FE International is one of the most reputable online brokers for buying and selling businesses. I categorize them as mid-market brokers since most of their deals are above the six-figure valuation.
In this review, I go over the benefits, the buying and selling process, FAQs, and much more.
Let’s get into it!
FE International M&A Market Report Analysis
FE International released its mid-year report and it provides some fascinating tidbits about the current market for buying and selling online businesses in general, and niche websites in particular.
While 2020 and 2021 were challenging years for many individuals and businesses alike, they were transformative for online business sellers according to FE International’s data. The top-level numbers have shown a growth in average value/sales price across all types of online business.
On average content-based online businesses increased more than 27% in value, over 30% for e-commerce, and over 37% for SaaS. The volume of e-commerce sales changed a whopping 100%, showing just how hot the market is with investors looking to buy.
Two very interesting trends to watch:
- The large increase in the number of SaaS deals as trends to work from home continue
- The giant jump in the value of the average deal for a content-based online business, with multiples showing a clear and noticeable upward trend.
While there’s plenty to watch out for in the economy, especially with the appearance of the Delta variant of Covid, the report is optimistic that the powerful growth in the selling value of online businesses is likely to continue.
You can view the full mid-year report here.
3 Major Benefits of FE International
FE International is one of the big names in the online business broker vertical, and for good reason. They have positioned themselves as focusing on profitable online businesses that are six figures or higher, with an emphasis on seven figures for online businesses that aren’t simple apps.
FE International is often mentioned in the same breath as Empire Flippers for buyers and sellers looking for the high end of the market.
1. Established Group of Thousands of Buyers
FE International vets individuals who want to buy sites. This means that those who sign up actually have funds to be serious buyers. Since they give information to FE International, that means anyone selling there not only has a larger group of buyers already paying attention but the potential to match the right buyers with the business on sale.
This group of buyers in one place ready to purchase at high price points makes FE International a great place to sell, and that in turn attracts better online businesses for buyers to pick from.
2. Actively Shopping Your Business
One of the major benefits of FE International that makes them stick out is that they aren’t a conventional list and leave brokerage. They actively shop any online business put up for sale through their brokerage with not only the large group of investors who are members of FE International, but they also identify and reach out to other individual or corporate investors who might be interested.
That active approach to connecting with interested parties who are a good potential match for the business being sold sets FE International apart. This helps to get a better potential deal, and FE International does negotiate on the seller’s behalf for a better deal.
3. Excellent Support Throughout the Process
Multiple other brokers will give instructions on how to migrate a site or how to use escrow but will stop short of offering direct support. FE International gives strong support, keeping as much of the technical side in-house as possible while offering close team support for both buyer and seller throughout the transaction.
The amount of support given sticks out as one of the major benefits of this broker. It also helps explain the excellent 94.1% success rate.
FE International vs Empire Flippers vs Quiet Light
For a more detailed overview, check out the breakdown of all website brokers. Here is a breakdown of a few brokers side-by-side:
|FE International||Empire Flippers||Flippa|
|Commission Rate||15% or less||15% or less||10% or less|
|Exclusivity Agreement||Revealed during Representation Agreement signing||60 days||While listing is live|
|Users||Tens of thousands||195,000||1.5 million|
|Escrow Fee||Included in up front fee||$0||0.89% – 3.25%|
|Proof of Funds Requirement for Buyers||Yes||Yes||No|
|Free Site Migration Service||Yes||Yes||No|
|Legal Documentation Provided||Yes||Yes||Yes|
|Due Diligence Provided||No (vetting only)||No (vetting only)||No|
What Types of Online Businesses Are Offered for Sale?
FE International focuses on content-based websites, SaaS businesses, and e-commerce. Examples of all three styles of online business can be found among FE International’s listings.
SaaS businesses vary from custom software to premium WordPress themes, app stores, and everything in between. These sites have developed and built products for business use and will have a built-in demand as a result since the business is already active with clients.
E-commerce can mean dropshipping FBA businesses, but there are other examples from digital products to businesses that have official licenses to make merchandise for major brand names. The variety of e-commerce businesses is usually quite impressive, and if a buyer doesn’t see one that interests them it just takes some waiting until something interesting comes up again.
The demand for content-based businesses via authority sites or large niche sites has exploded. This coincides with the rise in valuation. There are almost always several of these websites/businesses available in the mix of what’s on sale.
What is FE International’s Brokerage Fee?
There is no listing fee with FE International, and the brokerage fee is going to depend on the size of the sale. The larger the sale the smaller the brokerage fee is going to be (by percentage). For sellers, there is a 15% selling fee that drops down to 10% for big enough deals.
Buyers do have a 2.5% transaction fee up to $1,000 maximum after the successful completion of a sale.
The Buying Process with FE International
The buying process is fairly simple overall and comes with plenty of support.
1. What listing information is provided publicly to everyone?
The actual site name and URL are kept hidden. This protects the seller and also keeps competition from using tools with the site URL to try to get information that both buyer and seller would want private.
The information listed would be estimated earnings, a description of the business, and a brief one to two-paragraph listing provided by the seller. In some cases, the earnings might be private although this is uncommon.
2. What Listing Information Is Provided Privately to Buyers?
The specifics are kept private until legitimate potential buyers begin the process. This includes detailed information on the domain name, the business numbers over multiple quarters or years, vetting, and due diligence information.
This is where things like keywords, analytics, traffic sources, and other important information are provided only to serious buyers, and this gives the information needed to see if this is a potential match.
3. What Vetting or Due Diligence Is Provided?
Basic vetting is provided by FE International who checks to make sure the traffic and income numbers seem legit. At this point in the buying process-specific information is provided to the buyer who then has what they need to do a more thorough in-depth due diligence to make sure the business being looked at matches with their goals.
Make sure to read the guide on performing due diligence.
4. How Is the Migration of the Business Handled?
FE International has a team that works with the tech people of both the buyer and seller to make the migration process as smooth as possible. This is a highly technical stage but with experienced people, it can be broken down into a step-by-step process that runs smoothly as long as everyone is on the same page.
5. How Long Is the Inspection Period When Buying?
The inspection period can last anywhere from 1-10 business days.
6. What Post-Sale Support Is Provided?
The teams at FE International work to make sure all the necessary legal transfers take place. This includes the change of ownership of the domain name, following regulations in place, and also assisting with the transfer of email, social media, etc.
For individuals who like to do the full deep dive when looking at a site, FE International has a good page outlining their buyer process.
The Selling Process with FE International
The initial stage for the seller is the “Assessment & Evaluation” stage. This is where the brokers at FE International really do a deep dive on the seller’s goals, the business, and gather the information they know will be useful for matching the business with their buyers who would be most excited to pay a premium price for the business.
A listing is placed in their members’ section as they handle communication and shop the site around.
Since they are an active brokerage, once this initial stage is done they are shopping your business on your behalf and looking for multiple offers. This allows a seller to work on other projects or not worry about it while the best offers are being compiled and FE International negotiates for better offers on our behalf.
Once there is one, or a series, of offers on the table, FE International brings those to the seller to see if they like the deal. If so, it proceeds forward with full support from the brokers helping both sides make the process nice and easy.
If the seller isn’t convinced, more negotiations can continue or the listing remains until an appropriate offer comes in or they decide to remove it.
Payment is processed using Escrow.com to protect both parties and FE International is in contact with both the buyer and seller for the step-by-step process of getting the business sold and the seller paid.
FAQs About FE International
Here are some of the most common questions people have with FE International.
How much experience does FE International have with online business sales?
They boast a 94.1% success rate with over 1,000 sales totaling over $1 billion in acquisitions since 2010.
What is the minimum value an online business needs to be?
A business must be a minimum of a six-figure value, with a focus on 7 and 8 figure deals being even more common.
Summary of FE International
FE International is one of the top middle market business brokers out there. For small deals, this isn’t the right place to go. However, for buyers and sellers looking for vetted six, seven, or eight-figure deals, this is a great potential option.
There’s a reason FE International is one of the premium brokers out there. They have been in the online business brokerage for some time and understand the importance of support and cultivating an excellent market of experienced buyers to pitch acquisitions to.