Note: If you’re considering selling your site through a website broker, please click here to fill out our “sell your website” form.
Should you consider hiring a website broker when selling your websites? After reading this interview I had with Michael Koral, lead broker for WeSellYourSite.com, you’ll be able to answer that question yourself. Based on what I learned in the interview, the answer is a resounding yes if you have a website for sale that is worth at least $50,000. For sites worth less than that, you may want to look at our other website brokerage post.
I have never used a website broker myself but then again I’ve never owned a website worth that much money. Given the amount of work brokers do to sell your website and the network of high-end buyers they have access to, I would definitely use one and wouldn’t hesitate recommending a website broker either.
FW: Michael thanks for taking the time to do this interview. Tell me a little bit about yourself.
I have been browsing the web since I was 13. I graduated from Dalhousie University in 2005 with a Bachelor of Commerce and have since been honing my sales skills in several different industries. I started my career as a sales rep at Xerox Canada as they had a fantastic sales training program that has been accredited for years. I moved on from there to become an Internet Marketing Consultant at MenuPalace.com. It was here where I gained insight to making money online by selling advertising space and managing ad campaigns for over 150 different clients. After almost 3 years at that position, I partnered up with a few colleagues and helped grow www.WeSellYourSite.com as a website broker. My experience in the online space and the sales skills I have gained over the years has helped me grow into a professional e-business broker at WeSellYourSite.com.
FW: Tell me about your company, WeSellYourSite.com.
The company is a sister company to AyceInternet.com, a complete web development firm located in Toronto, Canada. Ayce Internet (All You Can Eat Internet) and WeSellYourSite.com have been operating since 2005. We have 3 brokers, including myself and together we have sold several million dollars worth of web based businesses. Over the years, the company has helped numerous webmasters sell off their business for a fair price. We handle the entire sales process. From site valuation, to fielding buyer inquiries, to due diligence, to contract negotiations, to closing the sale, WeSellYourSite.com does it all.
FW: What exactly is a website broker and what does a broker do?
A website broker helps webmasters sell their e-business. A website broker evaluates the business and positions it to sell at a price that is fair for both the buyer and the seller. Some website brokers do more than others, but we handle the entire sales process. Since we operate with AyceInternet.com, we also help either the buyer or the seller increase the value of their website by implementing new designs and marketing strategies.
FW: I would imagine just a few years ago the web brokerage industry was rather obscure. How has the industry evolved today?
I think the “buying and selling websites” industry is still in its infancy. If you search for “website brokers” in Google I am sure you will find numerous websites that are on the subject, but not that many people are actually a website broker by profession. As the Internet continues to grow in popularity, people are seeking more ways to make money online to supplement or even replace their regular stream of income. One of these avenues is website flipping (or buying and selling websites). Most of us brokers are still trying to educate the industry that website brokers actually exist and that there is a benefit to going with one. In the last year or so, I have received more seller inquires through my website than in years past, but that is mainly attributed to the marketing I do on my own (interviews like this help for sure!). Blog writing, article writing and interviews are a great way to educate the industry without being too aggressive in your approach.
FW: I think when most people hear the word “website broker” they automatically assume only sellers use brokers but do buyers use website brokers as well?
Sure. We have a network of buyers that we represent. We send out emails to these buyers with e-business opportunities in their investment range all the time.
FW: Can buyers contact a website broker and just ask what is available for sale or is there more involved?
A buyer can contact a website broker at any time to get a complete run down of their listings. This is at least the case with us at WeSellYourSite.com. All the buyer has to do is visit our site, take a look at the listings they are interested in and sign a non-disclosure agreement for each listing they want more information on. There are no fees whatsoever. We simply have them sign the NDAs to protect the sellers’ information.
FW: Does your company primarily work with buyers or sellers?
We work with both. We found that once we list a website, we receive countless buyer inquiries. Obviously, only one buyer can buy any given e-business so we are then left with numerous buyers who are seeking a certain type of e-business that did not get to purchase that initial offering.
FW: Can you walk me through the general sales process from beginning to end when a broker is involved?
Website brokers generally handle the entire sales process. If we represent a buyer, we simply just find out what they are looking for (how much money they have to invest, what type of sites they are looking for, what kind of deal structure they are willing to accept, etc). When we represent a seller, we go through pretty much the same process as a real estate agent. Before we enter into an agreement with a seller, we do our own due diligence. We want to make sure the seller is selling a legitimate business so we do not waste our time with them. We analyze their traffic and revenue streams, confirm profits via bank statements and tax returns and scour the Internet for articles and information about the business in question.
Once they pass our due diligence test, we get the seller to sign our exclusive listing agreement. We then gather as much information as we need to sell the business. We create a proper prospectus, acquire financial statements and traffic analytics and put all this into a proper sales package that we send out to prospects. Once we list it on our website we handle all prospect inquiries, and do what is needed to get an offer for the business. Once we negotiate a fair price for the business, we get a contract signed between the buyer and seller and enter the due diligence period. At this point the buyer inspects the seller’s business to ensure everything that was presented to them is, in fact, true. At the date of closing, we handle the exchange of money via an escrow service.
FW: Can you tell what’s happening behind the scenes to market the websites you’re selling? You’re obviously not listing your websites for sale on Flippa so what are you doing to get your websites sold?
We have a network of buyers in place that we have created over the years of running the business. For every business we put up for sale, we receive countless buyer inquiries, so our network is quite large now. No, we do not list our sites on Flippa. We are part of a number of brokerage websites that we pay for on a monthly basis. That helps cast a wide net and get the website sold as fast as possible. If our network of buyers are not interested in the business, someone will find our listing on one of these sites and we will get the website sold.
FW: I’m sure it varies, but on average, how long does it take for a website broker to sell a website?
You are right, it does vary, but I would have to say it takes an average of 60 days to close a business. It depends on the due diligence period most of the time. Some buyers need more time than others and that is somewhat out of our hands. One due diligence period lasted for a couple of months because the buyer was asking the seller for items that he could not provide in a short amount of time (Tax returns, for instance).
FW: On average, what do websites typically sell for – is it the “standard” 10-12 x monthly revenue?
Websites usually sell for two years profit. This too depends on the website in question. If a website has only been operating for 6 months, it may only sell for the profit that it generated in that 6 month period. If a website has had growing profits for 3 years and has a fantastic domain name and high growth potential, then it may sell for much more than 2 years profit.
FW: Let’s talk legalities and contracts for a minute. I’m assuming there are agreements in place when you work with your clients, correct?
We certainly have listing agreements in place when representing a seller. We also make sure that every buyer signs a non-disclosure agreement before receiving information on any given business.
FW: How long are the listing agreements in place?
We typically sign listing agreements for 120 days.
FW: How hard is it for a seller to get out of an agreement with a website broker in the event they aren’t happy with the service they’re getting? And are there typically any fees involved when canceling?
This is usually handled on a case-by-case basis. Before the seller enters into the agreement, they can decide how long they want the agreement to go on for. There are no fees to cancel the agreement, but there needs to be a valid reason as to why they want to get out of it. Sellers would typically wait for the agreement to expire if they are not happy with the service.
FW: Does your company charge any upfront fees and is the brokerage fee a flat fee or a percentage of sale?
We do not charge any upfront fees. We have a broker fee that is paid by the seller only once the website is sold. It is a fee that is a percentage of the sale.
FW: You don’t have to tell me what your company specifically charges as I’m sure you’d like to handle that on a case-by-case basis, but what can someone expect to pay when using a website broker?
Typically fees can range anywhere from 8-12% of the sale price.
FW: What are the average price ranges of websites that your company works with?
The websites that we typically sell need to be turning a substantial profit for at least a year. So, if it profits at least $2,000-$3,000 per month for 12 months, we would be interested in it. We typically deal with websites that we can sell anywhere from $50,000- $5 million. Any smaller site is not really worth our time as it takes the same amount of time to sell a $30,000 business as it does to sell a $900,000 business. There are obviously exceptions to this as we may do favours here and there for previous clients of ours.
If you’d like to work with a website broker, please click here to fill out our “sell your website” form.
Michael Koral can be contacted through his company’s website WeSellYourSite.com, or by email at Michael@wesellyoursite.com or by phone at (416) 551-0300.
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