A profitable affiliate site is a highly desirable asset to own.
In the past few years, affiliate sites have gone from being relatively unknown and are heading towards mainstream investments. This has brough about high net worth individuals and private investment firms, all looking to get their hands on successful affiliate sites.
While this is great for you as a seller as it drives multiples and sales prices up, it also means that buyers have become increasingly savvy.
To get the most money possible for your exit you need to know what you’re doing. Fortunately, we’ve helped people buy and sell a few affiliate sites over the years (hundreds and counting!).
Read this post to find out everything we’ve learned along the way.
When’s the Right Time to Sell?
This is a frequently asked question, especially by first-time sellers, and there are a few things to think about.
Why do you want to sell?
It’s an obvious question, but asking yourself this can help you figure out the best strategy to take. For others, there may be a need to sell immediately in order to pay for something in their personal life.
Whether paying off debts or purchasing a home, the idea of selling is receiving a lump sum that can be anywhere from 20 to over 60 times your average monthly net profit.
How to Maximize Your Profit
If you’re not in a hurry to sell, exit planning can help you figure out when the best time is to sell and how to get the most money from your sale.
To begin, you must first assess the worth of your affiliate business. We’ll get into how this is determined later on, but it’s likely to be the most important consideration in whether or not you’re ready to sell your site.
If you want to find out how much your affiliate store is worth, then check out our valuation tool. It’s completely free to use and will give you an accurate estimate as to what your site could sell for based on current market data.
After you’ve done this, it should be easier to decide if you’re prepared to sell. Maybe you have a certain amount of money in your head that you want to achieve before selling.
There are a few things you can do to make your exit better, if you aren’t already doing so. You may also set up processes to guarantee the transaction goes as planned.
To learn more about these processes, you may wish to consult with an industry expert—someone who lives deal-making on a daily basis. You can set up a free call with one of our seller advisors who will give you exit-planning advice tailored specifically to your business.
This does not imply you must sell, but it can assist you in determining whether your site is ready to sell, from a logistical standpoint. This advice will enable you to choose the most lucrative exit for your business.
It doesn’t matter whether you use the popular Amazon Associates affiliate program or you write product reviews that have more of a niche affiliate marketing program. We have examples of selling almost any kind of site so would be happy to give you some advice.
We’ll also go over some tips for planning your exit in the Preparing Your Business for Sale section below.
Opting for a Private Sale
It’s critical to choose where you want to sell your site carefully, not just in terms of which business broker you’ll utilize, if any, but also whether you’ll go the private sale or brokerage route.
A private sale is a sale in which you take care of everything. This may be done by finding potential buyers on your own or utilizing a website such as Flippa to post the ad for your company.
The major disadvantage of this technique is that you’ll be required to do the bulk of the lifting in terms of vetting, communicating, and negotiating with prospective buyers. You’ll also have to transfer the firm to the new owner, which is frequently neglected when thinking about a sale.
If you take this path, however, privacy is not always an option. You may not have any say in who has access to your actual store.
The most effective way to almost entirely eliminate the possibility of tire kickers and copycats is to withhold your affiliate’s website URL. Only verified buyers should be able to see this delicate information.
The advantage of this is that you won’t have to pay the fee for using a broker. If you’re OK with doing more work, this may be something to think about.
Working with a Broker
Brokerage services are useful for people who don’t have a buyer contact list or the skills to complete a transaction themselves.
We’re not afraid to admit we might have a personal preference in this debate as a broker…
To be as transparent as possible, we’ll tell you everything we offer as a full-service M&A broker. We feel that it stands up very well when you compare us to a private sale and should be the minimum any other broker should offer.
The most popular reason to employ a broker is the availability of their large list of purchasers and investors.
When selling your successful affiliate business, you’ll want to work with the broker that has the most experience in working with the affiliate business model.
This will give you more opportunities to connect with relevant buyers. At Empire Flippers, we have one of the highest deal flow of affiliate stores in the industry.
Not as well known is the range of services that an affiliate business broker should execute on your behalf. We vet both purchasers and sellers who want to use our market to ensure a high level of quality for both.
Listings will provide the most information about your business as possible without revealing sensitive facts. If a potential buyer wishes to visit your domain, they must first become verified, which entails submitting ID and liquidity documentation.
We have a dedicated team for each step of the process, from vetting and sales right through to migration.
Vetting will work with you to prepare your profit and loss statement (P&L) as well as a valuation.
You’ll have direct access to a business advisor who will walk you through the whole buying process. This entails answering frequent queries on your behalf, only contacting you when necessary. You’ll be counseled before entering any negotiations, and they’ll act as an intermediary between the buyer and the seller.
When a deal is in place, your company will be transferred to our dedicated migrations team for no extra charge to transfer the asset to the owner. We are one of the few brokers who can provide this service as part of the commission and not as an add-on.
We’re also so confident that we can sell your business that we have one of the lowest exclusivity periods of any broker: two months.
We’re informing you of this so you can use it as a benchmark when doing your own study. Don’t be scared to inquire about what a broker is doing for you as well as the sort of deal flow they have for affiliate websites.
Preparing Your Business for Sale
Getting your company prepared for a sale will save you time in the long run. You may already have completed all of the procedures below, in which case we’ll try to offer you some insight into what buyers are likely to ask.
Accurate Data with Analytics
Buyers will want to see how your affiliate site is generating traffic and won’t simply believe what you say.
Google Analytics or Clicky, the two widely accepted analytics platforms, will need to be installed to get this traffic data.
The information that these platforms provide is crucial to potential buyers. For qualified purchasers, this is the norm to give read-only access to these platforms.
This will allow Buyers to take a look at your organic traffic data. It will give insight into your top-performing pages, the countries that are driving the traffic, and any seasonality.
They’ll use all of this data to see opportunities for growing your site, should they decide to take over the business.
Organizing Your Finances
If you don’t have your finances in order, you won’t be in a good position to negotiate a sale. It might scare off a buyer if they notice that your calculations are incorrect.
Buyers will want to be able to check your affiliate store’s finances easily. The easiest method to do this is with a P&L. Monthly revenue, monthly net profit, and expenses are all included in a P&L.
If you don’t know how to make a spreadsheet or compute these figures, it’s suggested that you get help from an accountant. Our vetting experts at Empire Flippers will work with you to develop the P&L.
Establishing SOPs
Standard operating procedures (SOPs) are essentially instruction manuals that explain how to carry out particular operations in your affiliate business.
An SOP is a truly valuable tool for any job that needs a step-by-step procedure. It’s easy for you since you do it every day, but what about someone from the outside?
Even if you have workers doing this for you, creating a template for the procedure can assist the buyer in hiring new staff should your present employees decide not to continue.
Having operating procedures in place makes your company a more appealing prospect. Buyers aren’t interested in spending too much time figuring out how to operate your firm; they’re primarily interested in devoting their efforts to growing it or delegating it to others.
Employee and Affiliate Contracts
If you’ve got a good relationship with your affiliate network/manager, then this is a major asset to your business. Inform your affiliate manager that you’re working toward a sale and get it in writing that your current arrangement will remain in place.
Bonus points if you have negotiated a higher commission rate and can get it in writing that this will continue for the new owner.
Buyers don’t want to be caught short and find that the network drops the affiliate program rates and affects the affiliate income once they’ve taken over.
Any workers your business may have should be transitioned in the same manner. Talk with your team and see if they’re willing to continue working for a new buyer. If they’re not, then your SOPs should make it simple enough to train new staff.
If your business has used freelancers, then including their contact details will be appealing to buyers.
Business Management
Your company is now in a fantastic position to be sold once all of the processes and contracts have been established.
If your site is in this state, you should avoid making any large changes. You should continue to operate things as if you were planning to keep it. Updating plugins is fine, but don’t tamper with anything that’s currently functioning properly.
The Sales Process
Your company should now be ready to sell. The most important thing to remember is that the sales process isn’t a time to relax.
Running your business as if you expect to keep it will help to ensure that there is no avoidable decrease in performance. This is important for affiliate marketing where search engine optimization (SEO) needs to be monitored fairly consistently in order to maintain performance.
This not only keeps everything as promised, but it also demonstrates to potential buyers that you care about the company’s success.
To give you an idea of what to expect, we’ll go over the typical components of the sales process, beginning with valuation.
Valuation
The sales process for everyone begins with a valuation. Even if you aren’t planning to sell your company anytime soon, you’re at least thinking about it.
We recommend that all affiliate site owners find out the value of your business when you’ve built up a year of profitability and at regular points thereafter. When you have an idea of where your business is now, based on the market, it helps you obtain a more objective assessment of where it stands.
Also, understanding how a valuation is calculated may help you to improve your business.
Our valuations follow a pretty simple formula:
[6-12 Months’ Average Net Profit] x Multiple (Typically 20–60+)
Net profit is determined by taking the revenue from a period of 6 to 12 months and subtracting any costs (, marketing, hosting, employees, etc.).
We’ll try to take a 12-month average if a site appears to be seasonal. Similarly, if a company is displaying recent growth or decline, we’re more inclined to use a shorter pricing period.
What makes up the multiple?
The multiple is dependent on a number of factors, including business age, social media followers, email list subscribers, and traffic diversity.
Using our valuation tool will give you three selling price points.
The typical valuation is the most common approach to value a company, and it’s based on current sales data in order to get you the best price and pique buyer interest.
We also give an absolute figure if you’re prepared to wait for a large offer, but this does imply you are overpricing yourself. Lower figures are intended for business owners who need to sell their business fast.
The valuation tool does provide a reasonable estimate, but speaking with one of our business advisors will help you obtain a more precise valuation that is particular to your affiliate business.
Finding a Buyer
Now that you’ve got a valuation you’re happy with, it’s time to list your business.
We begin by working with our vetting and marketing teams to have your company listed. On
Monday at 10 a.m. EST, all new listings are published and immediately sent to our large number of buyers and investors.
Our business advisors will also utilize their contact lists to send out emails to particular parties who may be interested in your organization.
We conduct an interview with sellers who have listings worth more than $100,000, if you’re interested. It gives you the opportunity to talk about your company in your own words and is a feature that buyers have appreciated.
After your listing goes live, you can anticipate being in touch with our business advisors on a regular basis, who will be passing on any questions interested buyers about your business.
Negotiating a Deal
If your business is below $100K in price, the process of negotiating a deal will be largely automated thanks to our platform.
Buyers will be able to make offers for your business, allowing you to counter or accept. If you accept an offer below list price, your business will go into a 24-hour circulation. This alerts all interested buyers that an offer has been made, giving them a chance to beat it.
The circulation period is an important component of the sales process; it aids in obtaining the highest possible price for your company.
Because listings above $100,000 usually have a lot more moving pieces, interested purchasers will often schedule a call with you. A business advisor will perform a pre-call with you ahead of time to prepare you and answer any questions you may have before going into any buyer-seller conversation.
Deal structuring will soon enter the discussions for higher-priced listings. An earn-out is one possibility, in which a buyer offers an upfront payment that is less than the asking price but continues to make monthly payments after the sale is completed.
Not all purchasers have the immediate cash flow or are willing to pay close to the entire amount. Considering deal structures like this will help your chances of making a sale.
When you’ve got an offer you like, it’s time to move on with transferring the affiliate site to the new owner.
Transferring Ownership
Even after a sale has been made in principle, there is still much work to be done.
When you’re not familiar with online businesses, transferring a site might be difficult. It’s critical to transfer your website quickly but effectively in order for a contract to succeed.
If your affiliate site uses WordPress, it’s fairly simple to transfer. Most of the major website platforms are transferable. Although the process of moving a small business is most likely to be considerably different from that of a large one, every business will have its own structure, so employing an expert makes your life easier.
At Empire Flippers, we have a migrations team that will take care of this for you at no extra cost.
Due Diligence
It’s a common practice in the M&A industry for a 14-day due diligence period, which allows purchasers to double-check that everything is as represented.
During this time, buyers are unable to make any substantial changes to the site. Some buyers will terminate this early after determining that everything is going well and they’re ready to start making changes to their new business.
Any type of agreement will almost certainly include some sort of post-sale assistance. This is something that the buyer may bargain with you on, but it’s likely that they’ll require at least 30 days of email support and maybe a few Skype conversations, should they need them.
Being available for a buyer can go a long way towards ensuring that the transaction goes through. You’ll have your money transferred after it’s completed, and you’ll be able to enjoy the sale of your affiliate store!
How Long Will it Take to Sell My Business?
The average sale time for an affiliate business on our marketplace is 21 days.
However, this does not give the full picture when it comes to selling your affiliate site.
The time it takes to sell your business is largely dependent on the size of the business. The time it takes to work through a seven or eight-figure business will typically be longer than sub $200K deals, for examples
Selling Your Affiliate Website
Now that we’ve given you everything you need to know about the selling process, it’s time to get a valuation for your business.
Take a few minutes to fill out our valuation tool.
Once you’ve done that, schedule a call with our business advisors to discuss an exit plan. This will be the best way to sell your affiliate website for maximum profit.
