Website investing is a relatively new way to build your investment portfolio and there is always the debate whether buying websites from brokers is better or not.
Like everything there are pros and cons to buying websites from brokers and before you start investing in websites it may be worth considering them all. This way you can ensure which track you want to head down when finding websites you want to buy.
I personally believe I started the hard way when I came to the market of website investing. This is because I started looking at and buying websites that weren’t for sale through brokers. The reason buying websites that aren’t listed through brokers is tougher is because it is a lot harder to find these types of businesses for sale. Unless of course you already know people in the industry who are actively buying and selling websites which you could connect with to see what they have to offer when looking to buy a website for yourself.
Apart from finding websites for sale that aren’t listed through brokers. When you do find something you are interested in, gathering all the information you need to perform a due diligence check can be more difficult and slower. Since you are relying on the seller to provide you information they may not have prepared or ready for you. Like profit and loss statements, proof of funds and ownership and everything else you need to examine for due diligence.
On the other end of the spectrum, when buying websites directly from the seller doesn’t mean you need to rush through every aspect of the deal. Especially during the due diligence phase which is where you optimally would like to spend as much time dissecting the business as you can. Unlike what you may need to do when buying through a broker as when buying websites through a broker can mean having other competitive buyers interested in the same business.
The great thing though about buying websites from brokers is that a good broker will help you significantly with getting your questions answered about the business whilst chasing up info on the business for your due diligence check. This whole aspect of gathering information can be a punish with off-market deals depending on how quickly the seller wants to sell the business.
Apart from getting more information about listings within reasonable time frames, buying websites from brokers is great because they have a large list of businesses listed for sale. Which means you don’t have to go hunting high and low for off-market deals or waiting around for them to pop up for sale every few months.
To conclude buying websites from brokers is far easier although you may pay a little more for the listing due to brokers charging commissions and trying to get the most they can for each deal. Which ideally I don’t mind because at the same time a good broker doesn’t particularly want to sell bad businesses which could drastically affect the reputation of the brokerage firm.
