This is his successful acquisition story.

The Hunt for the Perfect Business

When Andrei first landed on the Flippa, his initial quest was open-ended, contemplating the acquisition of various assets such as Ecommerce, content platforms, or SaaS ventures. He knew though, that as soon as something good caught his attention, he would’ve been ready to buy it. 

He spent about a month looking for the right business to appear on Flippa Then one day, his discerning eye spotted a nine-year-old WordPress plugin Ecommerce business, freshly listed on Flippa. 

Actively reaching out to the seller within 24 hours of its appearance on the marketplace, Andrei initiated discussions and negotiations.

Acquiring a Powerful WordPress Plugin Store

SnapOrbital specializes in selling popular add-ons for the WordPress Learning Management Plugin LearnDash, as well as a stand-alone membership and eLearning plugins, coupled with and an innovative project management platform. 

At the time of sale, SnapOrbital boasted a monthly profit of $11.6K, with an impressive profit margin of 87% and a TTM revenue of $180.2K.

The Experience on Flippa as a First-Time Buyer

In this first-ever buying and selling experience for both parties, Andrei commands Flippa’s invaluable support. 

Certified M&A Advisor, Alexis Whitlock, played a pivotal role, guiding Andrei and the seller through every phase of the process, ensuring clarity in decision-making and facilitating seamless negotiations.

After agreeing to a sell price, Andrei and the seller dried the ink on the contract, and the sale was done. 

Andrei’s Future Plans on Flippa

Impressed by Flippa’s professionalism and the adept guidance of its advisory team, Andrei is now actively exploring opportunities to expand his portfolio with another business acquisition.

Are you ready to find the perfect business for you? Head to our search page, and let the hunt for your next, incredible business venture begin. Your perfect opportunity might be just a click away…

Ready to acquire your next business?

Search for businesses for sale on Flippa here.

Or if you own an online business, find out what it’s worth.

Get a free valuation here.

This opportunity will not be overlooked by ambitious entrepreneurs who are already realizing that they are not only buying a successful business but can also benefit from the experience and market knowledge of the seller. Departing business owners will look to ensure that their life’s work is placed in a safe pair of hands and will likely be willing to offer expert guidance to the new owners – one of many benefits. 

This article will discuss this new market opportunity and why entrepreneurs should buy businesses from retirees instead of purchasing a less-established company or setting up their own business. In addition, we will also provide some helpful tips on how to find such an opportunity and complete a purchase. 

The Benefits of Buying an Existing Business From a Retiree

Many business owners close to retirement age are considering their exit plans and how to recoup as much money as possible to enjoy their later years. However, the cost of buying a business from a retiree can still be much lower than starting a business from scratch or buying one that is relatively new and on the up. 

There are several advantages to buying a well-established business. One of the key benefits is the little-to-no startup time of buying a recognized brand, its customer base, and possibly a well-trained workforce. This solid base can also make it much easier to secure financing from lenders if you want to grow the company quickly. 

But let’s not forget the value of the person you are purchasing the business from. Their decades of experience and know-how can be tapped into to allow you to hit the ground running. Many retirees may not be looking to down tools immediately and could be open to sticking around in a consultancy role, giving invaluable advice and ensuring a smooth transition. 

In summary, the key benefits of buying an established business from a retiree include the following:

• Potentially a lower investment than starting your own business or purchasing a startup.
• You are buying an established brand and customer base.
• The business may already have a trained workforce in place.
• Financing may be easier to secure.
• You can tap into the previous owner’s experience and industry knowledge. 

How Baby Boomers Are Giving Back to Younger Entrepreneurs

During the transition from being a full-time business owner to a retiree, many baby boomers will be more than willing to give a little back to the businessmen and women of the future. Many people selling their businesses will still hold a lot of influence in their respective industries and may still wish to be involved in an advisory capacity. Some retirees may even join regulatory committees on a part-time basis, remaining important figures that earn instant respect and influence others.

Retirement does not mean a person no longer seeks new challenges, with some people taking up new roles within the community or lending their skills to charities and worthy causes. The experience and connections of baby boomer entrepreneurs cannot be underestimated, and younger generations can benefit greatly from their mentorship, support, and guidance. 

Since most experts recommend investing 10-15% of your income for a healthy retirement, many retiring businessmen may also be on the lookout for new financial opportunities, such as investing in growing businesses. Data shows that baby boomers are around 9 times wealthier than millennials, meaning they are in a much stronger position to make speculative investments. Therefore, young entrepreneurs looking for additional financing should consider tapping into this demographic for a mutually beneficial partnership. 

In a less impactful way, retirees will also support new and existing businesses as valued customers. Whether looking to invest in property, travel the country, or just spend their money with local businesses, they represent a significant part of the national and global economy. 

8 Steps to Buying a Business From a Retiree

When buying any business, you must do your due diligence to determine whether the company is the right fit for you and can be purchased for a competitive price. This is why we have put together a short eight-step guide to help you through the process.

1. Conduct Extensive Research

Many factors need to be given deep thought before any purchasing decisions can be made. These include three key questions:

• What type of business are you looking to buy? 
• Does it tie in with your existing businesses and experience?
• What can you bring to the business to help it grow?

Knowing the industry is also crucial if your new business venture is to succeed, so research every market area to understand the niche and what competition you may face. One way of getting a foothold in the industry is by attending trade shows and conferences and speaking with people who have spent years working in the field and your potential customers.

2. Build Connections

Following on from attending industry events, it is a good idea to build connections that may point you in the right direction of businesses that may be available for purchase. News travels fast if a person is looking to retire. Speaking to people with their fingers on the pulse can help you stay one step ahead, giving you the opportunity to make an offer before the business reaches an online business marketplace or an auction. 

Business advisors, brokers, accountants, and lawyers linked to your chosen industry can all be invaluable sources of knowledge. 

3. Do Your Due Diligence 

Before a deal can be concluded, it is vital that you know exactly what you are buying by conducting due diligence and following the “paper trail.” Therefore, you must request all business records and accounts to identify potential issues, such as scheduled tax audits, insurance disputes, pending litigations, existing liens, etc. 

For corporations and LLCs, you should also check the operating agreement and bylaws and review the Certificate of Good Standing. Of course, this can be a complicated and painstaking process, so hiring experienced advisors to assist you is recommended. 

4. Analyse Competitors

Buying a business without knowing the competition is a recipe for disaster, especially if the company is based in an area heavily saturated with rivals offering the same services or products. Entering into a highly competitive market while being new to the industry presents considerable risk, and it may be sensible to pursue other opportunities instead. 

As well as your potential competitors, it may be a good idea to get in touch with a few existing customers to determine why they use the services of this company and what makes it stand out from the crowd. 

5. Think About the Future

You may have discovered a company that is available at a great price and ticks numerous boxes in terms of being free of debt, having a strong customer base and no real competition. However, you also need to ask yourself, what can you bring to the company? And how can you push it forward and achieve growth?

Before you sign on the dotted line, take the time to create a viable plan regarding your ideas to take the business in a new direction and how you can generate profits. 

6. Why Should They Sell to You?

Many business owners who have put decades into making their businesses successful are reluctant to sell to private equity firms that will look at their hard work as just another asset. This gives young entrepreneurs a chance to convey why they are a much better option and have the same drive, values, and ambitions as the departing owner once had. 

It may sound sentimental, but when a business has been a person’s life for 20, 30, or maybe 40 years, they likely want to ensure it goes to a safe pair of hands who will treat it with love and respect. 

7. You May Need To Be Patient

Even after the contracts have been signed, the time between that sign-off and completion could still take a while. During this time, you need to just relax and maintain regular communication with relevant parties to be up-to-date with any new developments or hold-ups. Processes such as the issuance of new tax numbers, employer identification numbers, and business licenses can all add to the timescale. 

8. Draft a 100-Day Plan

New business leaders are advised to draft a 100-day plan, a structured approach to how they will succeed in the first 100 days of their new business venture. This plan can act as a guideline or checklist to help you get your feet firmly under the table and build a platform to take the company to the next level. 

When developing your plan, it is recommended to consider the following factors:

• Your role within the company and what is expected of you
• What resources are available
• How you will engage with your customers
• Building supplier relationships
• Governance
• Developing core KPIs
• Identifying new opportunities
• Assessing the current workforce
• Annual goals and a long-term strategy

Conclusion

Buying a business from a retiree can be extremely advantageous compared to setting up a new business from scratch or investing in a recently launched and unestablished company. Benefits include an already loyal customer base, an established brand, access to financing, and the wealth of experience and expertise the departing owner may provide. 

However, like any business acquisition, research, due diligence, and market analysis are required to determine whether this is the right opportunity for you. Fortunately, with patience and the right connections, buying a company from a retiring baby boomer could be the best business move you will ever make. 

And that’s why some businesses opt to acquire existing social media accounts while others choose to buy Instagram followers. Either way, this is usually a great way to accelerate results. 

But as you can imagine, buying the wrong social media account can be a huge mistake. Therefore, this is something you want to approach carefully. In this review, we’ll share four tips to help you buy a social media account that’ll benefit your business long-term. 

3 Benefits of Buying A Social Media Account

Before going into what you need to do to ensure you’re buying the right account, let’s quickly go over why this is a reasonable route to take. So, here are the three major benefits of buying a social media account:

• Unlimited access to a great audience

Purchasing a popular social media account can give you access to a large and engaged audience. If the account is well-known and has a large following within a particular niche, it can be an effective way to promote your product or service to a targeted group of potential customers. 

However, it’s vital to consider whether the account’s followers match your customer persona. This is critical as it ensures that you can reach your ideal audience through the account effectively.

Essentially, it’s not just a matter of purchasing an account. Sure, buying one will give you instant access to an audience. However, that won’t be beneficial if the audience is not your ideal customer base.

Therefore, you must buy a social media account whose followers match your target customer to get the most value out of the account.

• Have complete control over the posts

Collaborating with influencers is very beneficial. After all, the content generated by influencers is known to perform better than brand-generated content. That’s one of the many reasons 97% of brands have partnered with influencers at some point.

Unfortunately, influencer marketing can also be costly. Plus, influencers will not give you complete autonomy with their accounts. There’s only so much they can publish about your brand. 

These are all issues you can resolve by acquiring the accounts. When you purchase a social media account with a large following, you get complete control over the account. This allows you to run the campaigns how you like. You can, hence, promote your business in a way that wouldn’t have been possible had you decided to partner with the account owner.

That said, you should know that social media users tend to be sensitive about the type of content shared by the accounts they follow. Therefore, if you decide to go on a promotional spree, chances are you’ll lose some of these followers. 

To prevent this, avoid posting promotional content alone. Mix up your social media content calendar to ensure you publish content types that can educate and entertain your followers.

• Saves marketing costs

One of the main benefits of buying a social media account is the ability to reach a targeted and engaged audience at little to no cost. This is particularly true if you’re a new business that wants to reach a larger audience. In such cases, your options are usually limited to influencer marketing and paid ads, both of which can be very expensive.

Buying a social media account requires a considerable investment upfront. However, it is a long-term investment that pays for itself, especially if you buy the right account. 

We also can’t ignore the fact that buying a social media account saves you time. As mentioned earlier, building an account from scratch can take months or even years. Buying one helps you bypass this process.

Where to Find Social Media Accounts for Sale

You know why buying a social media account is a good idea. But do you know where to find good social media accounts worth buying? Here’s where:

1. Use the help of a third-party company

If you’re the type of person who likes to play it safe, you might want to consider using a third-party company that specializes in buying and selling social media accounts. 

These companies typically act as a go-between, scrutinizing an account’s numbers (such as followers, engagement, and audience segmentation) to provide you with as much information as possible before the purchase. 

While these companies tend to charge more than buying directly from the account holder, they often offer some level of security and guarantees regarding the transfer of login information and payments. This prevents you from losing your money which can happen if you decide to purchase the account directly from the owner.

Moreover, the best 3rd party companies tend to do a thorough background check of the accounts on behalf of buyers. They’ll scrutinize the account for fake followers, for example. Doing this yourself can be quite difficult and time-consuming.

That said, you should know that most of these sites don’t disclose the exact account name before the purchase to prevent undercutting themselves.

There are different third-party vendors of social media accounts. We’ll cover one of them, Flippa, later in the article.

2. Manually search for social media accounts

This is the perfect option if you prefer to handle things independently and avoid using an intermediary. 

One of the main advantages of finding and buying an account on your own is that you can make the first offer and set the starting point for negotiations. Also, it can be cheaper to buy a social media account directly from the owner, unlike through go-betweens, who typically add charges for their services.

When looking for an Instagram account to purchase, look for an active page in your niche. Let’s assume you want to market an eCommerce store that sells beauty products for young women. The ideal account for you should have the appropriate young demographic, mostly made up of women.

On the other hand, if you’re trying to market a B2B SaaS product and your target audience is marketers or business owners. In such a case, you’ll want to look for a social media account with such an audience. You can easily get some of these details by analyzing the analytics. More on that later.

To put it simply, go for an account that has a high number of followers and has been relatively inactive lately. 

The idea here is that you may be able to find an account owner who is too busy to keep the page active and would be willing to sell the account for a good price.

One way to find these types of accounts is to search for popular hashtags. A little digging may help you uncover high-follower, low-activity accounts that are open to selling. 

4 Tips to Help you Buy Social Media Accounts Safely

Now to the best part. Here are four things you must keep in mind when purchasing a social media account:

1. Know about fake followers

One of the biggest issues with the rise in popularity of influencer marketing is the buying of fake followers. Social media account owners may be inclined to buy followers to increase an account’s perceived popularity and value. 

This practice is quite common, but there are ways to determine whether an account’s followers are fake. 

One way to do that is to examine the number of likes a post receives. If an account has tons of followers, but the posts get very few likes, chances are they may have some fake followers. 

Unfortunately, some fake account services have become more sophisticated and may even “like” posts and leave comments on behalf of their clients. To catch this, read through the comments on the account’s posts. If many of the comments are generic and vague, such as “Great post!” it’s possible that they are fake engagements. 

You can even go further and investigate some of the accounts leaving comments. Do those have any other activities? If not, you’re probably looking at a fake account.

Finally, consider investing in tools that scan for fake social media followers. These include tools such as Hype Auditor and Analisa. 

It may take some time to thoroughly assess the authenticity of an account’s followers, but doing so can be valuable in making informed decisions.

2. Ensure to make secure payments

If you choose to complete a transaction without using a third-party service, make sure to use a payment service that offers protection against disputes and allows for refunds. 

PayPal Goods & Services is a great example of a payment service that provides this level of security. 

With that said, note that PayPal payments done using the Friends and Family transfer option does not allow for refunds.

3. Check the analytics

Many social media platforms, including Instagram, provide their users with insights into their own accounts. 

For example, Facebook and Instagram offer business accounts access to insights with details on the demographics of their audience (such as gender, age group, and location). This can be useful for determining whether the account’s audience aligns with your buyer persona.

Moreover, these insights can provide information on engagement numbers, which can help you determine the authenticity of the account’s followers and assess the audience’s engagement level. Ideally, you want to go for an account with an engagement rate of between 2 to 5%.

4. Change the login credentials

Lastly, make sure to change the login information for a social media account as soon as you’ve completed the purchase. This involves creating a new email and password for the account to ensure the previous owner cannot lock you out of the account. 

Essentially, take full ownership of the account. Change those logins and start using the account on your website, email, digital business card, and other company assets.

How to Buy Social Media Accounts on Flippa

Flippa is one of the largest online marketplaces for buying and selling online businesses and digital assets like websites and apps. While it’s yet to introduce a dedicated section for buying and selling social media accounts, Flippa allows users to buy websites with their accompanying social media accounts. 

Therefore, while you may be looking for a social media account, buying one through Flippa gives you access to additional assets like a website, which gives you more value. 

The Flippa marketplace also has a reputation for offering a high volume of new listings every week, making it a good resource for finding undervalued assets. 

The drawback with Flippa is it can be time-consuming and expensive if your sole goal is to acquire a good social media account.

In Closing

Buying a social media account is a sensible move in business. It speeds up your growth process significantly. But, of course, it’ll only be beneficial if you do it correctly.

In this article, you’ve learned how to safely buy a social media account. Scrutinize the account for fake followers, check the account’s analytics, and make the payment using a secure vendor that supports refunds. Finally, make sure to change the login credentials after completing the deal.

Many website owners use Google AdSense for their websites, blogs, and YouTube videos to monetize their online presence. While there are alternative options for monetizing your website, Google AdSense remains the most popular. After all, Google is the online advertising market leader and commanded nearly a 30% share of digital ad spending globally in 2021.

Key takeaways:

• Google AdSense can earn you money from your online content.
• It’s easy to set up, and there are numerous ad types.
• Learn about CPC and how much money you’re likely to make.

What is Google AdSense?

Google AdSense is a Google advertising platform that enables website owners to monetize their web pages. It is also a method of increasing the traffic to your website, and advertisers bid to place advertising on your blog, YouTube channel, or website. 

If a website visitor clicks or watches an ad on your site, you receive a percentage of the advertiser’s bid. Google takes the difference as their fee as the mediator.

How does AdSense work?

While we don’t know all the details, as Google doesn’t disclose its’ secrets, we can still explain the basic premise. If your website has unique content and complies with AdSense’s other policies, you can apply for an AdSense ad account. 

Once approved, you can arrange for ads to appear on your website. You can choose which types of ads run and where on the page they will appear, playing around with ad sizes, ad space, and ad types. 

Source: Google

To set up the ads, you’ll need access to your website’s design features or backend so you can paste the ad code onto the page. These ads will be either relevant to the content of your website or users’ previous searches, based on Google’s “secretive” algorithms. 

So, for example, if you write a travel blog, an airline company might pay to advertise on your page if they think they can attract your audience. Alternatively, if you own a website selling holiday packages, an advertiser selling luggage may place an ad on one of your pages.

The companies that show up on your site bid for their right to be there, and a few things will determine their bid price (which we’ll go into in more detail in a moment). If you have a high-performing web page with high-quality content where many visitors click on the ad, that ad space is valuable to the advertiser, so they’re likely to pay more.

Keep in mind that Google AdSense works on a cost-per-click and revenue-sharing basis. So, as a website owner, your task is to generate as much web traffic as possible to your site and then get those visitors to click on the ads placed strategically on the site. 

Just don’t cheat. If you specifically instruct people to click on your ads or click on them yourself, Google will find out. And they will punish you, likely with suspension. 

A closer look at CPC

CPC, or cost per click, is the price businesses pay when someone clicks on their advert. They get to choose the amount they’ll pay per click, and you get a percentage of that as a commission (usually 68%).

Your commission can range from $0.20 to $15 (or more). It depends on the traffic to your site, your niche, and how many competitors there are within your niche.

For example, high-paying niches are insurance, online education, marketing, and advertising, with insurance averaging over $15 per click (and even up to $54 per click). However, most niches bring less than $3 per click.

The most crucial factor that determines the CPC is traffic. You can run a blog on a high-paying nice with strategically-placed ads, but it amounts to nothing if your website has no visitors. 

Say you have a clickthrough rate of 2%. So, 2% of visitors will click on an advert on your website. If you want to generate revenue from that 2%, you need a substantial number of visitors in the first place.

How much does Google AdSense pay?

It depends on what the advertiser is willing to pay per click, but here’s a basic breakdown. Say you get 4,000 views on your site in a month, and 1.5% of those people click an ad — that’s 60 clicks. So if an advertiser makes a bid of 75 cents per click, you would see up to $45 for that month.

AdSense has a helpful tool to help estimate how much you could generate from your blog. This tool will give you a good idea of how much traffic you need. Head to the handy ‘revenue calculator‘ to get an idea based on the type of content you create and the geographical location of your audience. 

You won’t earn $1000 a month unless you have a great website with 20-30 pages of relevant, high-quality content. 

How to create an AdSense account?

Now that you know a bit more about how the money side of Adsense works let’s look at the process of getting an account and setting up different ads on your site. 

It’s completely free to join; however, Google Adsense will only authorize ads on high-quality websites to protect the integrity of its ad network. So, to get an AdSense account, you need to meet specific requirements in your application. 

You need to:

• Be at least 18 years old.
• Have an active Gmail account that’s not linked to an AdSense account.
• Have a website that meets all of Google’s terms of service.

This last element is where things can get a little complicated, but generally speaking, it’s good to follow these guidelines:

• Your website should have at least 30 pages of unique content.
• Your website should be at least six months old.
• Your website should be getting regular traffic – there isn’t a minimum amount of traffic but the more, the better.

Here is the specific process step-by-step:

1. To start, head to https://www.google.com/adsense/start.
2. Click on “get started.”
3. Enter the website URL you want to host the ads (your blog or online business).
4. Enter your Gmail.
5. Here, you can choose whether you want AdSense to send you tailored help and performance assistance. We recommend opting in for this to learn how to monetize your site efficiently and skillfully. Additionally, take advantage of the helpful AdSense community, where you can gain insights into how best to manage your ads. 
6. Once you make your decision, click “save and continue.”
7. Sign in to your Google account, where you’ll need to give your country/location. 
8. Check the terms and conditions before reviewing and accepting. Then, click on “create your account.” Now you will have access and can start experimenting with ads for passive income.

You’ll receive a snippet of code to add to your site within the <head> </head> section. This connects your site to Google AdSense for them to review. It usually takes 24-48 hours but can take up to two weeks.

There are simple and easy instructions demonstrating how to do this. Then, once approved, you’re all set to take the next step.

The different types of AdSense ads

Always keep the user’s end goal in mind in your decision-making process related to ads. Before running ads on your site, you need to understand the variety of ad types and how to use them.

1. Display ads

Display ads are responsive and will often automatically fit the visitor’s screen size. Digital advertising comes in different formats and sizes and appears on over three million websites. Experiment with the size of these ads first to determine which works best for your website.

A display ad on Entrepreneur

2. In-article ads

In-article ads are great if you aim to provide a seamless user experience since they don’t disrupt text flow too much. They blend well with the layout of your page, fitting alongside placements that complement the reader’s flow when viewing. They are a favorite among those optimizing for mobile phones for this reason.

Source: Setupad

3. In-feed ads

A feed is a stream of content that you can scroll through. So, by extension, in-feed ads let you customize your feeds to include ads. These are native ads that fit within the context of an article without disrupting the reading experience, as readers can continue scrolling. 

Many will be familiar with the in-feed ads you see on Facebook. You can scroll right past them, but they may be of interest since they are fully customizable. In-feed ads aren’t overly intrusive to the user as they fit within the context.

4. Matched content

Matched content ads are relevancy-based ads recommended to your site visitors. These enable you to promote related content elsewhere on your site for visitors. 

Source: WPBeginner

Google will flag alternate content pages on a website to encourage visitors to click through to other pages on a site. Matched content ads are great for your website as they encourage visitors to spend more time on-site and not elsewhere on competitor sites.

5. Link ads

Link ads are a more basic form of an ad using the ad text link format. They are single-image ads that help promote your website, article, or post-click landing page. Businesses can use the same ads in different places to reach more people, and they can be responsive or take on a fixed size.

6. Video ads

Video ads feature video content and are effective mechanisms to create those thumb-stopping moments. With the growth of social media, it’s no surprise that video ads are growing in prominence. 

When done right, their attention-grabbing quality entices customers to click. When done wrong, you compromise the user experience with unwanted disruptive, rich media that detracts from the rest of the content.

7. Sticky ads

Sticky ads remain fixed on the screen as the user scrolls. These ads lead to high viewability since they are difficult to ignore. However, many users find these ads irritating and may adversely affect your user experience. 

Auto ads vs. ad units

There are two different methods of placing ads and monetizing your website. When you login into your AdSense account, you’ll have the option to choose between auto ads or ad units.

Choosing ad units lets you play around with the ad formats. You have complete control over their placement within specific guidelines. On the other hand, you can also use auto ads and let Google take care of all the ad placements on your website.

Having control of some of the ad categories you want to display on your website will allow you to maintain brand consistency and select the ads that make sense in context, as you don’t want to detract from the primary purpose of your website.

It’s best to prioritize user experience over any attempts to monetize your site, particularly for online businesses whose primary purpose is to sell products and services. Running ads should not come at the expense of your web design or page layout that still needs to serve its purpose and look inviting and uncluttered to the reader.

Top tips for success

Success won’t happen overnight, and you’ll need to implement strategies with long-term planning in mind, both in terms of your content creation and your ad optimization strategies.

The success of your AdWords depends on several factors, and since you’re using Google’s advertising software, it’s advisable to check their tips for moneymaking success. 

Here are some basic guidelines and tips for making money with Google AdSense, or at least giving yourself the best chance:

• Comply with all Google policies. Don’t try and do anything to induce clicks artificially.
• Maintain high ad viewability (IAB recommends at least 70%).
• Focus on great content as this leads to a longer session duration. Keep writing and updating to let Google know you are constantly working on your website. 
• Don’t overfill your site with ads, which can negatively affect user experience.
• As you tinker with ads, make changes one at a time and continuously monitor performance. A/B testing is always good practice to follow when assessing website performance.

AdSense alternatives

There are many alternatives to AdSense, including AdMob, WordAds, and DoubleClick. Here are some of the critical differences that you need to consider.

1. AdSense vs. Google Ads

Though both are part of Google’s advertising network, AdSense is an entirely different product from Google Ads, and they require separate accounts. Bloggers and website owners use AdSense to monetize content, whereas business owners use Google Ads to buy ad space on Google. 

With Google Ads, Google is, in effect, the seller, whereas Google is the mediating buyer with AdSense since they are buying your space on behalf of an advertiser.

2. AdSense vs. AdMob

Google AdMob is a mobile ad network that offers monetization opportunities and detailed reports to app developers, whereas AdSense targets mobile web publishers.

Source: Google AdMob

3. AdSense vs. WordAds

WordAds is a great platform to consider using if you are a WordPress blogger. Like AdSense, WordAds allows bloggers and website owners to generate ad revenue by displaying advertisements on their sites or blogs. 

Source: WordAds

Google’s AdSense takes a little technical know-how to set up and only pays out when users click on ads. However, WordAds pays per impression rather than per click. In addition, you can integrate WordAds with WordPress very quickly without knowing how to code.

4. AdSense vs. DoubleClick Bid Manager

DoubleClick aims to take out the middleman by creating an online bidding exchange putting advertisers in direct contact with publishers. This arrangement can be beneficial for premium publishers and advertisers who can demand high prices by selling their advertising space directly to advertisers. 

Source: Google

DoubleClick has now been migrated to Google Marketing Platform to unify advertising and analytics.

Source: Google Marketing Platform

Advantages and disadvantages of AdSense

Making money from AdSense is a viable revenue stream if you have a well-established blog with a decent amount of regular visitors.

Advantages of AdSense:

• It’s free to sign up and use, so you’re getting money for nothing.
• AdSense is relatively painless to set, and you can monitor performance easily with Google Analytics.
• Many publishers and advertisers use it, so many stakeholders continually look to improve the service. You can benefit from researching the community.
• AdSense supports a broad range of ad formats, so there is plenty of room for experimentation to see what works best.

Disadvantages of AdSense:

• Ads will often compromise the user experience of your website. They can clutter the layout, provide distractions, and even slow down your site, not to mention the idea that many users don’t want to see ads in the first place. This dynamic is something you have to reckon with when using AdSense.
• If Google detects any fraudulent or suspicious clicks, it will suspend your account, meaning you miss out on earnings.
• To start earning money with AdSense, you need to have a high-traffic, high-quality website. 

Summing up

With AdSense you can start making money right away. The AdSense program is an excellent website monetization strategy for content creators to earn an income and generate revenue from their content.
Flippa is the best marketplace for buying and selling websites. You can use Flippa to find your estimated website value in no time. Utilize our free website valuation calculator, browse Google AdSense websites for sale, apps, and domains for sale, list your online business for sale or learn more about how we verify Google AdSense revenue.

Frequently asked questions

What do I need to sign up for AdSense?

Besides meeting essential eligibility criteria, you’ll need to populate your website with plenty of pages filled with unique, relevant content. We recommend at least 20 pages, but probably closer to 30 would be better. 

While we don’t know for sure about Google’s selection process, we can share this advice based on other user experiences. Before you apply, you can do your best to prepare by visiting the AdSense Help Center.

How can AdSense help with business growth?

AdSense is great for those with regular, decent-sized website traffic to monetize their website, and business owners can earn extra revenue to reinvest somewhere else in the business.

AdSense offers websites a way to earn passive income. Most of the process is automated and done for you, allowing you to stay focused on creating great content for your website. At the same time, it’s not difficult to take charge if you want to engage in some experimentation with your ad optimization strategies.

Can I link multiple sites to one AdSense account?

You can manage multiple sites and their ad performances from one AdSense account. This capability is helpful for website owners to manage all their sites’ ad metrics in one place. 

Why is my revenue going down?

There could be various reasons for a decline in AdSense revenue. We suggest heading to your AdSense account to check four specific engagement metrics:

1. Clickthrough rate (CTR).
2. Cost per click (CPC).
3. Pageviews.
4. Page revenue per thousand impressions (Page RPM).

A careful analysis of these metrics should lead to a decrease in revenue. Why are fewer people visiting your site? Why are fewer people clicking on your ads? It could be ad type or size. It’s your responsibility to find out the underlying causes, make amendments to your ads, and track the consequences of your alterations.

How and when do you get paid?

There is a process to getting paid through Google AdSense. You’ll need to head into your account to fill out some information first. You’ll also need to confirm personal information, including verifying the accuracy of your payment address and payee name. You may also need to provide tax information depending on your location.

Verifying your address is quite complicated. When your earnings reach the address verification threshold, your Google ad manager will mail a PIN to the payee address in your AdSense account. You’ll then need to enter this pin into your AdSense account – you won’t get paid without doing this step. They’ll send the pin by standard post, and it can take up to 3 weeks to arrive. 

Once you’ve filled out your pin, you can select your form of payment. Several forms of payment are available, including Electronic Funds Transfer (EFT), EFT via Single Euro Payments Area (SEPA), wire transfer, etc.

It is little wonder then that so many tech-savvy individuals attempt to develop and sell apps to make it big. And given mobile phone usage continues to rise, now is the perfect time to make your move.

With the potential of such lucrative results on offer, thousands of like-minded would-be entrepreneurs hope to develop the next big thing, and tech juggernauts such as Google and Apple are looking to buy apps and turn them into global hits. 

And while the opportunity is always there to make considerable gains with the correct marketing strategy, dogged determination, and a little bit of luck, the ultimate reward for the amount of time and effort put into the app may not always correlate. Indeed, a report from App Annie found that of the 21 million apps published, only 233 made more than $100 million in 2021.  

If you’re looking to get started, you need to understand the steps and strategies that will help turn your app idea into a source of revenue.

Search Apps For Sale On Flippa

Key takeaways:

• Considerations to make when developing an idea for an app.
• Outline the steps required when building your apps.
• Generate revenue and reputation for your app.
• Why you shouldn’t contact Apple, Google, or Facebook?
• Strategies that will help you to sell an app.

How to formulate an app idea?

The American chemist and Nobel Peace Prize recipient Dr. Linus Pauling once stated that “the best way to have good ideas is to have lots of ideas.”

You might be one of those people that wakes up in the middle of the night with thoughts racing through their heads. You may believe your business concept is “the next big thing.”  After all, every app started as a notion. So how, then, do you determine if your “good idea” will create revenue?

Source: Credencys

Does your idea solve a problem?

Take a look at technological success stories, and you will see that almost all of them have one thing in common; they solve an issue or make the user’s life easier. For example, Spotify brought the worlds of music streaming and record labels together, and Netflix changed the rules regarding access to movies and TV shows. 

When considering your idea for an app, if it solves nothing, it may be classified as a quirky novelty with no real-world value. Although this type of app may still sell (no one can predict what will take the market), there are far more practical, proven strategies.

Start by considering the issues you face in your own life. Are there times when you are consistently bothered by something where you’ve wished there was an app that could eliminate the problem?

If it’s an issue that bothers you, then there is a high chance it will bother thousands of other people. So this should be a critical early consideration of the development process when designing an app from scratch.

Is there a gap in the market for my app?

Before diving head-first into an idea, you need to understand your intended market. Market research is a vital early step for any business enterprise, and mobile apps are no different. 

The mobile app market is unpredictable, and so without this aspect of your due diligence, you’re unlikely to get anywhere. With the sheer number of apps available, the chances of your app standing alone with no competitors are slim.

You can start by checking out the various app stores to see if there is already a similar app. Next, find successful apps in your target market and examine how they got to their position and what they’re doing well. Finally, gauge the market size to determine whether there will be room at the table for your app.

It isn’t just your competition you will need to be aware of. Customers are the lifeline of any business, so you must evaluate precisely where they are and what they are buying. Google Trends and Google Keyword are free tools to determine potential interest levels for your app. 

How do I craft an app proposal?

You are now in a position where you have reduced your many app concepts to a single one with real-world value and practicality that can fill a market gap. Now you must flesh out the idea.

Now you must decide what will differentiate your app as this is what your selling point will be. You should have a clear grasp of your app and the problems it can solve. You’ll be aware of your competitors and what they have to offer.

A minimum viable product (MVP) should form part of this app development process. An MVP, concerning mobile and web apps, is where the designer identifies the key features and functions of the app that they will need to develop. An MVP can often save vital time and money when used with user feedback to finetune what people will want from the app.

Source: Net Solutions

The more detailed your business plan is at this stage, the better chance you will have when it comes to selling your app idea and vision to app developers and potential investors. You should ideally know the potential scope of the app, the target audience, the cost to build the app and product engineering, and the timescales involved in growing your app.  

How to build your idea into an app?

You have your idea. You have conducted the necessary market research into your competitors and your customers. You know what will set your app apart from the competition, and you have a clear business concept of your vision. What do you need to do next to build an app?

How do I put together a development team?

Unless you have spent many hours learning how to code, market, and sell, you will almost certainly need to build a dedicated team to help you at this stage. Very few businesses can take off under the guidance of a single founder, as most people do not have the vast breadth of skills to pull it off.

Coders and developers

These are the people who will write the source code that will turn your idea into a functioning product. Though most apps appear straightforward, many will have hours of nuanced code running in the background. Your coders will build the app and fix any subsequent bugs discovered during initial feedback and playtests.

You may wish to explore three main avenues when finding your ideal development partner:

• Freelancers: These are independent contractors who work for themselves, often found on Freelancer and Upwork. They will set their rates and schedules. Some freelancers may not have professional experience with a company and may not have gone through rigorous hiring, so the range of quality may be substantial.
• App development company: These companies will often offer services separate from the coding itself. They will provide consulting and project management services to aid with the process. As a result, they are often more expensive than freelancers.
• Programmers: A mix of the previous two, programmers often work for companies but will have a high level of control over the projects they take on. They will usually charge considerably more than freelancers.

Designers

Coders and developers are experts at creating the technical basis for an app. However, they might not be as skilled in app design, and instead, specialize in a particular area, for example, eCommerce design.

If you also lack that creative flair, you may wish to bring a designer on board. You can use many freelance databases to find your ideal designer, including Dribbble, a go-to stop for designers and creatives. 

Source: Space-O Technologies

A reputable designer will frequently have a portfolio of previous client work that prospective partners can review to see whether their design preferences are compatible. Usually they will offer client testimonials as additional proof of their competence and skills. They may also have a blog page or website with posts detailing their process and knowledge.

Investors

No matter how incredible an idea is, it won’t get off the page without money to pay for your coders and designers and ongoing development costs. This is when the investors and the raising of capital enter the picture.

There are several ways to reach investors and raise capital for your app:

• Startup platforms.
• Business angels networks. 
• Crowdfunding.
• Business incubators.
• Professional social networks and individuals.
• Private equity markets.
• Bank loans.

Most investors will expect to see a detailed proposal and proof of concept before considering coming on board.

Protecting your idea

A vital consideration you will need to make when you bring in additional people to work on your app is how you go about protecting your intellectual property. It is also prudent to put steps before any significant app development.

You can protect any information and data for your app by having all relevant parties sign a Non Disclosure Agreement (NDA). It is a way to ensure all information remains legally confidential. You must protect your intellectual property rights across all aspects of the app’s construction. 

For example, a developer has the right to their coding and can use it for an iteration of your app idea if it is not made explicitly clear that all content, designs, and code developed for the project are your intellectual property. This should take the form of a legally binding contract, which you can draft yourself or obtain through a business solicitor.

How to market your mobile app?

You have now thoroughly tested your app. It looks great, and you have been able to secure the initial funding needed to bring the app to life. Now it’s time to get it in front of the people who will most likely use your app and recommend it to others. 

This opening phase of marketing and building an audience is essential if you wish to sell the app to the likes of Google Play and the iOS App Store. The following are key app marketing strategies you may want to implement before and after your app launches.

Before the launch

Business owners can often generate considerable interest in a product or service even before the project fully comes to fruition. So while your developer team is hard at work putting together the codes and designs for the app, you can take several easy steps to drum up interest within your potential market base:

• Build an app landing page: Landing pages are not the same as websites. They are standalone pages found at the end of a link that contains all the critical information about your app and what the visitor has to look forward to. You can use landing page creation sites such as Unbounce to develop this valuable marketing tool.
• Build an email list: As part of your landing page, you should create a call to action to encourage visitors to register their email addresses so that they will be notified when the app launches. This should give your app some traction from day one.
• App Store Optimization (ASO): App Store apps are ranked by their ASO score. You can boost your ASO score through strategies such as keyword optimization within your metadata, app conversion rates, and App Store creatives such as preview videos and engaging screenshots.
• Include a media kit: Journalists and social media influencers can have a great deal of sway when driving traffic to your app. You can make things easier for them by including a media kit as part of your landing page, which will contain the information and logos for your app that journalists can use for their reporting.

After the launch

Once testing and feedback sessions for the app are complete, you are finally ready to launch the app. First, though, there are further marketing steps you may wish to take to maximize your revenue and reach.

• Email your pre-launch list: It is likely those people who signed up to receive a notification when your app launches are already aware, particularly if they have been receiving product updates via a newsletter. However, making a big launch announcement to those who came on board early can’t hurt.
• Create a press release: If you have networked with journalists and other online publications before launch, there is a chance they will be interested in publishing a press release about your product. These are often cost-effective ways of grabbing some additional attention.
• Utilize paid marketing: While organic growth is the preferred option, you may wish to invest in some paid marketing if your budget allows. A Facebook ad could be a good option, with a reported cost-per-click increase of 13% compared to 2020.
• Get early adopters: You can find early adopters online through various communities such as Reddit, BetaList, Product Hunt, Indie Hackers, Quora, and Hacker News.

How to sell an app?

So now, we’ve arrived. Your app has been on the market and is selling well. You are bringing in revenue from in-app purchases. You have a loyal customer base, but you feel you’ve taken the app as far as you’re willing to go and want to pursue new endeavors. It’s time to sell your app.

There are several avenues you can follow. However, before starting the sales process, you need to consider the following.

Transfer criteria

When you choose to sell your app, you are essentially transferring it over to a new developer’s account, where they can manage and develop the app. However, not all apps are eligible for transfer.

An app will need one of the following statuses:

• Ready for sale.
• Prepare for submission.
• Developer removed from sale.
• Invalid binary.
• Developer rejected.
• Rejected.

Additionally, no version of the app can use iCloud entitlement, the app must have had at least one version released to an App Store, and no version of the app can use Passbook entitlement.

You can read here for a full list of criteria.

How much can you sell an app for?

Naturally, the rewards for your efforts are often the first thing you might think of when you’ve decided to sell their mobile app. 

Source: Flippa

Though the overall process of determining a pricing model is far more detailed, you can estimate your app’s worth by applying a one (x12) to five-year (x60) forecast multiplier to your net revenue. It is logical to start with the highest range to ensure you are not selling yourself short.

So if, for example, your net revenue per month is $4,000 (x60), your initial starting valuation over five years might come in at $240,000. Once you have established the value, it will then be down to the buyer to determine why this highest range is not a suitable price for the sale. 

If your app is less than a year old and cannot fulfill the lowest forecast multiplier, there will likely be a sharp drop in the number of potential buyers. They will need as much reassurance and evidence as possible that what they are purchasing has long-term staying power or potential. Other factors, such as high traffic and revenue diversity, will appeal to many buyers.

As an alternative, you can use Flippa’s online business valuation tool, which will give you a far more detailed breakdown of your app’s valuation.

Can I sell my app to Apple, Google, or Facebook?

The dream scenario is for this to happen. Voice recognition software Siri was rumored to have been sold for around $200 million, netting its investors and developers huge profits.

However, the reality is that these tech giants will only want to purchase apps that will give them a significant advantage over their competitors. It goes back to the first consideration you took when starting this journey. Does the app solve a problem or issue?

If the issue is a resounding yes, and you have the evidence to back this up, then perhaps they will take note of your app and make you an offer.

Tip: It is also unwise to contemplate selling your app idea to one of the big players. If you submit an idea to either Apple or Google and either company takes a liking to it, they will be able to claim it as their own in line with their Unsolicited Idea Submission Policy.

How to sell an app to a company?

There are many alternatives to selling your app to one of the big three. Marketplaces like Flippa are always looking for new customer acquisition apps, services, and products.

Flippa acts as a mediator between buyers and sellers. If you are looking to go down this route, you will need to list your app as being for sale. In a similar vein to App Store Optimization, the more details you can provide potential buyers, the more interest you will likely generate.

Operations, financial performance, track records, and proof of revenue are critical factors in proving that your app is a quality acquisition. If these are clearly defined, you will find your app higher up the listings.

Other companies are looking to bolster their portfolios and consider buying apps directly from the owner. If one of these companies approaches you, you can choose to enter the negotiation process.

Negotiations

If you are inexperienced when dealing with negotiations or have no team member well versed in the process, you should always seek independent advice beforehand. App brokers can also provide guidance, but unlike real estate, they are not duty-bound to favor you in the negotiations.

Buyers will always look for the best deal, and some may not hesitate to take advantage of owners keen to make the sale. A knowledgeable negotiator or someone should be able to appraise the app accurately and provide a logical estimate price. This will give you something to work with regarding the first offer, which will likely be lower than the evaluation.

Summing up

Selling apps doesn’t have to be stressful. If you are well versed in the art, there is enormous potential for profits and monetary gains. Ultimately, only you will have the power to determine the final destination for your app.

At Flippa, we have provided an online marketplace for buyers and sellers to trade since 2009. As a result, we are now the world’s leading platform for all forms of digital media and assets to grow and thrive. If you believe you have an app ready to sell, contact us today, and let’s get started.

Frequently asked questions

What programming languages should I use to build an app?

For mobile app design, it is crucial to develop your app in a technology that is widely being used by developers. Ultimately, it may come down to the specific functionality that an app needs and one programming language may be able to handle it better than another. 

With that being said, it is vital for entrepreneurs to explore trends. For example, some developers prefer agile development; whereas others might prefer the waterfall approach to app building.

How to sell your mobile app?

There are plenty of ways to sell a mobile app such as being acquired by a large company, selling your app to a competitor, or through a private sale. 

You can also sell your app on Flippa, a global online marketplace where individuals and business owners buy and sell websites, online businesses, apps, and digital real estate.

The selling price will largely depend on your app metrics, valuation, revenue, and the competitiveness of your business model.

It offers a  higher average return compared to traditional investment. Let’s say you bought a blog for $24,000 and it generates $1000 revenue per month. Even if it had zero income growth post-purchase, in just 24 months or two years, you gain back your initial investment.  

Say you keep this as a static investment for five years, by then, you’ll be able to make $60,000. Imagine how big the average return you get! More than 20% per year. Compare that to traditional investments and their typical return rates According to BankRate: 

There’s no clear cut range of how much you can make with blogging. But just to give you an idea of how lucrative it can be, if your blog posts get 10,000-100,000 page views per month, you can make $0.2-$0.10 per page view from ads. That’s $200-$10,000 per month. 

Of course, there are other monetization means you can employ, Adam Enfroy, a travel blogger earns more than $44,000 just from affiliate marketing. Add online courses and products to the equation you can make as high as $10,000 more per month. 

But why not just start blogging from scratch? Successful blogs don’t reach their full potential until after they’re around a year or two. For new sites, Google still has to crawl your site, add other websites to the queue making the wait longer. 

Whereas if you buy a blog site, given that it already has tons of quality articles, the wait will be shorter, having more chances to expect explosive growth in just a few months. Blog owners sell their sites based on the previous six month’s performance, not the next. Doing so undervalues the growth potential of their blog making a good buying opportunity. 

Of course, there’s more to learn about buying a blog and monetizing it for an additional income stream. Buying a blog is a serious business, but once you get the hang of it, you can make smart financial decisions and see this field as a lucrative space to grow your income stream. 

So where do you start? With choosing a blog niche to focus on. 

Choose A Blog Niche You Care About

When owning a blog, it’s best to buy one in a niche you’re passionate about. This way, you’ll be more inclined to explore the subject and create more quality content about it. You won’t be as dedicated to a blog you’re personally interested in as in a blog you know nothing about. 

While you can always hire someone else to create the content for you, having a personal attraction to the niche will ensure higher quality content. You’ll easily be able to choose topics to write about and identify which parts of the blogs need more focus on and which information to update or change. 

You’ll be more confident discussing the topic and with a personal interest involved, you’ll be able to resonate better with your audience. 

Whether it’s about outdoor sports like hiking and cycling, lifestyles like travel and fitness, hobbies like photography or coin collection, and business like marketing or crypto, the important thing is, you’re passionate about the niche so you’ll be able to offer to generate value for your content. 

If you’re selling merchandise like sports apparel, you can do a health blog like what Impossible did. Or if you’re promoting medical alert equipment, you can do adult health care blogs like what Medical Alert Buyers Guide did. 

With the best value, readers will be satisfied with the content they consume, moving them to explore more content, share it with others, or take action to generate conversions. 

In many cases, a niche might be too saturated with stronger competition. There will likely be a blog that discusses the topics you’d like to cover. This is why it’s recommended to narrow the content focus.

If you’re planning to create content in the photography niche, narrow it down by focusing on wedding photography, lifestyle photography, high fashion photography, product photography, sports photography, photojournalism, or some other specialized avenue in the photography niche. 

Create Original Content

Duplicates can affect your chances of ranking high on the search results. Once search engines like Google finds out you published copied content, it’ll penalize your site by putting on the last on the search results, likely the last page where no searcher ever goes. Basically, you get zero traffic which translates to zero chances of conversions. 

Creating original content involves looking at competing blogs. But does that mean you’ll be enticed to plagiarize? Of course not. The purpose is to gather their best practices and give you a good idea on a content outline to work on. 

A good practice is to consider and check the search results on the first page. Check out recurring subheading, sections, and keywords.  Work those out in your content as well. Those topics likely put them in the first page and so it’ll increase your content’s chances too. 

Always keep in mind to include keyword targeting in the prewriting phase of the content. This will ensure that the content you’ll write will have enough interested audience to visit your site. The more targeted the keywords are, the better chances for acquired traffic to convert. 

To draw more traffic, consider writing guest posts on related niche sites. You’ll be able to tap into another website’s network and thus increase your audience base once discovered. 

Understand The Operations Of The Blog You Want To Buy

Of course, it’s assumed that a blog you’re looking to buy has good search result ranking performance. This involves learning about the blog platform or website management tool the blog is currently under and replicating the system the previous owner or writer put in place that helped them rank to where they are now. It keeps operations streamlined moving forward. 

Replicating the system and strategies the previous owner had in place includes fully understanding the process the blogs go through. Does the owner craft the content themselves, do they have a team to handle aspects of the content creation, or did the owner hire a blog content writing service to do the job?

So you have to decide if you should handle this on your own (given that you have content writing experience and expertise), if you need to hire a full-time staff and request transitioning phase assistance from the previous owner, or if you should tap contractors to do the job for you. 

Quality blog content only comes with an efficient system in place. To get the same quality results, ask the current owner to a meeting (physical or through conference management software) to ask about how the existing blogs were crafted to be in a good place to take over.

Taking advantage of Flippa, you’ll get access to chat forums in the blog listings you’re interested in. Read through the discussion board to find answers to your questions, or if there is no existing question yet, you can pose it yourself. 

Also, ask about the additional blogging costs you might need to spend to get a more accurate picture of the investment amount needed to acquire and run the website. Pinpoint all the pieces from topic ideation to content creation up to the blog support needed to sustain the current rankings and traffic flow. 

To take some weight off your shoulders, you can also work with blog content writing services. You can provide them a detailed briefing about the content you want written and just wait for the content to be produced. 

In many cases, more than just relying on organic traffic, traffic acquisition strategies involve promoting the content on social media sites. If social sites are a major source of traffic for your blog, discuss with the previous owner if the purchase will include access to all of the social media sites they run that’s linked to promoting the blog. 

A helpful reminder though: It must at least have 50% of organic traffic. Traffic acquisition from social media and ads will likely get less interest compared to traffic generated from search engines. The latter gives a certain level of assurance of the people’s commitment to your website or the niche it focuses on making them more receptive to the action you want them to make when on the website. 

While you’re discussing blog operations, don’t forget to inquire about other website maintenance needs. You can ask questions like:

• How long will the current domain name purchase last? How much does it cost? How much do you pay for the website management system? 
• Do you have additional tools like a PIM or a plugin utilized in the blog, if so, is it an essential tool? How much does that cost? 
• Do I need to tap web developers to help with website maintenance? Do they need to have specific expertise like a React JS developer, a React Native developer, or other types of developers?

Also, consider if email marketing strategies are already put in place, and if not, does the previous owner have an email list acquired from the blog you can start working on? 

A good thing to consider when choosing a blog to go for is that it should at least have 500-1000 email subscribers. In many cases, you can’t make visitors convert on the first visit. You should have the chance to retarget them to finally close a deal or make any other kind of conversion. Reaching out through email marketing will make this possible which will only happen if you’ve captured their email information. 

Blog Traffic

When considering a blog to buy, check out how its current traffic acquisition. You can’t monetize a website when no traffic is coming in, that’s why examining the existing traffic with tools like Google Analytics is an essential step to take. Check the blogs’ traffic volume and the traffic source to ensure the initial statistics the owner provided are true.

Third-party reports from tools like SEMrush might also help. Flippa partnered with this tool to give buyers an insight into a blog’s traffic volume and overall health. 

Ahrefs can also provide valuable insight. For example, I checked out this skills gap analysis blog by Axonify and it showed the average traffic it gets and how many backlinks it currently has plus other pertinent SEO insight. 

Consider the traffic growth chart. Is it growing, decreasing, or plateauing? Several elements can result in this. You can first ask the previous owner about the reasons for this and then you can do additional digging yourself. 

It’s either the content publishing volume changed (maybe slowed down knowing it’s in the purchase process), new search algorithms are put in place, ad spending is decreased, or less promotion on social channels. 

You can also use Ahrefs or SEMrush to check on the blog’s backlinks. While this is not a foolproof method, it’ll give you valuable insight into how the blog is faring in terms of rankings.

You can look for red flags such as a site ranking on the first page but only having 3 backlinks. If that’s the case, something fishy might be going on and the search results screenshot provided to you might be doctored. 

Know the blockers so you’ll know how to address it. It’ll also give you a good gauge if the blog is still feasible to buy or not. Feasibility also concerns how revenue is generated, so let’s consider that next. 

You’ll want to make sure you’ll get your initial investment back at an optimal rate hence analyzing the current revenue will help in doing that. Ask the owner for revenue spikes, the reasons for it, and the financial history of the blog. 

Blog Revenue

Simply, understand how the blog generates its monthly income. You can ask the owner questions like:

• Does the blog run on sponsored ads? Affiliate link purchases? Banner ads?
• Did it generate monthly revenue from Google Adsense?
• How much of the traffic rate is from organic searches?
• Are their seasonal highs and lows on traffic and revenue?
• Do they sell in-demand products like kids masks, vitamins, handwash, or alcohol? (pandemic times)

By considering these questions you’ll have a better understanding of the blog’s profit margin to assess if it’s a good blog to buy or not. 

Using Flippa, you’ll be able to use built-in integrations like WooCommerce and Stripe to verify its revenue. Check out the revenue history for the last 2 years at least. It’ll tell you if the blog can deliver sustainable revenue for you. 

Like what was mentioned at the outset, with blogs, you can make as much as a 20% average return per year. Compared to real-estate rentals, blogs arguably pay larger dividends making it a good underlying asset. (see first image above)

You can look at blogs as a digital real estate investing opportunity. As with the analogy we’ve used at the outset, blogs can be considered as a real estate investment, only that it’s in the virtual space. 

The difference is, with a physical rental property, you’re likely to pay 10-15 times the monthly revenue. So if the property you own produces $50,000 in rental revenue, you’ll likely pay $500,000 to $750,000 to buy it. 

Buying a blog website, you’ll likely pay more, 18-24 times the monthly income. But significant ROI will be made in the very first year. Plan to monetize it in more ways than it currently does, you’ll still make more money to cover the initial cost you shed out for it. 

In comparison to physical real estate property, your initial investment may not be paid back until 3-4 years have gone by. With blogs, you can get a return of investment, if not in the first year, the second, faster than physical real estate. 

With physical real estate, you’ll only be making money from rent alone but with blogs, as mentioned, you can employ several ways to make the virtual space income-generating. How can you increase your blog income?

Blog Growth

When considering a blog to buy, more than just looking at the monthly revenue, take a look at the monetization strategies already in place. If the blog already has an ad space, utilizing affiliate marketing, or promoting a product but the monthly income it makes can’t cover a 100% ROI in 1-2 years, you might want to check out other options to buy. 

Here’s why it’s good to go for under-monetized blogs. It’ll give you more confidence that you can still employ more ways to generate more income from the blog. If the blog is mainly promoting products like High Desert Pure, you can also place ads, add affiliate links, have backlink clients, and sponsored posts, as an additional income stream. 

The ideal is that you can still add 2-3 income sources. It can be different types of ads (CPC ads, banner ads, text link ads), sponsored posts, or own products like eBooks or services allowing you to recover from your initial investment in a year or two. 

You also have to consider if you have the expertise to open up other revenue sources for the blog. If you have to hire someone else to help you out like a media buyer or an affiliate marketer, will the pay for the external help needed not hinder you from generating back your return of investment within the ideal timeframe?

Blog Acquisition Process

After completing learning about the blog operations, checking if it has sustainable traffic and revenue, and if it still has opportunities for income growth, you can now start the blog purchasing process. 

First off, make sure you know who owns it. Nothing worse than handing over your money to someone who isn’t in authority to turn over a blog you are interested in. There have been stories where hackers take control of a blog, sell it to someone and the new owner realizes they have little to no control thus losing the money they paid. 

Use WhoIs’s Domain History tool to check out the ownership history of the blog you’re looking to buy. These tools archive alterations made on the domain so anything odd will stick out. It’ll also give you details on who owns the blog so you’ll know the right person to reach out to, especially if you’re negotiating a website purchase privately. 

Here is a sample of the details you get with WhoIs. I researched Close’s predictive dialer blog and it gave me the needed details including phone and email to contact the owner. 

Next, check the website’s history. More than just the domain name, check out the blog’s history. We’ve been in a situation where we thought we got a high-potential domain only to find out later when the traffic growth stunted that it was previously an adult site. It was an awful lot of work figuring out and deeply researching for a new domain name to adopt and then migrating all the content to this new site. 

To prevent this from happening to you, you can use a tool like Wayback Machine that provides snapshots of the website’s past. This way you’ll gain confidence that your blog has no sketchy past that will cause a decrease in your growth. 

When website and ownership credibility is established, it is time to do due diligence. You can refer to these basic requirements to consider if a blog is worth purchasing:

• It must at least have 50% of organic traffic. 
• It should at least have 500-1000 email subscribers. 
• It should under-monetized blogs
• It has to be at least one year old. It takes a few months to a year to be crawled, be recognized by Google, and have valid traffic data to assess. People debate over a longer domain being better over its maturity having no considerable significance. At the bare minimum, still, the blog has to be at least a year old. 
• Blog/domain history. Research on the blog or the domain names history to find out if it has some type of history with Google. If it does, skip considering this blog, your website traffic will suffer in the long run no matter how good the content you’ll be making will be. We’ve been there, and we had to change domain names because of it.
• If you’re looking to have a good visitor base to start with, aim for a website that already generates 10,000 monthly visits. Starting from scratch, you can easily build a blog that gets 3,000 visits. Aiming for more visits than that will make what you spend more valuable. 
• Must have established brand awareness. Having this, it’s easier to generate more traffic and gain confidence from your readers. When you buy a blog that already has an authority on the niche, people will be more likely to trust it and the products it promotes which in turn will generate more revenue for you.  
• Good theme and page speed. No one wants to visit a site that takes forever to load. If your site takes more than five seconds to load you’ll lose 27% of the potential traffic volume you’d get if it had just loaded three seconds faster. Good page speed signals Google to rank you higher thus getting more blog reader volume. 

If it passes the basic requirements, you can now make an offer or make a bid if it’s on a website auction platform. If the blog you chose fell short of some of the basic requirements, you can use these as points to haggle in a negotiation for a cheaper price. When the price is settled, you can now move forward with the payment arrangement, it’s best to take advantage of an escrow feature. 

Flippa comes with this feature where the sum of money is held including other digital assets until the transaction is given a go signal to move forward. An escrow feature ensures the transaction goes smoothly and each party gets what they agreed on. 

Should anything go wrong, an escrow will help you get your money back. However, you can also research ahead how a purchasing arrangement goes in both your countries (given that you’re from different places) to find out what works best. 

You can also opt to purchase in stages. For example, you might both agree to have the database or PIM tool, email list sent, and hosting access delivered first. Once the payment clears, you can move forward to sending over the domain and website details. 

When that’s settled, ask the current owner for the supporting assets which include website username and password, social media account details, and email subscription lists. 

Remember to know exactly what you are purchasing. Is it the domain name and its content? The server? Database? Images? Mailing list? Being very specific with these details will ensure you’ll get the best value for your money and isn’t going to end up upset in case what you assumed is not included in the package. 

Other details you’d want to get are the owner’s complete name, phone number, business number, tax number. You can run these details on a government database to ensure that the person owns the website, its domain, content, and has the authority to sell it. 

It’s best of you to have an expert blog broker to assist you so you’ll be more confident about your decision on buying the chosen blog. Additionally, they’ll be able to point out blind spots and guide you in the valuation stage including handling any legalities involved. 

Creating a contract will be a wise move. Not only does it reinforce the agreement made, but it also helps solve any issue that may arise quicker. For this, you may need assistance from an IP lawyer. 

In the contract, including a non-compete clause. This ensures that the current owner will not go off creating the same niche blog like the one they sold you. Doing so helps you maintain the traffic and prevent the previous owner from using their niche expertise and connections against your newly-owned blog. 

If necessary, you can also include a period of support as an additional clause in the contract. This will ensure a smooth transition from the previous owner to you. This will also ensure that you’ll be oriented on the blog creation process that helped them generate the traffic and income it currently is generating. 

Conclusion

Taking the effort to research a blog before buying it will be worth your time and money. Unless you do the needed due diligence, you can end up buying a site that’s a huge waste of your money. 

Some sites might be tempting to buy just by looking at the initial details. But that’s just the tip of the iceberg. You have to do additional research and go through each step of the process to ensure a good virtual investment. 

Check for sustainable traffic. Half the monthly audience should come from an organic source. Then check the monthly revenue if it can cover the ROI in 1-2 years. Additionally, check if all monetizations are already exhausted, if it is, revenue growth might be a challenge which is a factor for you to consider other options. 

Also don’t forget to check ownership and website history. Without doing the latter, you might put effort and money towards making new quality content but end up in futile results with organic ranking not improving. 

Again, if you’re not familiar with some of the technicalities, it’s best to hire experts like an IP lawyer, blog broker, and a content writer if writing is not your cup of tea. And remember to choose a blog in a niche you like, this way you’ll be more invested in growing your blog. 

Consider each step in the process and keep in mind important requirements and tips, in no time you’ll be able to find the right blog that will help you reach your financial goals online. 

Ready to buy a blog? Find the perfect blog for you on flippa.com.

I don’t know about you, but I love reading success stories. 

It’s captivating, even inspiring, to think that, one day, with a bit of hard work and consistent effort – that could be you next. 

But what happens when we’re faced with our own non-success story? Ouch!

This, unfortunately, is always on the cards. You run a risk of failure in anything in life, but in this realm of buying and selling websites, a failure like I experienced, can almost entirely be avoided.

Let’s learn from my mistakes.

The Mistake, Context & A Bit of Background

For the past few years I have been dabbling in affiliate marketing, web development, search engine optimization and combining knowledge within these areas with the acquisition and growth of websites.

On a day-to-day basis, I use Flippa’s filters and email alerts to stay updated on the latest additions to the marketplace. I have a very particular criteria so it’s easy to get excited when I get pinged “New Website” alerts for these.

I came across a fantastic-looking site that was quickly growing in a unique niche, and I felt confident I could handle content, SEO, and other miscellaneous tasks to develop. So I jumped the gun:

The listing originally was an auction starting from $10k. The attractive elements to me were:

1. The organic traction (keywords and traffic in the organic channel). This is my bread and butter as an SEO expert.
2. Brandability (beautiful site, beautiful name, clean).
3. Content marketing was superb (lots of original, unique existing content).

Also, from my perspective – it was under-monetised and a high-risk but potential high-reward move (cosplay events during covid, all cancelled – but could return in 2021, 2022) – I knew it would always be a waiting game, but I was willing to give it a go.

I subsequently put in a bid for $15k. But I wanted to stifle the competition and ensure I won the auction, so I got impulsive and offered the buyer $20k BIN and he agreed.

And so I added website number 12 to my portfolio. And on that note, let’s move on to…

Mistake #1: Purchasing A Website Based on Emotion & Gut Feel

I purchased the website on a whim. I think it’s safe to say that this is the #1 mistake you can make when looking to buy websites.

When it comes down to it, there are 2 types of people who have been successful in buying and selling websites: those who use their emotions and gut feelings to guide them, and then there’s the ones who are highly analytical – using copious amounts of data to base their decision on. Be the latter, use business acumen.

Once you get excited and jump onto a website purchase, it’s so easy to go with the flow of emotions and convince yourself that it’ll work out. I didn’t have time to do my due diligence on this website, so I made an impulsive decision. An expensive one!

Key Takeaway: Don’t get impulsive or emotional about investments. Put emotion to the side and get out the spreadsheets. Do your due diligence.

Mistake #2: Made An Impulsive Direct Offer On The Website

There’s a reason why Flippa has the live auction feature, it’s to allow for negotiation to take place. I should have taken advantage of this, but, instead I psyched myself into thinking that this was “too good to be true”, it was going to be snapped up and I made a direct offer to the seller.

No doubt, this can work in your favor sometimes. But make sure you still do your due diligence and the website is in a niche you’re extremely comfortable with growing.

Key Takeaway: Use time to your advantage. Be patient. Come back to the deal in 24 hours, if it gets snapped up – move on. There will be more relevant opportunities in the future.

Mistake #3: I attempted to predict the future. And didn’t plan ahead.

This particular niche and situation is more complicated that I’m making it seem. For example, at the time of purchasing the site (March 2021) the situation with the pandemic was still unclear and that directly affected the niche of the website – cosplay.

There were lots of risks with this site. But I was betting against them. Would conventions be a thing this year and next? Would Halloween be able to “go ahead”?

The optimist in me assumed that everything would be fine and the year ahead would be a boom year, to make up for the lack of previous activity in this industry.

Note to self, I am not a prophet nor a fortune teller. You aren’t either.

Key Takeaway: Leave guesswork out of the equation. This, again, is an investment and you need to accurately predict the state of the market ahead.

Mistake #4: Absolutely nothing constructive was done. I did nothing!

This, in a way, wasn’t my fault. My business model completely pivoted from 100% affiliate marketing for my own websites to creating a search marketing service which I provide for clients.

And my client base grew to the neglect of my affiliate portfolio. As a result, I did next to nothing.

Don’t get me wrong. I knew exactly what to do in order to grow the site, I had the SOP’s, the plans (in my head) and the strategy all worked out. But I became 1. time poor, 2. frankly, a bit lazy and 3. uninterested.

Read into shiny object syndrome. It hits hard sometimes. This was a shiny object that I was excited about at first but 1 month later, that feeling had long dissipated.

Key Takeaway: Don’t invest in something that requires your input if you imagine yourself being distracted throughout the year. Acquiring a website is a medium to long term endeavour (in my experience, unless you flip fast).

Mistake #5: Picking a niche that I had zero experience or enthusiasm in.

Look, I’ve established that I bought the website for the wrong reasons from an investment standpoint. But I also didn’t think about the road ahead and was going against my previous advice (I’ve written about this exact point before).

I picked a website in the cosplay niche. And I’ve never cosplayed. In fact, the first costume I’ve ever bought was this year:

And I forgot to wear it! But I promise I will next year, for the kids.

Anyway, learn from me. Stick to your expertise, be a subject matter expert and leverage this in your affiliate marketing efforts.

Key Takeaway: Get involved in industries or niches that you have a real passion for. Buy a website that gets you excited to write about and research for.

So What Exactly Happened?

From an SEO standpoint, the site was a success but this is mostly due to the content that existed before. Here’s a look at the traffic value.

Even organic traffic increased:

To be fair to myself, I did keep the website updated, ran SEO campaigns and did all of my usual SEO based activities. However, from a content standpoint, nothing was done.

In the end, I realised it was a bad investment and wanted to cut my losses. So, I rushed the process and now am in the middle of selling the website in question for a 4-figure loss. 

Bonus key takeaway: Have an exit strategy when buying websites. 

Conclusion and Wrap Up

My advice to you is, don’t let it turn into this. Let this be your failure therapy and learn.

If you’ve acquired a website, dedicate yourself to it. No excuses will fly here. Treat it as an investment and not another stream of income or passive activity that requires little effort from your end.

It’s a medium-long term endeavour and if an opportunity presents itself, you should be ready to act on it.

And finally, when starting out in affiliate marketing or buying websites in general, seek advice from people who are experienced in the field. It will save you a lot of trouble.

Thanks for reading! I hope you’ve found some value here. Feel free to reach out to me and I’ll be happy to connect.

But before your start perhaps you want to consider Buying an Amazon FBA Business? You can enter the Amazon FBA industry with someone having done the hard work of starting an FBA business for you! Read our Guide to Buying an Amazon FBA Business and decide what the right option is for you.

If you still want to start an Amazon FBA business from scratch, keep reading! 

What is Amazon FBA? 

FBA stands for Fulfillment by Amazon. Amazon FBA is a service offered by the Ecommerce giant as a means for third-party sellers to store their products in Amazon’s fulfillment centers, so the company picks, sorts, packs, ships, tracks, and handles returns and refunds. An Amazon FBA business is where you, as the business owner, choose what products you want to offer, find suppliers, purchase and stock them, and send them out to buyers.

In Amazon’s terms, “you ship it, and we ship it!” Launched way back in 2006, Amazon FBA has become a popular trend in the Ecommerce world today as it allows vendors to shift the burden of managing inventory, shipping every single order, and overseeing customer processes to Amazon so they can concentrate on scaling their business and reaching more customers. 

Fulfillment by Amazon (FBA) is one of the two core fulfillment options provided by Amazon, with the other being Fulfillment by Merchant. In FBM, Ecommerce businesses sell directly to customers. An FBM seller is responsible for just about every aspect of the business, and this includes: storage, creating listings, and then, after a sale is made, picking, packing, and shipping directly to the customer. 

If a customer wants to make a return or an exchange, the FBM seller will have to directly handle the return and refund. In other words, FBM sellers only use Amazon as a place to reach customers and generate demand since they do everything. Also, sellers must be in top form every day, including weekends and holidays. 

Amazon’s sales continue to grow year on year so if you want to get a piece of the very large pie, now is the time. Below you can see the annual net sales revenue of Amazon from 2004 to 2021.

How does Amazon FBA work? 

The Amazon FBA process is fairly straightforward, so you don’t need to put a lot of effort into it. Let’s break the process into steps.

Step 1: List and label your products 

Amazon requires that you list all your products on their website. There are three major ways to do this. You either add the products individually to Amazon’s catalog or add them as a group. Alternatively, you can integrate your inventory management software with Amazon’s API. You will also have to choose between labelling your products or using Amazon’s FBA Label Service. 

Step 2: Send your products to Amazon’s warehouses

Once you’ve added your products, it’s time to hand them over to Amazon to take care of the rest of the process. When you contact Amazon, they will provide the address of the warehouse you should send the products to. You can ship the inventory with Amazon or with a courier of your choice. 

Step 3: Amazon stores the products 

Upon receiving your inventory, Amazon will scan the labels, weigh and measure the products and store everything accordingly. When this is done, you will receive a confirmation email, and you can monitor your inventory through their tracking system. 

Step 4: Amazon processes all orders 

When a customer purchases your products, Amazon takes care of receiving orders and processing them. Amazon’s team will pick the products from inventory, pack and ship the order. The team will also track the order to the customer’s doorstep and provide customers with the tracking information. 

Step 5: Amazon handles returns and refunds 

If there are any return and refunds claims, Amazon handles them too! You will, of course, be notified of the same. 

Step 6: You get paid 

Amazon deposits your total earnings into your linked bank account every two weeks. 

Also, keep in mind that the FBA service isn’t free as Amazon charges a fee for the service it renders. Nonetheless, the overall fees are significantly lower when you try to manage everything on your own. Also, Amazon states that they will be responsible for any damage to your products while in their warehouses, which means you don’t have to worry about mishandling or losses due to damage.

How to Start an Amazon FBA

Without further ado, let’s dive into details of how you can start your Amazon FBA business. 

1. Choose a niche 

The first thing you want to do when starting an Amazon FBA business is to choose a niche. A niche simply refers to the focused segment of a broad marketplace. You can refer to it as a submarket if you will. 

Choosing a niche can be beneficial to your business in that it provides you with insight into your target audience and its unique demands, thus giving you a competitive advantage compared to sellers trying to reach a broad market. 

Finding the niche that’s right for you can be a daunting task, but with the right approach, you can identify the particular segment of the market that will help you maximize profit. Here are some tips to guide you on discovering the perfect niche for your Amazon FBA business. 

It should have a good product margin: The overall reason for starting an Amazon FBA business is to make a profit, so you want to do research to see the margins you stand to make on a niche before you commit to selling on Amazon. 

Avoid highly seasonal products: Try to avoid products that don’t suffer from seasonality, as this will ensure that you have a steady sales volume throughout the year. Consider hunting for products that are timeless and inconsistent with demand all the time. 

Do keyword research: If you’re struggling to get specific enough, let keywords help you. Keywords refer to specific words and phrases which shoppers use to search for products they wish to buy. You can find help in researching keywords by using tools like Google Adwords.

Look for product competitors without video: Videos are a crucial factor when it comes to product rankings. Product categories with a few videos are an incredible option to consider as you have the potential to rank higher than your competitors. 

Consider what an ideal product looks like: The dimensions of the product matter too. A large and heavy product is a bad idea unless you already have a good delivery network in place. Products that are small and light are generally easier and cheaper to ship. 

There should be good demand for it: Many new sellers often miss this crucial point. Your goal should be to find products that people actually want and not to list products that you think they will want. Research to find categories that generate regular orders. 

The tips above are some of the freeways to find the right niche for your business but if you’re not afraid to spend money to make money, consider using an Amazon niche finder tool.

2. Find products – how to find products, assess your competition 

If you followed the tips above, you should have no trouble identifying profitable niches for your business. Now you need to find the exact products 

Don’t compete with Amazon: This is an underrated piece of advice, but you will save yourself from a lot of trouble by avoiding products that Amazon sells. They will outprice you, and they almost always have the Buy Box. 

Avoid products sold by big brands: Amazon isn’t the only big brand you have to worry about. Popular brands can be tough to compete with as the only way to beat them is to have a product that’s pretty revolutionary. 

Review best sellers page: If you want to have a really good idea of the products that are in consistent demand, check Amazon’s best sellers page. This page lists the top 100 sellers in a category, allowing you to gauge the popularity of each product and determine if they will be worthwhile. 

Identify products that can become private labels: Look for profitable items that you can put your own spin on, and then let Amazon take care of the rest for you using the FBA service. The idea is to spot a top-performing product that you can brand and put back to the market. 

Assess your competition: Once you have found a product that’s highly in demand, you want to see how much competition there is. Simply search for the product you want to sell and see what comes up. From the search results, you should be able to see the movers and shakers in that category. Here’s how to analyze the competition:

Identify the keywords they rank for.

Audit your competitor’s product listing by paying attention to what they did in the areas like product title, features, description, Q & A, images, etc. 

Check the reviews to see what they like and their pain points for those items. 

Monitor their pricing to see whether they sell products at a consistent price or whether they change the prices. A price tracking software (like Sellics) can help you monitor your competitor’s product prices 24/7. 

Track their monthly sales to have a solid idea of how many products they sell and how much profit they’re making. Tools like Sellics Edition Software and Jungle Scout‘s Amazon Sales Estimator Tool.

Investigate their marketing strategy by checking their on-Amazon and off-Amazon efforts. Notice the type of content they use, how they communicate with prospective buyers, their social media pages as well as emails and blogs. 

Competitive products are great items to sell as the possibility of hitting a goldmine is high. However, you need to also do your due diligence before you start selling. It’s vital to analyze the competition as this may help you discover a competitive advantage to leverage on. 

3. Source manufacturers and suppliers 

Now that you have found your winning product, it’s time to source manufacturers and suppliers. The right supplier will help you conquer the marketplace by delivering quality products at reasonable prices that allow you to make a decent profit. A few top places to look for manufacturers and suppliers include:

Google 

Google has always been a lifesaver when it comes to searching for things, and you just may be able to find a manufacturer and supplier for your desired product. A simple internet search will bring up thousands of results to find the right suppliers. 

Trade shows 

Attending a trade show can help you meet face-to-face with suppliers. There are usually many manufacturers and suppliers in attendance, so there’s a good chance that you will leave the event with a variety of choices to consider. Plus, you don’t have to set an appointment and wait for days because the manufacturers and suppliers are on the ground also to meet with business owners like yourself. 

Online marketplaces 

There are plenty of online marketplaces where you can find manufacturers and suppliers for your products. Platforms like Alibaba and Aliexpress are great places to look too. You can also explore wholesale directories like WooCommerce, Spocket, Doba, Wholesale 2B, Salehoo, Worldwide Brands, and more. 

Sourcing agencies 

A sourcing agency is a company that specializes in finding manufacturers and suppliers for products you want to sell in your country. They’re an excellent way to find reliable suppliers in South Asia or China. These agencies don’t only find but also import the products at a low cost. 

Industry associations and publications 

Industry associations are groups of people that operate a similar kind of business, which in this instance is Amazon FBA. Mingling with members of these associations might lead to you getting product supplier referrals. Alternatively, search for magazines and blogs that target wholesalers and distributors in your industry, and subscribe to them. 

4. Brand your products, establishing your brand and design 

Branding your products is an excellent way to stand out from the competition. For starters, you will need to choose two brand names, namely store name, and product name. It’s a good idea to choose a generic store name so you will have no problem adding other products in different niches over time. Also, the product name should be a compelling name that you can potentially trademark. 

Your brand logo is an important element because it will be attached to your products, so if you can’t create one yourself, consider hiring a graphic designer. But don’t forget to choose your brand colors and your tagline. When creating your branding design, you want to make sure that it meets some basic criteria that include:

• Simplicity 
• Visually appealing 
• Contact information 
• Request for customers to review your product. 

Next, consider enrolling in Amazon Brand Registry, a program that offers verified sellers enhanced access to marketing features and complete control over their brand across Amazon. 

To register your brand, you will need a trademark number, images of your brand’s logo, and a list of countries where the products were manufactured and that you plan to distribute them in. The process is straightforward as all you need to do to create a Brand Registry account and enroll your brand. 

It takes 2-10 days for the process to be completed, and when your application is approved, you will receive Amazon Standard Identification Numbers (ASINs) for your products so no other seller can list the same items from your page. 

5. Creating your seller account 

Once you have figured out what you plan on selling, you will need to register to get an Amazon seller account. Before you proceed to create your Amazon seller account, you need to have the necessary paperwork, including:

• Your business information 
• Email address 
• Credit card 
• Phone number 
• Tax ID
• State Tax ID

Now, let’s get into the registration process. 

Go to https://services.amazon.com

Scroll down the page and click on ‘Sell on Amazon.’ Follow the directions. 

Select between ‘Sell as an Individual’ or ‘Sell as a Professional.’ Sign up as a professional if you’re going to sell more than 40 products per month; otherwise, the Individual plan is your best bet. A professional account has a monthly subscription fee of $39.99, but you won’t be charged from the first month. Plus, the plan will also help you save money since it doesn’t come with additional fees. 

Enter your email and select ‘Create a New Account.’ 

Choose your business location and business type. 

Enter your personal information 

Choose your marketplace (the country) in which you’d like to sell. 

Enter your billing information 

Provide answers about your products and validate your address. 

After setting up your Amazon account, add FBA to your account. 

You can now start selling on Amazon! 

6. Shipping your Amazon product 

Becoming an Amazon FBA seller comes with a lot of benefits, but most newbies struggle with sending their first shipment to the Amazon warehouse. Here’s a simple guide to help you. 

Step 1

In the Seller Central dashboard, select ‘Manage FBA Inventory’ from the ‘Inventory’ tab. On the right-hand side, choose the drop-down menu that reads ‘Edit’ and click ‘send/Replenish Inventory.’ If your product is already an FBA listing, all you need to do is click on ‘Send Inventory.’ 

Step 2

Next, you will be asked to ‘Create a New Shipping Plan.’ Click to proceed and select ‘Case-packed Products,’ which is the option that means you want to send more than one unit of the same product to Amazon. Click on ‘Continue Shipping Plan.’ 

Step 3

On the next screen, you will be asked to enter the quantity of the products and how many cases you’re shipping. For instance, if you’re planning to ship 20 products in 2 cases, you will need to enter the number 10 into the ‘Units per Case’ box and the number 2 into the ‘Number of Cases’ box. Click to continue.

Step 4

Next, you will need to choose whether or not your products will be prepared before shipping to Amazon. Amazon will let you know what type of prep your type of product requires, but most products are to be packed into an individual polybag with a safety warning. Click continue once your product is correctly prepared. 

Step 5

At this point, you will need to label your products. If you’d rather not do this, you can ask Amazon to do it for you, but fees will apply. 

Once you’re done with the labeling, it’s time to find out where Amazon wants you to send your inventory. Your account’s default settings are on ‘Distributed Inventory Placement,’ which means Amazon is at liberty to split your inventory, so you send different units to different warehouses. However, you can fix this by changing your FBA shipment settings in Seller Central to send all your units to one warehouse. Go to Settings > Fulfillment by Amazon > Inbound Settings and then edit. 

Step 6

In this last step, you will be given an option of courier services – UPS or FedEx, but this is after you have given Amazon the dimensions and weight of your package, which will determine the shipping charges. Click on the checkmark next to ‘I agree to the terms and conditions ‘ and then ‘Accept Charges.’ Lastly, choose the ship date and print your shipping labels. Once you have completed these steps, click ‘Complete Payment. 

7. Third party inspection services

Importing products you want to sell so you can ship them to Amazon’s warehouse can be scary because you can’t be too sure of the quality of the products. This is where third-party inspections services come in. Third-party inspection services refer to pre-shipment solutions offered by companies to help sellers ensure that their shipment meets the following requirements:

• That the quantity is as per order 
• That the quality matches specifications 
• That there are no defects in the products 
• That the weight and dimensions of the cartons are per Amazon’s FBA requirements 
• That the packaging is as per Amazon’s FBA requirement 
• That the labeling is as per Amazon’s FBA requirement 

There are many third-party inspection companies out there, and they can help ensure you don’t lose money to fraudulent suppliers. They also help decrease the risk of returns and ensure the quality of the product is top-notch so you can succeed in the marketplace. 

8. Launching your products

Before you post your products on Amazon, there are a few things you can do to make the launching a huge success. Here are three tips to help you launch your product and get great results: 

Generate a buzz ahead of launch 

You may have a great product, but no one will buy it unless they know about it. So you want to do things like write blog posts about the product so buyers can jump in right when it is released. Consider also creating videos for YouTube and social media about the products. Post frequently and make the content interesting. 

Optimize your listing 

Based on the research of your competitors, you should have a clear idea of how best to list your products for greater visibility. When you’re done, double-check to be sure the title, bullets, and descriptions are keyword-rich. Keep in mind that the goal is to sprinkle keywords in your product detail pages and not to stuff keywords. 

What you actually write about your products goes a long way to determine how successful your product will be. So make sure the product description is informative and engaging. Don’t forget to take excellent, hi-res photos from different angles. 

You can read more about optimizing your Amazon listing here.

Gather a bunch of product reviews

Most buyers tend to avoid purchasing a new product as they need reviews to help them decide whether or not to buy. In this instance, it’s a good idea to launch the product on your own website so you can garner reviews from respected sources. Post them on your site and share your site to your different social media pages, directing buyers to your Amazon page. From there, you can build reviews for your site. 

9. Build your audience 

There are many ways to build an audience of raving fans for your Amazon products. The first step is to identify who your target audience is, as this will help you hone your marketing message correctly. 

An excellent way to build your audience is to participate in Facebook groups by writing and posting valuable content whenever questions are posed. The idea is to make them know you, like you, and trust you (the KTL factor). You can also create your own group and invite your friends to it while encouraging them to invite others. The idea is to provide valuable content and involve them in the development of new products. 

Additionally, you can also explore promotions such as discounts in price, a free gift, free shipping, etc. You can also use the concept of lightning deals and make them available for only a limited time. 

10. Amazon Delivery Service Partner

Launched in 2018, Amazon Delivery Service Partner is a program that allows entrepreneurial-minded individuals to start their own delivery business for low startup costs. In other words, the program offers you the opportunity to hitch your entrepreneurial fortunes to one of the fastest-moving companies in the world.

If you become an Amazon delivery service partner, you will operate the business entirely on your own, including setting up, hiring staff, and managing the business. You don’t have to worry if you feel you don’t know much about the business, as Amazon is there to help its DSPs ensure smooth operations via hands-on training to on-demand support. 

Set up your Amazon Delivery Service Partners Business Program and Employ Staff

Amazon’s Delivery service Partners (DSP) program is the Ecommerce giant’s attempt to reduce its reliance on United Parcel Service Inc. And the U.S. Postal service. You can set up your Amazon Delivery Service Partners business and join a growing community of DSPs. 

You will be required to start up the business, but you don’t have to worry as Amazon offers a variety of deals to acquire the assets you need to start the business. These include discounts on recruiting tools, payroll, tax, accounting software, legal support, and insurance support. 

Top Tips for Getting Started with the Amazon Delivery Service Partner Program 

If you’re looking to start an Amazon DSP business, here are some key tips:

Be sure you meet the requirements for the business

• Amazon gives five criteria for the DSP program
• Minimum investment of $10,000
• Commitment to fully managing the hiring and development of their teams 
• Capable of managing a minimum of 40 vans and 100 employees 
• Ensure that shipments are delivered seven days per week throughout the entire year

Fill the online application

You should have no trouble filling the form as the questions are in yes-no format. Amazon essentially wants to know if:

• You have experience hiring and developing teams; You are ready to commit to being a hands-on DSP owner 
• You have a strong credit history
• You have owned a business before
• Prepare for the screening process

Amazon wants to know if you qualify to be a DSP. What they’re basically looking for are an up-to-date resume and a clean driving record. They will also run a background check on you, which will include a criminal record check and credit check. 

Go for the interview. 

The interview is held at one of the company’s fulfillment locations nearest you. Visit this link to know where these locations are. Once you scale through the interview, you can expect an offer and rate card for your business, and you can complete the DSP program. 

11. Your Product Listing 

Your product listing refers to the product page for each of the items you sell. As you’re probably aware, a typical product page comprises the information you enter when you list your products, including title, images, description, and price. It’s vital to pay attention to your product listing as it not only allows your products to be found but also encourages shoppers to purchase your products. 

Here are three things you can do to improve your product listing:

Secure a badge on your product listing 

Amazon’s Choice Badges are the company’s way of filtering the best of the best items that shoppers are looking for so they can have peace of mind during the purchase process. To brighten your chances, target keywords you can win because each keyword has a badge attached to it. For example, both ‘hair cutters’ and ‘hair clippers’ have their own Amazon Choice badge attached to them. 

Product reviews

 If you want Amazon to vouch for your products, you need to generate positive customer reviews. Amazon wants to see that previous buyers are happy with your product and services. Most of your reviews need to be in the four and 5-star categories. If you have negative reviews, go the extra mile with the goal of changing them into positive ones. 

Maintain a high seller rating 

Your seller rating is a reflection of your customer experience over a period. It is determined by a range of factors, including the return rate, how fast products get to customers, and how quickly you respond to inquiries. 

12. Product description 

A product description is an essential part of listing as it shows the value of a product to a potential customer. If done correctly, it can positively influence the decision of a customer because it clearly highlights how the product can solve their problem. 

Optimize your product description 

Want to write a compelling and SEO-friendly product description? Here are some tips:

Strategically sprinkle keywords in the content to increase the chances of shoppers finding the product 

Clearly highlight the key features of the product so potential buyers can instantly have an idea of the problem the product solves. 

Make the content simple and clear. Use simple words to state what sets the product apart from competing items

Use strong verbs to describe how the product will 

Write your product descriptions

Copying product descriptions is a must for every seller that wants to be successful. Always write unique and distinct product descriptions. 

13. Private label 

A private label is a product that a retailer gets produced by a third party but that it sells under its own brand. Excellent examples include Walmart’s ‘Great Value,’ and Costco’s ‘Kirkland.’ Many Amazon FBA sellers are adopting private labels as their business model because of its lower operating costs, better brand loyalty, higher profit margins, and better brand loyalty. 

Identify products that can become private label products 

How to find products with the potential to become private label items can be grouped into three steps:

1. Search for items that are highly in demand by looking out for products with a low sales rank and highly ranked keywords. 
2. Next, check out your competition. Narrow your focus items with less than 1,000 reviews to confirm that the market isn’t already saturated. 
3. Evaluate products that make it to this stage by selecting products that are small and light so you won’t pay heavily for shipping. 

Uncover product opportunities and establish your private label 

To succeed in the Amazon FBA business using the private label model, you will need to increase your product offerings. To do this, research product ideas, do competitive analysis, study the reviews, and identify ways you can make the product better. Don’t forget to also source for manufacturers and suppliers for the products, 

14. Customer Service

Customers get Amazon’s trusted customer service and returns

A major advantage of the Amazon FBA program is that Amazon takes care of customer service and returns for sellers’ orders. Your product listing will be displayed with the Prime logo so customers can have peace of mind from the knowledge that Amazon handles packing, delivery, customer service, and returns. 

15. Profit margin

Wondering how you can be sure a product is going to be profitable before you start sourcing it? Use Amazon’s handy FBA profit calculator to figure out the exact profit on the item. 

To get started, get the ASIN of any item you’d like to calculate the margin for and enter it into the search product box. Fill in the item price, the cost to ship it to Amazon, and the total cost of the product per unit. 

When you hit ‘Calculate,’ the tool will give you a breakdown of your Amazon fulfillment costs. Adjust the number of sellers and estimated sales to calculate the revenue and profit. 

16. Costs of Starting an Amazon FBA Business

When it comes to starting any business, many people often wonder how much it would cost to start and grow. Here is an overview of the costs of starting an Amazon FBA business. 

Costs of starting an Amazon FBA business

Ongoing costs: Amazon FBA sellers pay a monthly fee of $39.99 for a professional plan to operate their business. 

Shipping costs: Amazon charges fees per unit, with the cost including picking and packing your orders, shipping and handling, customer service, and product returns. The fees are calculated on the weights and dimensions of your product.

Below are the costs for FBA Fulfillment for non-apparel items.

 Startup costs: The startup cost is up to you as it depends on how much you have budgeted. 

Storage costs: Amazon charges monthly storage fees of $0.69 per cubic foot used for January to September and $2.40 for October to December per cubit of storage used. Long-term storage fees (that have exceeded 365 days) attract $6.90 per cubic foot used or $0.15 per unit, whichever is greater. 

Marketing costs: Small businesses spend around $9000 to $15,000 for Amazon marketing services, while medium-sized companies spend about $15,000 to $35,000.

Average costs: Depending on your budget, the average cost of starting an Amazon FBA business is around $1,000 to $3,000.

Biggest costs:  Perhaps, the biggest cost of selling on Amazon FBA is the sales cost. Also known as the referral costs, this is the fee Amazon charges whenever a sale is made for referring buyers to you. Sales fees range from 6%-%20.

17. Tax 

If you’re planning to start selling on Amazon, it’s important to consider issues relating to tax. These are the major questions that new sellers ask. 

Do I need a business plan license to sell on Amazon? 

The simple answer to this question is ‘No.’ You don’t need to secure a license to sell on Amazon since most of the products and services on the website are not federally regulated. These products are primarily consumer products, and they don’t require government approval. 

Do I need to pay taxes if I sell on Amazon? 

The short answer is ‘Yes.’ Amazon FBA (and non-FBA) income is taxable. All sellers on Amazon are required to report Amazon sales on their taxes just like other income streams. 

Do I need an LLC? 

The simple answer is ‘Maybe.’ You don’t really need an LLC to start selling on Amazon unless you wish to do so for a few reasons, which typically border on financial and legal protection. However, you can create a seller account as a sole proprietor as long as you’re a US citizen. 

18. Business plan

Much like every other type of business, it helps to have a business plan if you’re looking to start Amazon FBA. You want to stand out from your competitors, and a business plan can help you define the path to get there. Here are some questions you may want to ask about having a business plan for Amazon FBA. 

Do I need an Amazon FBA business plan? 

A business plan is not one of the requirements for starting an Amazon FBA business, but it’s a good idea to have one, so it serves as the internal road map to implement when starting and growing your business. 

Marketing strategy 

There are thousands of Amazon FBA sellers and products in the marketplace. If you want to achieve success, you need to figure out how you can get ahead of the competition. Here are some things to put into consideration when developing your marketing strategy. 

SWOT analysis: Conduct strengths, weaknesses, opportunities, and threats analysis so you can know how best to market your products. 

Customer segments: Identify the specific groups of people that your products target and the factors that matter most to them. 

Customer relationship: Develop strategies to build lasting relationships with your target audience. 

Elevator pitches and taglines: Create short ways of introducing your products and persuading your audience to buy. 

Marketing ideas: Brainstorm things you can do to create awareness about your product and promote it. 

Marketing budget: Decide the amount of money you can afford to allocate to marketing

How can I find an existing Amazon FBA business for sale 

Amazon FBA sellers put up their businesses for sale for the same reasons brick and mortar brands sell their business. There are many places you can find existing businesses to buy, but the best place to start is Flippa!

Amazon FBA FAQs

How much time do you spend per day/week on running your Amazon business?

It’s up to you to decide how much time you want to spend operating your business. You can choose to run it full-time or part-time. Most sellers spend less than 30 hours per week working on their Amazon businesses. 

How to Start an Amazon Business as a Seller?

You can start selling by visiting the Amazon seller sign-up page to create an account. You will be asked to choose your business model and provide basic details about yourself and the products you want to sell. 

How Much Does Starting Amazon FBA Cost as a Reseller?

In general, it takes about $500-$2000 to start an Amazon FBA reseller business if the products are relatively inexpensive. 

How to Get a Business Loan to Launch Your Amazon Business?

You can get a business loan by applying for one via the Amazon Lending Program. Alternatively, you can opt for the Small Business Administration (SBA) microloan or secure a loan from Fintech lenders like Kabbage and AccrueMe. You can also check out Flippa’s Finance Services here.

Do I Need an Amazon FBA Business Plan?

Unless you’re looking to secure a loan, you don’t need a plan to start your Amazon FBA business. Nonetheless, it’s a good idea to have a business plan as it can help you have a solid idea of how to start and run your business. 

How to Find Products to Sell on Amazon FBA? 

Finding products to sell on Amazon can be a daunting process, but it helps to know what to do. Top tips include keyword research, product reviews and ratings, weight and dimension of the product (preferably small and light), and consistent demand all year round, among others. 

Is Starting an Amazon Business Still Worth It?

Starting an Amazon business is still worth it for the benefits and efficiencies Amazon can provide to Ecommerce business owners, including effortless shipping and logistics, discounted shipping rates, return management, more storage space, etc. And if you need more convincing, read our post about how much money you can make with Amazon FBA.

What is an Amazon FBA Business? 

An Amazon FBA business is a type of Ecommerce business where sellers empower Amazon to take care of storage, packaging, and shipping of their inventory for a fee. Sellers are able to focus on the core of their business (sales) while Amazon takes care of the boring aspects of the business. 

How Much Money do You Need to Start an Amazon FBA Business? 

It’s all up to you. You don’t need much to get started as you can start with as low as $500 if you plan to sell inexpensive products or start with a larger sum if you wish. 

Can I Start Amazon FBA With no Money? 

The short is ‘Yes.’ You can start Amazon for free by selecting an individual seller account when registering. After signing up, look for an item you’d like to sell and list it on Amazon to sell for free. Deliver the product when it sells by shipping it to the buyer. But to build your Amazon FBA Business you’ll need some money.

Is Amazon FBA Still Profitable in 2021? 

Yes, Amazon FBA is still profitable in 2021 as more than 50% of sellers rake in an average of $1000 to $25000 per month. With more than 150 million shoppers ready to buy at any time, Amazon FBA is a lucrative business. 

Do I need a Business License to Sell on Amazon? 

No, you don’t need a business license to sell on Amazon since the products on the website are not federally regulated. 

What is the Minimum Quantity for Amazon FBA? 

With Amazon FBA, there is no minimum for sending inventory. You’re free to fulfill any order quantity that buyers want without risking a penalty. 

Conclusion

As you can see, there’s a lot involved with starting an Amazon FBA Business. But it’s worth it – Amazon continues to be the leading online retailer, growing every year. You can see just how well Amazon and FBA Business owners did in 2021 here.

If you want all the benefits of owning an FBA Store without have to start an Amazon FBA Business, maybe Buying an Amazon FBA Business is the right option for you? Read our Guide to Buying an Amazon FBA Business and decide what the right option is for your FBA empire!

In this guide, we’ll discuss the best way to go about doing so. Purchasing any business comes with its own questions that this guide will aim to answer. By the time you’ve finished reading, you should feel more confident in your decision to purchase an Amazon KDP enterprise.

What is Amazon KDP?

Amazon KDP is an abbreviation for Amazon Kindle-to-Direct Publishing – a service that allows you to quickly and easily publish your own literature easily on the Kindle store. KDP is an absolute game-changer allowing authors to sell their work to millions of readers without needing a publishing house.

With the rise of mobile devices, we’ve seen ebooks explode in popularity as consumers digitize their reading experience. Amazon KDP dominates the industry, controlling no less than 80% of the ebook market. This industry continues to grow, making it all the easier to understand why buying a KDP business can be a fantastic opportunity.

How Does Amazon KDP Work?

If someone wants to publish their ebook with Amazon, all they need to do is upload their book files to KDP. Authors also can have their books printed on demand whenever a purchase is made. These printing costs are then subtracted from the total royalties allotted to the author.

After an ebook is published, everyone can purchase it on the Kindle platform. The KDP business you are buying will likely already have several titles available that are actively being sold and receiving royalties.

Fees and Royalties

It’s free to publish on the Kindle store. However, there are other voluntary fees involved, such as marketing, artwork, editing, and even ghost authorship services. In terms of compensation, there are two options available to publishers – 35% and 70% royalty rates (for physical paperback books, you’ll receive 60%).

The 70% royalty rate applies to all books sold in the Available Sales Territories (view the complete list here). For all other locations, you’ll receive 35% in royalties. Finally, there’s a low rate for digital delivery based on the size of your ebook.

What To Consider When Buying an Amazon KDP Business

When purchasing any business, you want to ensure you’re buying into a genuinely profitable venture. While buying a business can be the start of an amazing journey, you have to be careful not to buy into a sinking ship – or just to not be scammed outright. When analyzing a KDP business, there are a few key metrics to consider, which we’ll discuss below.

Industry/Niche

Now, when thinking about publishing to a specific audience, our most significant concern will be how big that audience is – and whether they spend money on ebooks. Let’s look at an example from a KDP business for sale on the Flippa marketplace:

Generally speaking, every KDP business is going to target a specific niche. This will allow them to establish their authority in that domain and create a positive reputation. With that in mind, you must pick an industry you’re knowledgeable about. Even if you outsource most of your writing, it’ll be up to you to ensure the quality and integrity of the books you’re publishing.

This seller’s business is in the parenting niche. Our intuition tells us that parenting is an excellent niche since we see parenting books promoted everywhere. The research backs it up, too: millennial moms spend $231.6 dollars on parenting books annually. So, in this case, we know that we’d be buying into a profitable industry – if we chose to seal the deal.

Customer Demographics

When researching any niche, we’ll be especially concerned with the exact audience interested in the subject. For example, if you’re selling children’s books, your biggest audience will be children and the parents buying them. In the case of our model, the target audience is readers male and female.

While the seller isn’t particular about the demographics of their readership, an audience can be incredibly specific depending on the niche. For example, history books will sell to history fans, and cooking books will sell to practitioners of the culinary arts.

You get the picture! Demographic information will be directly relevant to your marketing and growth efforts. Therefore, before purchasing a KDP business, you must ensure it caters to a demographic with solid revenue potential.

Business Model

While every KDP business will revolve around selling books, the actual approach will vary. Do they write the books themselves, or do they outsource them? Do they rely on paid traffic, or do they have a more organic model? It’s these kinds of questions that you’ll need to answer to know what you’re getting into.

Content Creation

For KDP accounts created to make a profit, it’s most likely that the business will outsource all or most of the writing labor. Outsourcing is done because it allows the business owner to multiply their output orders of magnitude greater than what it would be if done solo. So it will be a necessary expense, though more than made up for with a properly-run KDP account.

In all likelihood, the freelancers the previous owner was working with will pass on to you. This is the case with our example candidate, who outsourced most of the writing process:

Just know that no freelancer will last forever, and you’ll need to understand how to vet and acquire component writers.

Audiobooks

Many KDP businesses will choose to have their titles recreated in audiobook format, which will allow them to tap into a market experiencing incredible growth.

As the chart indicates, audiobooks have exploded in popularity in recent years – a trend set to continue for the foreseeable future. Buying a KDP business would allow you to cash in on this growing trend and enjoy the significant growth thereof.

Audience Acquisition

As with all other products, there has to be a method of generating leads and creating customers. Will your KDP business rely on paid traffic, organic traffic, or a combination thereof? If your business uses ads, it’s another business expense you have to account for.

The firm you’re purchasing may also have a blog, which will generate expenses in hosting, software, security services, and more. Of course, any of these expenses will return dividends if executed properly.

For any methods of audience acquisition that a seller’s business doesn’t utilize, those will be potential avenues to expand the business after your purchase. As hinted above, starting a blog can be a fantastic way to generate organic traffic that fuels purchases.

Distribution Channels

When we discuss distribution channels, we’re talking about the platforms that the business will sell its ebooks on. So even though “KDP” is in the name, many firms will sell on multiple platforms.

Such is the case in our above example, which sold on Amazon, Audible, IngramSpark, and more. Intuitively, we understand that having broader distribution channels means casting a wider net and making more sales.

KDP Select

That said, some publishers may choose to enroll in KDP Select, which requires them to commit to publishing exclusively on the Kindle bookstore. These firms trade the wider net of broad distribution for the benefits offered by Amazon Select.

These benefits include higher royalties, exclusive promotional tools, automatic enrollment in Kindle Unlimited, and more. It should be noted that enrollees in KDP Select may still distribute physical books however they choose.

Financials

When purchasing any business, you must have a thorough grasp of their financial situation. To verify we’ll turn a profit, we’ll have to ensure the integrity of the publisher’s accounting.

Revenue

For our example business, we can see that they’re receiving a consistent revenue ranging from a low of $929 to a high of $2,904. Given that the company is only 22 months old, there’s a good chance we can continue to grow it and make back its $24,000 price tag.

While metrics such as median revenue and net profit are important, you’ll need to go in-depth into their finances to know exactly what you’re getting into. Believe it or not, people actually lie on the Internet.

To avoid making a grave business-buying mistake, you’ll have to make sure everything the seller advertises is true. Fortunately, Flippa offers a due diligence service you can leverage to verify any business’ integrity.

Securing Copyrights

It’s critical that you completely secure the copyrights of any content your prospective business may be selling. Although copyright transfer is typically a necessary clause in any KDP acquisition, it’s still up to you to ensure that all property – intellectual and otherwise – is transferred entirely to you during the acquisition process.

Time Commitment

Any business you acquire will require a certain amount of time to maintain and grow. Your KDP acquisition is no exception, and you’ll have to factor it in if you want to make a profit after the purchase.

That said, a KDP business tends to be relatively passive and will generally require a minimal amount of time. Here’s what our example publisher noted about the time needed for their business:

Once the seller grew their business into a profitable venture, it was generally smooth sailing from there. Once they hand it off for you, there will be only a minimal amount of time required to keep the business running. Of course, if you wish, you may want to invest more time to grow the account’s revenue – that’s the beauty of a passive KDP business.

Why Not Just Start From Scratch?

Having learned all the ins and outs of an Amazon KDP business, you’re probably wondering why you shouldn’t just start one from scratch. It’s an excellent question, given that the price tag for a KDP business can run well into the six figures.

The main benefit of buying one outright is that you’re acquiring a business that’s already successful. When you start one yourself, you may very well achieve profitability. However, there’s always a real risk that the company will fail, and all the time and money involved will be wasted.

When you buy a KDP business, you know exactly how much the purchase will cost you, allowing you to plan out exactly how long it may take to achieve profitability. However, if you start your own company, you can only have a rough idea of the costs involved with no guarantee of ever seeing that money again.

When you purchase a KDP account that you know for sure is turning a profit, you buy security – it’s that simple.

Conclusion

While purchasing a KDP business can be a fantastic venture, it’s essential that you fully understand what you’re getting into. From the business model to the financial situation, you must understand every facet of the company to succeed.

The good news is that Flippa is incredibly eager to help you out. From everything to acquisition to valuation, they have an incredible set of tools to help you achieve your dreams. I’ve been incredibly impressed with both the quantity and quality of the resources they offer.

If you choose to purchase a KDP business, good luck! You’ll be buying into a fantastic industry experiencing a consistent growth for you to cash in on.

It’s a common dilemma many startup founders face. You’ve spent a lot of time and money building a product and marketing it to the right audiences. For a long time, your main focus was on acquiring funding, developing products, hiring a team, and scaling. But now you find yourself asking, how do I sell my SaaS business? 

In this guide, we’ll cover some of the important questions to ask when selling a SaaS company, including how to determine value, what avenues to use to sell, and how you can position your company to get the best price possible. 

Why Sell Your SaaS Company?

Arguably, the question to ask before how to sell a SaaS business is why sell at all? Why now?  Ultimately, the motivation to sell is up to you and your plans for the company. It may be a personal life change that motivates you, such as retiring. Or, you may be looking to take advantage of the upward trend in the SaaS market without drowning in the competition. 

Either way, there are certain criteria to use when considering the timing of a sale.

You Don’t Have the Means to Grow

This is a big one a lot of newer businesses face. Early growth trends may have been sharp, but this usually slacks off over time. If your business has been slacking in its growth and you don’t think you have the means to change it, then it might be time to sell. 

A common scenario for businesses involves building a useful product and gaining some customers, only to find that there is nowhere to go within current means. Scaling requires money for new hires, marketing, technological advancement, and more – and not all small businesses have the revenue to push past this threshold. 

There are a number of reasons this could be the case. Sometimes it’s an issue with the SaaS business model you chose. Some SaaS products lend themselves to low-cost, high-volume sales, and many businesses try a freemium model to entice users to adopt. Others rely more on fewer, big-ticket enterprise sales. A transactional sales model is arguably the most scalable, though many SaaS solutions lend themselves better to a low-cost subscription-based model. 

The takeaway here is, your business model impacts scalability, and not all SaaS businesses will be equipped to grow. This may be hard to recognize or accept at first, but larger companies may have a better capacity to scale your business than you do. 

You’re in it for the Product-Building

Some SaaS startup founders are more interested in the tech side than the business side. Fundraising, marketing, etc. can be draining, and it requires very different skill sets than developing a cutting-edge SaaS application. 

If this might be you, experts suggest asking yourself if you would want to keep growing if you had the funds. If the answer is yes, you might consider selling a small percentage of shares just for some quick liquidity. You also might consider seeking a loan or other funding source if you think it might just be a temporary cash-flow issue. 

But this isn’t the case for everyone. If you are more interested in tech than marketing, you can hire people to do the rest for you. But without the funds or the desire, future growth will be limited. There’s nothing wrong with moving on if you prefer to stay a developer and leave the long-term plans to another owner. 

Your Product is Not a Whole Business

Another common challenge SaaS startups face is having a good idea that doesn’t necessarily lend itself to a full-scale business model. This is partially caused by the way most SaaS products are developed, namely, by identifying a problem in a particular industry and trying to fix it. Often, the problem and its solution are fairly niche, and this can yield a product that may be better as a feature of someone else’s service platform than an independent offering. 

If this is the case with your business offering, that’s fine. Your product can still be valuable to customers and the industry. It just might be more valuable as a part of another business’s service suite than trying to make it on your own. 

How To Measure Value

Before selling any business, it will need to be valued. We’ve previously prepared a guide on valuing online businesses, so that is a good place to start if you’re completely new to the topic. Here, we’ll briefly cover some basics and then get into the SaaS-specific factors to consider. 

Estimating Fair Market Value

Without getting in over our heads in finance speak, a few basics first. Small businesses are commonly valued using a concept called seller’s discretionary earnings (SDE) to help prospective buyers estimate the expected ROI on their purchase. In short, SDE = Revenue – Cost of Goods Sold – Non-discretionary Operating Expenses + Owners Compensations (salary, shares). 

This number is what a business can expect to earn in a year (pre-tax), so it’s then multiplied by an industry multiplier to try to predict long-term value. SaaS businesses historically fall within a 3x – 10x range. For our purposes, more important than the calculations themselves are the factors that influence it. 

The Significant Variables

There are a few variables that are easy to understand as having an influence on your business value. The first of these is age. It’s an oft-cited statistic that about 90% of startups fail, and about half fail within the first two years. 

So, congratulations – if you’re currently looking to sell your business, you probably beat the odds. That being said, an older business will show prospective buyers that your product and business model are sustainable. Businesses less than two years old can still be sold, but know that the age may count against you.

On the topic of sustainability, buyers will also want to know how much input the business will require. Many owners want a completely hands-off asset, so if you alone are the development, marketing, and sales departments of your startup, fewer prospects will want it. We’ll take a deeper dive into this point later on. 

Finally, be ready to show prospective buyers the growth trends of your business. It probably goes without saying that a business trending upward is more valuable. But many businesses showing strong growth potential aren’t necessarily being sold. It’s not a problem necessarily if growth is not where you would like it to be – that might be why you’re selling in the first place. But you will hopefully be able to show at least consistency rather than a decline in order to prove the value of your business. 

Quantifying Success

Overall, it’s important to know specifically what buyers will be looking for when they assess your SaaS business. Different industries have different ways of measuring value. For example, something that is unique to online businesses is the amount of attention paid to web metrics in assessing business value. Similarly, for SaaS businesses, churn, MRR, and ARR will be significant factors.

While some churn is unavoidable, high churn is often viewed as a potential flaw in a SaaS business model. That’s because acquiring new customers is expensive. What’s more, losing a lot of customers after a short time might highlight problems with your service. 

The churn rate is calculated as the number of customers who leave in a certain period divided by the total number of customers (x100). It is expected that churn rates will be higher for newer startups. But for SaaS businesses, many of which rely on monthly and annual subscriptions, churn is a bit more complicated. 

SaaS businesses must differentiate between annual run rate, also known as annual recurring revenue (ARR), and monthly run rate (MRR). MRR is the recurring revenue normalized into a monthly amount, and it can help put subscription-based revenue in perspective when you look at different billing periods. It’s important to track your revenue from yearly subscriptions as compared to monthly subscriptions. 

To give more context to your churn rates and revenue, you should also consider two of the biggest metrics for SaaS: customer lifetime value (LTV) and customer acquisition cost (CAC). If the cost of acquiring new customers is too high, or the predicted long-term value you get from each customer is too low, your business will be less sustainable. 

Where To Sell Your SaaS Company

Once you understand the basic criteria, you can start to calculate an internal valuation of what you think your business is worth. Then, get a second opinion, either through a free online tool or professional valuation service. After that, the next step is knowing the different platforms at your disposal.

Sell Directly

Probably the most obvious way to sell a SaaS business is to just sell it. If you have what you think is a well-positioned company and you know there might be prospective buyers in the industry, there is no reason you can’t approach them. Some larger companies even make offers on smaller companies they find to be of value. 

Steve Jobs, for example, once tried to acquire DropBox. Harkening back to our product vs. feature discussion, Jobs thought file syncing capabilities were not a business in and of itself. He saw it as a feature – a feature which he apparently wanted. DropBox turned down this offer and is still alive and well, but Apple and other giants also have added file syncing capabilities in their own platforms. 

This isn’t to say you should wait around for Apple to come to seek you out. But it does go to show that large companies will recognize value when they see it. And you can help them to see it by cold-calling potential buyers and pitching to them the way you would any other customer. The downside is, this can take a long time and doesn’t always yield lucrative results. Plus, you will likely need to pay accountants, lawyers, etc. to assist, so you might not be saving yourself much money in the end. 

List On A Marketplace

If you don’t want to sell directly, you can always list your business on a marketplace (life Flippa) – the online business version of the classified ads in newspapers. The cost to list is relatively low, and you are putting your business in front of people who are already seeking out businesses to purchase.

Still, this process can be time-consuming because you have to research every prospective buyer and negotiate. Just as with direct sales, you will have to handle all of the grunt work, contracts, etc. yourself. It’s certainly a viable option, but not always the best for first-time sellers.

Go To Auction

If your business is small and not priced very high, this option might be best for you. Like a traditional auction, there will be a set amount of time for prospective buyers to bid, so it’s a good way to shorten the time to sell if you’re in a hurry.

Again, the logistics are on you with this method. Unlike with marketplaces, the fee structure is usually a fixed listing fee and a percentage success fee when it sells. On top of that, auctioned businesses don’t usually sell for very much, so this will likely earn you less than other options. You may get a lot of looks and offers, but it doesn’t necessarily equate to a better price. 

Use A Broker

Using a broker to sell your company is a good way to save time and effort, particularly if this is your first go at business ownership and selling. You will have someone to manage the sales process for you. Good brokers can also help you optimize your business before you sell so you can get the most out of the transaction. 

There are trade-offs, of course. For a brokerage service, you will be charged a percentage fee of sale value, so you will pay more for the service the more money you make. On one hand, this can be good because you know your broker is invested in getting you the best possible offer. But if you suspect your small business isn’t worth much in the first place, you might be better off with a marketplace or auction. 

Tips To Position Your Business as an Easy Sell

Now that you know how SaaS business value is determined, it’s time to think about how you can increase yours. If you are looking to sell soon, you may be somewhat limited in what you can do in terms of reducing churn, releasing new product upgrades, etc. But there are still some steps you can take to make your business appealing to buyers. 

Audit Your Operations

As mentioned above, buyers will likely not want to acquire a business that will require a huge amount of input from them. This means it is in your best interest as a seller to automate and streamline as much of your internal business processes as possible.

A good example of this is customer service. Early-stage startups may have an all-hands-on-deck culture. But as your business matures, you should hopefully be outsourcing things like customer service  – either to call centers or by utilizing chatbots. Functions like accounting should also be a mostly automated process, or at least not something you are doing yourself as the owner. If you are automating a large portion of your marketing, all that much better. Automation and outsourcing will noticeably increase the perceived value of your business because it will make owning it a mostly passive activity. 

Document Everything

SaaS business buyers will not necessarily be tech people themselves. Even you as the business owner may not have been actively involved in every stage of the product development process. But when it comes time to sell, the new teams will need to precisely understand how the product works. 

For this reason, clean, well-documented code is absolutely crucial to increase the value of your SaaS business. Document every change made, when it’s been last tested, etc. This rule doesn’t just apply to the technical aspects either. You should also have clear documentation of accounts, internal expenses, business processes, marketing plans, etc. The easier it is to understand your organization, the easier it will be to convince an outside party to get involved. 

Don’t Try To Inflate Value

We’ve talked a lot about the factors that impact value, but that doesn’t mean you should make a last-ditch effort to fake them. For example, resist the urge to have a big sale on reduced price annual memberships just to rapidly increase your numbers. Buyers will see through this, and it will not equate to long-term growth. It’s better to maintain a consistent trajectory in the months before you try to sell. 

Conclusion

Choosing when and how to sell a SaaS business is a big decision. You should avoid taking any drastic actions and instead reflect on why you want to sell and whether the present time is the best time to do it. Once you are sure selling is the right move, keep these tips in mind to make sure your success as a founder translates into a highly-valued, lucrative business offering.