EDITOR COMMENT: Post updated March 2016 for freshness, accuracy and adding more reviews from readers.
So you’ve grown your website into a profitable business and now you’re looking to sell your website?
If you want to get the best possible price for your site (start your site here, if you haven’t already) you need to be working with one of our recommended website brokers. Would you rather sell your site yourself for $50,000 or $100,000 and pay an expert? By taking control of the transaction and professionally guiding you through the every step of the sales process, a website broker is the only sensible option when your profits are on the line.
In this article, we will be looking into what makes and breaks a successful broker and what to look for when choosing the right broker to sell your website. At the bottom of the page, we have highlighted 5 different website brokers that we think are the best in the industry, catering for owners from every size and niche based on feedback from MonetizePros readers.
Spoiler alert: Of all the brokers in the industry, our research indicates that Flippa takes the top position as the premier place to sell your website (and also where you can to find premium websites domains and apps to buy.) .
What is a Website Broker?
The main function of a website broker is to help webmasters sell their websites quickly and easily. Your website will be closely evaluated by an experienced broker, taking many variables into consideration to give you the most realistic sale price. This will then be presented and marketed in the most logical way to build interest in your website while retaining your privacy. As many reputable brokers will have an extensive list of prequalified buyers, getting the highest offers will be a much quicker process than if you were to try and market the business on your own.
A broker has no upfront costs and only gets paid when they sell your website. This means that you can be sure they will do everything in their power to get your website sold quickly. The broker will then help with the handover of assets and when both parties are happy, the funds will be released and the broker receives their commission.
During the sales process, brokers perform a number of tasks to maximize your profits:
- Determine an appropriate valuation range
- Compile an information memorandum (sales memorandum)
- Market the website
- Present the website to potential buyers
- Draft and present offers
- Assist in negotiation on behalf of the seller
- Protect sellers’ confidentiality
- Look after paperwork
- Provide after-sales support
What is my Website Worth?
When it comes to researching the value of your website, unfortunately, there is a lot of over-generalized and inaccurate information available on the web. With this often coming from so-called authority sources it can be difficult to know who to listen to. Sites like these will simply offer you an arbitrary result that is usually extremely far from an actual listing price. Online tools can never give you a valuation as accurate as a trained website broker as there is no such thing as a standard industry multiple, nor is there an automated way to calculate a website valuation.
As a general rule of thumb, the average sale price of a website is approximately 2-3x annual net profit for businesses in the $20k-$2m range. However, this generalization can also lead to inaccurate results as other factors should be taken into consideration. A reputable broker should look at other variables to analyse profit such as “seller discretionary income” where they will ‘add back’ costs that are not requisites for the new owner but the seller may have taken for personal benefit e.g. a company car or owner distribution.
Look out for brokers who offer you extremely high valuations such as 5x annual net profit with no individual personal variations being taken into account. This tactic is used by disreputable brokers to entice businesses like yours onto their list. Here the website will remain listed and unsold for months, in the meantime you are likely to spend less time working on your website and its value will quickly decline.
How Does the Process of Selling a Website Work?
This process will be done differently by every broker, however, their primary goal is always the same – minimize the work and time commitment on your end, whilst maximizing the final sales price of your business.
Below we outline 6 general steps that website brokers will follow:
- Assessment and Valuation – This is the no obligation stage where the broker gets to know your business and your goals for the sale. You will be asked lots of questions to determine an accurate evaluation and determine if it is the right time for you to sell. If you agree it’s not – you can work on an exit plan with your broker to ensure the sites value is maximized for a future sale. However, if you do decide to go ahead and work with a broker, a representation agreement will be signed that outlines commission and exclusivity period. (Broker’s should not charge upfront listing fees).
- Sale Preparation – From the information you have provided, a prospectus will be prepared for buyers that covers everything they need to make an informed offer on your business.
- Marketing Your Business – At this stage a broker should work with their marketing team (if they have one) to promote your business in a confidential way while identifying suitable buyers from their list of contacts.
- Sales Negotiations – A broker will now work on narrowing down a list of serious buyers and begin getting offers in. Once an offer has been negotiated, a Letter of Intent should be prepared which outlines the terms of the offer and sets out the timeline for due diligence and closing the deal.
- Due Diligence – This is an essential part of a broker’s job that ensures the buyer is comfortable with the business they are investing in and the claims being made.
- Closing the deal– Once the contract terms are agreed with the buyer and seller, the contract is signed by both parties and the deal will move ahead of the transfer. Once transfers have been made according to the Asset Purchase Agreement and the buyer is happy, your funds will be released and the deal is complete.
What Should I Think About Before Hiring a Website Broker?
How do you pick the best broker that will extract the maximum value from the sale of your website and while representing your best interests? Here are a few questions you should ask yourself:
How Well Do They Answer Questions?
A good broker will take the time to explain their process and tell you everything you need to know in order to make well informed decisions about your website sale. You will generally be working with the broker for a number of months so you want to be confident in their abilities, track record and experience.
Are They Legitimate?
You will see at the bottom of the page we have highlighted 5 brokers who we have researched and confidently recommend. However some things you should still look out for include:
- Are they members of relevant industry associations such as the (IBBA)?
- Do they have a company name/address? Is this address legitimate (not a PO Box)?
- Do they make claims that don’t correlate with evidence you can find? E.g. if a broker claims to have sold 1000 businesses, do they have a sold page and testimonials from a respectable number of clients?
How Many Listings Does the Website Broker Have?
Have a look at how many other internet businesses for sale the broker already has. A lack of listings is a good indication that they aren’t popular or they are inexperienced. However, a large number of listings can also be an indicator that the broker will take on any website that comes their way. Three to seven active listings per broker is a good balance.
The Broker’s Buyer Network?
Brokers that boast ‘qualified’ buyers in the tens of thousands are likely to have a generic mailing list. When it comes to buyers, a small number of qualified buyers are far more valuable to the sale of your business than a large number of unqualified buyers.
Do They Value Your Confidentiality?
If you are selling your website, you do not want your staff, customers or competitors finding out about an upcoming potential sale. Professional brokers will hold confidentiality in very high regard and will create interest in your business by only marketing it with the relevant teaser information.
Our Top 5 Website Brokers
Taking everything above into consideration and based on our conversations with MonetizePros readers, we have put together a list of 5 website brokers who we recommend. We have highlighted the key information that you need to know in order to make an informed decision about what broker to use when you decide to sell your website.
Who or what exactly is Flippa? Think of Flippa as the ebay of buying and selling websites, domains and apps, but not just any brand new website, but rather those that are often aged, and in many cases generating revenue. That is perhaps the main attraction to such a marketplace.
If you are someone who does not have the patience or know-how to build a website from scratch and grow it to a stage where it can become revenue generating, them a marketplace like Flippa is your best option, as the investment you make in an income generating website or app will save you that 6 to 12 months of pain, often times longer, that you are almost certain go through if you were doing it from scratch.
Flippa, according to several online sources is arguably the largest online marketplace buying and selling websites, domains and apps. Even one of their closest rivals, Empire Flippers acknowledges and admits that Flippa is the largest market for buying and selling websites. According to them, Flippa had over 26 thousand auctions in 2011, generating $31 million in revenue. That was 6 long years ago. Which means it is safe to assume that they quite probably would have grown these figures by 2017.
Just what makes them the leader in their field? There’s perhaps a number of things:
- Large database of buyers: From a seller perspective, access to a large pool of buyers drastically improves your chances of making a sale, provided of course everything with your product checks out.
Likewise, anyone looking to buy an established and income generating digital real estate is almost guaranteed to find something within your budget range and other specifications.
- Quick turn-around for customer support. (Much improved from what it used to be.) Now I must stress that anyone looking to use Flippa and does some basic research is sure to find quite a few bad reviews about them. This is something that is to be expected. Even Google has gotten many a bad review from its users. The point to note is that you are going to find both positive and negative reviews about any business. No business can satisfy 100% of its customers.Monetizepros can however speak from first hand experience, as we have had multiple interactions with Flippa and we can honestly say that all our interactions were positive.
FE International Review
With over 5 years of website brokerage experience, FE International has emerged as the pre-eminent advisor within the industry with a specialism in the sale of mid-market online businesses between $2ok and $2m. To date, the firm has successfully executed an industry-leading 350 transactions ranging from several thousand dollars, to multi-million dollar deals.
Selling your website though FE International will offer you direct access to an established network of over 10,000 pre-qualified international buyers, getting your business seen by the right people first, with 85% of the sites they list being sold within 60 days!
FE International is run by a 12 strong team of internationally based specialists who are experienced in both the technical and business aspects of website sales. This unparalleled experience enables them to give you support and guidance through the whole process of selling your website that will not only maximize your sites value but close a deal that you’re happy with.
With the largest team in the industry and two offices, one in Boston, USA and one in London, UK to bring them closer to their international client base, the future is looking very promising for FE International!
Best for: solid all round company with experience at various levels. Best rated broker across a number of websites.
Update 2: Jeff got back in touch to say he just completed another 6 figure deal in 3 weeks! Amazing!
WeSellYourSite.com was created by a 3 piece Toronto, Canada based team in 2006. They specialize in selling high end, well established, web-based businesses that have a history of generating significant profit. They have been around long enough to have proven themselves within the industry, closing million dollar deals in previous years. In the last few years it seems they aren’t very active so bear that in mind if contacting them.
Between them, Michael, Justin and Jeremy have over 15 years of experience working in the online brokerage market. In this time they have built up an internal prospect database with all types of investors, including: fortune 1000 companies, private investors, web entrepreneurs, and top executives at publicly traded companies.
WeSellYourSite.com have turned over $15 million in total website sales. WeSellYourSite’s success is attributed to their ability to manage the entire sales process: from advertising your business, finding prospective buyers, to the negotiation of the sale price and closing the deal.
Best for: their range of experience.
TrustedSiteSeller was created taken over by Ryan Kaufman, who has been buying and selling websites for the past 10 years. Over the years he has helped hundreds of buyers and sellers by ensuring that all that of his listings are quality, vetted opportunities for the buyer.
His ethos is that he would ‘never list a website that he wouldn’t consider buying himself’, this has branded him a trusted broker to help those who want to sell their website quickly.
Trustedsiteseller broker profile on Flippa is backed by feedback from previous clients who have used his website brokerage services. Ryan also has a VIP buyers list that you can sign up to where you’ll be contacted first about their latest listings and get the chance to make a private Buy It Now offers before his list of 80,000 regular website buyers (although we aren’t convinced by this number!) get the chance to see the listing.
Best for: buyers looking for a good deal.
Quiet Light Brokerage Review
Quiet Light Brokerage was founded by Mark Daoust in 2007, in response to a gap he saw in the market when he came to sell his Internet business. It one of the first website brokerage firms of its kind to help internet business owners sell their sites. Since then, from their headquarters in Minnesota, USA they have facilitated the sale of hundreds of different online businesses.
They verify all of their buyers in advance to ensure a quick sale for your business. Quiet Light Brokerage have an extensive list of thousands of registered buyers which helps towards their above industry average close rate that is making them stand out from their competition.
Their team includes seasoned entrepreneurs and professional advisors who have successfully owned, bought, and sold their own six and seven figure businesses. Jason Yelowitz, for example has raised over $10 million in venture capital while starting many of his own sites. This first-hand experience from well-respected brokers has gained them a great reputation within the industry.
Best for: 7 figure deals
Do you have experience with any of these brokers? Leave a comment below to let us know your thoughts and recommendations.