What is a Web Property?

A web property is an asset. If you own a website, you own an asset. It might be just sitting there being a static website you haven’t updated in a long time. It might even have value if it has been active for many years, has a prime domain name, attracts substantial traffic, or generates revenue. No matter what shape the site is in or what it is used for, it is an asset.

A web property asset can be any of these common types:

Basic Brochure Website

E-Commerce Website

Blog

Amazon Seller Account

Domain Name

Many people play around with creating websites, never realizing what they might have. For example: Your son might have created a trading card website for school, and over the years it has become an important source of information on those types of trading cards. However, when your son went off to college, he lost interest. Over the years, that site might have built a large and dependable flow of visitor traffic and has been linked to as a valuable resource by other websites. With a little effort, it could be generating revenue. It might also be valuable enough to sell for an amount of money that could pay for some of his college education.

Many people who own websites don’t realize that they can be sold quite easily, and sometimes are worth more than a million dollars.

Websites can be created for very little money. All you need to do is select a domain name and have it hosted. The rest is a creative activity of setting up the site design and content, so many people create hobby websites to educate others about history, crafting, gardening, and other such interests. Many of these sites are only intended to provide creative satisfaction to the site owner plus the pleasure of knowing that a few people visit the site every month.

However, other sites generate hundreds, if not thousands of dollars each month for their owners.

Other people don’t realize they can buy a profitable web business.

Other people don’t realize they can buy a profitable web business. They might be looking for additional income and are considering creating an online store, but hesitate to move forward because they don’t have the knowledge or creative skill to easily build a successful e-commerce website from scratch.

Operating online businesses is a relatively new thing. Buying and selling existing web properties is also a new thing. In fact, there are reputable brokers online who specialize in brokering web properties of all types.

However, not all web properties are the same . . .

. . . which is why on this site I will be teaching you

How to tell if your old website is actually worth money if you were to sell it.

How to increase the value of your website.

How to sell that old website.

How to buy a website that is already producing revenue.

 

 

Insider’s Guide To Selling Or Buying An Online Business

how to buy or sell a web-based business

The Small Business Administration estimates that one-third of business startups with employees fail within the first two years. A Forbes article quotes a Bloomberg claim that 80 percent of startups fail within their first 18 months. I have seen other estimates that for every one web business startup that succeeds, one hundred fail within the first year.

I doubt anyone knows for sure.

How it normally works

Sometimes it is difficult to do the very thing you want. The biggest mountain anyone has to personally climb is the hesitation born of unfamiliarity, so here is a general description of what happens when selling or buying a web-based business:

The broker markets each available web business with a listing on the broker’s website and posts the listing on affiliated websites. Listings and price changes are announced in the broker’s weekly newsletter that is sent to its VIP customers, the mailing list, to private equity investors, and via cold-calling prospects.

  • Buyers work with assigned brokers who supply information, schedule meetings with Sellers, and assist with negotiations and the final sale transactions.
  • Brokers attract listings through marketing, referrals, broker outreach, and existing relationships with clients.
  • Seller executes a Seller’s Agreement, which spells out the duties of the Seller and the Broker.
  • Broker takes company information from Seller and creates a strategic pricing and marketing plan that includes information that is only available to Buyers who have signed a Non-Disclosure Agreement (NDA).
  • Prospective Buyers sign NDAs and receive information about the web business, talk with the Seller, and present letters-of-intent (LOI) that outline the terms of purchase, such as the price and potential closing date.
  • Seller may either accept an offer or counter.
  • Once there is agreement on price and terms, the Buyer has an exclusive period to perform due diligence on the web business being considered.
  • Money is deposited with an escrow agent.
  • The Purchase Agreement is signed and the transaction closes with the escrow agent disbursing the proceeds of sale minus

Due diligence

Buyers want deep and detailed information on their prospective web business purchases.

If you are a Seller, start compiling a file containing platform or marketplace (e.g. Amazon, Walmart, etc.) and supplier contracts, trademarks, patents, incorporation documents, tax returns, supplier contact information, customer lists, and other things a Buyer will want to see during due diligence. Your consultant or broker can help you with this.

If you are a Buyer, these files also come in handy when applying for bank loans.

Key elements of a due diligence file include:

  • Business activity. If you have a referring website or are active on other platforms such as Walmart or eBay, provide proof of the number of transactions, unique visitors, page views, traffic sources, and backlinks.
  • Proof of ownership of all assets. Information on trademarks, copyrights, and proofs of photo or graphics ownership or licenses. A Buyer will use this information to help evaluate the business.
  • Financial records. Statements of sales transactions, product invoices, ad-network payments, affiliate commissions, marketing expenses, and hosting and maintenance expenses, bank statements, merchant account statements, and such.

Take the first step

If you are unsure of whether to sell your web-based business, or how to buy a business, do yourself a favor and hire a consultant. Web Property Investor is a consulting firm that works for you. We educate you and help you avoid or at least limit mistakes.

Take a look at What We Do for further information.