Last Updated on February 20, 2023 by lukesguide
Whether you are selling your online business through an online business broker or to an aggregator, the sales process can often be overwhelming and stressful. It can also be a costly exercise if you don’t prepare well and do your research when choosing the best place to buy and sell online businesses.
This guide will take you through some of the options available to you and help you choose the best places for buying and selling online businesses.
Founded in 2011, Empire Flippers provides a curated marketplace for users to buy and sell online businesses.
During the 11 years that Empire Flippers have been in business, Empire Flippers have notched up some impressive milestones.
You can check out the Empire Flippers scoreboard here but some of the highlights include an overall sales volume of more than $421 million and an average sale multiple of 37.5X over the last 12 months.
- Legitimate businesses – Empire Flippers screens and vets all businesses before they are listed on their marketplace. This is one of the major advantages of using Empire Flippers since fraudulent listings are found before they go live.
- Real data – Empire Flippers rigorously validates the figures provided by potential sellers before the business is listed for sale. If they can’t verify the figures or if something looks fishy, the business won’t be listed!
- Migration assistance – Migration can be complicated but Empire Flippers will assist with the migration of the business assets (e.g. Amazon seller central account, domain, etc.) as part of the post-completion process.
Empire Flippers will not charge the seller a listing fee.
Instead of listing fees, sellers of online businesses will pay a final value fee to Empire Flippers. The fee is calculated by applying a percentage rate to the value of the business for sale.
The Empire Flippers commission structure can be a little bit confusing. In simple terms, commissions will be calculated as follows:
- If your online business is valued under $700,000 – The Empire Flippers commission will be a flat 15% of the sale price.
- If your online business is valued between $700,000 and $5,000,000 – The Empire Flippers commission will be 15% on the amount up to $700,000 and then a slightly reduced commission rate of 8% for the portion of the sale price that exceeds $700,000 and up to $5,000,000.
- If your online business is valued above $5,000,000 – The Empire Flippers commission will be 15% on the amount up to $700,000 and then a slightly reduced commission rate of 8% for the portion of the sale price that exceeds $700,000 and up to $5,000,000. For the portion of the sale price that exceeds $5,000,000, a rate of 2.5% will be applied.
You can use the Empire Flippers commission calculator and play around with the possible commission amount payable based on your asking price.
- Curated marketplace with vetted listings to take the stress out of buying and selling online businesses
- Work out the value of your business using the free valuation tool
- Extra support with things like the migration of the asset once the business has been sold
- Empire Flippers have a podcast that features business owners talking about their online businesses which can give buyers some great insights into the online business
- Higher commissions payable for an online business for sale when compared to competitors
Sell your business on Empire Flippers
Best for bargain hunters
The Flippa name has become synonymous with buying and selling online businesses for sale.
Founded in 2009, Flippa has more than 3 million users worldwide and has sold over 300,000 digital assets.
It is probably the largest marketplace for buyers and sellers to find online businesses for sale across several platforms, utilising different monetization methods and at varying price points.
Flippa has several great features that cater to buyers and sellers alike.
- For Sellers – Flippa Private, free valuation tool, automated listing process, verified buyers, escrow service (through escrow.com), Flippa Legal
- For Buyers – Flippa Due Diligence, Flippa Finder, Flippa Financing (via SBA loan, 401(k), unsecured loans), Flippa Legal
When selling online businesses through Flippa, sellers will pay a percentage based success fee plus they will need to purchase a listing package.
The success fee component varies depending on the range that the sale price falls within.
- Sale price of $1 to $9,999: Up to $99 listing fee + 10% Success Fee
- Sale price of $10,000 to $49,999: Up to $399 + 10% Success Fee
- Sale price of $50,000 to $99,999: Up to $399 + 7.5% Success Fee
- Sale price of $100,000 to $2 million: Up to $499 + 5% Success Fee
- Sale price of $2 million or more: VIP program custom pricing
Flippa also has a price match guarantee. If you find a comparable platform that offers a lower overall success fee, Flippa will beat it by 1%.
- Huge amount of listings across several digital assets categories
- Pick and choose additional support services based on your needs (at an additional cost)
- Price match guarantee
- Level of verification of online businesses for sale not as robust as some competitors
Sell your business on Flippa
Best for buying high value online businesses
FE International is a specialized team of M&A advisors that would be best described as an online business broker rather than a marketplace. They would typically deal in high value transactions with a deal value in excess of $1,000,000.
Since 2010, FE International has completed over 1,200 deals totalling more than $1 billion.
- Knowledge transfer – FE International has sold over 1,200 online businesses and can share with sellers real world advice and guidance
- Valuation – The team will analyse several variables including traffic, financials, operations, precedents, market insight and projections to come up with a robust valuation of your online business
- Sale preparation – Based on the analysis, detailed marketing materials will be prepared for qualified buyers
- Marketing – Using their contacts, the team will market your online business to hundreds of potential buyers globally, approach a vetted pool of the right buyers through a confidential process, solicit offers, negotiate terms and identify the best offer for you and your online business
- Due diligence – Vendor due diligence preparation is key and the team will help you be ready for when buyers start their due diligence process
- Closing – FE International willhelp sellers with all aspects of closing a deal, including signing legal documentation, inspecting funds held on escrow, and transfer of the asset
- Post closing assistance – Assisting with various post-closing items such as ensuring the delivery of training to the new buyer and tracking any earn-out or deferred consideration payments
FE International does not make its commission rates publicly available. It is likely that the commission or success fee rate will vary from deal to deal.
Given the high level of service provided by M&A advisors vs a typical marketplace, the commission rate would likely be higher than platforms like Flippa and Empire Flippers so expect a commission of 10% to 25% calculated based on the final sale price of your online business to be charged.
- End-to-end support for those looking to sell their online business
- Access to a large rolodex of qualified buyers
- For buyers, high quality online business investment opportunities at your fingertips
- Potentially a higher commission payable
Sell your online business through FE International
You are not limited to any particular business type when buying and selling online businesses. This means that virtually any kind of online business can be bought or sold on an online marketplace. This includes ecommerce businesses, content sites, Shopify store, websites, domain name, or other online store.
Online businesses can be a great alternative to buying and selling brick and mortar operations since the initial capital outlay and ongoing overhead costs are generally lower.
Here are a few of the more popular online businesses you can buy and sell.
One of the easiest and most cost effective online businesses to set up are content sites and blogs. While they may be simple to set up,turning your new content site or blog into an established business that generates revenue is an entirely different matter.
For this reason, many people look to buy an online business such as a blog that has already been running for a while so that they can hit the ground running.
The global ecommerce market is expected to hit $5.5 trillion by 2022 which means ecommerce stores are in hot demand.
For most ecommerce stores, there is quite a bit of capital outlay to get started (i.e. when purchasing inventory etc.) but when dne properly, can be money printing machines.
Software as a service or SaaS businesses have become very popular over the last decade due to their high margins and recurring revenue.
There are many investors out there who would love to add a SaaS business to their investment portfolio which means there is a huge market for high quality, established SaaS businesses.
While the thought of buying an online business is super exciting, there are a few things you should think about before jumping in.
The things to look out for when buying an online business are unique and differ from the things you might look at when considering other types of small business.
Here’s a few of the things you should think about before you buy an online business.
Take a good look at the revenue generated by the business and the net profit to make sure there are some healthy margins.
It is important that you can verify or validate the numbers as well. The best way to do this is to ask the seller to provide you with ‘read only’ access to the backend of their website so that you judge for yourself whether the financials are in order.
How much traffic is the website getting? Is the traffic coming from one source or multiple sources?
These are just a couple of the questions you should be asking when looking at online bsuineses for sale.
You can also request ‘read only’ access to Gogole Analytics or use paid tools to verify the traffic volume as well as the quality of the traffic coming to the website.
A high quality online business needs loyal customers who come back again and again.
A good way to see whether a business has established a strong brand and goodwill is to take a look at customer reviews and feedback. Usually this is publicly available but you should also ask a seller for any details that may not be available to you.
Sometimes this question can go unasked and could potentially provide you with some insight into the quality of the business.
Before wiring your money into escrow for a brand new online business – ask the seller why they are selling?
There may be a completely legitimate reason for the seller to want to sell their online business but if they are evasive or sketchy when asked, that could be a red-flag.
Have a good think about the product or niche that the online business operates under.
Is it a seasonal business? Is the niche or product ‘evergreen’?
Even if a business appears cheap based on the asking price, there may be a reason for this. For example, if the business is seasonal or its core products are a ‘fad’, you might find the revenue is choppy, indicating an unsustainable business.
Buying and selling online businesses can be a lot of work but it can also be very rewarding. If you are looking to buy and sell online businesses, it pays to be prepared and do your research.
The best places to buy and sell online businesses we have covered in this guide can help take away some of the stress from the sales process.
We hope you have found this guide helpful and you are more confident in understanding where you can find online businesses for sale and where you can list your business for sale.
Are you in the market to buy an online business or do you want to sell an online business? Have you been through the sales process before and sold an online business?
Let us know in the comments below!