The Challenges in Selling a Regional Website Business
A website business can reach Internet users anywhere in the world. But many online businesses focus on providing products and services to customers in a specific geographical region. This is their target audience. We’ll call these regional website businesses.
For example, an online retailer may only ship products to local customers. Regional classifieds websites focus on serving users who buy and sell products in a specific region. This is because it’s inconvenient for users to travel far or ship products over long distances. It’s logistically much easier to trade products with people nearby.
This doesn’t just apply to website businesses that offer physical products. Some businesses serve their local market and sell advertising space to local advertisers only.
As a business owner, targeting a specific region can be very profitable if there are few businesses offering the same service in the region. A local business often understands its local market better than a global foreign business operating in the same area. This is a huge competitive advantage for the local business.
However, if a local website business owner decides to sell the business, this can be a gift and a curse.
The gift is that there’s a very well-defined pool of buyers to choose from. More often than not, the website buyer will be a local resident. This means that the seller can promote his business to a very precise, targeted market. No need to spend time or money advertising the business beyond the immediate local environment.
The curse is that the number of buyers for a regional website business will always be smaller than the number of buyers for a website business that serves a global market. The global business can often be relocated easily. Therefore, it can be acquired by any buyer anywhere in the world. A website business that can be relocated easily will always receive more interest because there are more potential buyers for it.
On the other hand, promoting a global business is more expensive as the seller must promote to buyers all over the world.
Selling a regional website business does have its challenges. Sometimes the business can, in fact, be operated by a buyer outside the region. But it’s very difficult to convince “foreign” buyers to buy these websites. It’s usually a waste of time and money to promote to these foreign buyers. Regional website businesses rarely ever sell to foreign buyers.
The most important thing to do is to ignore the world outside the local region.
Focus on buyers within the region. For example, as a website seller, if you use Google AdWords to promote your website business for sale, target your regional Location only. Do not allow your ad to be displayed to buyers outside this region. Your ad will inevitably receive fewer views (Impressions) and clicks. But the eyeballs and clicks it does receive will be from potential buyers that are more likely to buy the website.
Some global business-for-sale marketplaces operate local portals. Promote your business for sale on these local portals.
Again, no matter what promotional strategy you decide to use, target your website business to local buyers only.
Being local is the competitive advantage that enabled you to operate your business successfully. Use it to sell your business too.
Author: Kris Tabetando
Kris Tabetando provides mergers & acquisitions (M&A) advisory and brokerage services to Internet companies. He also partners with investors to acquire & manage Internet businesses.
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