Tip of the Day: Ask for a Discount When You Make an All-Cash Offer on a Website
Most website sale transactions over $100,000 involve some form of seller financing. This means that buyers do not expect to pay all-cash upfront for the website they are acquiring.
Most buyers expect to make a down-payment and then pay the balance of the purchase price over time. Generally, this involves monthly debt payments over 1 to 5 years. The exact financing arrangement depends on the buyer and seller.
As a website buyer, if you make an all-cash offer, which is unique, you should ask for a discount on the purchase price.
Why should you receive a discount?
When you purchase a website for the full cash amount upfront, you are taking the risk that the website will not perform in the same way as it performed for the website seller. In order to compensate you for this risk, the seller should provide you with some form of a discount.
A reasonable discount can be about 15% to 25% of the purchase price.
Do not be afraid to ask for this discount.
In many cases, potential buyers who are looking to purchase this website using seller financing may offer up to 50% or more as a down-payment. As such, if you are offering all-cash upfront, an 85% payment is a good deal for a seller. As a buyer, if you have also negotiated down the purchase price, then you get a good deal.
So, do not forget to ask for your discount if you make an all-cash offer on a website for sale over $100,000.
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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