Starting a business from scratch can be tough. On top of all the hard work it takes to get up and running, there's always the possibility that it just might not work out in the end. That's why some entrepreneurs opt to buy online businesses instead of building them from scratch.
By buying an already established business, you can be sure the business model and operations are a success. It doesn't mean less work, but it does mean a softer landing for many. Let's look at some considerations and the 11 best marketplaces to browse if you're looking to buy an existing online business.
5 steps for purchasing an online business
The process of acquiring an online business involves several important steps. Here's how to navigate each stage:
Step 1: Research and create your shortlist
Begin by exploring multiple platforms and listing sites. Filter results based on your budget and preferred revenue model. Keep a spreadsheet with links and key details to track promising opportunities.
Step 2: Calculate value and pricing benchmarks
Online businesses typically sell for a multiple of their owner earnings. Content websites often sell for 2-3 times annual earnings, while ecommerce sites range from 2.5-3.5 times and software companies from 3-4.5 times. Always verify earnings with bank records and payment proof.
Please note that these figures are only a guideline. Always take the time to do your due diligence.
Step 3: Present a formal offer
Draft a letter that specifies your offer price, payment terms, and timeline for completing your review. Include a deposit to demonstrate serious intent and secure an exclusive period to complete your analysis.
Step 4: Secure funding
For purchases under $5 million, SBA loans can cover up to 90% of the cost with 10-year terms. Buyers typically need a 10% down payment and must present a solid business plan to qualify. Though specific down payments and term lengths can vary by lender and the business's structure.
As we mentioned earlier, make sure you carry out thorough research to ensure you have the most up-to-date information.
Step 5: Complete the transaction safely
Use an escrow service to handle money and asset transfers. After signing purchase agreements, transfer domains, store ownership, and payment systems. Plan for 30-90 days of seller support to ensure smooth operations.
Pros and cons of buying an online business
As with every business option, there are considerations to weigh. Let's look at some pros and cons:
Pros of buying online businesses
- Established business model, revenue stream, and cash flow
- Established customer and user base, so you don't have to build one from scratch
- Proven business model with established infrastructure, tools, processes, operations, and digital assets
- Access to valuable performance data through tools like Google Analytics
- Potential for rapid growth and scalability
- Banks and investors find it easier to fund companies with proven track records
- Existing teams can provide operational knowledge and continuity
- Previous owners can share insights about what works and what doesn't
Cons of buying online businesses
- Significant upfront investment compared to building many types of businesses
- Risk of fraud in the unfortunate event that the seller is dishonest
- Risk of unforeseen issues or circumstances that weren't apparent when you made the purchase
- Possible dependency on the seller's insights, skills, and relationships
- No guarantee that your average net profit will be the same as the previous owner's
- May need to rework existing supplier and vendor agreements
- Sellers might not reveal the true reason for the sale
- Challenging to reshape an existing brand's image
11 best marketplaces for buying an online business
Here are some of the top marketplaces to find established businesses to purchase.
1. Flippa
Flippa is a top marketplace for buying established businesses like Shopify stores, SaaS companies, apps, digital services, Amazon FBA stores, blogs, domains, affiliate sites, and more. The company has been around since 2009, and has built a trusted reputation for itself over the years.
Under the "Reduced Price" section of the Flippa site, you can even bid on online companies with a starting price of as little as $1. This can be a great opportunity for those who don't have the capital to invest in a highly profitable business.
2. Empire Flippers
With mentions in publications like The New York Times, Inc., Forbes, and HuffPost, Empire Flippers has overseen the purchase and sale of more than $550 million worth of internet businesses. You can choose from a wide range of monetizations, like Amazon FBA, display advertising, dropshipping, ecommerce, service, subscription box, and more.
Empire Flippers analyzes criteria like traffic data, revenue data, business expenses, customer information, and the overall legitimacy of the company. It also confirms that the business has a steady net profit of at least $2,000 per month over the past year.
3. Side Projectors
Side Projectors focuses on, well, side projects. These are businesses that entrepreneurs pursue alongside their 9-to-5 job or main business. From mobile apps to SaaS businesses and ecommerce brands, the marketplace has plenty of small projects that might pique your interest.
You can filter projects by target market, project types, programming language and the tools used. Once you find a project you like, submit a proposal to initiate a conversation with the seller. Prices tend to be lower since these are typically smaller ventures.
4. Niche Investor
Niche Investor lists profitable websites and blogs that are available for sale. You can view a site's listing to get background information about the business, as well as the monetization method and monthly revenue it generates.
Niche Investor also has filters in place to make finding the right online business easier. You can search by niche, category, minimum and maximum price, and earnings per month. Additionally, the platform lets you sort listings by newest, oldest, highest price, just listed, and featured.
5. Motion Invest
Motion Invest offers the sale of legitimate businesses in the form of content sites in various industries, including travel, auto, fashion, and tech. These sites monetize through channels like AdSense, Share-A-Sale, and Ezoic.
Motion Invest stands out from many competitors because it offers "starter sites." These sites haven't made any profit so far, but they're already set up and ready to run. This option could be ideal for those with a lower budget, as some of these starter sites are priced at less than $1,000 to purchase. The service also provides ongoing support throughout the buying process.
6. Business Exits
Business Exits specializes in brokering the sale of companies valued anywhere from $2 to $60 million. The company focuses on high-value transactions across various sectors including ecommerce, construction, manufacturing, marketing and consulting, retail, service, SaaS and software, and wholesale and distribution.
Business Exits puts a lot of work into its meticulous screening and vetting, giving you comprehensive insights on any prospective purchases you're looking to make. You can engage with them for price negotiations and terms of the sale, and they'll help transfer ownership once an agreement is reached.
7. Latona's
Latona's is a trusted brokerage firm for mergers and acquisitions. The company was founded in 2008, but before that the owners were domain name brokers. The site has comprehensive filtering options. This makes it easy to run a search on whatever particular type of entity interests you, as well as browse the catalog.
Search based on price, revenue, visitors, profit, location of the business, and more. You'll find listings with a wide range of revenue streams, including affiliate, content, domain portfolios, membership, ecommerce, and SaaS.
8. Acquire.com
Acquire.com is the go-to platform if you're looking to buy a business in the startup and SaaS sectors. The platform allows you to track startup metrics and assess future potential, enabling you to make an informed decision. It also provides free escrow services, legal documentation, and expert assistance when purchasing an existing business.
Additionally, Acquire.com offers a brokerage service for those who prefer a hands-off approach. Plus, it features tools like co-browsing and text chat to facilitate communication between buyers and sellers.
9. BuySellEmpire
BuySellEmpire boasts a network of more than 10,000 buyers and sellers. The company helps to connect the right people and companies. It has an impressive portfolio, including ecommerce stores, various types of Amazon businesses, affiliate sites, content blogs, Chrome extensions, lead generation, marketplaces, and more.
The team supports buyers through every step of the process, including due diligence and help with post-sale training. Migrations and transfers typically take one to two weeks to complete the sale.
10. BizBuySell
BizBuySell operates as the web's largest business marketplace. You can browse specifically for web-based companies or franchise opportunities. The platform allows searches by geographic location and provides access to hundreds of thousands of existing businesses across different industries.
11. FE International
FE International refers to itself as a technology advisory firm for M&As (mergers and acquisitions). Founded in 2010, the company has facilitated more than 1,500 successful business exits and over $50 billion in lifetime acquisitions, with an impressive 94% success rate.
Types of business listed on the site include ecommerce businesses, content businesses, and SaaS (software as a service) companies, as well as several other types. FE International vets companies extensively, looking at things like business operations, opportunities for growth, website traffic, financial metrics, obligations, and market trends to ensure it's a sound opportunity. The firm specializes in mid-market deals typically valued between $1 million and $50 million, with each listing pre-reviewed by their analysts. Buyers receive personalized advisor support throughout the entire acquisition process, including detailed prospectuses that outline both opportunities and risks.
What to evaluate when buying an online business
With millions of businesses operating worldwide, choosing the right one requires careful evaluation. Here are the key factors to assess:
Financial consistency
Look for businesses that show steady monthly earnings or clear potential for stable income. Any seller should willingly share detailed financial records. This transparency is essential before considering any purchase.
Brand reputation
Like building a brand, fixing a damaged reputation takes significant time and resources. Research customer reviews on platforms like Trustpilot and examine the brand's social media presence to understand public perception.
Operational systems
Examine existing workflows and technology. Outdated systems require investment to modernize. Even smaller companies should have clear processes for key activities like order fulfillment and integrated technology solutions.
Website traffic patterns
Online businesses depend on web visitors for revenue. Seek companies with growing, stable traffic from multiple sources. Avoid businesses relying on a single traffic source, as algorithm changes can eliminate that revenue stream.
Growth prospects
Consider the business's long-term potential. Evaluate whether products are seasonal, trendy, or have lasting appeal. Also, assess if the current customer base can expand into new markets or locations.
Customer feedback
Understanding customer sentiment can make or break your decision. Review both praise and complaints to identify strengths and areas needing improvement. Consider whether you can address common customer concerns.
Types of online businesses you can purchase
The digital marketplace offers various business models for acquisition. Common options include:
- Software-as-a-Service (SaaS) platforms
- Ecommerce stores
- Dropshipping operations
- Affiliate marketing websites
- Mobile applications
- Service-based businesses
- Content websites and blogs
- Subscription-based companies
- Digital product retailers
How do you get a great deal on an online business?
You want a great return on investment, right? Here's how to make sure you're squeezing every bit of value from your dollars.
Search everywhere
Look all around to find businesses that might normally go unnoticed. Use different methods to check out and compare their prices, revenue, and other important details.
Assess fast
Set up a quick list to score each business. Evaluate things like cash flow, growth potential, reasons for selling, reputation, and customer base. High scores usually mean higher prices, but they also indicate good revenue and growth prospects.
Investigate thoroughly
Examine the legal and tax details of the business and identify any issues before you start negotiating. For example, an online store registered in Europe will likely be subject to sales and value-added tax (VAT). The more you know about the business, the stronger your position will be.
Negotiate
The listed price isn't fixed. With your research and ratings in hand, you can negotiate with the seller to try to lower the price.
Safe buying practices for online businesses
While marketplaces provide structure, risks still exist. Follow these guidelines to protect yourself:
Focus on facts, not promises
When a business shows declining performance but the owner promises improvement, trust the data. Historical performance provides better insight than future projections.
Verify information independently
Financial statements don't tell the whole story. Speak with current and former employees, customers, and other stakeholders to understand the business's true condition and internal dynamics.
Get legal guidance
Business acquisitions involve complex paperwork. A lawyer can explain contract terms and help you understand any obligations that come with the purchase.
Understand the sale motivation
While many business sales are legitimate, be cautious if owners avoid explaining their reasons for selling. This evasiveness might signal underlying problems.
Verify existing partnerships
Most businesses depend on suppliers, distributors, and other partners. Contact key partners to confirm that agreements will remain valid after ownership changes.
Take a different path to entrepreneurship
If you're interested in making money online, or you're looking for your next investment, buying an established business can be a great option. Once you begin your search, you'll find that there are for-sale listings of all shapes and sizes across various industries and niches. Take a look through the marketplaces we've discussed above and see where your next opportunity lies.
Buying an online business FAQ
Can I buy an online store?
Yes, you can purchase an online store. Platforms like Flippa and Acquire sell established ecommerce businesses that are ready to operate.
What online business makes money fastest?
Dropshipping and digital product sales typically generate income quickest. These models need minimal upfront investment and can begin earning revenue soon after launch.
Is buying an online business risky?
Buying an online business comes with its risks. To ensure you're making a safe purchase, start by researching thoroughly. Look over the financial records and key documents. It's also a good idea to talk with a lawyer who can help with the paperwork and guide you through the process.
What is the best marketplace to buy and sell online businesses?
Entrepreneurs buy and sell online businesses through:
- Flippa
- Empire Flippers
- Side Projectors
- Niche Investor
- Motion Invest
- Business Exits
- Latona's
- Acquire.com
- BuySellEmpire
- BizBuySell
- FE International