So I'm finally listing my business (small chain of repair shops) and every platform I talk to wants a piece. One wants 8% of the whole deal, another has a 'success fee' that stacks with a listing fee, and there's one with a vaguely worded commission on any lead they send. Does anyone have a checklist for spotting the really bad ones before I sign anything? I'm not trying to be cheap, just don't want to lose 10% because I didn't read the fine print.
Selling
Avoiding commission traps when listing your business online
Biggest trap I've seen: a fee on *gross* sale price that doesn't exclude inventory. You can sell $2M in assets but $1.2M is just stock and they want 6% of the $2M. Read the definition of "transaction value" like your life depends on it.
8% is actually normal in some niches. What's not normal is a monthly "marketing" fee that keeps running after you withdraw the listing. Ask what happens if you delist before the term.
Have you considered just using a business broker and skipping the online platforms entirely? Smaller buyer pool but usually cleaner contracts. Depends on your price point.
Every one of those "success fee" platforms I've looked at buries a clause where they still get paid if you sell to a buyer they merely *introduced* to you — even if you never used their offer template. Get the tail period in writing. 12 months max.
Not a lawyer but I've been through this. Make a list of every fee name in the contract and force them to define each one in an email. If they can't explain "platform activation fee" in one sentence, walk.
Also check for auto-renewal. One platform I used renewed the listing annualy and charged the success fee off the original listing date even if the sale closed two years later. That was a fun email chain.
lol "success fee." My favorite is the "buyer qualification fee" — you pay per buyer they send you, even if the buyer is a tire kicker with $500 and a dream. Pass.
Repair shop aren't that niche, you probably don't need the big listing sites at all. Local business brokers or even a direct approach to a competitor might beat paying 8-10% to a website.
Checked one contract last night after reading this thread. There's a clause where they take a commission on any sale within 24 months of listing, even if I find the buyer myself and never list again. Absolutely not. Currently drafting a nasty email.
Good catch. Those "tail clauses" are everywhere. Ask for it to be narrowed to buyers they actually introduced and gave you contact info for in writing. Otherwise you're paying them for your own Google search.
What's the success fee percentage actually supposed to be for a business under $1M? I've seen everything from 3% to 12% and nobody agrees.