If I had a dollar for every time I’ve heard this question…well, I started this website instead of taking that dollar to help colleagues looking for their own potential online business acquisitions.
As the online business acquisition industry is relatively new, many people don’t know where to start.
Let’s jump right into what to do first, how to find the right places to start looking, and who to contact to get things moving in the right direction.
Start with the Brokers and Marketplaces
The online marketplaces run by the more reputable brokers are the best place to start.
For the same reasons, you don’t list your own house “For Sale By Owner,” you don’t buy or sell a business without a professional. Plus, that’s where all the action is!
Marketplaces are where buyers and sellers come together to get the best deals for both sides of the market. It’s unwise for sellers not to use a marketplace. They couldn’t be sure they’re getting the most exposure to buyers and paid top dollar for their business. And it’s impracticable for buyers to ask thousands and thousands of companies if they are interested in selling only to get one to say “maybe…”.
Brokers weed out the 85+% of the harmful listings to keep them from cluttering up the marketplace. They put out a ton of educational information to help teach you about the business. (Keep in mind, however, that they are speaking as seller brokers trying to sell businesses. They are not working as buyer brokers.)
When you decide to buy, you’re going to be well-served if you’re purchasing through a broker until you have a few purchases under your belt. I’ve made a few purchases, and I see no reason not to use a broker, as they do 90% of the hard work for me.
Where to Find Listings and Brokers
First things first, let’s locate the online marketplaces and get yourself in front of the most reputable online brokers:
This my personal opinion of brokers and their relevance, competence, and trustworthiness.
Step One: Get Notified of New Listings
Sign up for the newsletter and prospectus lists from the following most reputable brokers. These are the marketplaces that professionalize the business the most and have repeatedly shown themselves as trustworthy and reliable. They create the most informative prospectus’ and allow potential buyers to learn as much about the company without sending in the same 20 questions each time because they leave out important information in their listings.
1) FEI a.k.a. FE International
They are likely tied with Quiet Light Brokerage (#2 below) as the “best” broker for online websites based on their deal flow, robust criteria, and in-depth vetting. Very few duds ever come from FE International. I’m not just saying that because I’m interviewed on the site, they have a high standard for listing online businesses.
Specialties: SaaS
2) Quiet Light Brokerage
Also really good, quality sites for sale, I’ve bought from them in the past too. FEI is more SaaS focused. QLB also has SaaS but has a historically broader focus on Amazon, FBA, and Content/Advertising sites.
Specialties: eCommerce, Amazon FBA, SaaS
https://www.quietlightbrokerage.com/
3) Empire Flippers
The best marketing for the online buying and selling world. They mainly sell Amazon and eCommerce sites. Empire Flippers is trying to do more SaaS deals from my discussions with them, but those changes take time. Yet I’ve seen some excellent SaaS companies for sale on Empire Flippers in the past year.
Every Monday at the same time, EF sends out their listings of the week. When you’re in the market to buy, it’s an excellent email to keep an eye out for Monday morning to see if anything might strike your fancy.
Specialties: Amazon Associates, Amazon FBA
https://empireflippers.com/marketplace/
4) MicroAcquire
New kid on the block, but pulling in many listings from what I can tell so far. They have a premium buyer program for an annual fee. I haven’t purchased from them yet, but they appear to be making an honest foray into the lower end of SaaS businesses.
Specialties: SaaS
Other Marketplaces and Listings
Cautionary Notice About Other Brokers
I’m taking this straight from an Empire Flippers article because it is essential to know about this new and upcoming industry. Nobody could have said it better:
“We were pretty shocked the first time we heard about some of our customers who had to deal with fake listings using other brokers. Since then, we learned there are TONS of shady brokers in this industry. Multiple times, we’ve heard about a scheme where they lure you (the buyer) in with a really juicy-sounding business. Then, suddenly, it turns out that it’s already been “sold”—but, of course, they have ANOTHER business they can show you. The truth is that magic listing was never real to begin with.“ – Empire Flippers 10 Things That Separate Us From The Rest
Be careful if you’re dealing with a broker that is not in those top five listings. Until they’ve proven themselves in the community, they may not be entirely reputable. People are always looking to con wealthy people with money to spend. Creating fake listings is one way to get those people to raise their hands and say, “I have money and am looking to invest.”
If you see a broker selling many borderline businesses (AltCoins, cryptocurrency tools, cannabis, vaping, etc.), this is likely not who you want to start with to begin your journey. Even if they are legitimate businesses, you may want to try your hand at more reputable companies first, even if it’s just a Starter business, until you get a handle of how the ecosystem functions.
Step Two: Fill Out Buyer Profiles and Schedule Phone Calls
For the top five sites above, most of them have a “buyer profile” to fill out so they can easily segment your goals into their weekly listing targeted emails.
Once you’ve filled out those profiles, you’ll start to receive prospectus’ offerings in your email. I highly suggest contacting each broker you receive an email from and requesting a quick 15-minute introduction call to let them know who you are and what you’re looking for in a business. Many profitable businesses are shopped to “preferred” clients before they’re available to the general public.
Step Three: Start Requesting Buyer Prospectus’
As you start to receive prospectus’, request access to a few that seem similar to what you’re interested in for a business. Reading these prospectus’ will give you fantastic insight into how these companies are run and likely create dozens of questions in your mind to research in the future.
I have a folder of hundreds of old prospectus’s from the past few years for reference and even some business ideas for the future. These reports are invaluable as sneak peeks into how so many online companies operate. It’s one of my favorite things about online business buying, the ability to look under the hood of so many different companies, and see what’s going on.
Study Business Industry Reports
Many of the brokers publish an annual report on the industry. They also publish occasional Buyer’s Guides with more information. Both of these are great to see what trends are occurring in each type of online niche.
Almost all of the different niches are trending upwards, but a few you’ll find are falling out of favor due to changes in each niche.
Buyer and Seller Annual Reports
FEI: 2019 Technology M&A Report
QLB: E-Commerce State of the Merchant Report for 2019 (on Amazon)
EF: State of the Industry Report and Online Business Trends for 2020
*If you find yourself here in 2021 and beyond, you can likely search for these same terms using the year you want to see on each of their websites to find the most current report.
Buyer Guides
The brokers will often put out Buyer Guides that are personal views on how certain types of markets are doing. There are Amazon FBA buyer guides, SaaS buyer guides, eCommerce Buyer guides. These are just a couple below, but you could Google for your buyer niche to see if some of these have more white papers in your particular niche market.
- FEI The Advanced Guide to Buying an Online Business
- QLB – David Newell’s How To Build, Value, and Sell A SaaS Business for 6, 7 or 8 Figures
Don’t forget to check out my 8 Buying SaaS Businesses Insights I Learned from David Newell’s SaaS Business Valuation Guide.
- Centurica Annual Buyers Report – Centurica is a great company that works as a “buyer due diligence service”. If you’re buying anything over five figures, it pays to have Centurica do some due diligence for you on your purchase. I’ve used them on every single purchase of mine.
Read Online Business Acquisition Books
A few kind souls in the industry have even written books related to online business buying and selling. Some are a bit dated, some include offline businesses, but they give you a general idea of what is possible and can spark some interesting ideas.
*These are all affiliate links, not because I expect to make money, but just to keep my toes in Amazon Affiliate market and see what’s changed after all these years (I don’t actively do much with Amazon Affiliates anymore).
If you click any of the links below and purchase something, I’ll receive some spare pennies from Amazon.com.*
- The Ace Formula – How to Buy a Business: Ace Chapman
- Buy Then Build: How Acquisition Entrepreneurs Outsmart the Startup Game
- Cracking The Code: An Entrepreneur’s Guide to Growing Your Business Through Mergers And Acquisitions For Pennies On The Dollar
- The Website Investor: The Guide to Buying an Online Website Business for Passive Income
Listen to Podcasts
In the same vein as the industry, podcasts are as popular as writing books. Here’s a few that I listen to on a regular basis to learn more about buying and selling online businesses.
There are many other podcasts about running an online business, of course. These are the three I listen to primarily that deal only with the buying and selling of online properties.
Most of All, Practice Patience
Buying an online business isn’t a game where perfect opportunities are on the shelf each day. There are only a few businesses that will work for your particular skills and goals. You have to be patient.
Remember, there are a lot of other buyers out there, many with better access, more money, and more leverage than you. That means you have to leverage your skills and talents to be able to get a seat at the table when a fair offer comes along.
Starting with the steps outlined above is the best way to get started and learn more about the industry, the players, and how the buying process works.
