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Buying Online Businesses We Make the Process Simple

Buying online businesses isn’t easy, but we want to make it as simple as possible for everyone who visits our marketplace.

We noticed a lot of the same questions get asked and we wanted to compile them all into one resource to have any questions you may have answered. Below is a short video that explains our buyer process in full details.

Frequently Asked Questions for Buying Online Businesses

Why don’t you reveal the URL’s on all of your listings?

We hide the niche and URL on our listings to protect the (future) buyer from additional, unnecessary competition.

We sometimes have thousands of visitors in one day to our site – some of whom are searching the web for profitable niches and websites they can copy and replicate.

While some websites are deeply entrenched as market leaders in their niche and are defensible (i.e. an eCommerce business with product sourced in China that has great press, brand recognition, etc.) others are earlier in their life-cycle and still need some months/years before they’re ready for direct competition. (i.e. an early dropshipping company that’s just starting to get a name for themselves or relying on the brands they list to drive sales)

Most of our buyers appreciate the fact that there won’t be thousands of others investigating the niche and dozens of others looking to copy or replicate the business’s success.

How do I buy a business from your marketplace?

The first step would be to visit our marketplace to see what sites we have for sale. We flesh out all the details of the business and show various screenshots of their revenue and traffic data directly in the listing. The URL will not be shown unless you unlock the listing.

You can choose to either unlock the listing for more info or buy the business directly. To purchase, click the Buy It Now button and send the bank wire. All sales are final and we make no guarantees, expressed or implied.

In any instance where we receive multiple wires for the same business, we follow a “first in” policy. The first wire we received gets the purchase and the others are refunded. There is a way to make sure you get the deal and “win the wire race” by leaving credit on file with us. You can read more about Winning the Wire Race here.

If you’d like us to hold funds in anticipation of a sale, please contact us.

How do you determine a business' price?

During our vetting process, we look at the business’ history of earnings and traffic to make sure both are stable and pass our verification process. Once they’ve been qualified, we list a business based on a multiple of net monthly profit.

Here’s the formula we use:

List Price = Monthly Net Profit X Multiple

Net monthly profit is usually determined by looking at the previous 12 months of revenue, subtracting any costs (COGS, marketing/advertising, hosting, virtual assistants, content, etc.) and dividing by 12. In some instances we may use less than 12 months to determine averages. This will be clearly mentioned in the listing.

The multiple used can range from 20X to 60X or more depending on a wide range of variables. To get a good estimate, please see our Valuation Tool.

Here are a few examples:

Example 1: Content-based Amazon Associates site that’s made $102,000 in net profit in the last 12 months.

We’ll take the 12-month average ($8,500) and multiply by the multiple (28X for example) to determine the price. ($238,000)

Example 2: Dropshipping Halloween site that earned $900,000 in gross revenue Sep/Oct/Nov  and $135,000 in net profit. It’s made $1.2 million in yearly revenue with $180,000 being the net profit. They’ve got inventory value with a wholesale value of $72,000.

Because the site is seasonal, we’ll look at the average net monthly profit earnings from 2015 ($15,000/month) and multiply that by the multiple (Let’s use 30X or $450,000). With $72,000 in inventory, that puts the price of the site at $522,000. Though it’s worth noting that wholesale inventory is not included in the initial list price on our marketplace as it is negotiated between the buyer and seller.

Example 3: Lead generation site in the education niche that earned $192,000 over the last 12 months with $100/month in hosting costs and $900/month in paid traffic.

The site has made $16,000/month in gross revenue, but we’ll subtract the $100/month and $900/month worth of costs, putting the net profit at $15,000/month. We’ll use the Valuation Tool to determine the multiple. Assuming we use a multiple of 30X, the site will list for $450,000.

What does unlocking a listing get me?

Sellers are much more forthcoming with prospective buyers once they’re sure someone has taken steps toward a purchase. This is where unlocking comes in.

In short, unlocking a listing will grant you access to the URL, detailed traffic/earning reports, ability to ask the seller questions, etc. You’ll then be what we call a “verified buyer”.

Also, if an offer below list price is accepted by the seller, the offer will be circulated to active verified buyers of the listing during a 24-hour window. This gives others an opportunity to beat the below-list price offer.

Who handles the migration?

We’ll handle the migration process with both you and the seller. In a Zendesk ticket, we’ll ask you for hosting details, registrar, and monetization codes if applicable (i.e Amazon Associate tracking links, Adsense codes etc.). Once you provide the required information, we’ll begin the migration process on your behalf.

Will I get to contact the business seller?

Once you’ve unlocked the listing, you’ll have all the information you need to start your due diligence and ask any questions you may have about the business. For listings over $100,000, we’ll pass the questions to the seller as we handle communications between both parties. Unlocking these larger listings also gives you the ability to schedule a call with the seller of the business in addition to asking them questions directly from the listing. A member of our team will be on the call to mediate and provide any explanations about our business process.

So what about listings under $100,000? For these listings, calls with the seller are unavailable, but you’ll be able to ask them questions directly from the listing page. You should see a button at the top of the unlocked listing to list your question(s).

If you decide to move forward with the sale, we will put both you and the seller in direct contact when required. Once the purchase has been made you will be in direct contact with the seller and us.

Do you provide due diligence reports?

No. While we put all of the sites we list through a rigorous vetting process that includes both automated and manual checks by several of our staff, ultimately each buyer is responsible for their own due diligence on every business purchased.

You are, however, free to perform your own due diligence after unlocking the listing and receiving all of the details about the business. We recommend Centurica as a 3rd party provider of due diligence reports, but you’re free to use whoever you’d like.

What’s involved during the vetting process?

We have a rigorous, multi-step process for vetting sites that includes both the use of automated tools and manual checks by two or more people. The vetting process checks both:

The Seller

Is this a real person or a fake profile? Do they have permission to sell the business? Do they have social media profiles that match and are legitimate? Were they transparent about both the opportunity and the risks involved? Did they properly disclose traffic methods, linkbuilding, etc.?

The Business

Can we verify the earnings and that they belong to this business? Is there any paid or undisclosed/sketchy traffic sources? Do the earnings-per-pageviews match other sites in this range or industry? Is the backlink profile clean or properly disclosed by the seller?

While it is still the responsibility of each buyer to do his/her own due diligence, our vetting process ensures that you’re not wasting your time with sites that aren’t worth reviewing.

There’s more to it than we can cover here, but we go into more depth regarding our vetting process and due diligence in this podcast episode.

How recent are the business’ prices?

We ask sellers for revenue report updates at the beginning of each month. If/when sellers have fallen behind and the pricing has changed, the buyer will be refunded any difference and/or asked to pay any increase in pricing. (If they choose not to, they will be refunded in full.)

Can I sell the business later on your marketplace after I’ve bought it from you?

Of course! – Although any site being resold on our marketplace will have to go through the same vetting process again.

Have a Specific Query?

Use our contact page to submit your question.