Online Business For Sale Australia
This is the ultimate guide to online business for sale in Australia. In this guide we will cover the key things you need to know. Including the best places to find online businesses to buy. The wide variety of online businesses available to buy, The benefits of buying an online business and being able to work from anywhere. Lets get to it!
// 1. Best place to buy or sell an online business in Australia?
When you sell your business you can choose to sell the business yourself or use a broker.
There are pros and cons to both approaches but if you want to sell yourself, here are some of the best marketplaces that you can use:
1) Business For Sale
Business For Sale focuses specifically on Australian businesses for sale.
Pros
- All businesses listed for sale, sell predominantly to Australians.
- As an Australian marketplace all asking prices, revenue and profits are listed in $AUD.
- It is free to search all listings
- You can use "online" or "ecommerce" to view only the online businesses for sale
Cons
- Once you find the perfect buyer you have to complete the transfer yourself or use a broker
- No filter email alerts so you have to search the listings on the site itself here.
What are the fees?
- From $297 to list your business for sale.
- Free to search the marketplace for all listings and does not require account creation.
2) Flippa
Flippa is one of the oldest marketplaces and was originally founded in Australia, however it now focuses more on the larger American website market.
Pros
- Large size range of businesses especially in the smaller end of the market.
- You can now change your profile currency so you can see prices in AUD rather than USD.
- You can now filter for Australian owned businesses.
- Wide range of different businesses for sale from domains to apps.
- Unique auction format that lets you bid on businesses similar to the old eBay.
- Often includes stats from the sellers Stripe or Google Analytics profile.
Cons
- Australian owned businesses filter may show businesses that sell to the US market but are owned by Aussies.
- Listing fee and commission make this quite an expensive way to sell a business.
- Majority of American buyers are looking to buy US based businesses.
What are the fees?
As the majority of businesses listed are American, the prices are listed in USD:
- $1 to $9,999: Up to $99 USD + 10% Success Fee
- $10k to $49,999: Up to $399 USD + 10% Success Fee
- $50k to $99,999: Up to $399 USD + 7.5% Success Fee
- Over $100k: Up to $499 USD + 5% Success Fee
Here are the same prices but converted to AUD for you:
- $1 to $14k AUD: Up to $142 AUD + 10% Success Fee
- $14k to $72k: Up to $574 AUD + 10% Success Fee
- $72k to $144k: Up to $574 AUD + 7.5% Success Fee
- Over $144k: Up to $718 AUD + 5% Success Fee
Note that the listing fees are in USD so I have translated them to AUD at the current exchange rate.
For example, on a $75k AUD business sale, the fee will be up to $574 for the listing fee plus $5,625 for the success fee.
Buyers also get a 20% discount on Escrow fees. For a $75k business, the Escrow fee would usually be $668 but if you use Flippa it would be $532, saving you $136.
The listing fee is non refundable but the success fee is only due if you sell and is based on the final selling price.
3) Seek Business
Seek Business is one of the largest marketplaces in Australia for jobs and a few years ago they expanded to include businesses.
Pros
- Popular marketplace with lots of traffic, especially for traditional offline businesses.
- Lots of brokers use Seek to post their deals so it can save having to visit every brokerage website, which are often pretty outdated.
- No commission on the sale, just an upfront package fee.
Cons
- Online businesses are not categorised other than the search term 'online'. This means you will get lots of physical offline businesses mixed in with your results.
- Listings get auto renewed every month so when you search most recent, it is very difficult to find businesses you have not already seen before. This makes it painful to use for serious buyers.
What are the fees?
As the majority of businesses listed are American, the prices are listed in USD:
- $385 for a 6 month ad pack
- $659 for an ad pack to list until sold
- $1649 for the concierge package, list until sold and they help write the listing ad for you
You can also pay to boost ads once you have bought your ad pack.
There is no commission when selling privately yourself on Seek Business so these listings fees are the only fees.
4) Shopify Exchange Marketplace
Shopify is the most popular platform to build eCommerce business on.
They used to have the Exchange Marketplace but Shopify has since chosen to close this down.
The quality of businesses on here was a bit hit and miss so check out the other options instead.
Pros
- Wide range of stores from $500 up to $1m. In general most deals are in the lower end.
- Lots of brokers use Seek to post their deals so it can save having to visit every brokerage website, which are often pretty outdated.
- No commission on the sale, just an upfront package fee.
Cons
- Approximately 12% service fee when you sell your business.
- All prices are listed in USD which gets a bit annoying having to translate to AUD every time.
What are the fees?
Shopify make it hard to find the fees publicly but they use a 12% success fee model.
- 12% success fee
- Escrow fee is included in this price
For example on a $75k business sale, the success fee would be $9,000.
If you were to use Escrow privately the fee would be $668.
5) What if I don't want to sell the business myself?
Selling a business yourself on a marketplace is the cheapest way to list your business.
Business brokers usually charge 5-15% brokerage fee.
But they are also best equipped to help you get top dollar for your business and will help take care of the sales process for you.
At Aussie Acquire we aggregate all the Australian online business listings, so we see which brokers are the most active in each size bracket.
If you want to get a business valuation and a recommended broker.
Fill out the valuation request form here.
And we will match you with the top 3 brokers that have sold the most businesses of your size and type in Australia.
// 2. What are the different types of online business for sale? And which one is best??
There are loads of different potential business models for online business for sale. But these are the eight that we see most commonly listed:
eCommerce
These are typically Shopify stores for sale. Shopify is the most popular platform for running an eCommerce store but you may also find Australian stores that sell using other platforms like WooCommerce, BigCommerce, Magento or even eBay.
Dropshipping
These are typically classed under eCommerce but have a different business model. Instead of keeping products in stock, instead they buy it from a third party to fulfil orders. These were very popular but are becoming less common.
Blog / Content Site
These are typically websites that make money from advertising through either affiliate links or display advertising. Although they may also do Lead Generation so they sell leads to other businesses. For Aussie Acquire we list .com.au or .au content sites and blogs.
Digital Goods
Not all websites sell physical products. If your business sells a course, membership or a downloadable product then these are classed as Digital Goods businesses.
Agency / Services
These businesses provide a service using technology. A good example is a digital marketing agency that helps businesses advertise online. Or a good example of a service would be an online food delivery business.
Mobile App
Apps are all the widgets that you have on your phone, they can either be monetised through ads or through paid subscriptions through the App store. A good example of a popular app is Calm, that helps people get to sleep.
Marketplace
If the business brings two sides of a market together then they are classed as a marketplace. A good example of this is AirBnB as they connect home owners with people looking to rent them.
SaaS
Software As A Service is any business that charges a subscription fee for access to their software. A good example of popular SaaS companies are Shopify plug ins that online store owners use to build their stores.
So which one is the best business model?
There are pros and cons to each business model and even within a business model, there are different niches that have different benefits and disadvantages.
Lots of people spend ages wondering what industry to go into eg fashion vs pets but within each industry it is even more important to choose what business model you will be building.
You can evaluate the different business models by looking at their profit margin, customer acquisition strategies, skills required and competition.
The best business model is most likely going to be the one that you have the most experience in. This is definitely true when buying a business as the experience running businesses in that industry will help evaluate different listings better.
Similarly most successful buyers stay within their business model, so if they are buying Shopify stores then they may scale and sell one and then buy another.
The knowledge they build up helps them scale each store quicker and also helps them know what type of store to buy next.
If they were to go and buy a SaaS company then the different skill set and experience required would mean they lose any advantages their experience has built. So choose carefully what business model is most interesting to you.
In Australia there is definitely the most demand and supply for eCommerce stores. There are more Shopify stores for sale than ever before and more buyers than ever before.
SaaS companies and content sites often try to target the larger American market but there are lots of niche marketplaces and digital goods businesses in Australia.
The bonus to building a successful company in Australia is that once you have proven it works in this market, you can take the business to the larger American market or sell to an American buyer who plans to do this.
// 3. How to value an online business?
I wrote a guide on how Australian eCommerce businesses are valued.
You can find out how to value Australian eCommerce businesses here.
One thing that surprises a lot of people, is that the business is almost always primarily based on its net profit.
This is because if you buy a business for $200k you need to know how long it takes to get that $200k back.
You will never see a business valued at $200k because it has the potential to be worth that. A business is primarily valued on its past history not its future.
Online Business Valuation = Net Profit x Multiple
This is the formula that business brokers will use to value your business.
This seems fairly simple as you can work out your net profit with the help of an accountant. (Don't forget about add backs though, these are expenses that you the owner claim but are not required to run the business, these can get added back so your net profit will be higher than your standard Profit & Loss).
The trickier part of the equation is working out the multiple that you will use. There are loads of factors that can influence a multiple so this is where it becomes more of an art than a science.
I wrote in depth about every possible factor in determining a multiple here.
But the basic ones are:
- Age of business
- Potential for growth
- Defensibility
- Growing, stable or declining growth
- Are key metrics diversified? Single large customer or single source of traffic?
- Other assets eg email list, social media followers etc
- Operations - who is running the business day to day? Is the owner involved?
This way you can see that a 10 year old company that is still growing year on year with an operator in place will have a higher multiple than a newer store relying on one traffic source with the owner managing every piece.
You can use this equation when looking at any business. Brokers are professional valuers but you can still work out the multiple and compare it to other businesses that you like.
One tip is that most buyers obsess over the asking price and therefore aim to get the best multiple so they can brag what multiple they got.
But it is always much better to get a sustainable growing business for a solid multiple then get a less solid declining business for a cheap multiple.
Over the lifetime that you own the business, the growth from a growing business will be worth a lot more than the difference in multiple that you save.
// 4. What to look for when buying an online business?
Once you find a listing that you like the look of, what should you do next?
The beauty of online businesses is you can research a lot of factors from your office chair.
Online Businesses:
Where is the traffic currently coming from?
Rather than going out to a retail shop and counting foot traffic, you can get access to their Google Analytics and see exactly where online customers are coming from.
What do the under the hood financials look like?
Most businesses use Stripe so the seller can send you a monthly profit and loss to show the growth and any seasonality in sales and expenses.
Are there any reviews of the product?
Can you find reviews from customers? Do they mention any repeating issues or compliments.
Why is the owner selling?
There are lots of legitimate reasons to sell a business. The owner may want more time, they may have reached a ceiling of their skills or they may have another project taking off. Talking with the seller and asking the right questions will help to uncover dishonest sellers.
What levers can I pull?
When looking at each factor what levers do you know that you could pull. eg are expenses high or do they have strong organic SEO traffic but no social media presence and you are an expert at Instagram or TikTok.
Why do you want to buy the store?
It can get easy to get carried away with new interesting businesses that you see being listed but do they fit in with your goals. Are you looking for passive income or a full time project? Does this business hit the mark with your personal, career and financial goals.
There are lots of online business for sale Australia but once you find the perfect one, make sure you do your due diligence to check that it is perfect for you and your skills.
// 5. Benefits of buying an online business?
If you are looking at buying a business you may be considering buying either a bricks and mortar store or an online business.
It is true that there are a whole generation of baby boomers that own bricks and mortar businesses that are retiring. So there is going to be a massive shift in value changing hands over the next 10 years.
However online businesses have a lot of benefits vs more traditional bricks and mortar businesses.
Here are some of the reasons why I found online businesses attractive to buy:
- Higher profit margin / lower costs of online businesses - Content sites or SaaS businesses can run at 90% margins consistently without the need for property leases or large full time teams.
- Always open - You can have your online business earning money while you sleep, it does not have to be tied to in person business hours.
- Scale - It is a lot easier to take an online business nationally to everyone in Australia vs a local business offering a service that needs people in each city.
- Analytics - It is really easy to sit at home and analyse an online business, there are benchmarks for things like conversion rates and customer acquisition costs that make life a lot easier.
- Work from home - There are some beautiful parts of Australia that traditionally had no jobs. You can buy an amazing property and be your own boss with a home business if you run a successful online business. (PS. I did exactly this, moving to outside Byron Bay instead of living in the city!)
- Liquidity - When it comes to selling your business you don't have to find the exact person in the exact same area, your buyer can be anyone and you can transfer your website in a day vs the same traditional business that has a lease and a large team etc.
- Time to sell - The average days on the market for an online business are usually a lot shorter for online businesses. So if you needed cash for a house purchase or something you could sell your business quicker in general.
Summary: Buying an Established Business?
There are more online businesses being created and so there will be more and more opportunities to acquire them in the future.
If you want to skip the painful parts of working out product market fit, suppliers, software systems and getting initial customers.
You can skip all of these by buying an already established business.
If you are looking in Australia, Aussie Acquire curates all the listings of Australian online businesses from over 40 platforms.
You can search business for sale here to get an idea of multiples.