As the popularity (and hype) around content based affiliate businesses has grown in the past few years, so has the brokerage ecosystem offering sites for sale and allowing site owners at all levels to exit.
Factors to Consider When Choosing a Broker
Success Fee/Commission Structure
Most of the brokers operate on a model where a success fee is paid as a percentage of the site sale when it is successfully sold and transferred. Percentages can range from 7.5% – 20% depending on your business type, size, and particular broker. It’s important to remember that everything is negotiable, so don’t be afraid to ask for a more favorable rate or be willing to talk to multiple brokers before committing to an exclusive agreement.
Many brokerages will have established connections with large email lists of interested buyers who have the funds and are actively looking to acquire sites of various sizes.
Valuation & Multiples
Most brokers have a value model where they will suggest the price to list your business as. Remember, as with the success fees, everything is negotiable and it doesn’t hurt to ask for a higher valuation or shop your business around to multiple brokers to get an idea of different valuations.
Level of Exposure & Confidentiality During the Sales Process
Different brokers handle this differently with various levels of public information on the sites for sale. The most common requires an NDA before the full prospectus being sent. This is an important point to consider if you are trying to keep the sale of the business quiet from current employees and customers or if your business is driven by a few keywords or other arbitrage (most content sites) that could be replicated and see declining revenue with increased competition.
Escrow & Transitional Tasks
Many brokers will have relationships with attorneys which can handle escrow and others use services like Escrow.com. It’s important to understand and trust the escrow method the broker uses to prevent any difficulties is problems arise during the transition period.
Some brokers also have a team of VA’s that can help with switching affiliate links and other tasks for transferring a site post sale. However, it’s important to note that no one will be incentivized as much as you to get the deal finalized, so you may want to dedicate your own VA’s and resources to expedite this process.
Most of these brokerages have a sweet spot where they have both a large buyer pool and deals in a certain price range. Generally most of the brokerages on this list operate in the <$5 million dollar range, with a few exceptions.
Factors to Consider When Evaluating a Buyer
Offer/Ability to Close
Many buyers will misrepresent their financial situation or say they have the funds ready for purchase, but in reality they only begin passing the hat to raise funds after locking down an LOI.
Some groups will try to tie you up with an LOI only to try to tire kick or decrease their ask near the end as interest from other parties has cooled.
It is very rare to see legitimate private equity firms at these deal sizes, although this term is thrown around a lot and gets sellers excited. Be skeptical.
Level of Sophistication
This is an important factor to consider the amount of post sale guidance that will be requested by the buyer. Generally it’s much smoother sell to a competent, experienced operator in the space.
Plans With the Site Post Sale
Depending how much time you spent on your business and the level of attachment you have with it, you may be invested in the continued success of the project that you can reference and proudly talk about in the future.
Also if you have a team in place, you may want to look for a buyer that will retain them and continue to provide opportunities to work and grow.
Notes for Buyers
When working with a few brokers on this list and entertaining buyer calls, I noticed the majority of buyer fell at either end of the extremes.
- Very experienced SEO’s and online marketers who deeply understand the space looking for strategic opportunities where they can add value through SEO, CRO, or better affiliate relationships.
- Older professionals with significant savings and experience, but didn’t really understand the nuances (and sometimes risks!) of content sites and their reliance on Google.
I do truly believe that content sites and other online businesses can be a great place to generate significant returns that are unheard of in the traditional investment world.
But it’s important to emphasize the complete platform dependance many of these businesses have on ever-changing algorithms and the terms & conditions of the largest tech giants which can (and frequently do) decimate or significant reduce the value of a business overnight.
If you do not completely understand all the levers that influence the asset you are purchasing (especially if using an SBA loan of other financing structure) you are putting your financial future in significant risk.
Online Business Brokers in the Market Today
Traditionally a marketplace for websites Flippa has been around the longest and is typically the most well know place to look when buying an online business. Sites can be purchased for as low as a few hundred dollars, however there is very little vetting in place to verify financials and traffic so there are many, many scams and fraudulent behavior that occurs by sellers.
One step up from Flippa with lots of content sites in the $50k-$2mm range, Empire Flippers verifies the financials so there are fewer outright scams. However, there are definitely still some lower quality sites listed there, so it’s important to conduct proper due diligence and fully understand what you are getting into if making a purchase.
EmpireFlippers has a large buyer list for smaller content sites and they assist with the site transfer and changing of affiliate links. (Although we recommend handling this yourself to make sure there are no errors and it’s completed in a timely manner.)
One unique point about EmpireFlippers is that they require a cash deposit to view the URL and details of their listings to deter copycats. However they allow frequent buyers to view all listings for free and we’ve seen some of their listing information circulated on forums.
They also routinely act as the escrow agent for the transaction. Some people see this as a red flag, but you can always request to use an attorney or other escrow service to ease concerns.
FEI plays in a similar market to EmpireFlippers, with a slightly more buttoned up image and staff.
Another digital first brokerage that handles slightly larger deals. Great content marketing initiatives with their podcast and blog with prospectuses available after a general NDA is signed.
A moderate sized brokerage that offers a range of businesses from content, SaaS, ecommerce, agencies, and job boards for sales usually up ~$10 million dollar asking prices.
A smaller brokerage that sends periodic emails when deals become available. They offer content, ecommerce, SaaS, and even digital agencies for sale occasionally.
A large catalog of deals available, some reaching the higher end of a few million in EBITDA.
An impressive catalog of online business listings featuring multiple monetization models.
A smaller brokerage that focuses on small online businesses, while it doesn’t have the largest selection or broker the most volume on this list, good opportunities periodically arise so it’s worth getting on their list/checking them out.
This is a new model that emerging, apparently offering to broker deals for no success fee from the sale price, instead the buyer pool pays a recurring monthly fee to have access to the deals.
Flipping Websites Facebook Group
Recently acquired by the AlphaInvestors group, this Facebook allows users to sell content sites directly to one another without fees or brokers.
Started as a premium domain brokerage, Latona’s now offers a variety of online business for sale. Good mix of a variety of business types.
The FBA Broker
A specialty broker that deals with FBA businesses only. While the focus of this site is mainly affiliate driven content business, FBA companies can be an excellent addition to a portfolio of content sites if you are able to leverage the traffic of the content portfolio to boost sales and rankings of the FBA products.
Large variety of online businesses available.
This is a large directory style site where numerous brokers syndicate deals and offers to reach a larger audience. Although there are mainly offline deals listed, we have noticed a growing trend of online businesses for sale. Some even being listed directly by the sell which can provide for some underpriced opportunities for savey buyers.
This is more of an investment bank than many of the marketplace style options on this list, but they have been involved with multiple content deals (mostly finance) in the mid 7 figure + range to holding companies and public media players.
HL.com (Houlihan Lokey)
More of a legitimate investment bank that works on transactions in the hundreds of millions or billion dollar range. If you have a business in this range you likely have a board and existing banking relations so you probably don’t need this article to give you advice.