Website For Sale Makes $370,000 On Autopilot

Matt and Liz Raad speak with Alex Shute from Upward Exits on website making $370,000 on autopilot

Imagine owning a website that makes over $370,000 a year and is maintained by an experienced website manager. On today’s Website Showcase, Alex Shute from Upward Exits shares details on a great website he has listed in the photography niche which is monetised with an information product. These are exactly the style of websites that we focus on buying and building because they require relatively low time input and have high potential for growth. Alex shares his insights into this exciting listing and the seller who created it.

Liz Raad:                  Hi and welcome to this week’s Website Showcase. And this time we have a new guest who we’d like to introduce. This is Alex Shute from Upward Exits. This is a website brokerage out of L.A. and he has some awesome listings, and one today that we’d really love to share with you so, welcome Alex.

Alex:               Thank you guys, thank you for having me.

Background on Upward Exits…

Liz:                  Can you give us a little quick background on Upward Exits and what you guys do?

Alex:               Sure, so here at Upward Exits we’re a boutique online brokerage. It consists currently of myself and my business partner, Mark Woodbury. Mark has run a portfolio of online sites for quite some time and I have a personal background of SaaS and software, and we just have a genuine desire to help entrepreneurs. We’ve been meeting more and more entrepreneurs here based in L.A. that are interested in exiting their businesses.

Liz:                  You were mentioning earlier, Alex that you have actually have a lot of clients from all around the world now.

Alex:               Yes, exactly. So, this is the beautiful thing about this space. There are a lot of website sellers that we’re coming in contact with who are actually outside the U.S. There’s a lot of interest in buyers in the U.S. or Canada or Australia that we’ve started to see.

Bigger Passive Website For Sale

Liz:                  Fantastic. So today what you’ve got for us is a website that’s currently for sale and it’s a really interesting one that we wanted to share with you, because it’s a higher turnover website than we’ve talked about before. But I think this is something you might be interested in if you’ve got an equity partner or something like that. It is in the photography niche isn’t it?

Alex:               That’s correct, it’s in the photography niche. And it’s selling an info product, so there’s no tangible product. So that makes it easy that here’s nothing to be stored, so that cuts down on one of those issues there.

Matt:               And I like what you said as well Alex – it’s an interesting one because it is a bigger site, but it’s not really big enough for private equity because it doesn’t quite net a million dollars yet.

Alex:               Right.

Matt:               But, it’s a nice opportunity for someone who can come in, maybe as Liz said, either they’re a high net worth or there is a private equity person because it’s under that net profit of a million dollars, isn’t it?

Website Nets Owner $370,000 per year under management

Alex:               Exactly. It falls in that space where, right now it’s earning about $370,000 USD per year. But it falls in that category of being out of the range of most hobbyists or even portfolio people. And it moves more into maybe a person looking for a career change etc. Or maybe there’s partners, or private equity who are going to be starting at $1 – 3 million EBITDA. So, it’s right in that space that we’re looking for the right buyer.

The thing we’re most excited about this site is the fact that there’s a manager in place and there’s a team in place, and the owner and the seller is really hands-off.

Matt:               And we should mention, when we’re talking these figures – that’s not turnover, that’s net profit. What the owner makes out of the business. $370,000.

Alex:               Correct.

Liz:                  And I think that’s really important to reiterate. This is a business where there is a manager who looks after the day-to-day operations. And that manager comes with the sale, doesn’t he?

Alex:               That’s correct. And the manager is excited about staying on. He creates the content, he meets with the current owner every other week, and they discuss ideas. It could be new photography-based ideas for real estate, or drone, or any other ideas they come up with.

And the current seller (the owner) doesn’t have much of a background in photography, so this isn’t something that is super niched down. He has his ideas that he’s thought about, and they discuss it. Then he says, “Okay, you have the blessing to go out and make that work, let’s create the product and get it done”.

Background Of Website For Sale

Liz:                  Fantastic, so what’s the history of the website? How old is it?

Alex:               It’s just over three and a half years old.

Liz:                  They’ve done some good growth. That’s fantastic.

Matt:               Well, the seller’s not even based in the States is he?  He could be anywhere in the world?

Alex:               Correct. The owner of the business could literally be anywhere in the world. The owner is based in Europe. The actual team that’s handling most of the logistics are based in the States. So, it really could move anywhere in the world, yes.

Liz:                  Fantastic. So, let’s have a look at a couple of the bits of that business and have a look at a few of the details for it.

Okay, so obviously it has a big tick in the box of passive info product business. So, something that we don’t have to hold stock, and it makes its money out of an information product. Does it also have advertising income as well?

Alex:               I think there’s a little bit through Amazon Associates but it might only be ten per cent. It’s not their main source of income. There’s an opportunity there, really.

Large Following and Email List Asset

Liz:                  And like we see here, it also has a really good base of subscribers. So, we’ve got 330,000 email subscribers. So that’s a really valuable part of this asset. As well as 14,000 opt-in for the push notifications as well.

And then we’ve also got a social media following. So, 44,000 fans on Facebook. We’ve got 155,000 monthly viewers on Pinterest, roughly 7,500 subscribers on YouTube, and 4,500 on Instagram.

So again, we’ve got a cross play – where this is very organically based, and it doesn’t have any paid traffic. But it’s spread that traffic over the organic key words and also across social media. And an email list. So you’ve got three really nice assets there.

Alex:               Exactly. And this is really where a lot of the excitement of the business comes, there’s these closed groups that this business is essentially hosting. A lot of their conversation are happening on these sites and it becomes a resource essentially for these, for this niche. So essentially, you’re “hosting the party” if you will. You just happen to sell a product that these people are interested in.

Liz:                  Oh fantastic, so it’s creating a whole community as well?

Alex:               Yes. And that’s been going on for I think, even longer than the business has been around. That’s essentially how it started was through those blogs and through those groups and then, over time, monetized it and now it’s obviously quite successful.

Liz:                  And does the owner see any opportunities for growing further?

Website Growth Opportunities

Alex:               Yeah, his primary thought in terms of growth are potentially paid ads, growing into other markets. So currently, the majority of the sales are coming through the English market, whether that’s U.S. or Europe. But there is a secondary site that comes with the package (Brazilian Portuguese), and they have a lot of traffic coming through there. And he sees that very much as an opportunity that’s been under-utilized. He is someone who is stretched thin personally, and in his business endeavours, as many of us serial entrepreneurs are!

And so, he has a number of ideas that he’d like to share with the new owner, and even stay on to consult them and work with them. He is also willing to sign a non-compete for life, so he really wants to see the success of this. Because it has been his baby that he’s grown over the years. So, he really has a number of ideas that he just doesn’t have the bandwidth to kind of implement.

The Website Seller

Matt:               And you mentioned (and I’m sure you don’t mind sharing this) that he is a serial entrepreneur, and he’s a very nice, humble guy.

Alex:               Yes, and it’s one of those things where you meet a seller like this. And obviously he’s our client, but you learn so much from them. Even in his attitude and disposition, its actually quite humbling.

That’s one thing that we really can’t stress enough. And oftentimes when you’re doing these sorts of transactions, you’re going to be working with the individual for sometimes 3 or 6 months etc. So this type of attitude means a lot.

And he is very responsive, even in our communication with him. Very responsive, very humble. And wants to see the success of the site even beyond himself, so he very open. I can’t really say enough good things about this gentlemen who we have come to know.

Liz:                  That’s a big tick in our due diligence. That’s one of the major things that we look for is a seller that we can work with and that we feel we can trust.

Alex:               That’s true.

Matt:               And a transaction like this, like you said Alex, they’re a high net-worth looking for a life change or a tree change, and you want to get out of the big corporate rat race and you can make an investment like this. That’s exactly the sort of seller you want to work with. Because presumably, like you’ve indicated, he’s going to work with the buyer and make sure this is successful.

Website Sales Price 3x Earnings

Liz:                  Fantastic, so what’s the sale price? What’s he asking?

Alex:               So right now, like I mentioned, he’s earning just north of $370,000 a year. And the sale price is just north of three times earnings so that would be $1,120,000. So that’s three times earnings there.

Liz:                  Which is a reasonable ask for a very good business under management. Good history, so definitely in that. It’s interesting – we’ve seen websites valuations rise a lot over the last 10 years that we’ve been in this marketplace; and three times is not an unreasonable figure for these kinds of businesses.

Matt:               Especially ones as good as this.

Liz:                  Fantastic, well thank you so much for introducing this business to us and also being part of our website showcase. We look forward to speaking to you again soon and looking at some more businesses that you have and websites that you have on your books. So, thanks again Alex.

To find out more about this website contact Alex or go to https://upwardexits.com/listings/passive-info-product-business-for-sale/

About The Author

Liz Raad

Liz Raad is a website investor, Angel Investor and leading educator in Digital Marketing, and is recognised as the Australian expert in buying, renovating and selling profitable websites and businesses. Connect with Liz on Facebook, or LinkedIn.

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