In 2018 I sold my first website which ended up opening many doors and creating unique opportunities. Since that initial sale, I have been involved with many website transactions on both the buying and selling side.
My goal with this article is to help current website owners who are exploring exit strategies, and to help potential website buyers that are learning about selling tactics for once they become owners.
Websites Can Sell Quick!
The speed at which a website will sell depends on several variables, with pricing being the largest determining factor. Obviously, there are more prospective buyers with $30,000 at their disposals than $3,000,000, however there are buyers all along the pricing spectrum.
Selling A Website Fast – $75,000 in 48 Hours
One of my technology review websites sold in roughly 48 hours, after being listed with Empire Flippers, for $75,000!
Additionally, I review all of the new Empire Flippers listings each Monday morning and a majority of the sub $50,000 listings sell within hours of being listed.
Additional factors that play an important role in how quickly a website can sell include:
- traffic and revenue trends
- whether it’s powered by WordPress
- pricing multiple
- PBN usage
- age of the website
- whether it’s being represented by a reputable brokerage
- history of past search engine penalties
- social media presence
- how much time is needed to maintain the website
- included SOP’s (typically on larger websites)
To summarize, in my opinion, if your website is valued under $150,000 and is overall solid, a strong offer within two weeks or less would be realistic. If your website is valued at the mid six figure mark or beyond, then it may take 30-45 days for a sale to occur.
Should You Sell Your Website?
In some instances it may not be the right time for a seller to sell, my advice is to not rush into the decision to sell, rather think methodically about the pros and cons that come with a sale.
Some positive reasons to sell may include:
- Looking to have extra capital on hand for other various investments such as,
- to purchase another website and try to “level up” to a greater pricing tier
- to purchase a piece of real estate as either an investment property or primary dwelling
- to purchase stocks, mutual funds, etc
- To free up time to spend on other business ventures or to spend more time with family and friends
- No longer passionate about the website or topic niche
- The average monthly profitability is at a high and the site is valued well
Often times I see people wanting to sell because they are discouraged about their websites’ performance, or they don’t have the discipline to set aside the time to work on the website. Of course, there is a time to get out of an investment such as if it’s losing money, however in many instances a website just needs some sweaty equity put in for a rebound to occur.
Before you sell, think hard about why you are selling and don’t sell yourself short!
Some brokers may have you sign a non-compete clause (or this is worked into the listing agreement), so keep this in mind if you own a website in the same niche or were planning to start another similar website.
How Much Is My Website Worth?
The short answer is that your website is worth whatever someone is willing to pay for it, but fortunately there is a mathematical way, mixed with opinion, to help determine a starting value.
Since I’m a minimalist, I like to keep things as basic as possible. Here is the formula that I use, along with some other brokers:
[(total last 12 months of profit/12)*(a multiplier)] = approximate website value
Example: ($21,837/12)*32 = $58,208 value
The multiplier is really just the future value of the monthly profit value at today’s market.
Let me break this down a bit.
Obviously the 12 month of profit divided by 12 simply determines the average profit on a monthly basis. In some situations it would make more sense to use 6 months of profitability numbers, or 15 months, or some other number. This is where rational thinking comes into play by choosing the correct date range that depicts the website accurately.
As for the multiplier, there is no mathematical way to derive this number. My advice is to research other similar listings on the market and analyze the multiple they are using, as this will help you determine where the market, as a whole, is currently standing.
Using a broker makes this part of website selling very easy as that is what they do for a living.
Also the additional factors discussed earlier, such as traffics trends and the use of a PBN, will positively or negatively effect the multiple.
If you click here, you can download a 90 page “State of the Industry” guide created by Empire Flippers that goes into extreme detail about all of their deals in 2019, and the numbers/trends associated with these transactions. I highly encourage everyone interested in website buying or selling to download this.
In 2019, Empire Flippers states that the average sales multiple across all of their online business was 27.84, an 8% increase from 2018. However, this multiple was the combination of SaaS, FBA, and other businesses, so with regards to content and affiliate websites, the average multiple was right about at 30x.
Empire Flippers used a 34x multiple to value my tech website because it did not use a PBN, had steady earnings, and required little work to maintain.
Different Types of Websites
There are numerous different types of websites and monetization strategies, but lets break down the most common:
- Affiliate and Amazon Associate Websites – monetized with affiliate links where the website owner earns a small commission if a visitor uses their link and makes a purchase (this is one of my favorite segments to invest in).
Learn more about recent Amazon Associate commission changes.
- Lead Generation Websites – the goal is to generate leads within a specific niche by collecting user information or redirecting traffic to partner websites. These leads are then sold on a per lead basis to a company that can benefit from the lead.
- Display/Advertising Websites – a content rich website that cannot benefit greatly from affiliate offers, so advertisements are placed within the content to generate revenue.
- Mixture of Monetization Strategies – a website that uses two or more of the monetization strategies above to drive revenue (websites using this tactic are typically valued higher as they are more diversified).
How To Sell Your Website
When you are ready to sell your website, there are several selling strategies you can explore:
- List with Empire Flippers – Empire Flippers has a 91% success rate, charges between 8% and 15% commission based on value, and has brokered over $124,000,000 in deals. I’ve personally done over $150,000 worth of transactions (as a buyer and seller) with this brokerage and have had excellent results. Their listings are pre vetted to ensure quality, and they have a migration team that ensures a smooth transition to the buyer. It’s a very hands-off process if you’re a seller.
Empire Flippers typically charges a $297 listing fee to sellers who want to submit their website for sale, but if you use this link the listing fee will be waived for Money Nomad readers.
2. List on the Money Nomad Marketplace – I recently created a subsection of Money Nomad called the Money Nomad Marketplace which specializes in website listings that are earning less than $500 of profit per month. Click here to fill out a listing form, no listing fees apply just a 10% commission is assessed upon a successful sale.
3. List on Flippa – Flippa has been around since 2009 and is a common name in the website buying and selling space. They have a huge buyer pool and many listings, however many of their listing lack quality. There are many stories of scam websites being sold through Flippa, and overall the websites sold on this marketplace are typically of less quality.
4. Post on Facebook Groups – Several Facebook groups exist that help connect website buyers and sellers, however these groups do not assist with the transactions so both parties must work together and complete all the transaction steps on their own. In my observation, these groups contain a lot of “tire kickers” that end up wasting the sellers time. Facebook group transactions should be reserved for a seasoned buyer or seller.
5. Advertise To Your Network or On Your Website – Consider putting a banner ad on your website informing visitors the website is for sale, or do an email blast to your subscribers.
Empire Flippers and Money Nomad deal with a buyer directly so you don’t have to, these brokerages handle all aspects of this arrangement. If you sell a website on your own, both parties must work together which can prove challenging considering different time zones, schedules, and ethics.
As with real estate, using a broker to sell your asset, in most cases, results in higher selling pricing which allows you to pocket more money than selling yourself, even after paying a commission.
If you don’t use a broker, then I recommend using Escrow.com to hold the funds as migration takes place.
Website Deal Structures
Depending on the value of the website being sold, a seller may be presented with different types of deal structures. Here are some common deal structures:
All Cash Payout – the purchase price is paid in all cash by the buyer, most websites sold under $100,000 are all cash deals but an “earn out” may be structured as an option.
Earn Out – an earn out occurs when a buyer pays a certain amount of the purchase price in cash, then the remaining balance is paid out at certain time or at certain intervals, sometimes contingent upon certain metrics being met. This is more common on deals greater than $100,000.
Seller Financing – seller financing occurs when a seller gives the buyer a loan for a portion of the purchase price while charging interest over a specific time period. This is more common on deals in the high six figure range and beyond.
Partial Equity Retention – equity retention may occur when a buyer and seller meld well together and the buyer determines that by keeping the seller invested in the asset, the performance may be greater. In this instance, a seller would receive some cash up front while keeping a certain percentage of equity.
Working with a broker like Empire Flippers will help you structure creative deals as they hold the website’s domain in escrow, as a way to protect the seller, and will not release it until the buyer fulfills the agreed upon terms.
Selling Tips – Listing, Negotiations, Escrow, and Beyond
Below is a list of tips that I’ve put together for sellers from my personal experiences:
- When filling out a listing form through a broker, provide as much information as possible
- If listing on a Facebook group or on your own website, still provide as much information about the website as possible…ample information equates to easier, quicker, and more profitable sales
- Quickly respond to brokers or prospective buyers that are seeking additional information about the website, wanting Google Analytics access, or etc…a lack of speed from a seller can kill a legitimate deal
- If a serious buyer wants to talk, be flexible with your schedule as this industry spans all time zones
- Always tell the truth
- Formulate questions to ask the buyer to gauge their seriousness, experience, and financial situation
- At least consider why a buyer made a certain offer if it’s under your asking price
- Be easily accessible to answer any questions during the escrow process and assist as needed
- Offer one or two Skype calls (or similar) to the buyer to walk them through all functions of the website and answer any specific questions once they have had time to explore the backend
As an example, the buyer of one of my websites would send me Skype chat messages now and again about the website’s intricacies.
Tips To Sell Your Website Fast
Speed is on your side during any transactions, especially with websites sales. I’ve compiled a list of tips that will help you sell your website faster, as I’ve used these with excellent results:
- Put together an up to date, accurate, and detailed P&L statement…Click here to download a free P&L statement template that I created
- Take screenshots to show proof of earnings for each month reported on the P&L
- Make sure you have access to, and know all your usernames and passwords, the affiliate accounts, website, emails, etc
- If listing with a broker, know when your listing is going live and be available via phone or email as much as possible for the 48 hours following as listings can sell quick
- Grant potential buyers Google Analytics read only access quickly
- Be willing to negotiate and lean on your broker for advice
- Answer buyer questions quickly and with good detail
Formulating Your P&L Statement
A profit and loss statement, also known as a P&L, helps business owners and prospective buyers understand the financial position of an asset, how and where revenue is generated, and where expenses are going.
For most small to medium sized content websites, the P&L’s are simple with line items for revenue and expenses, but when looking at these statements for an e-commerce business things can get more tricky as COGS and other variables are in play.
Fortunately, since you’re reading this article, you’re probably more interested in websites than e-commerce anyways.
When I’m creating a P&L (don’t forget to download this template), I include at least 12 months worth of data, or more if possible. Half of the sheet will be used to outline revenue streams while the other half will be used to outline expenditures.
List out and label each affiliate program, ad network, and all other substantial revenue streams. If there is a month with no earnings just enter $0 or put a dash. Have Excel total the revenue for each month.
Follow the same procedure for the expenses, leaving no associated expense out.
Once all of the values have been calculated, subtracting the total expenses from the total revenue will produce the total profitability number. This will be used to value your website, so ensure all of the numbers are accurate.
A broker will also verify these numbers and any savvy buyer will double check the numbers against screenshots, bank statements, credit card bills, and etc.
Post Sale Opportunities
If your post sale experience is similar to mine, then you’ll be left in a position to explore a whole slew of new opportunities. After going through a sale, the world of website investing became even clearer to me as I began to fully understand the different aspects of the industry.
I’m a believer that you must train yourself to see opportunities, and by getting a taste of a profitable website exit, I trained myself to look for new opportunities as a website buyer and creator.
Since my first sale in 2018, I’ve done more sales that have been profitable along with several purchases. I’ve also dove into creating content and lead generation websites from the ground up which have honed my website and SEO skills…skills that I can use to earn money into the future.
All this to say, once your website sale is closed take some time to reflect on your journey and analyze the untapped opportunities around you. Use the skills you just honed to explore any of these opportunities and force yourself to expand your skillset in the process.
Wrapping It Up
Selling your website for any dollar amount can potentially be life changing, not only in a monetary sense, but also in increased opportunity. If you’re a buyer reading this to learn about exit strategies, then I highly encourage you to consider making a website investment as there is an incredible amount of opportunity. For buyers, use this link to set up a call with Empire Flippers to start the process of learning more and viewing listings.
For soon to be sellers, congratulations and enjoy reaping the benefits of your hard work and perseverance!
If I can help in any way, feel free to send me an email zach@moneynomad.com, or send me your website selling success story.
