I’m George Moulos, Senior Broker and CEO at Ecommerce Brokers. We operate as a sell side and buy side online business‘ broker. In this article I’ll use mine and my teams 11 years of buy side and sell side business brokerage experience to walk you through the process of what a buy side business broker is.

Buy side business broker

1. What is a Buy Side Broker?

A buy side broker is a professional or firm, like George Moulos at Ecommerce Brokers that assists companies or individuals in the acquisition of other companies’ online businesses, employees or assets. These brokers work on the business owner, or buyer of small business’s behalf to identify potential targets, negotiate great acquisition, purchase price and terms, and facilitate the transaction. The best buy side business broker for online businesses is the Elite Acquirers Service by Ecommerce Brokers.

Online buy side brokers usually specialize in specific industries or market sectors, such as e-commerce, software, or search and digital media sales. They usually have a thorough understanding of the market, its players and customers, its trends, and can offer valuable insights and advice to their clients. This is what we do at Ecommerce Brokers through our Elite Acquirers service, bringing 11 years of experience in buying and selling businesses.

To ensure owners a smooth and successful acquisition process, some buy-side brokers for online businesses transactions may also provide additional services such as due diligence, valuation analysis, and post-merger integration support. At Ecommerce Brokers we help buyers every step of the way and our services are make communication available 24/7.

My role as a buy-side advisor for ecommerce business acquisitions is to provide strategic advice, research and support to companies and individuals interested in acquiring ecommerce businesses. Our key responsibilities as a buy side advisor in search for online sales businesses includes:

  1. Business Sourcing: One of the first things we do is conduct extremely thorough research across the industry to identify potential acquisition targets that align with our client’s acquisition goals. We send our clients 3-10 listings every week in an email bringing them listings sourced from our cold call team, listings that come to us to sell, listings that also come from our partner brokers and marketplaces. This gives our clients the most thorough but concise view of the industry

  2. Target Identification: Once we identify potential acquisitions, we evaluate them based on various factors such as their financial performance, product offerings, customer base, and growth potential to determine if they are a good fit for our client. We do this in every email and if our clients wants, we dive further into analysis and negotiation.

  3. Negotiation: This is where we earn our service fee and commission. We help negotiate the terms and price of the acquisition and ensure that our clients’ interests are protected throughout the transaction. On average we achieve 20-40% reduction in price for our clients and 20-50% earn out or seller financing for our acquisitions.

  4. Due Diligence: We perform high level due diligence for our clients but all buyers should use an accountant and lawyer for final reviews. We highlight potential risks and challenges associated with the acquisition, and ensure that all relevant information is disclosed by the target company in a data room.

  5. Transaction: We cover all communications between buyer and seller and set up an escrow for the transfer of funds and assets.

  6. Post-Merger Integration: We assist with the integration of the acquired company into our client’s operations, helping to ensure a smooth transition and maximizing the value of the acquisition.

Overall, as a buy-side advisor in the marketing and ecommerce, you know how my goal and focus is to help my clients identify and acquire businesses that will have market value, accelerate their growth and help them achieve success in their strategic objectives.

With 11 years of experience selling online businesses, I can tell you that online business owners and brokers make money in a few different ways that have their pros and cons. Here are the three main ways:

  1. Commission-Based Fees: Online business brokers typically charge a commission-based fee, which is a percentage of the total sale price of the business. This fee can range from 5% to 15% or more, depending on the size and complexity of the transaction. The commission-based fee is usually paid by the buyer of the business to the broker once the broker successfully sources, negotiates and closes the transaction. At Ecommerce Brokers we maintain high competitiveness and don’t have our buyside fees exceed 5%.

  2. Onboarding Fees: In some cases, online business brokers may charge a onboarding fee, which is an upfront fee paid by the buyer to cover the broker’s expenses and time spent on the acquisition process.

Overall, online business brokers make money by bringing their expertise and experience to buyers who are looking to buy an online businesses. By helping buyers navigate the complex process and cost of buying an online business, brokers can expect to earn a commission-based fee that is based on the value and cost of the business.

Here is a real life example from February 2023 with a US buy side client of ours.

  • We started sourcing for our client on 15 Jan 2023 and delivered 8 listings a week.

  • We found a great listing our buyer was interested in. The price was $110,000 USD.

  • We negotiated with the seller and brought the price down to $92,000 USD and brought the upfront amount to ony $50,000 USD and achieved $42,000 in seller financing.

  • We covered communications, high level due diligence, escrow and transacted the deal within 40 days of starting to work with our client.

  • We successfully onboarded the company into our client’s portfolio.

  • Here is our client’s testimonial:

5.Is a Buying Agent Worth it?

Everyone of our clients has said that paying for using a buying agent is worth paying for it for several significant reasons, including:

  1. Range of Businesses: Online business buying agents have access to a far wider range of businesses for sale that may not be publicly listed, allowing our buyers to find and purchase businesses that meet their specific acquisition criteria.

  2. Expertise, Experience and Guidance: Online business buying agents have experience in the industry and can provide expert advice and guidance throughout the buying process, in identifying great targets and especially negotiating the deal!

  3. Time-saving: Buying an online business can be a ridiculously time-consuming process, involving extensive research, due diligence, and negotiations and is doubly as hard when you don’t have experience in this. Hiring an online business buying agent saves buyers time and effort, as the agent will handle many of the tasks involved in the buying process and ensure that the deal is completed efficiently.

Buy-side and sell-side due diligence are fundamentally important processes that are carried out during the closing of the sale of stock, or acquisition of online businesses. However, they have different objectives, and focus on different aspects of closing the transaction.

Sell-side due diligence is conducted by the seller of the online business, with the objective of preparing the business for sale and presenting it in the best possible light to potential buyers. The focus of the buyer’s broker during sell-side due diligence is on identifying and addressing any issues or risks that could negatively impact the sale of the business. The the seller’s broker is responsible for preparing a comprehensive due diligence report, which includes financial, legal, operational, marketing, and other relevant information about the business.

In contrast, buy-side due diligence is conducted by the buyer and usually a team that usually includes a buyers agent listing broker, accountant and lawyer with the objective of assessing the business and determining whether it is a good fit for their investment. The focus of buy-side due diligence for many investors is on identifying potential risks and opportunities associated with the owner and target business. The buyer is responsible for conducting a thorough analysis of the business, including its financial performance, market position, customer base, and operations.

7.Buy Side Business Broker Conclusion:

In conclusion, a buy-side small business broker like George Moulos at Ecommerce Brokers can provide valuable assistance to buyers looking to acquire an online business. By leveraging our experience and expertise, buy-side right business brokers help buyers identify potential targets, navigate the due diligence process, and negotiate a fair deal. With this guide, buyers can begin to better understand the role of buy-side brokers and make informed decisions when purchasing an online business.

Author Bio: George Moulos

Forbes 30 Under 30 2020, CEO of Ecommerce-Brokers.com

I own an online M&A firm called www.Ecommerce-Brokers.com and we have 11 years experience helping buyers and sellers acquire and sell millions of dollars worth of online businesses.

Looking To Buy? Visit our Elite Acquirers buy side broker service to learn more here

Looking To Sell? Visit our List With Us page to learn more here

Looking For Staff? Visit our Recruitment page to learn more here