Case Study: The Fastest Million Dollar Website We’ve Ever Sold
October 14, 2021
Normally, when you think of selling seven-figure businesses, you think of the reams of legal paperwork, months of due diligence, and arduous back-and-forth communication between all parties involved before arriving at a deal.
Given the amount at stake, this is normally true—especially for online deals where anonymity and scams are part of daily internet life.
As a seller, you’ve likely spent years putting your heart and soul into a business, building it up to a point where you’re ready to consider selling, and wondering if anyone would buy it. For some, the anticipation is as nerve-wracking as the day they opened their business and were waiting for their first customer.
So imagine seeing your business go live on the marketplace at the start of the day, and after coming back from your morning errands, you see a notification that someone has already sent in over a million dollars for your website. The deal is done.
5 hours and 16 minutes. This was the length of time between the new business listing going public and the buyer placing a deposit to purchase a $1,029,303 website.
This broke the record for the fastest seven-figure website ever sold. What made this even more incredible is that the buyer felt comfortable wiring more than a million dollars to us without first contacting anyone on our team. There were no initial questions for the seller and no discussion with our sales advisors.
In this case study, we’ll discuss what made this seven-figure website an attractive asset and quick grab for the buyer. We’ll then go into why our process gave this buyer the confidence to wire over seven figures within hours.
A Thriving Website from the Dot Com Era
The first part of the equation for selling this business so quickly was the unique strength of the business itself.
This was an incredibly well-aged display advertising and affiliate business that had been operating for over 20 years. It was in the highly competitive and lucrative pet care niche, had a DR of over 50, a strong backlink profile, and its traffic was spread evenly across its pages with no single page generating over 2.5% of overall site traffic.
The business saw significant growth due to a change in its display advertising network and a traffic boost from a Google algorithm update. By the time the seller was considering selling the business, it was consistently generating over eight times its monthly revenue prior to this spike.
We’ve consistently seen sellers time their exits around sales spikes. The common dilemma faced by sellers at this point is between trying to grow their business more to see if they can further increase the valuation or to cash out so they can allocate their capital and attention elsewhere.
This is a personal decision for each seller. However, we’d also recommend you speak with a business advisor to give you insight into what others have done in similar situations.
Arriving at the Valuation
The seller spent about two months working with our vetting team to organize all revenue and expense figures into a profit and loss (P&L) statement. They answered questions to help us determine the listing multiple we used in calculating the business valuation.
This took a little longer than the normal valuation timeline due to the sudden and significant growth in the business.
Together, we wanted to confirm that the revenue continued to be consistent over the coming months. We needed to be confident that this was the new baseline in order to justify calculating a valuation around this level. After reviewing the business for a couple of months, we confirmed that it was.
By the end of the vetting process, we valued the business using an eight-month net profit average rather than the commonly used twelve-month average. Given the business attributes, we were able to justify assigning a strong listing multiple and a high overall valuation.
This goes to show that our valuation tool is a great way to get started with the valuation process—but that circumstances can change and adjustments can be made to each deal during the actual vetting of the business.
The Buyer’s Perspective
A few hours after going live on the marketplace, the deal was purchased so quickly that only one other interested party had time to try to schedule a call with the seller.
As mentioned earlier, the buyer purchased this business without first requesting a discussion with anyone directly on our team. After the wire came through, we had a chance to get on our first call with the buyer, and we learned about how they made their decision.
According to the buyer, they made this purchase for two reasons: they saw an opportunity that met their predefined investment criteria, and they trusted the Empire Flippers process.
Predefined Investment Criteria and Buying Quickly
The buyer had been looking for a website within this niche for a while and didn’t want to miss the opportunity.
With the information provided by our vetting team and perhaps some additional preliminary website pre-checks of their own, the buyer was able to quickly verify that the business met their investment criteria.
Speed is also important in successful acquisitions.
Our marketplace closes a deal to the first buyer who submits their deposit. This can lead to assets being purchased quickly after being listed. We used to only see this happen with five-or six-figure businesses – it is now happening with seven-figure businesses. The game has changed.
The reason for this is that websites have become attractive purchases not only as standalone assets but also as acquisitions to supplement other business models in a portfolio. This is known as the bolt-on strategy. This has significantly increased buyer appetite and competition for higher-priced websites.
In this case, the buyer saw an opportunity that matched their predefined criteria, quickly performed their due diligence, and bought with the confidence that they were purchasing a quality business.
Trusting in the Empire Flippers Process
The buyer said they felt comfortable moving forward as quickly as they did due to their trust in the Empire Flippers process. We have years of experience in closing high-caliber deals efficiently.
It’s our vetting department that helps establish this trust in the quality of the businesses on the marketplace.
A high percentage of the businesses that we receive do not end up being listed on our marketplace due to the specific quality standards set by our vetting team. As a result, our buyers have grown to trust the quality of businesses on our marketplace.
In this case, after purchasing the business and during the asset transfer (migration) phase, the buyer felt that the business was accurately advertised, and they were excited that the business’s performance even exceeded expectations during the migration period.
The high volume of deals we complete with overwhelmingly positive feedback is yet another driving force behind this trust.
In this deal, the migration of the assets took only 22 days, and the buyer was thrilled with how seamless the transaction went overall.
Larger Deals Are Selling Faster than Ever
While this business currently holds the record for the fastest website of this size to be sold, large deals are selling faster than ever, and buyers and sellers are experiencing success stories similar to this every week with us.
In every case, these success stories started with the seller reaching out to learn about their options. If you’re considering an exit in the future, we recommend speaking with a business advisor to determine what your options are and what might be best for you.
If you’re not quite ready to schedule a call with us but would like an idea of what your business could be worth, feel free to check out our free valuation tool.
