You’ve spent countless hours chained to your computer, tablet, and phone hustling your online business into a steady profit-maker. Now you want out.
Maybe it’s to start a new online venture, delve into brick-and-mortar, or retire. Whatever the reason, there will likely come a day when you’re ready to sell.
To do so, you might consider hiring an online business broker. Brokers are trusted professionals who will serve as the link between you and your potential buyers.
But choosing the right one can be tricky.
Some have great references, track records, and strong potential buyer lists.
Others are, well, less so.
Keep reading to find out how to choose the best online broker for your business.
Questions and Answers
Why Should You Work With an Online Business Broker?
Selling your product may have become second nature to you. But selling your website may be a different matter altogether.
You want someone with proven experience in this growing field.
- Someone with a network of potential buyers already in place.
- Someone who has developed a process to deal with the complexity of selling a business.
- Someone who can serve as an objective third party and as a mentor.
- Someone who will negotiate the best deal possible by knowing the market.
- And someone who will keep the whole transaction confidential.
As you can see, online business owners looking to sell will find several benefits when working with a broker.
Disreputable companies can cloud the field. You want to avoid them at all costs but you’re probably not sure who those potential shysters might be.
Try looking for brokers who have earned the International Business Brokers Association credential. IBBA sanctioning requires several years of on-the-job experience, plus passing some industry-backed educational courses.
Several states, such as California, also have local sanctioning organizations.
Next, check what price range the brokerage sells most of its websites. If your valuation is far higher or lower than the broker’s comfort level, you may not have the right fit.
How Many Listings Does the Website Broker Have?
Ask a potential broker to show you his or her current client list. Then, use the “three bears” test.
If the list is too long, the broker may not have the time or resources available to honestly work on your project. If it’s too short, the broker may not possess the skill or experience to do right by you.
But if it’s just right — approximately 10 active clients per broker — you’re probably in good hands.
How Big is the Broker’s Buyer Network?
The number of potential buyers can be a bit tricky. You certainly want a brokerage with a large list of potential buyers to make your website enticing.
But you might not want one with so many potential suitors that your site will get lost in the shuffle. You want someone who truly understands your particular online business, not just web businesses in general.
Look for someone with several hundred specific buyers, as opposed to someone with several thousand.
How Much Experience Does the Brokerage Have?
While there may be some attractive start-ups out there, experience counts in this field. You want to look for brokers with a proven track record.
Experienced brokers will work on a commission. If you contact someone who expects an up-front fee, go somewhere else. That is not the industry standard.
You also want someone who’s in it for the long haul. Selling a business can take between nine months and a year — or longer. Be comfortable with your choice. You’ll be in this relationship for a while.
Does the Broker Provide Legal Assistance?
Brokers often are not trained lawyers. But they understand the importance of obtaining sound legal advice and providing airtight legal agreements throughout the sales process.
Your broker should advise you to retain independent counsel — someone who will look over your contracts and other documents before you sign them.
If a broker you contact claims that legal advice is unnecessary, avoid him or her like the plague.
Do They Value Confidentiality?
Discretion is extremely important. Selling your business is no one else’s business.
You have to trust the broker you choose to put a plan in place to keep your intentions quiet.
Failure to do so can result in the loss of supplies or staff. It can also damage the final number you get in the sale.
How Do They Value the Business?
Internet businesses often have few, if any, tangible assets. That can make it harder to effectively evaluate your company’s worth. Someone who doesn’t understand e-commerce, or hasn’t worked in the industry, may overvalue or undervalue your business.
Either way, that can make it more difficult to find buyers.
Select a brokerage that knows how to obtain a reasonable valuation. That way, you’ll be in a much better place to receive a fair offer and find a buyer quickly.
Plus, brokers who value their assets correctly will find buyers more likely to qualify for the financing needed to purchase an online business.
TOP 7 Online Business Brokers
FE International began mergers and acquisitions in 2010 and has since completed more than 1,000 business sales. As a multinational company, Fe International boasts a large network of investors and buyers throughout the world. They have been successful in selling more than 94% of the companies that come to them.
Quiet Light Brokerage
Quiet Light Brokerage was an early adopter of selling online businesses and thus claims more experience than other firms. They have sold more than 600 online businesses totaling $300 Million. Quiet Light’s current brokers have each sold previous personal e-tail businesses, providing key insight into these transactions. Quiet Light promises to give you the truth, and nothing but the truth, in a low-pressure and one-of-a-kind way.
Website Closers is a franchise-based internet sales brokerage that employs global intermediaries and has done $750 Million in sales. Their goal is to reach $1 Billion this year. Website Closers focus exclusively on tech and internet companies and provide exit strategy consultation to those looking to sell immediately or down the road. Website Closers has a list of 800,000 potential buyers waiting for the right opportunities.
Website Properties boasts a buyer’s list of 30,000, an 85% success rate, $350 Million in sales, and more than 500 websites sold since 2004. They represent buyers interested in sites worth anywhere between $100,000 and $25 Million and looking to buy in virtually every digital and online industry. Website Properties handles each potential sale in-house and will use its network of sales portals, VC contacts, and wealthy individuals to generate offers.
Empire Flippers was named an Inc. 5000 fastest-growing company for four straight years (2016-19) and won four IBBA awards in 2017 alone. Their merger and acquisitions team has helped numerous buyers and sellers “remove the friction” in the deal-making process. Co-owner Joe Magnotti expects Empire Flippers to be the de-facto place for multimillion-dollar deals going forward.
Bizbroker24.com specializes in brokering deals between $150,000 and $20 Million and boasts more than $100 Million in total sales. Bizbroker24 manages each step of the process, from valuation to marketing and from fielding offers to negotiating terms. The team includes people with experience in banking, insurance, law, accounting, and real estate for a well-rounded approach to selling your e-commerce business.
Acquisitions Direct is about to celebrate its 20th anniversary of selling online businesses, having started in 2002. In the meantime, it has sold more than 350 diverse e-commerce businesses, ranging in price from $100,000 to $20 Million. Acquisitions Direct focuses on eCommerce and SaaS (Software as a Service) companies with a dedicated crew of current and former online entrepreneurs to assist in the sales process.