How to Buy an Affiliate Marketing Business
Certainly there is something to be said for building an affiliate marketing business from scratch. When you get your hands dirty with the code, the content, and the business development, no one will ever know your business better than you do. More importantly, the profits are all yours.
But building an affiliate marketing business is not the only way to own an affiliate marketing business. As affiliate marketing has matured as a proven business model, buying websites that already throw off affiliate marketing revenue has become a popular strategy.
However, you must buy an affiliate marketing business right or else not at all.
Find a Tired Website Operator
Some of the best affiliate marketing websites were started from scratch by one person or a small team. Often, years later, those people are tired, and would prefer to go do something else. But they're making money, and they're afraid of change. But oh boy are they tired.
If you can scout out just such an exhausted person or team, start licking your chops. The fatigue factor can be especially acute in the case of blogs or other content-heavy sites.
Run the Numbers--With Some Professional Help
Once you've made contact with a prospect, it's time to look at the books. Sometimes the books are organized, sometimes they're not. Either way, you need to evaluate the books thoroughly.
Make it clear from the outset that you are a numbers buyer. You are prepared to pay a fair price based upon hard numbers, and but you are not interested in buying a business based upon fuzzy notions of brand, business model, demographics, or growth projections.
Run the numbers, if at all possible, with the help of a professional. If you have a good accountant, pay for two hours of good talk. Also consider checking out some of the free business consulting services offered through the Small Business Administration.
A second pair of eyes can help you see areas within the business that could be improved, both in terms of increasing income and cutting costs.
Ideally, what you want to do is buy the business "as is," but with clear plans in mind about how to make the business run better. That's a goal that can use some teamwork.
Price or Terms? Seller's Choice
Let's say that your desired price, after you've run the numbers, comes to $40,000. Depending on how motivated the seller is, you might initially offer $35,000 all cash.
Likely the seller will want more money. All sellers do.
Excellent! Now you throw the ball into the seller's court, like so: "Let's say we did raise the sales price. What terms could you offer me in return for your higher price?"
The sale of an affiliate marketing business can present a tax problem for a seller. Meanwhile, business financing has been extremely tough for buyers. In light of this mutual dilemma, a multi-year installment sale can make a lot of sense for both parties.
Negotiate creatively and you may find that the seller is willing to give you a zero interest loan, let you pay for the business over five years, and maybe even buy you lunch to boot.