Knee-deep in Stats: Past Sales Teach You How to Sell Your Website

I recently gained access to Flippa’s archive of sales data (thanks a million to the guys at Flippa), and I’ve been having a blast pouring through the stats. I’m going to share what I learn in a regular segment called “Knee-deep in Stats,” where we’ll look at the trends and historic data that reveal how to get top-dollar for our website sales.

For the love of God, Put Analytics on Your Website!

Travis wrote a post some time ago entitled, “Hey Knuckle Dragger, Install Google Analytics Before You Sell Your Website!” so it’s not like this assertion is breaking new ground, but I think you’ll be surprised by the data.

I took a look at all sites sold since January 1 of this year with a claimed monthly net profit of at least $25 and at least 100 unique visitors per month (to weed out the startup sites that would otherwise skew the data). Here’s what I found.

The sites without Analytics installed had a claimed monthly profit of $649 vs. only $619 for the sites with Analytics (4.6% lower), so it’s not like the deck was stacked in favor of the sites with supporting data.  It’s a pretty even playing field.

Despite not having an edge in claimed earnings, the sites with Analytics sold for 213% more ($4657 vs. $2185)!  That’s a 7.5 month multiple vs. a 3.4 month multiple favoring the sites that had Analytics installed (and uploaded at least 1 verified Google Analytics document).

If Some Data is Good, Isn’t More Data Better?

So we know that buyers love data — they’ll gladly pay twice as much for more substantiated claims.  What happens when we start to add more Analytics data?  Some listings will include more than 1 or 2 Analytics files — is it worth the extra effort?  Take a look at the table and chart below:

[table id=20 /]

You need to upgrade your Flash Player to view this chart

The column I want you to pay attention to here is the net multiple — it peaks at 6 attachments, rising pretty steadily at each increment before that.  The bottom line — if you want to sell your site for a premium, you need to supply data (lots of it) to justify the expense.

So what about other attachments?

Well, they’re important too, but the specific impact is harder to judge since we can’t classify them by utility.  An attachment that’s just a screenshot showing potential ad placement doesn’t carry the same value as one showing PayPal payments.  As a result, the numbers are much more varied here — we do still see a drastic increase in net multiple when we go from 0 to 1 attachment.

[table id=21 /]

Honestly, it’s no surprise that sites with Analytics sell for more than those without — but more than a 2x boost over comparable sites? Definitely makes you realize that those extra 5 minutes it takes to install Analytics and send a verified report to Flippa are totally worth it!

  • Celebrity_jam

    Great tips. thanks. 
    http://www.celebrityjam.net 

  • Im a statistical nerd! I absolutely loved this post. If you notice that your page views per user doubles today, thats my fault! But seriously very interesting find about the 6 analytics attachments. But info could you upload to have 6 analytics attachments! It sounds like a lot.

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  • ifeanyi

    Sorry Eppie for my last post,i sent u an email in your box now due to the nature of my problems.

  • Hey Eppie,

    This my kind of post!

    I have a question though – what does your Uniques per month column represent – is this an average per site for the sites you sampled or a total?

    (I know it’s probably a stupid question and I’m guessing it’s a total but I have to ask)

    Justin

    • Justin,

      I had a feeling you’d enjoy this post. I’m a big stat nerd, so I’m in heaven going through some of this data!

      The ‘uniques per month’ column should be the average per site of the grouping sampled. It’s skewed by a few sites that claimed uniques in the millions — perhaps I should have put an upper cap on the data in addition to the minimum requirement I set. For data with this big of a variance (and small sample size), the median’s probably a bit more useful, so here it is:

      With Google Analytics: 3,000 uniques per month
      Without Google Analytics: 2,426.5 uniques per month

      • Thanks Eppie, that makes more sense.

        I usually sample a range excluding the upper and lower 20 percentile to keep things more balanced.

        • A good point — I’ll make sure to do that on future data sets, though in this instance the data for uniques would likely still be skewed for some groups, since the endpoint was net multiple. The sites claiming millions of unique visitors don’t necessarily fall in the upper 20th percentile for revenue or multiple. At a minimum, I’ll try to include median data when it looks like there’s a large disparity in a certain column.