Ask HN: Best marketplace for passive income businesses? - sharemywin
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ThomasSmale
I'm founder of FE International (mentioned quite a few times in this thread
already). We've done over $100m deals in the online space and have won various
awards (e.g. for my business partner, Ismael: [https://www.ibba.org/press-
releases/2016-ibba-member-excelle...](https://www.ibba.org/press-
releases/2016-ibba-member-excellence-awards/))

When searching for a business to buy, make sure you do your due diligence.
There's a _lot_ of junk out there and many "brokers" just make up their
numbers/claimed legitimacy to win business. Once you've got past that, you
then need to do due diligence on the business itself.

Passive businesses are not impossible to find, but it does depend on your
definition. You can't buy any business and do absolutely nothing (truly
"passive"). Even something low maintenance will require 1 hour a week,
especially if you want it to last for years. Expect to pay a premium for
businesses like this but be very cautious around claims from a seller. Number
of hours worked is the easiest to misrepresent (and the hardest to prove).
Almost every seller claims to work "2 hours a day" but IRL I've never met a
business owner who works less than 10 a day :)

To answer your question directly, don't just look at marketplaces, check out
brokers and advisors too. If you're upfront with what you're looking for and
budget, most will send you options that are a good fit.

Good luck with your search!

~~~
codegeek
I had a bad experience dealing with you guys and I hope you can improve your
NDA process. You make buyers sign a 2 year NDA. No problem with that except
that you claim that the NDA is not specific to one sale but for all sales for
the 2 year period. I had signed one already but when I inquired about another
company after 1 year had passed, your team tried to force me to sign another
NDA and gave the worst excuses when I tried to ask for the reason.

Either it is a 2 year NDA or it is not. If you want us to re-sign the NDA
after 1 year, say so. Otherwise it is frankly misleading and a lie.

~~~
ThomasSmale
Sorry to hear you had a bad experience - happy to take on all constructive
feedback so I appreciate you bringing it up!

The reason we ask for a 2 year NDA is that this is the generally accepted
length of time that NDAs are enforceable in all 50 US states. We do ask
buyers/investors to re-sign after 1 year so that our sellers are comfortable
that there is at least 1 year remaining on all NDAs at the point of us listing
a business.

That being said, on some listings sellers request that new 2 year NDAs are
signed with all buyers/investors irrespective of how long is left to run on a
pre-signed document. This is usually limited to 7 and 8-figure listings.

Sellers and buyers/investors both generally appreciate our strict approach.
Making sure that we are operating diligent process when it comes to NDAs and
sharing information is important for sellers as well as a new owner of the
business.

Happy to jump on a call to discuss further if you would like:
[https://calendly.com/thomassmale](https://calendly.com/thomassmale).

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itnAAnti
Flippa is decent, but there is a lot of garbage to wade through to find
anything real. Empire Flippers is a little better, they vet the sites some
before posting them. Bizbuysell.com is mainly focused on brick and mortar
businesses, but there are some online businesses for sale there as well.

Having said that, finding a true "passive income" business that is profitable
and someone wants to sell is challenging. Most of them (that I have found) end
up being scams. Do your due diligence and scrutinize their income and expense
reports, traffic figures, etc. I can usually "smell" when something isn't
right.

~~~
sharemywin
I bought a coupon site on flippa and realized a lot of the traffic was from
images of coupons. that linked to the site.

~~~
sjg007
No way to do due diligence before hand?

~~~
sharemywin
You don't know what you don't know. the traffic lasted a couple months. only
spent a $1000 on it. I just wasn't willing to put copyrighted material on the
web linking back to my site to get traffic.

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tbrooks
FE International is known to broker a lot of SaaS company sales. I haven't
sold/bought a business with them, but I have friends that have.

It's not a marketplace per se, but it might be what you're looking for.

[1] [https://feinternational.com](https://feinternational.com)

~~~
vram22
Patric McKenzie (patio11 here) sold either or both of his businesses via FE
Int'l - Bingo Card Creator and Appointment Reminder. IIRC he has written about
both experiences on his site kalzumeus.com .

~~~
vram22
s/Patric/Patrick - was a typo.

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pw
I've heard really good things about FE International, and, since they're a
true broker, everything they sell seems to be super legit. I've also had some
contact with them when I was thinking about selling some of my sites, and I
was impressed.

The fact that they're a true broker, though, means it's not worth their time
to sell sites with lower earnings, so I haven't seen anything much below
$2k/month in revenue.

Also, from talking to them, it sounds like they have a network of buyers that
they can privately pitch your site to if you're looking to sell quickly and
are willing to take a slightly lower multiple of earnings (in exchange for a
quicker, easier selling process, it seems).

~~~
pw
Oh, the other site for this I've heard of this EmpireFlippers.

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brandfountain
Careful what you wish for, 'passive income' can take on a life of its own.

I jumped into the branded domain aftermarket thinking it is the perfect
passive income business to support my primary project. After a building a
retail site and acquiring a bunch of quality domains the sales trickled in. So
did the inquiries and customer support tickets. As sales increased so did the
demand on my time. Now I have to choose between a fledgling/growing passive
side business or (more likely) flip it and focus on my main biz.

The lesson is its hard to serve two masters, no matter how easy the math
looks. Unless your Elon Musk.

~~~
ajeet_dhaliwal
Isn't this a great problem to have? Most people can't get one business to
traction.

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freshfey
Not sure if you're looking for a marketplace to buy or launch a business, but
I'd say the Atlassian store might be an interesting one.

A lot of (business) users who are willing to spend money. A lot of
ratings/reviews you can improve on to make a better product and a big
ecosystem.

~~~
thisisit
Just wondering what is Atlassian's share of any sale? Additionally, how do
they view apps which might have a similar purpose to an official but priced
lesser?

~~~
jpwright
Atlassian's cut is 25%.

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jefflombardjr
NYSE. Seriously. If you want to buy and be a completely passive owner, buy
stocks. You'll at least be able to minimize risk.

Buying and growing a business can be just as hard as starting one. If you want
to own a business, you have to be able to sell/market their product. If you
can't sell to one or two people to start a business, what makes you think
selling to 100s in an established business is a good idea?

 _If_ you already have a stock portfolio and need to diversify. Look to real
estate. Even then it's not completely passive, but hey you can at least hire a
management company.

 _If_ you still want to passively own a business, specifically a web business.
Take the $3,000 or whatever you want to use to buy a site and instead launch
your own site. Spend the money on ads to drive traffic to your site and learn
the valuable lesson that you can't just buy your way to success...

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throwaway2016a
This question is a bit too vague. I'm not sure how it got 17 up votes. I would
only up vote it if it was more clear.

We need to know the motivations in order to be able to answer.

Are you looking to buy a turn key passive income business?

Are you looking to sell?

If you are looking to sell what are your skills?

Can you, for example, write a Wordpress theme or would you do you want to sell
physical goods using a drop shipper?

If you update the questions I'm sure some people will be able to help.

~~~
sharemywin
It got up voted I think because a lot of people are looking for this type of
thing.

Honestly, I threw it out there to see what type of websites are in the space.

~~~
throwaway2016a
I asked for clarification and gave multiple possible interpretation.

Your answer assumes I am wrong about it being ambiguous and vague but you
don't say why.

I'm not trying to attack you I'm trying to be helpful so you can clarify your
question.

Can you please answer the questions?

A lot of people seems to have assumed you meant to purchase a passive income
business. Is that the correct interpretation?

Because a "marketplace" is also a website that sells good and service and a
passive income marketplace could mean one where you can list goods and
services on it without having to be hands on fulfilling each order
individually. If you meant that, there are literally dozens of possible types
of products and not all of them are suitable to everyone.

~~~
owlninja
You seem to be overthinking this.

~~~
throwaway2016a
Perhaps. I still have no idea what he is asking for :(

I'm just going to assume the majority of posters are right and he's looking to
buy a turn key passive business.

I come from an eCommerce world where there are a lot of hands-off drop
shippers. I don't think it is unreasonable to have thought he might have been
asking something like "What's the best place to drop ship on to make the most
profits?"

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CryoLogic
I sold passive income sites in the $300-$600/mo range on both Flippa and
BuySellWebsites (not sure if it's still around).

I would not suggest either due to the # of scams.

Really it doesn't take more than a year to make a website profitable. 2-3 to
get it into hundreds or thousands. Do your keyword research with adwords to
determine avg. cpm, or if you are selling products build out a social media
following.

~~~
shostack
Can you give examples of some of the sites you sold? I'm having a hard time
believing something that is a successful established passive income stream
sells for that range. Seems more like it would be more selling site templates
and infographics without a real customer base.

And if there's no real customer base then it is hardly passive since you need
to build the business.

~~~
thisisit
I think he meant he sold sites making $300-$600/month on those sites. Not that
the sites were sold for those prices.

That being said, CryoLogic, any course, books etc. you recommend to learn
about the process?

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FatAmericanDev
Not sure about the best but one is Flippa.

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moflome
Wanna buy one of mine? Thinking of positioning for sale a Business SaaS app, a
Sales/Marketing Automation app and a transportation related app. Keeping the
one that's earning the most... sorry.

~~~
sharemywin
how would I get a hold of you?

~~~
coderholic
His profile at
[https://news.ycombinator.com/user?id=moflome](https://news.ycombinator.com/user?id=moflome)
links to [https://moflo.me/](https://moflo.me/) which has a contact link and a
phone number

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leandot
Places like IndieHackers and forums. I guess HN is also not a bad place to
ask.

E.g. I have a passive income business that I could sell given an interesting
offer.

~~~
vanderreeah
You seem like a good person to ask the question that's appeared on this thread
already a couple of times: if the business produces "passive income", why
would you want to sell it? I.e. if you put little-to-no-effort into running it
and it gives you an income, surely you would (in the long run) lose money by
selling for a lump sum that bears any relation to the business's income.

~~~
mapster
one reason to sell income generating sites: to raise some capital to use on
growing other site.

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probinso
I think that if you were to lease out teleportation devices you would be
pretty well-off

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nickthemagicman
Why would someone sell a passive income business? By definition it's basically
free money.

~~~
ThomasSmale
Lots of reasons. Just beware on marketplaces (Flippa, EmpireFlippers) etc.
which have varying levels of vetting (from none to basic verification) as
sellers often make up reasons or are lying about hours worked.

Some legitimate reasons to sell something "passive"

\- Have another business growing that needs cash \- Need a lump sum of cash
for X \- Lower tax rate (generally) paying capital gains vs. income tax \-
Cash in the bank often beats future uncertainty \- Being passive doesn't mean
it's low risk or doesn't keep you up at night

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decentralised
Invest in tokens and ETH, BTC, BCC etc.

~~~
sharemywin
I did buy some 3 GPUs makeing aobut $5-$6 a day. Probably would have done
better just buying BTC when it crash a month ago.

~~~
decentralised
What are you mining? There are profitability calculators available, last I saw
Monero has the highest return on investment.

