Why buy a digital asset?
The simple answer: It’s one of the greatest ways to own your future.
What do we mean by that? Investing in a digital asset is an investment in yourself. When you put money into the stock market or invest for a few shares of a local startup, your return is entirely dependent on someone else’s work and determination. If the company whose stock you own has a good quarter, you get to reap the rewards, but if they have bad leadership or make some poor manufacturing or marketing decisions, you suffer the consequences despite never having had the chance to right the ship. When you invest in a digital asset – be it a website, SaaS, or App – the return that you get on that investment is completely determined by your own tenacity. You quite literally own your future as it is your business, you can manage it exactly how you see fit, and you can then sell it whenever you feel the right time has come.
Because of this urge to lean on oneself rather than rise and fall based on somebody else’s work, there is an enormous and growing community of entrepreneurs who are looking to acquire their first digital asset. The mix of what you can buy has changed dramatically over the past few years which makes the process more exciting than ever before. Be it an eCommerce store, a content site, a subscription based SaaS platform, an app, or even an Instagram account, Youtube channel, or Amazon product portfolio, the options are quite limitless and there is something for everyone out there on the market.
We see three primary reasons that people move towards an investment in a digital asset:
Lower Risk, Established Traction, and Good Returns.
Lower Risk Investment:
You can buy into the digital asset class with a significantly lower entry cost than other asset classes. While there are always opportunities on the market in the multi-million dollar range, there are also stellar opportunities available for just a couple hundred dollars as well.
We don’t all have the funds to flip houses or start a craft brewery and even if we do have those funds, we don’t necessarily want to risk them all on a single investment. It’s important that these lower cost opportunities exist, especially for those who are dipping their feet in for the first time, just trying to understand the industry and see what they can do with an online business.
This is one of the best parts of purchasing a digital asset through Flippa – you get to start off on the right foot. Historically, and still today, most people start a small business from scratch and are tasked with all of the heavy lifting, startup costs, and personal time needed just to get to day one. It can be incredibly tedious to build an eCommerce shop with hundreds of items or to code out a well performing SaaS platform and you won’t be getting paid during those months of hard work.
In purchasing an already up and running online business, be it just 3 months old or 10 years old, you’re purchasing something that is already established and moving forward. You will be acquiring an asset that could already have an established design and phenomenal branding, pages of content, optimized eCommerce operations, deals with international suppliers, part time contractors happy to continue their work with a new owner, and of course, established revenue.
Ask any entrepreneur and they will tell you that finding their first 100 customers is a struggle. Beyond the setup time and costs, it can take several months just to establish enough traction to get revenue flowing. In purchasing an established asset, you have a huge head start in your entrepreneurial journey.
Owning a business is an investment and when it comes to investing, there is only one thing that matters: returns. You aren’t purchasing a website because you think it looks pretty, you are purchasing it because you see the opportunity to own your future and create wealth. Luckily, when you purchase something that is already running well, you are set for a great return.
You should always aim for a 30-40% return on your investment in a digital asset. Compare this to the stock market where the average rate of return is around 10% annually and you realize how undervalued this asset class is right now.
To put this into real terms, imagine that you acquire an online business for $15,000. Let’s say that this business, as is, drives $500/month in net profit ($6,000 year). That is around a 35% return and you’ll have made your money back in less than 2.5 years. And that is just running things status quo. If you purchase an asset where you see a bit of opportunity for growth, something where you can turn some dials, you may be able to recoup your investment even quicker and be making pure profit in no time.