Buying Online Businesses | How to Buy A Profitable Online Business in 2021?
If you are looking to buy an online business, you have probably started gathering enough monthly income to the point where you can profitably acquire a business that is generating monthly income anywhere from $5,000-$50,000 USD a month in average net profit. Whether you have thought of buying an online business in the future or are at least curious as to what this looks like, knowing how these process works are important.
What Do I Know About Online Businesses?
Over a span of four-years, I helped one of the world’s largest online business brokerages successfully broker more than $120,000,000 in online businesses. I also own my own portfolio of online business and websites that I have been building since 2014. In addition to this, I contribute articles for Forbes and Entreprenur.com about the subject matter of buying and selling websites and online businesses. More interested in selling your online business? Make sure to read this post here about selling online businesses.
If you have been thinking of buying an online business, you might still be in the research and planning stage. Before you make an investment of any sort, it’s always important to know what you are getting into. Additionally, to have a high level of confidence that you are making the right decision and that you will get a positive return on investment (ROI).
Why Buy an Online Business? Three Reasons Why Buying an Online Business is Better Than Building an Online Business
Buying online businesses is an idea that is still fairly new to most investors, but things have started to really pick up traction recently. As a result, traditional investors are slowly getting involved, but some are still attached to how things worked 20-30 years ago might still be a little skeptical on whether buying an online business is the right decision. There are some reasons to alleviate your fear as online businesses are becoming more and more profitable.
1. Six and Seven-Figure Online Businesses Exist
Getting a six-figure or even seven-figure income is realistic in today’s world of online businesses. In the past, this sort of income was more reserved for people who worked high-caliber jobs, had large returns in the stock market, assets that were heavily gaining in value, and so on. Today, this can also be done online and so can acquiring a six or seven-figure business.
2. Income is Transparent in Advance and Verified!
Before you buy a business, you will know exactly what level of income it is generating in advance of your purchase. When buying an online business, the numbers need to be verified and this is done in a number of certain ways. I suggest the motto, “trust, but verify” and that is one of the big perks of utilizing an online business broker when buying an internet-based asset. Most brokers spend weeks or months verifying the financial details (and seller) before you even get access to seeing the business.
3. Avoid the Process of Building
The hardest part of having a successful business is often the hard work that is involved during the building process. There is often a lot of hard work and investment straight out of your pocket that is necessary before you can start reaping the benefit of your labor. When you buy an online business, you can avoid this altogether and start earning money right away.
Types of Online Businesses that are Booming Right Now
Before you go out and buy an online business, it’s important to know that there are many different options to choose from. This should provide relief to those who are worried about whether or not this is the right investment opportunity. To help you out with your search, let’s check out some of the top online businesses that are booming now.
1. Amazon FBA (Fulfilled By Amazon)
If you want to buy an online business that sells products and tangible assets, you might also be considering using a top-tier platform like Amazon. After all, Amazon is the world’s leading e-commerce website and is widely trusted by its users. This makes it a good opportunity to consider if you are looking for a tested and reliable business.
What Is Amazon FBA?
Have you ever bought something from Amazon.com? If so, there is a high chance that the product you purchased came from a third-party seller that utilizes Amazon FBA. More than 50% of all Amazon sales come from these third-party sellers. Amazon FBA is a type of business where you source a product from anywhere (USA, China, India, Etc) then store your products in official Amazon fulfillment centers. This way, you don’t have to handle the process of shipping and handling. You simply put your inventory in a fulfillment center, and let Amazon do the rest of the work. This makes it a lot easier for a business owner to put many aspects of sales on auto-pilot.
What is it Like Selling on Amazon FBA?
Many people who buy an Amazon FBA business will already see lots of income coming in right from the get-go. Essential, you can focus all of your effort on just growing the business since a strong moat or foundation has been established. In addition, this is being done through a stable and widely-trusted platform like Amazon. This creates a lot more stability in your online business. You can also avoid many chore-like aspects of handling sales such as putting the product into a box, making a shipping label, going to the post office, and so on.
What’s Not to Like about Selling on Amazon FBA?
Although it’s tempting to buy an online business that works in Amazon FBA, it’s important to know that there are also fees that can come along with this sort of business. The Amazon FBA fees will usually be based per-unit around 50 cents to $1.50. Keep fees in mind before you consider making Amazon FBA your primary source of income. Also, remember that Amazon is able to change their fees at any time and this is what is called “platform risk” and every online or offline business has some sort of risk like this.
If you want to buy an eCommerce business, you will be in good company in today’s world. Lots of people are shopping online due to the convenience it provides. As an entrepreneur, having your own eCommerce business is a great idea to consider. This is because it gives you a lot more freedom to be your own boss and rely less on third-parties than many of the other online business ideas.
What’s is it Like Running An E-Commerce Business?
An eCommerce business is where you have your own website where you list your own products. Typically, you will drive traffic to your website using marketing tactics like SEO and advertisements. Those who buy an eCommerce business will often have a higher sense of freedom since they don’t depend on a third-party.
What’s to Like About Selling on E-Commerce Products?
Those who buy an eCommerce business will instantly unlock access to their own virtual store where the only rent you have to pay hosting fees, your domain name, inventory fees, and most likely a big portion will go towards marketing expenses like ads. This is a lot easier than having a physical store where you need to commute to and back from work, pay rent, and so on.
What’s Not to Like About Selling on E-Commerce Products?
When you buy an eCommerce business, the most inherent risk you pay is having to compete with giants like Amazon. Many people will combat this by listing on these platforms as well for higher rates, but it can be a difficult thing to do without a proven business model that is already working well. In addition, you will often have to work more to handle the aspects of sales, marketing, shipping, customer service, and so on. If you don’t have a proven way to market your business with ads or organic traffic, then it can be very competitive to grow your business. Building a strong brand with loyal customers will always outshine a quick fad product like fidget-spinners.
Many of the people who buy an online business will be interested in dropshipping. If you want to sell products without having to worry about the process of production, shipping, handling, and so on, this is a great business to consider. Those who want a business that is less dependent on handling all aspects of sales often get into dropshipping.
What is Dropshipping?
This is somewhat similar to Amazon FBA in that you will be using a third party to fulfill orders. However, the main difference here is that you are essentially taking the order, then sending it to the manufacture who directly sends the product(s) to the customer. Typically, you might have a business in a separate country or state that handles the production and shipping. You, on the other hand, will need to handle the marketing and customer service. The image below gives a really great and simple explanation of how dropshipping works.
What to Like About Running A Dropshipping Business?
If you are good with people (customer service) and good at marketing (running ads or organic traffic), dropshipping is a great idea to consider. This is because dropshipping takes all the heavy lifting out of sales for you: production, packaging, and shipping. If you love the aspects of sales that include talking with people and engaging with your customers directly, then dropshipping might be a good business to get into.
What to Not Like About Running A Dropshipping Business?
The biggest problem that can come along with dropshipping is having to find third-parties that can produce and ship your products in a reasonable time. Once you establish a good relationship with a third-party, the business starts to kick into a higher gear. If you are someone who is buying an online business, though, this will generally be already done for you, and years of trial and error will be out of the way!
4. Affiliate Marketing
One of the top avenues to consider when researching to buy an online business is affiliate marketing. This is one of the most passive ways to generate income online, making it popular among those who are seeking to avoid as much work as possible when transitioning over to the online business world. It is generally very hard to start, making it good for people who are looking to acquire and buy an online business.
What is Affiliate Marketing?
Think of affiliate marketing as being similar to a “referral”. What you want to do is to find people interested in a product, provide details about the product or service, and then refer them over to the place where they can buy it. If the customer buys the product/service, then you are rewarded with an affiliate commission or “referral fee.” Affiliate marketing occurs when you have a platform with lots of traffic. What you do is use this platform to refer people over to the place where they can buy a particular product. One of the biggest affiliate marketing networks is Amazon associates and you can essentially get a commission for referring people to buy just about every product available on Amazon.
What is to Like About Affiliate Marketing?
What is nice about affiliate marketing is that you don’t have to do anything involved in sales other than referring buyers over to the platform where they buy a product or service. This takes away all hard aspects of sales such as customer service, shipping, inventory, and so on. Instead, you can simply focus on building your strategy to drive traffic and influence so that you can refer over as many sales as possible.
What’s Not to Like About Affiliate Marketing?
If you want to buy an online business that is based on affiliate marketing, you need to worry primarily about building traffic and affiliate commission percentages. Essentially, you need to rely on the commission rates that third parties provide to you. When the company you are an affiliate for decides to change your commission rates, this can leave you with fewer profit margins at a moment’s notice. Again, this can be reduced in multiple ways, but there is a platform risk with any business.
5. Blogging with Display Advertising
Getting into blogging is one of the most popular options for those seeking to buy an online business. This is because it is a more self-sufficient business than many other options available. This allows the owner a lot more freedom to be independent and write about what you love and build a career around it.
What Is Display Advertising?
If you want to buy an online business that is based on blogging, you are probably interested in a particular niche. Whether it be travel, music, politics, and so on, a blog depends on having a high level of authority. You want to make people come to you and have you as their source of information for a particular topic. When you buy into a blog, you will be able to avoid much of the heavy-lifting involved in building a fanbase. Essentially, your blog is monetized by ads and display advertising can be a great complementary monetization alongside affiliate income. There are loads of ad networks that automatically display ads on your entire website/blog and depending on the clicks or views these ads get will then determine how much money you earn.
What to Like about Display Advertising?
Having a blog that makes money is one thing, but having a blog where you get to paid to write about what industry you love is very satisfying. If you are passionate about something and can pour your heart into it each day and write about it, the exact amount of income you receive might be less important. If you have always dreamed of being an authority in something that you love, buying a profitable blog in your area of passion is a good choice. Even if you aren’t a passionate writer, you can always easily outsource the writing content to an individual or team of writers. Most established blogs would include curated writers that can easily be transitioned over in the sale.
What Is Not to Like About Display Advertising?
When you have a blog, there is a lot of background work that needs to be accounted for. You will need to make sure that your SEO remains solid, that you are building new traffic, retaining old fans, all while keeping your sources of monetization in mind. You will also have to rely a little bit more on third-parties ad networks and make sure you are consistently producing high-quality content.
How to Get Started in Your Search for an Online Business
Whether you are interested to buy an online business, or you are a business owner looking to sell your online business and finally secure your ROI, it’s important to do lots of research before you decide to make your first acquisition. If you want to set up a complimentary buyer consultation, feel free to fill out this short application to set-up a call.
About The Author:
My name is Mike Swigunski, and I am a bestselling author, remote work leader, and founder of Global Career. As an online business expert that has helped broker millions of dollars of internet businesses, I have cultivated a strong passion and knowledge for everything within the remote work realm. Now, I am focused on transforming the way location-independent work and business synergize. After more than a decade of working remotely and internationally in more than 85+ countries, I have built a unique 360-degree view of the remote workforce and love sharing my knowledge and experience to help others succeed.
Looking To Buy An Online Business?
Are you wanting to save years of time and buy an already established online business? If you have more than $150,000 in liquidity and ready to aquire a profitable online asset in the next 3-6 months, click here to schedule a free buyer consultation call today! Want to learn more about buying online businesses? Not quite ready for a call, make sure to read this post about buying online businesses or you can read this article I published for Entrepeneur.com.
Buying Online Businesses [Video]
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