Selling Your Affiliate Marketing Website

Preparing to Sell Your Affiliate Marketing Site

Just like selling a house, a car, or any other asset, you want your business to be in the best shape possible in order to attract the most attention from buyers. For an affiliate marketing business this means making sure your operating procedures are documented, you have automated as many operations as possible, you have documentation to show your content creation and link building strategy and your financial statements are clean and orderly.

Financial Statements

To get the best valuation for your affiliate marketing or content site, you should have very clean and easy to understand financials. There are very few revenue streams or expenses that go into running a content site, so the financials are typically short and east. If you have an accountant for your books, this portion is done for you.

If you are looking to create an income statement from scratch for your business, make sure that all of the following cash flows are addressed at a minimum.

A line item to show each revenue stream. This means separating out cash flow from your various sources (AdSense, Amazon Associates, Commission Junction, etc.)
A line for each expense your business has (hosting, domain, employees, etc.)
Here is a more encompassing guide to Income statements to double check your work.

Standard Operating Procedures

Outside of the financial statement, having clear operating procedures is the most important document that can be presented to a buyer. This means that all procedures done by the owner AND done by all of them employees should be documented.

If you outsource your content creation or link building, those relationships should be documented and passed on to the new owner.

Listing Your Business For Sale

Sales Packet Creation

Once financial statements and standard operating procedures have been created, we’ll make a sales packet for your business. The sales packet will contain not just the business financial statements and operation procedures but will include product summaries, Existing links, existing ranking information, historical rankings, opportunities to grow the business moving forward, a short Q&A with you, and who the business is a fit for.

Sample sales packet cover

Presenting the Business

Once we have completed the financials and sales packet, we’ll review them with you for final approval. We’ll also create a teaser for the business. This teaser is a one page document that just shares the small amount of information that we want to make public on the business. Typically that is the industry, revenue, net profit, age and asking price.

Once the teaser is complete we’ll send it to our list of buyers to see who is interested in the business. Many of these buyers like purchasing businesses at this stage before they go on the market.

If the business does not get any suitable offers from our current buyer list, we will put the business on our website, third party listing sites and advertise it to potential buyers to stir up more interest.

We ask that all potential buyers complete our non-disclosure agreement and explain who they are and what they are looking for before we let them view the sales packet. This admittedly is not a perfect system, but it is the best process that we have found to weed out the tire kickers.

Fielding Offers, Negotiating and Closing the Deal

Fielding Offers

Receiving offers for digital assets is more nuanced than selling most any other type of asset. There are typically many moving pieces in a business and that makes the transaction a bit more complicated. Buyers will ask the seller to finance a portion of the deal for them. This means the buyer pays you fixed payments over a few years for the business.

A buyer may also request a hold back on the purchase price. This is the most common deal covenant that we see and is also one that we typically advise buyers to consider. A holdback means a portion of the purchase price is not paid at close. Instead, it is paid after certain criteria are met. ($1M paid at close, $250K paid after 90 days of training is over.)

Sellers should be able to balance their primary goals for the sale with one of these deal structures that allows the buyer to mitigate some of their risk. If you as a seller are comfortable receiving payment over 2 or 3 years for your business, your business becomes much more appealing to buyers and you should be able to ask for a slightly higher purchase price.

Businesses based in the US with at least two years of clean tax returns may be able to get the business pre-approved for an SBA acquisition loan through one of our partners. Businesses that can be acquired through an SBA acquisition loan are more desirable to buyers and therefore typically close quicker, at higher valuations and with a higher level of cash paid at close.

Deal Negotiation

Once a buyer makes a suitable offer for the business, we will present it to you and discuss with you whether to accept, reject or counter. If you chose to counter the offer, we will help you structure a counter offer.

Although most affiliate marketing businesses and content sites tend to be fairly passive, one of the deal points proposed by the buyer will likely be that he/she wants you to stay on for a period of time to oversee the business and train them in the operations. This is fairly standard in the industry and we advise most sellers to accept a reasonable training period as part of the transaction terms.

Close & Migration

Once final deal terms have been agreed upon, it is time to transfer the capital and business assets. Being as though most business acquisitions are for assets and not equity, the corporate entity you used to run your business can typically stay with you, while all other business assets are typically purchased by the new buyer.

The majority of affiliate sites use WordPress as their CMS of choice. This makes migrating the website(s) to a new owner fast and simple. We will also oversee that passing of all business trademarks, employee contracts, and any other purchased asset as well as migrating the capital to escrow. The funds stay in escrow for a 14 day due diligence period and are then disbursed to you, while we keep our fee.

Most sellers will chose to get legal council before accepting a final offer. This is not included in our fee and business sellers should allocate $2K – $5K for an attorney to advise them on the asset purchase agreement.