Is a Lead Gen Business or Affiliate Website
Many entrepreneurs who have learned exceptional marketing skills have fired their clients and turned to running their own affiliate sites as a way to make a great living.
Because there are so few moving pieces to create niche affiliate or even broad category authority sites, the business model has a lot of appeal to buyers and builders alike.
We used to get the question frequently at conferences “is my affiliate marketing business even sellable?” However, over the past couple years it seems that most authority site builders have gotten the message that there is real wealth that is generated by selling their sites.
There are marketplaces for domains and small affiliate sites that make less than $15K per month, however, to work with a real online business broker, your business will have to meet a few more criteria. For starters, we require that the business:
- Make at least $200k in profit per year
- Be at least two years old
- Allow the new owner to continue in the success of the business (must not be reliant on the sellers skills, relationships or link network)
You can still sell your business if it doesn’t check all of these boxes, but it is really too small for a website broker like us to help you. You may look into selling it on a forum or message board in addition to listing it on a platform like flippa.
If you are interested in finding out how much your affiliate marketing business is worth, feel free to fill in the valuation request form below.
How Much is My Affiliate Website or Lead Gen Business Worth?
We are seeing most affiliate marketing websites and lead gen businesses sell for between 2.4 X and 3.3 X their annual profit.
There are brokers and marketplaces in our industry that sell these websites for significantly lower valuations than this. This is primarily because they work with smaller, more volatile businesses that are desirable for website flippers to buy, change the link profiles on and grow. However, these small sites are not attractive to high dollar investors and therefore sell for much lower valuations in
Generally speaking, businesses making over $250K in annual profit will be at the higher end of that valuation, while smaller businesses <$100K annual profit will typically sell quicker, it will be for the lower end of the valuation spectrum.
Factors Affecting Affiliate Marketing Websites and Lead Gen Businesses
The primary factor affecting the valuation of your affiliate or lead gen business is simple, “how much money is it making you”
There are a variety of other factors that we see playing a role in what the sales price of the business is as well as how quickly it will sell. Some of them are:
The industry your website is in.
Some industries are more popular/ competitive than others.
How old your business is.
- A sustainable track record of profitability is as good as gold.
Where your business is based.
- Websites based in the USA that have tax returns on their business are at a major advantage. When a business has clean books and tax returns, we can help buyers secure financing to purchase the business. Not only does this provide cash closings for the buyers, it also gets the business a higher valuation.
How many hrs./ Week are you working in your business.
- Affiliate and lead gen sites are typically quite passive. Investors in these businesses want to park their money in a site, work 2 hrs./week and get paid, they are generally not looking to buy themselves a job.How are you sourcing product.
What affiliate network or relationships does your business use?
- There are some affiliate networks that are more desirable to buyers than others. However, if your business has a relationship in place where you go straight to the e-commerse store/ service business and earn a commission for every sale/ lead you generate for them, that is the most ideal scenario for most buyers. Commissions are much higher and if the relationship has stood with a solid business for a period of time, they will not see it as much of an increased risk factor.
If you get serious about selling your business, you can setup a call or request a complimentary valuation.
Do I Sell The Corporation, Or just the website(s)
Generally speaking, small businesses transact in asset sales, not share sales. This means that the buyer will make an offer to buy all of the business assets (social media accounts, websites, employment contracts, operating procedures, etc.) There are some larger business that will occasionally sell in a share sale, but this is the exception, not the rule.
Who Will Buy My Affiliate Site or Lead Gen Business?
Affiliate marketing businesses and lead gen sites are some of the most passive online businesses. There are buyers who may buy 2 or 3 in any given year. With that said, it is typically the smaller sites that sell quickly. The larger ones may sit for some time until the right buyer comes along.
The three main buyers of affiliate marketing sites are:
Boutique private equity companies.
Small investment firms have popped up with increasing frequency over the past few years. They raise anywhere from $2 million to $10 million from investors. Then they’ll acquire a portfolio of affiliate businesses, bring in their content writers and media contacts to increase the number of posts and quality links with the idea of selling them all together as a package in a few years time.
Once affiliate marketers have mastered building sites from scratch or ranking their clients sites, it is time to use their talents to get them a higher return. This means that instead of building small, niche sites or charging a small fee to make their clients millions, they want to run a small portfolio of authority sites to be a major player in a certain category. These buyers know what they’re looking at, know how to run the business and know what it’s worth..
The passive nature and high earning potential has caught the eye of several nine-to-fivers. this means that there are a handful of buyers looking to get into buying and running affiliate sites instead of working in their current career.
We typically advise against a newbie buying an affiliate site, lead gen business or any other business that is heavily reliant on SEO as that is likely not something they are familiar with.
How Do I Sell my Affiliate Marketing Website or Lead Gen Business?
Start here if you are considering selling your affiliate marketing or lead gen business. In short, we’ll give you a realistic idea of what your business is worth and if it is something we can help you sell. Share with you the deal structures that are likely to be proposed and the timeline to expect. If you chose to list the business with us, there wil be some documentation that we need to gather from you and your business will be in front of buyers in no time.