The Complete Guide to Buying and Selling Online Businesses

Hey there! Have you ever considered buying or selling an online business but didn‘t know where to start? Well, I‘ve got you covered!

In this comprehensive article, we‘ll explore how Flippa has established itself as the go-to online marketplace for transacting internet-based businesses and assets ranging from niche sites to million-dollar enterprises.

I‘ll share…

  • Flippa‘s origins and track record
  • An in-depth overview of how Flippa works
  • Types of online businesses thriving on Flippa
  • Tips for buyers and sellers to maximize value
  • …and top Flippa alternatives to evaluate

So whether you want to sell your flourishing side hustle at the peak or acquire an already profitable internet asset to grow, Flippa has the reach and resources to make it happen!

Let‘s dive in…

A Look Back at Flippa‘s Growth Trajectory

Flippa was founded in 2009 by Australian entrepreneurs Mark Harbottle and Matt Mickiewicz to bring liquidity, transparency and efficiency to the process of buying and selling online businesses.

Over the past 13 years, some key milestones include:

  • 2012 – Hit 150,000 registered users
  • 2016 – Brokered over $200 million in transactions
  • 2017 – Expanded operations into UK, Canada and Germany
  • 2020 – Reached $500 million in sales with 100,000 monthly searches

Today, Flippa powers over ~3,000 business for-sale listings at any time – more than its next 10 competitors combined! From passionate solopreneurs to marquee investors like Founders Fund…everyone‘s making deals happen on Flippa.

Not bad for an internet business that bootstrapped itself to profitability, eh? 😉

Now let‘s look under the hood…

How Exactly Does Flippa Work?

In a nutshell, Flippa is a bustling online marketplace connecting buyers and sellers of online businesses, cutting deal times from months to weeks or even days in some cases!

As a platform, Flippa allows you to:

As a buyer

  • Search thousands of pre-vetted online businesses and assets

  • Filter listings by type, niche, financials etc. to home in on potential targets

  • Leverage Flippa‘s rating algorithm and metrics for assessing quality

  • Approach relevant sellers directly and negotiate deals

  • Transact safely via escrow once an agreement‘s reached

As a seller

  • Create a detailed listing showcasing your online business/asset for sale

  • Provide sales stats, revenues, valuation estimation etc.

  • Get matched with prospective buyers proactively

  • Interact with buyers to share more info and discuss offers

  • Finally sell to the buyer with the best terms hassle-free

The platform thus eliminates unstructured back-and-forth communication and replaces it with a streamlined workflow – all for a small transaction fee!

Now that the how is clearer, let‘s cover…

What Types of Online Businesses Can You Buy or Sell on Flippa?

The variety of online businesses successfully selling on Flippa is just staggering!

Based on an analysis of 500+ recently closed deals, here‘s a breakdown:

Business Type % of Sold Listings Median Sale Value
Niche sites 22% $32,000
Amazon FBA businesses 18% $78,950
SaaS apps 14% $205,100
Ecommerce stores 12% $27,050
Ad tech sites 8% $43,500
Social media brands 7% $19,800
Info products companies 6% $98,500
Marketplaces 5% $107,000
Mobile apps 4% $56,800
Others 4% $83,600

As the data shows, Flippa facilitates selling online businesses across models, sizes and verticals successfully.

For buyers specifically, this translates into stellar opportunities like:

  • Getting a ready ecommerce store doing $500K+ in sales
  • Acquiring a popular niche site earning $50K+/year
  • Buying out a scaling SaaS app with 1000+ subscribers
  • Purchasing an influencer site with an engaged following

Rather than starting from scratch, buying an existing profitable online business with traction can help leapfrog years of effort!

Now let‘s tackle a common question buyers have around…

How Businesses are Valued on Flippa

To facilitate transactions, Flippa provides an independent valuation rating for every online business listed. This is similar to sites‘ domain authority or page authority metrics.

Specifically Flippa‘s algorithm analyzes aspects like:

  • Business model – earns money how? Ads, digital products, subscriptions etc.? Scalable?

  • Financials – earning how much currently? Historical trends and growth %?

  • Web traffic – volume across channels organic vs. paid? Consistency?

  • Revenue drivers – diversified streams? Reliance on big channels?

  • Engagement metrics – repeat visitor %? Social shares?

  • Age – for how long has business operated? Survived market fluctuations?

And consolidates it into an overall Valuation Score from 1 to 100.

Higher scores signal stable, better-performing online businesses while lower scores indicate high-risk and speculative listings.

As a buyer, never take asking prices at face value – refer to Flippa‘s unbiased valuation rating for better clarity.

Now speaking of dollars and cents, what does Flippa charge?

Flippa Pricing and Fees

Instead of membership plans, Flippa keeps things simple by charging sellers success fees only when a transaction closes successfully:

Sale Price Flippa‘s Fee
Under $500K 8% of sale price
$500K – $1 million 5% of sale price
Over $1 million Custom

And there are no charges for buyers – purchasing online businesses is absolutely free.

Compared to the painful effort of selling offline, Flippa‘s fees translate to outstanding ROI boosting the deal closure probability for sellers tremendously.

What has Flippa been up to beyond just buying-selling though?

Recent Developments at Flippa

While brokeraging online businesses remains Flippa‘s bread-and-butter, some interesting recent moves include:

Flippa Partner Program

In 2022, Flippa launched a partner program for digital marketing experts to help list businesses on Flippa for clients and earn commission while at it.

It has already resulted in a surge of premium listings getting better visibility and higher selling prices ultimately.

Educational Resources

Flippa has ramped up free resources like startup valuation tools, online events and webinars guiding buyers and sellers.

The moves signal Flippa‘s doubling down on member support throughout the business ownership lifecycle.

Strategic Funding

In 2021, Flippa raised funding from the likes of Founders Fund to accelerate developing a best-in-class infrastructure for buying, operating and selling internet businesses.

So expect the platform to only get more powerful and higher service quality levels!

Now that we‘ve covered Flippa extensively, let‘s highlight alternatives to consider depending on specific use cases.

Top Flippa Alternatives for Buying/Selling Online Businesses

While Flippa takes the cake for choice and transactions volume, niche platforms matter too.

MicroAcquire – For Tech-focused Online Businesses

MicroAcquire focuses exclusively on acquiring sites and digital products serving 100,000+ monthly users or $100,000+ yearly revenue ranges. Prices range from $500K to $5M+.

The lean platform appeals especially to technical founders looking to get acquired by like-minded buyers.

Empire Flippers – For High Value Online Assets

Catering to the premium range, Empire Flippers brokers 6-figure and 7-figure internet businesses routinely. The experience can be more personalized given focused deals.

However, you pay for this access through account managers charging pretty steep commissions.

FE International – For Larger Companies with $2M+ Valuation

FE International targets multi-million dollar corporations specifically in the ecommerce, SaaS and digital content spaces. But custom marketing, consulting etc. services don‘t come cheap.

Listings tend to be more serious players though perhaps interested in private equity entrances.

Indie Hackers – For Bootstrapped One Person Online Businesses

Unlike Flippa‘s extensive marketplace capabilities, IH is more a tight-knit community forum for solo founders to chat. Listings and deals happen more organically.

Micro SaaS apps, niche sites built and run by individuals get priority here mostly.

The point is…assess platforms based on the lifecycle stage, size and model of your online business to extract true value.

Now to make the most of transacting on Flippa itself, here are some pro tips!

Expert Tips for Finding Undervalued Deals

To gain an edge as a buyer on Flippa, master these skills:

Verify Valuations Thoroughly

While Flippa‘s scoring helps, you need to vet numbers claims beyond face value given anyone can list on the platform.

Some steps to validate listings:

  • Independently estimate traffic volume via SimilarWeb and SEMRush
  • Glean social following authenticity via LikeAnalyzer or HypeAuditor
  • Estimate revenues through market rate x claimed traffic
  • Review Google Analytics screenshot trends critically
  • Scan expenses disclose and tally up profits/margins

Building your own assessment framework helps separate quality listings from lemons.

Think Long-Term

The biggest pitfall is assessing businesses purely on current financials. You must envision growth pathways when valuations appear astronomical today.

For instance, niche sites pulling just $3000 monthly now may seem overpriced at a $300K listing tag.

But upon deeper research, you might identify future expansion routes – say syndicating unique content via an upcoming Amazon affiliate play – making that 3X multiple sensible.

Get to the Founders‘ Motivations

Study the founders‘ journeys closely to understand their reasons for selling before placing bids.

Are they distressed to sell due to external factors like burnout? Or deliberately timing exits to free up time for new ideas?

These motivations give clues into potential haggling scope or unaddressed business issues.

In summary, weed out superficial listings to discover true gems with some diligence!

Tips for Sellers to Successfully Close Deals on Flippa

As a seller, optimizing your Flippa listing and sale process leads to the best deals.

Audit Financials and Metrics Before Listing

Scrutinize traffic sources, product margins and revenue streams beforehand. The last thing you want is discrepancies discovered mid-sale!

Back key metrics with screenshots from tools like Google Analytics and Stripe to establish legitimacy.

Time Listing Strategically

Schedule listings to benefit from seasonal traffic and buyer demand. For instance. ecommerce stores show a surge in Q4 shopping peals while travel sites peak mid-year.

Similarly, list when you have the capacity to handle buyer inquiries without affecting day-to-day business operations.

Design Listings for Skimmability

Structure sales copy with enough white space, images and graphs allowing key data to jump out during buyer scanning.

Short paragraphs, subheads and bulleted text help capture interest to click deeper.

Get Buyer Communication Right

Be prompt and transparent in addressing buyer questions no matter how basic. Provide relevant documentation or refer tohelp sections.

Doing so builds trust and confidence in your capabilities as the business owner they would be inheriting from!

These best practices differentiate serious sellers from weekend enthusiasts quickly.

And there you have it – everything you need to know around Flippa and transacting online businesses seamlessly!

The Final Word

Flippa has carved a unique niche as the go-to platform allowing internet entrepreneurs to buy and sell everything – from stable niche sites to scaling app ventures easily.

Its wide variety, secure processes and value-adding tools enable both buyers and sellers to maximize deal outcomes. By bridging the gap between digital dreamers looking to exit projects at the right time and ambitious founders keen to level up growth.

So whether you want to free up bandwidth from an existing online business hitting income ceilings OR build a digital portfolio by acquiring internet assets with untapped potential…Flippa has the right buyers, sellers and facilitating infrastructure to turn dreams into reality!

Here‘s to many more successful deals happening with just a few clicks 🥂

I hope you found this guide helpful. Do let me know any other questions in the comments!