Why do People Buy Websites?
It is important to know what kind of person is interested in buying your website and how to increase its value before proceeding to sell your website online. In my opinion, there are two main categories of buyers.
1. People Want to Own a Business But Have Limited Time
Creating an online business while doing everything yourself is an extremely time-consuming affair. I know because I have done just that. Folks starting out are often misled to believe it is easy to throw up a site and start earning money. Nothing could be further from the truth.
It is true, a well established online business will require little maintenance – a few hours a day but at the beginning, it is definitely a full-time job. So, there are definite benefits to purchasing a ready-made online business.
Let me give you an excellent example: There is a business community named Dropship LifeStyle owned by Anoton Kraly. They teach people how to build e-commerce websites using the Shopify platform. Now to go through the training to build your own store could take you up to 3 months or more.
However, he offers another service – professionally ready made sites for $1300 to $1500. The advantage of this is the technical stuff is taken care of, all you need to do is contact suppliers. So if you have a job and extra cash this is a good way to go.
There are also businesses wholly devoted to selling websites both new and old. We’ll get into that a little later. I’ll give you some company names and talk further in some detail.
2. Marketers Who Treat it as a Business
Some entrepreneurs flip websites as part of a business model. In this case, they are looking for websites with the potential to be further optimized thus increasing the value of the site. Of course, they then go on to sell it and make a tidy profit. It is significant to have the experience to flip websites.
For instance, there is one person I read about who bought a website earning $200 to $300 a month. He changed the monetization method which increased the revenue to $2000 per month. He originally bought it for $2500.
Later it was sold for $25,000. He made a profit of $30,000 because he also received revenue during the months he owned the website. He did not need to do anything to the content etc. Naturally, he was able to re-sell the site for much more.
That, in a nutshell, is why some people buy and sell sites as a business and it is also the reason you need to know what you are doing so you don’t lose money.
How to Determine The Value of a Website?
Before going directly into how or where to sell a website online it is important to examine the factors that will contribute to a higher selling price. We could also argue that this is part of how to sell a site in general because it does affect the profit.
Elements That Create Value
Buyers value revenue data or profit information above anything else. For example, a site that is making $1000 per month can reasonably sell for $12,000 to $18,000. Certainly, each website is unique but this gives you a general idea about the importance of having a monetized site.
The greater and more diverse the revenue streams the higher price you can ask. The buyers will want to see proof so keep up to date records of all earnings.
#2. Virtual “Curb Appeal”
Think of buying a house. One element which creates the perception of value is curb appeal – how the house looks from the outside. It’s similar for websites. Some factors affecting this would be:
1. Revenue & Profit
- Recurring or ongoing profits
- Affiliate income
- Earnings from leads
- Advertising revenues
2. Type of Website
- Platform ie WordPress, Shopify etc.
- Review style, e-commerce, Amazon FBA
- Number of overall impressions and click through rates
- Site age which affects traffic & search engine ranking
- Buyers look for high search volume
- They prefer buyer keywords versus passive keywords
- Ranking of KW phrases – how many are on the first page of Google.
- Social accounts
- Email list
- Brand recognition
All of these play a significant role in estimating how much a website is worth. It is also significant to note some factors are inter-related. Take keywords, for instance, if the site is bringing in $1000 monthly revenue you can be sure some keywords are well optimized. The person buying the site may know this and feel there is room to improve the monetization.
This too would affect traffic. Choosing keywords carefully – in our case long-tailed keyword phrases greatly increase the chances of ranking on the first page of Google leading to more visitors and potentially sales. So everything plays a part.
Where to Sell a Website?
The best place to sell a website online could depend on the value of the site. Some places will specialize in businesses earning on the low end of the scale while others target high-income makers. I imagine there are companies which accept both. The ones I am most familiar with are the following:
Flippa is just one of a number of businesses that specialize in selling websites. The process used falls into two categories. The first is described as “self-service” while the second involves “broker matching”. The monetary value of your site plays a significant role in the determination.
A website business with a high valuation requires more time and effort to sell. A broker can help prepare the business to be sold. They can liaise with buyers and are familiar with using the Flippa platform. In addition, they will review your valuation to make sure it is accurate and prepare critical paperwork for the prospectus, field offers and demand drafts.
I am familiar with members of my business platform who sell proven affiliate and e-commerce websites for thousands of dollars so I believe when dealing with substantial amounts of money it is prudent to get professional assistance. It is certainly worth the cost.
How Does The Flippa Broker Process Work?
First, Flippa reviews your website business. They ensure it meets the necessary criteria and assigns it to an appropriate size category. You will need to provide your accountant’s name and a profit and loss statement.
Second, Flippa reviews their brokers on file to find the most relevant match. Three are chosen to formally review your business. They will sign a Non-Disclosure Agreement and given access to important data.
Lastly, you can speak with the brokers and decided on the best fit. This is when your listing will be converted to a “managed broker” listing. After this the brokers handle everything.
The Flippa Blog has a couple of interesting case studies which will give you a better understanding of how it all works and what the potential is for either building and selling your own website or flipping sites.
The post is called Case Study: EZ Tool by Blake Hutchinson.
What are The Costs Associated With Selling a Website?
Various platforms have different pricing systems, however, generally speaking, they are similar in nature. I will use the Flippa platform as our example:
The three product categories & pricing are as follows:
Asset Sales: The products include domains, apps and starter sites. The definition of starter sites would be something not generating any revenue. The listing fee is $25 dollars. The success fee is 10%.
Self Service Business Sales: Good for profitable businesses with at least a six-month trading history. The listing fee is increased to $200 but the success fee is still 10%.
Broker Supported Business Sales: Recommended for those businesses with $200, 000 in annual profits. In this case, the listing fee is $200 but the success fee is 15%.
Success Fees are always fixed unless you negotiate a different price directly with your chosen broker. This may differ with companies other than Flippa.
Website Success Story at Wealthy Affiliate
Sporkypie’s success story is just one of many that are happening all over the web. Don’t be fooled it does take an investment of time and in some money (but not much is necessary).
The amazing thing about this story is she had only 60 posts on her blog before selling it for a whopping 28,000 dollars. You can read more about it at Sold My First Blog For $ 28,000.
There are many folks selling their businesses and some for much more. I do admit this is a little unusual because most entrepreneurs are still building the business at the one year mark but Stephanie seemed to do an excellent job with her keyword research which I am assuming got her tons of traffic.
I also think the niche she chose was one other than the “make money online” niche. This is a very competitive niche meaning you do need to work harder than most and not give up (which most people do).
If you are reading this article it means you are probably ready to sell a website business and I wish you the best of luck. Please don’t hesitate to leave questions below if you have any. I’d be more than happy to answer them for you!