Online businesses are a relatively new asset class with very high margins and returns. However, these assets require a degree of expertise and hands-on involvement that may not be immediately obvious or feasible for most investors.
Statistically, first-time buyers usually lose their money on the first deal.
Our Business Buying and Management Service is an opportunity for you to partner with a well-established player in the market and benefit from our expertise, network, and systems.
At Domain Magnate we’ve been buying and managing online businesses for 15 years with annual returns consistently above 100%.
We manage our own private deal flow, which allows us to buy the best businesses before they even hit the market. Our management team then steps in to increase cash flow and, ultimately, the final exit valuation.
- Amazon affiliate website in the cannabis niche acquired for under $50K, improved to increase traffic and revenue, and sold 5 months later for $165K.
- Another Amazon affiliate site in the coffee niche acquired for $52K and sold for $142.5K 8 months later.
- A beauty affiliate website acquired for $202K in July 2019. Three months later, revenue has increased to $15K and continues to grow. We plan to resell for $500K.
- … many other similar deals!
- A minimum budget of $65K. $50K will be spent on buying a business and the remaining $15K is invested in growth. However, we mostly work with budgets above $100K, and up to $1M.
- Basic familiarity with the business model and our strategy. Preference is usually given to investors who have done at least one similar deal before.
How does it work?
- Fill out our investor engagement form
- Have a call with our senior staff to discuss expectations and plans
- Sign an agreement and send a deposit
- Buy a business
- We set operational strategy, outcomes and timeline
- Our team operates and grows the business
- We resell the business and split profits
- After you fill out the engagement form our staff will review and respond via email to get more details and answer any preliminary questions you may have.
- We’ll set up a call with our senior manager or CEO to discuss expectations, plans, budgets, and other details.
- We’ll sign a short buyer-operator agreement, which outlines the roles, responsibilities, and expectations of both parties. After you send a fully refundable deposit, our team sources the best opportunities for your budget and criteria.
- We’ll show you several great deals. Our due diligence and strategic guidance will allow you to decide with confidence. We manage and review hundreds of private deals to find the best ones, so our deals are much better than what you’ll find on the market. Investors often find that our first recommendation exceeds their expectations.
- We negotiate, prepare, and sign a sales agreement with the seller, set up the transaction (via Escrow.com or similar), and handle the asset transfers.
- Our SEO and Marketing team will conduct an in-depth review of the business to decide on a growth strategy and timeline to begin executing immediately.
- We’ll manage and grow the business to increase profits and optimize it for resale.
- We’ll constantly monitor the market and financial trends so we can sell the business at the optimal time and distribute profits.
We take a 12% deal fee, have a minimum monthly operational cost of $600, and take half the profits generated from the monthly revenues and resale.
- Deal acquisition fee is 12% of the cost up to $350K and 8% thereafter, with a minimum of $6K.
- This covers our brokering costs and it is lower than the 15% industry-standard fee you would pay a broker.
- The deals we buy are far better than what you would be able to find on the market. We typically get a 15%-30% discount from the market value on the business we buy, so you get an immediate return on your fee.
- This fee covers our expert team reviewing hundreds of deals, finding and negotiating the best ones, doing deep due diligence and performing the asset transfers for all domains, websites, and accounts associated with the business, in addition to changing your ads and affiliate IDs.
- Transaction Costs: As a Premium Escrow.com partner, Domain Magnate usually conducts transactions via Escrow.com. The costs are under 1%. Sometimes we also do transactions directly, where the seller first transfers the assets to us, and then we issue the payment. This allows us to save on transaction fees and do deals faster.
- Operational costs are decided based on the maintenance requirements of the business and our growth plans, in coordination with the investor. (Minimum of $600 per month.)
- Profit split: We take 50% of the increase in monthly profit and 50% of the profit you generated after resale.
Example profit distribution:
We buy a business for $56K (with our $6K deal fee included) that is earning $2K per month. After 3 months we increase revenue to $3K. You receive your $2K revenue, then pay our $600 operational cost and we split the remaining $400. So, you earn $2200 in total and you pay $800 to cover our team’s management costs.
After 6 months we increase the revenue to $6K. You receive $3.7K and pay us $2.3K.
After 12 months the business reaches $7K in revenue and we sell the business for $256K. You received $36K in profits in the 12 months of Business operation. Then you receive the remaining $20K to reimburse acquisition costs and fees in full, and we split the remaining $236K equally. So, you receives $174k in total from an investment of $56K after 12 months.
Fill out the engagement form to take the first step and find out if you qualify.