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Competition Site Bought Out - Used as Feeder Site

by yukon Banned
6 replies
  • SEO
    • |
If you've ever read any of my old comments you'll know I'm in the download niche. There's a niche software that dominates, they generate a lot of buyer traffic. My download sites cater to those buyers.

I subscribe to this niche software email list to stay updated, I also own the software. The last email they sent out promoted their latest buy. They bought out a same niche download site & using that traffic to cross promote their software. They're using the new purchase/site as a feeder site (direct traffic + SEO). The feeder site has a shopping cart with a unique product.

I have no idea what the selling price was on the feeder site but I'm sure it was a decent chunk of change considering how popular the software site is in this niche. The pro version of the software sells for around $2,000 & up depending on the bundle with tons of buyers (huge proprietary forum for buyers only). Yearly software upgrades cost extra. My point is they're in a position to spend money, they're a quality business, they have a rep. to uphold. They don't cheap out on anything they do.

This got me thinking about something business related I read years ago, start your business with the intention of creating an exit strategy because there will come a day when your ready to move on to different things (new business, retirement, whatever...). I'm kinda rambling here but I thought it was cool how they leveraged that smaller site as a feeder site. Makes me want to tidy up my own same niche sites & see If they'll make an offer.
#bought #competition #feeder #site
  • Profile picture of the author Intrepreneur
    If you think like an expert businessman when creating a business the exit strategy will be apparent. If you think like a person just wanting to make a business, you don't be thinking of that. Maybe naturally the idea will come to you.

    Either way, later in time if your business is a success, the exit is always going to happen. Unless you stick with it until the end of your life. Which many people in business decide to do, handing it down the family or out to another.

    Exit strategies are important if you want an investor to back you, or to prove you can buy back their part of the business in 5 year's time.

    Anyhow, yes you should think about and be ready to take the exit if it comes your way.
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    • Profile picture of the author dburk
      Hi Yukon,

      The difference between a business and a career, is that a business doesn't require you to work in it as an employee might. If your business can't run without you there then it is really just a job, or a profession, not really a business.

      If you really want to sell your business some day then you need to stop working in your business and start working on it. Of course it may take time, but the key is to document every essential task so that an average person(s), without prior experience, could follow your documented system and do the tasks needed to run the business. You are in effect developing a operating system. Most serious businesses have this documentation, usually called an "operations manual".

      A buyer isn't going to pay for what's in your head, The more refined and documented the procedures of your business are the more value they will have in a sale of your business.

      Make your business system a turn-key operation and then it will be saleable. Otherwise, all you will be able to sell is the domain name as an asset based on the current traffic and backlinks. Trust me, when I tell you that you can command far more for a turn-key business than for just the domain and website content as an asset. You will also be able to market you business to far more potential investors.

      There are other benefits to documenting your operating procedures. If you become sick or incapacitated, a family member could step in and run your business while you recover. It also makes it easier to bring in employees and maintain the standards you have established for your business.
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      • Profile picture of the author Intrepreneur
        Originally Posted by dburk View Post

        Hi Yukon,

        The difference between a business and a career, is that a business doesn't require you to work in it as an employee might. If your business can't run without you there then it is really just a job, or a profession, not really a business.

        If you really want to sell your business some day then you need to stop working in your business and start working on it. Of course it may take time, but the key is to document every essential task so that an average person(s), without prior experience, could follow your documented system and do the tasks needed to run the business. You are in effect developing a operating system. Most serious businesses have this documentation, usually called an "operations manual".

        A buyer isn't going to pay for what's in your head, The more refined and documented the procedures of your business are the more value they will have in a sale of your business.

        Make your business system a turn-key operation and then it will be saleable. Otherwise, all you will be able to sell is the domain name as an asset based on the current traffic and backlinks. Trust me, when I tell you that you can command far more for a turn-key business than for just the domain and website content as an asset. You will also be able to market you business to far more potential investors.

        There are other benefits to documenting your operating procedures. If you become sick or incapacitated, a family member could step in and run your business while you recover. It also makes it easier to bring in employees and maintain the standards you have established for your business.
        Sensible words. Documentation is specifically how to make it a business. Otherwise as time goes on, without documentation, to employ other people you need to spend personal time training them rather than delegating the task.
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  • Profile picture of the author SEO Power
    I wouldn't sell a business that is making money unless it requires more effort to maintain than it's worth and in the rare situation where I might need a big sum of money urgently. Therefore, I don't start a business with an exit strategy.
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  • Profile picture of the author accessted
    I have a relative in the restaurant business. Hes has had a LOT of them. He opens them up fixes them top notch, then he runs them for about a year or two and when business is booming he sells them..

    I always wondered why he would do that, but the older I get I kind of understand.

    He gets top dollar for them..

    Most people sell out when they start going down hill and it is hard to sell..

    Sorry for my rambling, but maybe you could see where I am going with this...
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    • Profile picture of the author yukon
      Banned
      Originally Posted by SEO Power View Post

      I wouldn't sell a business that is making money unless it requires more effort to maintain than it's worth and in the rare situation where I might need a big sum of money urgently. Therefore, I don't start a business with an exit strategy.
      Sometimes life changes plans, things happen that can't be controlled. I had a family emergency a month ago that made me rethink what's important. I imagine everyone goes through similar situations sooner or later.




      Originally Posted by dburk View Post

      Hi Yukon,

      The difference between a business and a career, is that a business doesn't require you to work in it as an employee might. If your business can't run without you there then it is really just a job, or a profession, not really a business.
      I should have mentioned in OP, the guy that sold the website is staying on to create future content, so he's basically an employee at this point. I'm not sure If it's a long term strategy or they're using him to transition the work in house, they only said he'll still be creating the content the site is known for.






      Originally Posted by accessted View Post

      I have a relative in the restaurant business. Hes has had a LOT of them. He opens them up fixes them top notch, then he runs them for about a year or two and when business is booming he sells them..

      I always wondered why he would do that, but the older I get I kind of understand.

      He gets top dollar for them..

      Most people sell out when they start going down hill and it is hard to sell..

      Sorry for my rambling, but maybe you could see where I am going with this...
      Smart, sort of like flipping houses in a good economy.
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