When I speak to my investor base, they often ask me where I go to find Internet Businesses for sale. I tell them that finding large amounts of deals isn’t the hard part. Weeding them down to the deals that with high potential, solid returns and low risk is the tough part. So,
I thought I would share a few of the places that I go to find internet businesses for sale, whether they be content sites, eCommerce, digital products, software as a service, or any other type of model. First off, deals can be either be considered On-Market or Off Market.
- On-Market deals are businesses for sale that are actively being marketed directly by the seller, through a broker or some other intermediary (such as a lawyer or friend). Typically, the seller or broker has done their research and understands the value of the business and has posted the business for sale on a number of boards and sites to maximize the visibility to potential buyers. These deals tend to have a lot more competition and therefore sell for a higher multiple and more quickly.
- Off-Market deals are typically businesses where either the seller has just recently decided to sell and hasn’t yet connected with a broker or may not be aware that their business has value and that there’s a market out there. Either way, the sale of the business has not been advertised to the general public. With less competition, there is often an opportunity to get a better deal with Off-Market deals.
Where to find On-Market Deals
Market Places
There are a number of market places that allow brokers and business owners to post their business for sale to the public.
- www.flippa.com – is by far the largest listing for websites for sale. They also sell domain names and apps. Pricing will depend if the seller is using flippa’s auction functionality (in which you pay $29 to list and then 12-15% depending if you use their escrow services) or if you are just listing the website on their classified site (the cost is $9).
- www.Bizbuysell.com/buy – this marketplace has all types of businesses. The search functionality is quite good with a lot of options upfront such as cashflow, revenue, and price range. You can even click on “show Relocatable listings” which focus on businesses that can be run from anywhere. You can save your searches and have results emailed to you
- Bizquest.com – this marketplace also has all types of business listings. It’s important to select “Internet Related” in order to ensure that you’re getting online businesses for sale. What is great with this site are the email alerts that you can customize based on your price point, type of business, area, etc. Each day they’ll send you new postings.
- Businessbroker.net/ – This marketplace is more than just online businesses and even includes franchises. The site provides a great breakdown of industries when you search and has a lot of nice features.
- Bizsale.com/ is a market placed focused more on the For Sale By Owner market.
- Businessforsale.com/buy-a-business – Straightforward marketplace for finding businesses.
- Globalbx.com/ – Although the GUI has no bells and whistles, you can find some solid listings on their internet business for sale site.
- Dealstream.com/
Brokers
Many established sites today are sold by online business brokers. Similar to real estate brokers, online business brokers help the buying/selling process by helping the seller put all the information together that a buyer needs to know, manages the marketing and buyer aspects of the listings and helps the seller maximize the value of the sale. They have full fiduciary responsibility to the seller and charge sellers a steep 10-15% of the total sales price as commission.
Many of these brokers work hard to secure sellers and protect their relationship with their clients to ensure buyers do not go directly to the seller in fear of getting bypassed and losing on big commissions. From a buyer’s perspective, a good broker can be a tremendous help in gathering the information required to make the right decision on a deal, allow access for due diligence, set expectations with new sellers and help with the transition of ownership once the deal is completed.
I work with a lot of these broker so I’m not going to rate them (that’s just bad form) but here are the larger ones in this space:
Classified Ads
Businesses have been sold for decades though classified ads and although most businesses for sale on classified ads are standard brick and mortar, there are times where internet businesses are posted. Since it is rare to find online businesses in classified ads because most sellers use marketplaces and brokers, when you do find one, there will be less buyers looking and therefore less competition.
Here are just a few examples of online classifieds and there are always local newspapers as well:
Where to find Off-Market Deals
There are opportunities to find better deals by going Off-Market; that is finding sites for sale that are not currently being advertised. This is usually more challenging and requires work or funds in order to do so.
Also, since the owner of an Off-Market deal typically hadn’t thought of selling his business, be prepared that they wont have their financials in order, may not know the answer to your questions on the fly and may not be able to explain their business as well as those who have been coached by broker.
So the process may take longer, however, this also means they may be more honest about some of the pitfalls and challenges. Due diligence is that much more important on Off-Market deals.
Buyer Broker
Buyer brokers represent the buyers and try to find online businesses that fit what the buyer is looking for. Typically, they charge an upfront fee to search on your behalf and then a percentage of the closing (2-5%). It is the buyer who is responsible for paying this amount.
I recommend you be careful with buyer brokers that are also seller brokers as they typically try to make money on both sides and the fiduciary responsibility starts getting blurred.
Outreach
Essentially, this is where you look around the internet to find online businesses you would be interested in purchasing, connect with owners of sites and convince them to sell. The opportunity can be lucrative because many folks may not be aware that there is a marketplace for their online business.
If they have lost interest in the site or need capital at the time, you may be lucky and get a quick sale at the price point you offer. There are however chances that the owner says thank you and then goes out, realizes there is a large market place and markets it themselves or through a broker.
It’s a chance you take but the work can be well worth the return if you get good deals.
Networking
This is by far the best way to get Off-Market deals. The more people you speak to and connect with the more likely someone will find an opportunity for you. Let everyone in your network know that you buy and sell passive profitable website.
I would even recommend offering a finder’s fee (say 2-5%) of the purchase price if a purchase happens through an introduction Seller’s love to be referred to buyers because it means they don’t need to spend time finding a broker and then paying commission fees of 10-15%.
The best ways to network are through Linked In, email marketing, conferences, meetups, facebook groups, associations, other brokers and more. Yes, I said other brokers. In some cases, if brokers know you’re the real deal and that they can get a quick sale through you, they may offer you deals before they hit the market.
So bottom line, let everyone know that you are in the business of buying internet businesses
Conclusion
Good deals can be found both On-Market and Off-Market. The goal is to review as many deals as possible to better understand the changes in the marketplace and what a good deal versus a bad looks like.
A different approach and different expectations are required when dealing with On vs Off Market deals but once you understand how to approach each you can find a great buy to maximize your return on investment, while minimizing risk.
I’d love to hear from you around what resources you use to find On and Off Market deals to continue to grow your online internet business portfolio