitable enough to sustain itself without paying for advertising.
- Social media traffic is also a good indicator of the website’s popularity.
- Direct (people who have typed in the website’s address directly into their browser) is typically the most engaged and valuable traffic, so you’ll want to make sure there is a healthy amount of it.
Annual Revenue
How much annual revenue does the business generate? This will give you an idea of how successful the online business is and whether or not it is generating a profit.
Be sure to look at both the top-line revenue and the bottom-line profit (after expenses are deducted). If the website isn’t making money yet, is there growth potential?
Be sure to look at the sources of revenue as well:
- Paid advertising
- Affiliate marketing
- Product sales
- Selling services
Again, the mix of revenue sources can be a good indicator of how healthy the business is. If the majority of revenue is generated through one source, that’s something you’ll want to take into consideration when making your purchase.
Expenses
What are the business’s monthly expenses? This will give you an idea of how much money the website is making (or losing).
Some ordinary expenses to look for include:
- Hosting/domain name fees
- Web development or design fees
- Marketing expenses
- Advertising costs
- Salaries (if the business has employees)
- Operating costs like rent, electricity, and water bills
Growth Potential
How much potential does the website have for growth? This is an important factor to consider, as a business with lots of growth potential will be more valuable than a plateaued one.
Some things to look for include:
- The website age – an old domain name that has been around for a while and has a strong history is more likely to have the potential for growth than a new one.
- The website’s Alexa ranking is a measure of how popular the site is, with lower numbers being better.
- Social media presence – The number of social media followers the website has. If it has a large following on Facebook, Twitter, or Instagram.
- The market size – is the website targeting a large or small market? A site targeting a small niche may have more room for growth than one targeting a large, crowded market.
- The competition – how many other websites are competing in the same space as this one? If there are many competitors, the business will have to work harder to stand out and may not have much room for growth.
Ease of Transition
How easy is it to take over the website? This is an important factor to consider, as you’ll want to make sure that whoever buys the website can quickly take over ownership and management of it.
Some things to look for include:
- The website’s domain name and hosting – these are two of the most important aspects of a website, so you’ll want to make sure they’re both in good condition and will be easy for you to take over.
- The site’s content – most websites have some content (articles, blog posts, etc.), so you’ll want to make sure it’s something you can efficiently work with.
- Customer service procedures – If there is an existing team in place, how well-trained and communicative are they? One of the biggest challenges when buying online businesses is transferring all customer service procedures over to you.
- If this is an eCommerce store, find out how they source their inventory and how easy it is to work with their suppliers. Remember, you have not built a relationship with them, so it’s important to have a plan in place.
The Bottom Line
When buying an online business in any industry, it’s essential to research and make sure the website is healthy and profitable. By considering these key factors, you’ll be in a better position to make an informed purchase.
Buying an Online Business at an Auction Site
One of the best places to buy an online business is at an auction site. A few different auction sites specialize in buying and selling businesses, and they can be a great place to find deals on websites.
The 3 most significant advantages of buying an online business at an auction site are:
- you can get a good deal on a website that is already established and profitable, and
- There is a wide variety of businesses, so there is a wide selection
- Those who are experienced in due diligence and buying online businesses can find favorable deals.
When buying an online business at an auction site, it’s essential to keep the following in mind:
- Be sure to do your research before buying an online business at an auction site – make sure to read the seller’s listing carefully and ask any questions you have about the business. Also, be sure to factor in how much work will
- You may not see as much information about the business as you would if you were buying it through a broker or directly from the website owner.
- The auction process can be competitive and stressful, so make sure you’re prepared for it.
Buying an Online Business Through a Broker
While buying directly from the owner may seem like the easiest option, there are some cases where hiring a broker can be helpful.
For example: if you are buying an eCommerce store or website that has been around for years and has great sales figures and traffic, then it might cost $100k+ to buy outright.
In these situations, brokers come into play (if the seller decides to go through a broker) because they provide a more reasonable way for buyers and sellers to come together.
The broker will usually have a pre-existing relationship with the seller, so they can act as an intermediary and help negotiate a beneficial deal for both parties involved.
Purchasing websites through brokers can be a more expensive option, but it does have some advantages. Brokers will:
- Value eCommerce businesses
- Develop a selling document
- Market the business to qualified buyers
- Field offers
- Assist with due diligence
- Assist with the deal closing
- Manage the admin
On the other hand, they can have their own downside. Some of these include:
- Brokers will likely charge a commission (usually between 5-15%)
- There is no guarantee they will be able to find a buyer for you
- The process can take a long time (sometimes months or even years)
Buying a Business From the Website Owner
Buying an online business directly from the website owner has a few benefits:
- You can see more information about the business (including financials, traffic stats, and more).
- The process is usually faster than buying through a broker or auction site.
- You may be able to get a better deal if you buy the business outright.
Some things to keep in mind:
- Most important, you will need to do your own due diligence
- Make sure that the website owner is actually the legal owner of the business.
- Check to see if there are any pending lawsuits or other liabilities associated with the business.
- Get a detailed breakdown of the site’s traffic stats and revenue.
Conclusion
There are various ways to buy an online business – from buying directly from the owner to using a broker. It’s essential to do your research and understand each option before deciding. If you’re not sure where to start, then reach out to one of the many brokers or website owners out there, and they will be more than happy to help.