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One way to make money as an internet entrepreneur is to sell your website. There are pros and cons to selling a site, which I won’t get into in this article, but selling a profitable site is sometimes an opportunity to make a large sum of money quickly.
The fact that you can sell a website is one of the reasons I love internet marketing and making money online. As you work on a site and build it into something profitable and valuable, you are building an asset that can potentially have a huge payout at some point in the future when you are ready to move on to something else, or when you need some money.
Over the past 4 or 5 years I’ve sold a number of websites and blogs. These sales have ranged anywhere from $1,000 to $500,000, and I’ve learned a lot through the process of selling these sites, and some of the lessons have come through my own mistakes. The lessons I’ve learned have allowed me to be better prepared and to make more money from a website sale, and I’d like to share the things I’ve learned to help those of you who may be considering selling your own website or blog.
Here are my tips:
1. Plan Well in Advance Whenever Possible
The price that you’re able to get for your website or blog will depend on things like revenue, profit, and traffic. All of these are things that you can work to improve and ramp up before a sale, but you’ll need to have some time.
Whenever possible, I’d recommend planning a year in advance before you want to put your website up for sale.
Why so much time? Well, there are a few reasons.
First, many buyers will look at your average monthly profit over the past 12 months, and they’ll use this to determine what they will offer. If you plan to sell your website in a month or two you might be able to increase your revenue and profit before selling, but one or two good months isn’t going to impact the sale price as much as 6 – 12 months of steady growth. Many blogs and websites are under-monetized and increasing profit is realistic for most sites that have some established traffic.
I know on my websites I tend to under-monetize because profit isn’t always my primary goal. For example, the first website I sold was about 2 years old at the time. For most of those 2 years I had no intention of selling and my focus was on building a long-term asset. I avoided putting too many ads on the site or pursuing other potential revenue streams.
Then I decided that I wanted to sell the site and I anticipated that I could increase the revenue for a month or two and get a good price for the site. Looking back, that was a poor decision that probably cost me a decent amount of money.
I created a new ad zone and put a little bit of effort into finding advertisers. In two months I was able to triple the monthly profit for the site, but potential buyers looked at the big jump in revenue and profit as a red flag.
Sure, the increase in profit did help me to get a higher price than I would have just two months earlier, but I would have been in a much better spot if I had 6 – 12 months at the increased level rather than just 1 – 2 months. Having 6 – 12 months would have shown potential buyers that the increases were sustainable and not just a flash in the pan.
If you haven’t been planning to sell your site you may have just been coasting a little. This is a great situation for a potential buyer because they can buy your site, make some improvements, maybe add some new streams of revenue, and with the changes they can recover their costs of buying your site pretty quickly. The end result is that they essentially bought an undervalued website.
If you know that you’re planning to sell your site in a year and that your profit during the next year is going to directly influence how much money you can get for the site, chances are you’ll be highly motivated.
Obviously, planning in advance isn’t always possible, but from my experience it can have a huge impact on the price that you get for the site. I mentioned that my first sale was a mistake in this way, but the good news is that I learned from that mistake. Fast forward a few years and I did plan about a year in advance for what turned out to be my biggest sale to date. During that year I was able to increase profit significantly, add a great new source of income, and reduce the amount of time that I was spending on the site.
2. Consider Your Time Investment
If your website is bringing in $10,000 per month and your expenses to run the site are $1,000 you’ll probably view your profit as $9,000. Most buyers, however, will want to factor your time in at an additional expense. Many buyers will outsource all of the work to maintain the site, and as a result, they will need to hire someone to replace you.
To do this they’ll probably want to know the number of hours that you work on the site, and they may also ask if you know what it would cost to hire someone else to do that work. In some cases, the buyer will already have an idea of the hourly rate that they’ll need to pay someone to maintain the site, but they’ll probably still want to know how many hours you’re currently putting into the site.
So if you’re spending 20 hours per week and it will cost $20 per hour for them to hire someone to do the same tasks, that would be about $1,600 per month that they will factor in as an additional expense, which will obviously reduce the profit. In this example scenario, they would probably base their offer on a monthly profit of $7,400 instead of $9,000.
As a result, you should be prepared for this because it could impact the offers that you receive.
In order to maximize the offers that you get, and to make the site more attractive to potential buyers, try to work on getting the most out of the time that you’re working on the site. Take a few weeks and track specifically how you are spending the time that you’re working on the site. Make sure that you’re time is being spent efficiently and if you notice that you’re spending a lot of time on things that aren’t really making an impact or bringing in any revenue, try to cut back or eliminate this time altogether.
When I do this I usually find several things I’m doing that are taking up my time without really producing much in return. I can then make some changes and wind up reducing the time I spend on the site without really impacting the income. And if you can honestly tell a potential buyer that you spend 12 hours per week on a site as opposed to 20 hours per week, that is a big difference and it will reduce their outsourcing expenses
3. Consider Outsourcing Work
If you’ve been doing all of the work on your website or blog up until this point, there are a few reasons that I recommend outsourcing some of the work before selling. First, as I mentioned earlier, many buyers will want to know what it would cost to replace your efforts if they were to buy the site. If you’re already outsourcing some of the work this is much easier to calculate for both you and the buyer. If you’re running a blog and you publish 10 posts per month, all written by you, the buyer will need to estimate how much they would need to pay freelance writers to write 10 posts.
In most cases they’ll want to make sure they don’t underestimate those costs, so they may wind up estimating more than they really would need to pay. However, if you’re publishing 10 posts per month and you’re writing 5 and paying freelance writers $50 per post for the other 5 posts, it’s pretty clear what it will cost the buyer to maintain the site.
This can also be helpful because you’ll already have specific freelancers that you’re working with, and buyers won’t have to find their own people to do the needed work. If you can just put the buyer and the freelancers in touch, it saves the buyer from taking time to find the right person/people.
Another benefit is that in many cases you can outsource work inexpensively. You may estimate your time to be worth a specific amount, say $40 per hour for example. But you may be able to pay a freelancer $20 per hour to do the same work. This will help to reduce the amount of time that you put into the site, or it can free up your time to do things that will have a bigger impact on your revenue and profit.
4. Look for New Revenue Sources
If you’re thinking about selling your website or blog this is a great time to evaluate the revenue that you are making. Are there opportunities to add new sources of revenue? Are you selling ads on the site? If so, can you include any new ad zones without hurting the user experience? Can you increase the prices on any of your existing ad zones?
If you use AdSense, can you make any tweaks that will increase the click-through rates (things like link color, background color, ad size, ad location)? If you’re not selling ads or using AdSense, could you start?
Are you promoting relevant affiliate products?
Are you selling any of your own products?
Adding new sources of revenue can help to diversify your income, not to mention increasing it. Some added diversity can help potential buyers to feel a little more comfortable, and adding some new income sources is a great way increase your revenue and profit before looking to sell the site.
One word of warning, before adding any new revenue sources consider how it will impact potential buyers. For example, if you run a blog that makes all of its money from ad sales or AdSense there may be implications for selling the blog if you start creating and selling your own digital products as well. There are a lot of blog networks and companies out there that focus primarily on publishing content and monetizing sites with ads. They may not be interested in selling any products because it could add some customer service requirements and it may stray from their primary business model. However, in most cases, adding a new source of revenue is a good thing, but you may want to think about your potential buyers before deciding what types of revenue to pursue.
5. Don’t Do Anything that Will Damage the Long-Term Health of the Site
Although the goal is to increase revenue before you look to sell the site, you’ll want to make sure that you don’t do so at the expense of the long-term health and stability of the site. For example, don’t engage in anything like selling links that could put your site at risk of a penalty from Google.
Potential buyers will obviously want to feel comfortable that your site is a safe investment. This becomes increasingly important with higher-priced sites. No buyer wants to invest a lot of money in a site and then find out that the previous owner did something that is now harming the site.
Selling links isn’t the only way you can harm the long-term health of a site. You also want to avoid creating a poor user experience by including too many ads and/or affiliate promotions, or anything else that makes it seem like you are trying to milk the site for everything it is worth.
6. Build an Email List
An email list can be an enticing asset for potential buyers. If you’re selling your own products a list of responsive subscribers and past customers can make it much easier for a buyer to continue to sell products after buying the site from your. If you’re monetizing your site with affiliate programs an email list will allow you to promote new products.
Even if you’re only monetizing your blog or site with ad sales I would still recommend building a newsletter list. You can use the list to promote new content and increase traffic, and the list also makes it easier to add new streams of revenue since you’ll have an established list of people to whom you can market.
7. Make the Site/Blog Less Personal to You, if Needed
Showing your personality is a great way to grow your blog and to connect with readers, but if your blog or site is overly attached to you personally it can be a deterrent for potential buyers. Buyers will want to know that the site will be able to continue to move forward even if you are removed from it. They won’t want all of the readers to stop following the site once they find out that you’ve sold it.
If your blog or site is currently very heavily tied to you personally I would recommend taking some steps to slowly move away from this.
Please keep in mind, this advice is specifically for people who are interested in selling their website or blog. If you’re not looking to sell your site showing your personality is a great way to build your audience.
If you’re running a blog and you are currently the only author publishing posts you may want to either hire some freelance writers or start accepting guest posts and slowly reduce the percentage of the posts that are written by you. Over a period of time you can successfully (in most cases) move from a single-author blog to a multi-author blog without readers experiencing a big change. But if all of the posts have been written by you and then all of a sudden the site is sold and all of the content is written by others, that can be a bigger change that might turn off more readers.
Another thing to consider here is how you are marketing the site. If you use social networking sites like Twitter, Facebook, Google+, and Pinterest, do you use personal accounts or have you set up pages/profiles for your site? If you’re currently using your personal profiles I would recommend setting up profiles specifically for the site, profiles that will be transferred to the buyer at the time of the sale of the site.
8. Eliminate Unnecessary Expenses
We’ve covered the idea of outsourcing more work leading up to the sale, so this may be seen like a bit of a contradiction. Really, what I am saying with this point is not that you need to get rid of all expenses, rather that you should evaluate your expenses and make sure that you’re spending money wisely.
Buyers will usually base their offers on your current profit and how long they think it will take them to recover the cost of buying your site. There are two ways of increasing profit. You can increase your revenue or decrease your expenses.
Take a look at each item in your expenses every month, and evaluate whether it is necessary or if it could be eliminated or reduced. In most cases you probably won’t be able to make huge improvements here, but every little bit counts.
Could you save money each month by changing web hosts (of course, you’d want to make sure that you still have quality hosting)? Are you paying for any advertisements that aren’t producing? Are you paying for any web app subscriptions or services that you don’t really use? If you can eliminate or reduce a few recurring monthly expenses you may see a small increase in profit from that alone.
9. Keep Detailed Records
If you’re planning to sell your site you’ll need to have detailed records of your income and expenses, so make sure that you are keeping track of everything accurately now. You’ll also need traffic details, but in most cases you can use existing reports from Google Analytics or allow the potential buyer to have access to view your Analytics account.
You’ll also need to have lists of accounts when it comes time to turn the site over to a buyer. Things like your hosting accounts, social media profiles, any affiliate accounts that you use, etc. The affiliate accounts can be especially important, because it can be a major hassle when you go to sell the site if you need to provide the buyer with a list of all the affiliate products that you promote and your account details. The buyer will either need to take over ownership of those affiliate accounts, which will require a list of usernames and passwords, or they’ll need to change the affiliate links on the site to point to their own affiliate links. Either way, having detailed records will make this much easier.
10. Gather Statistics
Before looking to sell your site I’d recommend that you gather some basic traffic numbers for potential buyers. You can give access to your Analytics account, but I would recommend that you only do this with serious buyers and perhaps after you have an offer. Typically when I am looking to sell a site I put together a PDF document with basic info about monthly revenue, expenses, and traffic. I also include basic info on the history of the site and how it makes money. I’ll use this document to provide initial info to potential buyers and if they show interest I can provide more details.
For the initial PDF the only numbers I’ll provide are the total dollar amount of revenue and expenses, as well as the total number of visitors, unique visitors, page views, and search visitors. I’ll usually include numbers for the past 6 – 12 months. I’ll also have statistics ready that show things like the number of direct visitors and visitors referred from other sites, and the number of visitors from each of the top referring sites. I’ll also have additional information ready that will show the breakdown of revue and expenses by category for each month.
And then I’ll provide verification (like access to the Analytics account or proof or revenue) after I have a tentative offer that is acceptable. I don’t provide verification of these details until we’ve agreed on a price because I don’t want to have to do this with anyone except the ultimate buyer. If the buyer doesn’t like what they see at the verification stage they can still walk away from the deal, but if you’re honest up front and you avoid any surprises there shouldn’t be major issues at the verification stage.
11. Consider Your Options for Selling
When it comes to selling a website you can try to handle the sale on your own, you can hire a broker to sell it for you, or you can list it at a site like Flippa. Flippa is a good place to buy websites, but in my opinion it’s not the best place to sell. Most buyers at Flippa are looking for a bargain, and I’d rather try to find a buyer on my own first, especially for larger sales. If you’re looking to get $10,000 or more for your site I would recommend that you try selling on your own first, and you can always list it at Flippa later if you don’t find a buyer.
If you’re planning to sell it on your own you should expect that it might take a some time. It’s impossible to say how much time because it will vary, but as an example, when I sold a site for $500,000 on my own it took about two months to find a buyer and complete the sale. Some buyers will take more time, others will move quickly. Bigger sales tend to take more time than smaller sales, especially if the buyer is using investors to make the purchase. They may have to find some investors, and they’ll also have to get the money from the investors before paying you.
Listing the site with a broker can be a good option in some situations. This is especially true if you don’t have experience selling a site, or if you’re intimidated by the thought of handling the sale on your own. Brokers will charge a fee, usually 10% of the sale price, but they will have their own network of potential buyers, they’ll have contracts and any paperwork that will be needed, and they may be able to get it sold quickly. Some examples of brokers include FE International, Quiet Light, and Latona’s.
If you need to sell a site quickly, Flippa is probably your best option. Flippa has a large audience of buyers that monitor the site on a regular basis and just about any profitable website can be sold at Flippa, but you may need to be willing to take less than you would like to make that sale happen.
12. Make a List of People to Contact
As you’re getting ready to try to sell your site, I’d recommend making a list of people that you can reach out to. When I’m doing this I go through my list of contacts in my email address book and I look for people that are either well connected in the industry of the site that I’m looking to sell, or people who are well connected with other internet marketers. I don’t really try to think about who might be interested in buying the site at this point. I don’t email people and ask them if they are interested in buying the site (unless I know for some reason that they have interest). Instead, I let them know that I’m interested in selling the site, I give very brief info about how much the site makes or other key selling points, and I ask them to let me know if they have anyone in their network that they think might be interested. My goal isn’t to find the buyer directly within my network of contacts, instead I try to find potential buyers through an introduction from someone in my network. This can increase the reach exponentially, as each person in my network will have their own network of people that I don’t know. And if that person that I email is interested in buying the site themselves they’ll let me know.
For some reference, with my last sale I contacted about 15 people in my network. That led to interest from 3 people, serious interest from 2 of them, 1 low-ball offer, and 1 who wound up buying the site after some negotiation. The types of people that you’ll want to contact would include:
- People who own large blogs in the industry
- Editors of large blogs in the industry
- Companies who have advertised extensively at your site/blog
- Companies that you know have purchased other sites in the industry
- Networks that own multiple sites/blogs in the industry
- Other business owners in the industry
- Anyone else you know that is well connected in the industry
If you contact all of the people on your list from your network and you haven’t received any solid offers or any real interest within a month or two you may want to either 1) make some cold contacts to other companies that you think could benefit from buying your site, 2) list the site with a broker, 3) list it at Flippa, or 4) hold on to the site and continue to look for possible buyers in the future.
13. Know Why You Want to Sell
As you talk to different potential buyers you’ll get a lot of questions related to your sources of income, traffic, and other details, but one question that is likely to come up with every potential buyer is “why do you want to sell?” I’d recommend that you have an answer prepared ahead of time, because you’re sure to be asked. My typical answer is that I’m just looking to move on and do something else and I need to free up more time for other projects. Buyers will typically ask this question to see if it raises any red flags and they may also want to know what you will be doing after the sale. In some cases they may want to ensure that you’re not going to do anything that will compete with them if they buy the site, and you may need to include a non-compete clause in the contract that will prevent you from competing with them for a specified period time (often a year or two).
If you’re looking to sell your website or blog I hope these tips can help you to prepare and to get a great offer. If you have questions please leave a comment.
Article By Marc Andre