#1 DigitalExits.com – Best For High End Sites

Digital Exits is our #1 recommended website broker for 2018. They represent websites making $100k – $5m a year in profit. They are best if you have an established business over 2 years old making at least $100,000 per year.

#2 Flippa.com – Best for Startup and Small Sites

Flippa is great for smaller sites making under $100,000 per year in profit.

#3 FoundersIB – Best Large Companies

Founders Investment bank is great for sites making over $5m a year in profit.  They specialise in larger deals and do more strategic transactions.

Would You Like Our Help To Sell Your Online Business?

Selling a business is one of the most important financial decisions you will make. Don’t get it wrong! If you own an eCommerce, Amazon FBA, SaaS & Technology, Service Based, Adsense, Affiliate, digital products or content-based business and are considering selling or just want a valuation, the IncomeDiary recommended website broker team can help: Claim Your Free Website Valuation & Exit Strategy Today

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The history of website brokers

Classified businesses like flippa.com that sell small websites ($10k range) have opened the market to the possibility of selling your website. However you may be sitting there with a decent business on your hands that is making over $5,000 per month in net profit or even doing $1million per year in profit and you want to sell, that is where a website broker comes in.

If you research multiples on auction platforms you will find an average of around 8-12 times monthly net multiples. On a site that makes $5,000 per month that is $40,000 to $60,000 at the close of sale.

While this this may be a respectable sum, you might be sitting there thinking about all the hard work you’ve put into your site and you deserve a better return on the sweat equity you have invested.

That is why you need to find a retail buyer not a wholesale buyer.

A retail buyer is an investor that is looking for better places to put their capital than earning low returns in the bank. They want assets that are relatively hands off and have good growth trends. You won’t find these retail buyers on many of the auction platforms because they want to deal with bigger sites with more established revenue streams (minimum 2 years) and pay a premium for them.

That is where a website broker comes in.

You may get $40,000 for your website from a wholesale buyer. Whereas with a retailer buyer you can fetch anywhere between 2-5 times yearly earnings, with the average around 2-3 times yearly net earnings.

Would you rather $40,000 or $180,000 for selling your business?

Website brokers introduce you to retail buyers.

What is a website broker?

The primary function of a website broker is to help webmasters sell their web business.

Your site will get evaluated and then presented in a way to gain the highest possible price.

In that process there are a number of tasks performed to try and maximise price:

• Determine an appropriate valuation range
• Compile an information memorandum (sales memorandum)
• Market the website
• Present the website to potential buyers
• Draft and present offers
• Assist in negotiation on behalf of the seller
• Protect sellers’ confidentiality
• Look after paperwork
• Provide after-sales support.

How does it work?

The process is similar to that of a realtor (real estate agent). You approach a website broker looking to sell. You enter into a sales agreement with them. This is normally an exclusive agreement that is valid for 90 days. The broker will then prepare the information memorandum about the website to be used to show potential buyers. In this document is all the relevant information about the website, its financials, traffic stats and answers to general questions.

The broker will then go out and sell your website to potential buyers. Screen them with their screening process and present you the best offers.

The buyer will normally sign a letter of intent (LOI) and ask for  a set period for final due diligence. It is your choice as the buyer as to whether you allow this to be exclusive or not

They will make a formal offer after due diligence, you will either accept or decline that offer.

Then the transfer process happens. Money is normally transferred using an escrow service. That can either be the brokers trust account, a lawyers trust account or an escrow service. We prefer our own service or escrow.com. The site is then transferred to the new owner, the seller receives their funds and the buyer will take ownership of the website.

What is your online business worth?

What your online business is worth is relative to your individual business, the market and what potential buyers are willing to pay. However, there are some common questions to consider, including:

• What are the sales and profit?
• How big is the business?
• What are the growth trends?
• What channels do new customers come from?
• What is your market position?
• How reliant is the business on the owner?
• What systems and processes are in place to run the business?

Your business is also worth what similar businesses have sold for, we recommend you checkout this website appraisal report that analyses past transactions for internet businesses.  In the report it analyses $380m over 714 transactions.

Which Website Broker should you use?

Marketplaces – best for smaller websites (business value under $100k) – Smaller business and micro-businesses are usually best sold privately by the owner through forums or classified websites.

To sell your small business, check out:

• Flippa – the best marketplace for buying and selling small websites

Website Broker – best for medium businesses (business value $100k – $25m) – Medium sized businesses in the $100k-$25m valuation range are best sold through brokers who help with finding buyers, negotiating and structuring the deal.

To sell your medium sized business, we recommend:

• Digital Exits

Small M&A Forms or banks – best for larger businesses ($25m +) – Larger businesses are best sold through investment banks or merger and acquisition companies.

To sell your large business, check out:

• FoundersIB

What is the time frame for selling an online business?

Anywhere from two weeks to 6 months. Factors that influence timing of sales include getting access to the relevant website information from the seller, negotiation time and sellers getting finance available.

Who will buy your business?

They are a lot of potential buyers on the market for ecommerce businesses. Through experience, many of them fall into one of the following personas:

• Corporate Guy – This is someone looking to buy his or her first business. They usually are a high paid employee or C-level executive with disposable cash, IRA, savings or access to an SBA loan. They generally buy businesses up to $1m.
• Entrepreneurs – These are either online or offline entrepreneurs. They are generally either looking for a business to add to their portfolio or looking for their new venture. They don’t have any size of business that they buy. It is usually dependant on the buyer.
• Private Equity/Media Companies – Companies that look to keep the existing management in place and grow the business through varying sized stakes in the business. They generally acquire larger businesses in the $4m plus valuation range

What does a website broker cost?

A website broker will generally charge 10% of the gross sale price to sell your website. If the site is smaller some brokers charge up to 15% for the transaction.

Are website broker fees charged up front?

They are 100% commission based.  They do not make any money until they sell your website so there is a low level of risk of listing your site with them.

How do I get a higher price for my online business?

• Premium money is paid for:

• • With premium domains
  • Have an existing active community
  • Make recurring yearly income
  • Have multiple income streams
  • That are highly systemized
  • Have strong earnings history

What if I can’t sell my website?

A website broker will ask for a 90-dayexclusive agency period. Good brokers have a clearance rate of about 80%. Main reasons for a site not selling is generally price related and the seller wanting more money than the market will offer them.

Do You Buy Websites?

Join Our Website Buyers List

Whether you’re looking for a Blog, content-based business, eCommerce, Amazon FBA, Adsense or Affiliate website we have exclusive opportunities not found anywhere else!

Are you considering selling your online business?

=> Claim Your Free Website Valuation & Exit Strategy Today

The post The Best Website Broker of 2018 appeared first on How To Make Money Online.

This post was contributed by the team at www.digitalexits.com – is you are looking to sell your ecommerce business they are offering a free valuation for all income diary readers.

You have grown your ecommerce business over time with a lot of time and effort and now you are looking to sell. You want to get the highest price possible and you are looking at the options as to what you can do to sell the business. We will cover all of the questions you have about using an ecommerce business broker.

Would You Like Our Help To Sell Your Online Business?

Selling a business is one of the most important financial decisions you will make. Don’t get it wrong! If you own an eCommerce, Amazon FBA, SaaS & Technology, Service Based, Adsense, Affiliate, digital products or content-based business and are considering selling or just want a valuation, our recommended website broker team can help: Claim Your Free Website Valuation & Exit Strategy Today

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First let’s start with the number one question that every business owner asks us…

What Is Your Ecommerce Business Worth?

Always the first question that we get asked at Digital Exits by clients is what is my business worth? The answer to any valuation question is what the market will pay. The below graph shows the distribution of the multiples that ecommerce businesses sold in a report that we analyzed.

The multiples range from 0.5X to 6.6X in this distribution graph. This means if you have a business that makes $300,000 in net profit per year, the valuation range is from $150,000 to $1.980,000. Visually what you can see from the graph is that most businesses sell between the 1.5X – 3.5X range. This backs up the commonly held belief that a small to medium business sells in the 2-3times earnings valuation range.

Are bigger ecommerce businesses worth more?

Yes. The large the business the higher the value that the business will sell for. As you can see from the graph the larger the business the higher the selling multiple. So a business that sold for 6 million on average sold for a multiple of 3.5 times earnings which would mean that it was making $1.7 million in profit per year.

What Is An Ecommerce Business Broker and What Do They Do?

An ecommerce business broker sells established ecommerce businesses. The role of the business is as follows.

• Value ecommerce businesses
• Develop a selling document
• Market the business to qualified buyers
• Field offers
• Assist with due diligence
• Assist with deal closing
• Manage the admin

How Does The Process Work?

The selling process if fairly straight forward but can be more complex and take more time depending on the size of the business. In general, most sales will be structured like this:

1. Learn what your business is worth with a valuation
2. Digital Exits prepares the selling document
3. Market your business to qualified buyers
4. Negotiate an offer
5. Transfer the assets & money
6. Help train the new buyer

Why Would You Hire A Broker?

There are two main benefits of using a broker:

• Qualified buyer database
• Knowledge and expertise in the deal making process

What you don’t have as a business owner is a network of buyers that are looking to buy businesses like your or the knowledge or time to go through the process

How Long Does The Process Take?

The graph below represents the summary of all the deals that we have completed and the time it took to complete them on average. As you can see, over 50% of deals close within 90 days and over 70% close within four months. The reason this is so fast is that there is a lot of demand to acquire established online businesses.

How Much Do They Cost?

An ecommerce business broker will charge around 10-12% of the total selling price.

This fee is due due upon the success of the deal so if you don’t get paid they don’t get paid.

How Much Should My Business Be Making to Engage A Broker?

If you business is making up to $3,000,000 in net profit per year then a broker will be able to assist you in the sale. If you business makes more profit than that we suggest you use a small market mergers and acquisitions firm. Please contact us for recommendations on the best company to work with.

Why do buyers say “No”?

Here are some of the main reasons a buyer will say no to a deal:

• They just don’t like the business
• The niche isn’t a fit
• They can’t verify the stats and data
• The find something in the due diligence that makes them re-consider the offer
• The price is too high
• The funding of the buyer falls through

Are you considering selling your online business?

=> Claim Your Free Website Valuation & Exit Strategy Today

Are you looking to buy a Website or Blog?

=> Then Join Our Website Buyers List…

Whether you’re looking for a Blog, content-based business, eCommerce, Amazon FBA, Adsense or Affiliate website we have exclusive opportunities, often not found anywhere else!

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The post Best Ecommerce Business Broker To Sell Your Ecommerce Website appeared first on How To Make Money Online.