One of the keys to getting the highest price for a website when it comes time to sell is to find the right buyer. Once you’ve identified the right kind of buyer for your website, you can either contact them directly or go directly to the places your buyers typically shop for websites. Those are the places where it’s best to sell a website. This article and corresponding infographic aims to identify the options you have to sell your website and which might be the best fit for your particular case. Continue reading “Where to Sell a Website”
Are you considering selling your website and would like to know how to value the site? Perhaps someone has approached you and offered to buy your site. Maybe the idea of cashing out on your website for a lump sum appeals to you. Whatever your motivation is for selling, you need to know what price tag to put on it. That’s what this post is all about.
8 Things That Add Value to a Website
The first step to understanding how to value your site is to put yourself in the shoes of your potential buyer. Why are they interested in your site to begin with? More than likely it’s for one or more of the following reasons: Continue reading “How to Value a Website”
Your Website Isn’t Sell-able Because of YOU!
This can be the case more than you might think. I’ve recently been consulting with a large online retailer website that’s had fantastic success running a drop ship operation as a family business.
In the midst of a bad economy, he has 8 years of solid growth, and is projected to break $2 Million in sales this year!
The business is amazing, and I’ve been able to become intimately familiar with all the day to day operations. It’s a great business, in an evergreen market, and it’s growing at a rate of about 50% a year.
But, this website and business isn’t ready to sell, yet. Why? Because if the current owner left town tomorrow, it would crumble.
Is that what your business is like?
One of the most difficult things to overcome in a website you’re ready to sell, is the business’ dependence upon you. And oddly enough, when you actually achieve building a business that grows and thrives whether or not you’re around, you end up not wanting to sell it!
It’s important to build your business, doing everything through the lens of this question: “Does this make my business more sell-able?” Because should the day come that you DO want to sell it, you’ll only be able to do so if YOU are able to leave.
So, here’s a few things you can do to make your business less centered around your own personal efforts to keep it running.
1.) Apply the 80/20 rule. A lot of great books talk about the 80/20 rule, but in a nutshell, it basically means that 80% of your success, is derived from 20% of your effort. Which means the other 80% of the time you spend in your business, is likely the stuff you’re wasting time on, and it doesn’t make you more money. Find out what that one most important thing is, and immediately find alternative ways to get the other stuff done by other people, software, or systems.
2.) Create process maps. Boil it down to a science. “My business includes doing X, Y, and Z.” Color by numbers. As you’re working each day, take detailed notes on what it is you’re doing so that someone else could easily pick it up and follow the instructions, regardless of their level of experience.
3.) Hire people! This isn’t always the answer, but it’s less scary than most people make it out to be. You probably CAN afford to do it. You just don’t think you can because you don’t know the value of your own time. Imagine if you weren’t spending 8 hours a day doing something that could be done by an employee? Are there more profitable tasks you could be focusing on in that time?
4.) Don’t be an expert on everything. It’s a great way to become a bottleneck. The guy I told you about above is a victim of this very thing. He’s SO knowledgeable in his field, that everyone asks him for answers to Google-able questions. Force people to know stuff. Make it a point to let others be experts about things you don’t need to be.
What are some other things you can do to make your website and business less dependent upon you? leave your thoughts in the comments below!
Whether or not we’d like to admit it, our world of buying and selling websites can be pretty sloppy at times. And as it pertains to arbitration and things just going bad in general with deals, nearly ALL of it stems from plain old sloppiness.
I’ll be the first one to raise my hand in guilt to admit that I’ve been too lazy, too trusting, too unorganized, and too uninformed in the past. Every deal I’ve lost money on, (even the ones that were “other people’s fault”), is a direct result of my own informal approach to the deal. Which I GUESS means it was my fault after all.
When you approach a transaction with all your ducks in a row, all your boxes checked, and all the stones overturned, the margin for error becomes very slim and all potential instances of arbitration over the deal vanish. So here’s a few things you should always make sure to do in any deal…
This one is common sense, but goes at the top of the list. Approach the website (and it’s owner) as though you were conducting a criminal background check. That means you check out everything!
– The domain. I use domaintools.com to check for age, drops, registration matching the owner, etc. Then I use Market Samurai, Open Site Explorer, SEMRush, and SEO Spy Glass, to verify the incoming backlinks, the PR, the rankings, etc…
– The Seller. If you’re buying from Flippa or other online marketplaces, check feedback. Check their previous listings. Check their trust scores. GOOGLE THEM. Ask them LOTS of questions. Get to know them a bit. Is this the first site they’ve sold? Why are they selling it?
– The content. This one has bitten me in the rear before. Check Copyscape for duplicate content. Make sure it’s original. Make sure you have the right to use it. Make SURE it’s included in the sale!
– The Income. More and more, screen shots just aren’t doing it for me. I’m a serious buyer. Could you please take 60 seconds to make a screen recording of your affiliate dashboard, or your merchant account? I’d feel much better seeing it live…Especially if the account doesn’t come with the sale.
– The traffic. Same as income. Login, and show me. But I’m also gonna check sites like compete.com, alexa.com, quantcast.com, etc…I know they aren’t always the most accurate, but they should give me a general consensus as to whether or not the seller is telling the truth.
– The terms. Especially if it’s monetized with affiliate programs. Check out the affiliate programs terms. Check out any special payment arrangements the seller has with the vendor. Make sure those benefits transfer to you. Make sure the site isn’t in violation of those terms, etc…
– Everything you see posted in our Due Diligence category.
I’m willing to bet that over 70% of website transactions, especially ones that originate in most marketplaces, don’t even utilize contracts. I suppose I understand why. Who knows how to write a contract? Who want’s to pay a lawyer? Can’t you get in trouble for ‘practicing law without a license?’
Getting a contract in place is one of the most important aspects of any deal. All of your protection (buyers and sellers) hinges upon the contents of this agreement, and it’s ability to be enforced. Having a lawyer that can draw up the contract for a few $100 is well worth it for larger deals. But even deals that are less than $10k need to have some sort of formal agreement.
At a minimum, I recommend you grab a templated contract from somewhere like Legalzoom.com, or Sitepoint.com. I’ve used these templated contracts many times. They’re written by professionals who know legal jargon, and cover most of the basics. It’s not ideal, but it’s better than going commando with nothing at all.
Record Conversations with Other Parties
This may seem a little anal, but having a skype chat, or a recording of a voice chat can come in handy when disagreements arise. When you begin working on a new deal, I recommend you create a file in your inbox to save all email correspondence as well. This little bit of extra work will settle any issues about what has been promised, and what hasn’t.
Third Party Verification of Stats
This falls under due diligence, but is really only necessary for large transactions. An accurate recasting of financial records, tax statements, etc, by a professional tax expert gives an added piece of security and peace of mind to everyone involved.
Listing Agreements with Brokers
If you’re dealing with a website broker, you’ll want to have their services clearly defined in a listing agreement. How long will you give them to sell your site? What commission do you agree to pay them if they are successful? Do they have sole and exclusive rights to sell your site during the term of the listing agreement, or are there exclusions depending on where the buyer comes from during that time frame?
Most website brokers shoot from the hip, and don’t even use listing agreements. However, most states require that a pre-approved one be used by any and all business brokers that deal in their states. (That means web based business brokers as well). It protects you and them…So if they don’t sign one with you, don’t work with them.
Payment Terms & Financial Checks
This falls under contracts, but is important enough to separate out by itself. Most large transactions need some sort of verification to be done on the buyer to prove they actually have the funds available to make the purchase. Even if they’re only making a down payment on the business, if it’s a substantial amount of money you should make a stipulation for payment in that amount to be made in full within a certain time frame after the signing of the deal.
This is just protecting the deal. You don’t want them to flake out on you half way through the transaction because they didn’t really have the money to back up the offer they made you. Or, worse yet, they were counting on a third party investor to pay for the site and that person wasn’t involved in negotiations. So at closing, they go to their “investor” friend, and to their surprise and yours, there’s no money available.
Ask them to send proof of their ability to pay you before signing the contract. And make sure to put a “payment due by” date in the deal. Not doing so is just leaving the door open for potential problems…aka, being sloppy to the point of hurting yourself.
Introduction to Business Employees & Content Providers
This can’t be done pre-sale often times because of confidentiality, and fear of employees leaving once they find out the business is for sale. However, having some plans to get to know them, or atl east ABOUT them, is only smart.
I purchased a large blog that had it’s content generated by a team of writers in the past. The writers had no clue the seller was selling the site, and when I stepped in, I had to re-staff the entire team because I was left short handed when several of the key contributors jumped ship. They were loyal to the original owner, and I was the new guy on the block. None of them were held by a contract to continue providing the great content they were providing, and because I didn’t have a plan for retaining their services when I became the owner, the business became a burden for me quickly.
GET TO KNOW THE TEAM BEHIND THE PROJECT. I can’t stress this enough. At a minimum, you need to have the selling owner feel out the employees for you to ensure the business’ stability post sale. Are they planning to stay? Will their compensation change? Will their responsibility increase or decrease? If you don’t have a plan, it can blow up in your face.
To wrap things up, a lot of what goes wrong in online business transactions is a result of sloppiness. Plan for the worst case scenario and many times by simply making that plan, you’ll avoid issues down the road. This list is by no means exhaustive, so there my be a part 2 of this article coming in the near future.
What are your thoughts? What do you do before a transaction to make sure the deal goes smoothly? Anything you would add to this article? Leave your thoughts in the comment section below.
It seems as though the entire web has gone social. There are a ton of thoughts on this subject, and the purpose of this post isn’t to do an expose’ on the effects of Google +1 or facebook likes. However, one undeniable result of Google’s shift towards the social side of things is a crucial element for every marketer worth their weight in gold: Social PROOF.
There’s just something about our nature that is attracted to follow the crowd. Not only when it comes to making decisions, but when it comes to measuring the success of others. When it comes to making decisions (especially about a purchase), few selling tactics have as powerful of an effect as a long list of satisfied customer testimonials. But when it comes to measuring success and getting others to jump on your bandwagon, the tool of choice is social response in the form of a vote.
Take a look at some of the web’s top social bookmarking sites like Digg.com, or StumbleUpon.com. When something get’s voted for enough times, it gets picked up and syndicated all across the web. A post that experiences what some have called the “Digg effect” (server crushing traffic from reaching Digg’s first page), goes through a snow ball effect. The more people who Digg, the more people that see the story, which in turn leads to more Diggs…You get the point.
Then came the Facebook “Like”. The same snow ball principle is at play, it’s just a much steeper hill with more force pushing the ball. The viral effect of the Facebook “like” has made many people overnight internet celebrities, given YouTube videos millions of views, and increased online businesses overall fan bases (and value) by untold amounts.
The question everyone is asking, is how will the Google +1 button effect business owners and websites? Well, in an attempt to keep good on my promise to not discuss all the stuff you’ve probably read 1,000 blog posts about already (SERP changes, etc…), I’d like to point out the one change that could make you more money as a flipper: Social proof.
If success is measured by following the crowd, then having a high Google +1 count on your website’s content automatically infuses more perceived value into it. It tells potential buyers “people like my website.” Which gives them more confidence to make you an offer because the crowd is telling them it’s a good property to invest in.
#1 rankings are great…But being #5 with 10X as many +1’s as the guy who’s #1 in the SERPS tells potential buyers (and searchers) that your site is the site everyone likes the most.
So, the moral of the story is if you aren’t currently utilizing Google’s +1 button to add perceived value to your content, perhaps you should. You may even start seeing it in our posts here at FlipWebsites.com!
Have you ever seen the movie “Pretty Woman?” It’s the one with Julia Roberts and Richard Gear. My wife was watching it the other night and it got me thinking about website flipping.
If you’ve seen it, you’ll remember that Richard Gear plays a billionaire business takeover guy that preys upon struggling businesses, buys them out, and sells them off piece by piece to other companies.
In today’s post, I want to talk about doing the exact same thing when it comes to websites and group auctions. Let’s call this a Piece by Piece Website Flip.
One type of auction I see passed over by so many people in online marketplaces is the “group of 250 adsense sites” type auctions. Usually, there’s 1 or 2 sites in the bunch that make up the majority of the claimed income, and the owner is throwing in his collection to inflate the perceived value.
If you’re like most people, you don’t even give these auctions a serious look. I mean, who wants to pay to renew 250+ domains every year?! Who wants to go through with the hassle of transfering 250 sites to a different hosting account?
Sometimes, if you’re lucky, you can get the owner to sell you just one of the sites in the bunch, but more often than not they aren’t willing to separate the wheat from the chaff for fear of not being able to sell the chaff.
So, what’s a website flipper to do? Become Richard Gear!
When I see these types of auctions, I like to take a look at each site to sniff out ANY potential value in them. Even if the sites have zero traffic or revenue, the domains, content, and designs may be worth something. Even if only $25-$50 each.
Lets use the above example. You go to Flippa.com, and come across a listing that says “Network of 250 Adsense Sites for Sale”. The network of sites collectively earn about $350 per month, and over $300 of that is from less than 5 sites that are the real winners in the group.
The BIN is $3,000.
Also, the seller is absolutely UNWILLING to sell you the 5 money makers by themselves. They want you to take the whole bunch of them, or nothing at all.
After browsing through the 245 duds, you see that most of them have 5-10 quality original articles on them. They each have a decent looking design with a unique header graphic. In fact, the only reason they don’t make any money, is lack of traffic and ad placements.
So, with the domain names, site designs, and original content, you figure each site is worth about $30 to you.
You quickly place the BIN for $3,000, (primarily for the $350/month in adsense income from the main 5 producing sites), and you devise a plan for extracting that $30 per site from the rest of them.
Instead of being blindly optimistic, we’ll assume that we can only successfully extract that $30 per site from about 40% of them. So 40% of 245 sites = 98.
The plan is twofold:
1.) List the sites at eBay, digital point, and other cheap marketplaces where these types of sites will sell for $30 without much cost to you.
2.) Create a special offer at Warrior Forum or to your own marketing list to create “unique, high quality adsense sites with 5 + articles, graphics, & domains for $30 each”.
Between these two strategies, you successfully sell 98 sites times $30 for a cool profit of $2,940.
Your new income stream has paid for itself, and you still have 147 sites you can use for link building or whatever you want.
Perhaps this will give you a new perspective on monetizing auctions you normally wouldn’t give a second thought to.
Have you ever done a “piece by piece” flip? Have you ever broken down the assets of a larger site and sold them off piece by piece to other people? Better yet, have you ever bought a business and sold off chunks of ownership to 2 or more parties to recoup the initial spend?
Comment below with your thoughts on Richard Gear, piece by piece website flipping. We’d love to hear your thoughts.
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. Continue reading “Knee-deep in Stats: Past Sales Teach You How to Sell Your Website”
I was wondering what types of websites sell the best on Flippa so I thought I would do a little research and find out. I had a pretty good idea which ones were selling well but I wanted some data to back up my hunch. It turns out I was right on the money.
According to Flippa’s clearance rate data going back to April 18th of this year, autoblogs and AdSense sites outsold all other types of websites. For those of you not familiar with what the clearance rate is, it is simply the percentage of sites sold. In the spring, these two types of websites had clearance rates of 75% and 73% respectively – well over Flippa’s overall average clearance rate of 56% at the time. Take a look at the graph: Continue reading “The Two Types of Websites That Sell The Best On Flippa Are…”
This is a guest post from Kevin Muldoon of WordPress Mods.
If you have kept an eye on website flipping over the last several years you will have noticed one thing – looks are important. Sites with good designs tend to sell for much more than those which use plain generic templates.
As a seller, it’s your job to make sure your site has a high quality professional design. In many respects, selling websites is no different to selling cars or houses i.e. you need to make your product ‘buyable’. It can sometimes make the difference between selling the site and not selling the site. Continue reading “The First Bite Is With The Eye”
It’s been a while since I’ve done an interview so I’m glad I finally have one to post! This interview was with one of the “original” website flippers. She was flipping websites before website flipping was cool. She has been flipping sites going back to the Sitepoint days!
Her name is Suzanne Bucciarel and no, that picture is not of her. You’ll learn more about that picture in a minute. I learned about Suzanne from the Warrior Forum. Whenever there is a question about buying and selling websites on the forum, you’ll always see Suzanne with a helpful reply. She has a lot of experience with website flipping.
She continues to flip websites today but her focus now is on selling established websites (i.e. websites that have traffic and revenue) and creating high-quality, niche blog packages that she sells on her website that she started over a year ago, NicheBloggingTreasure.com. Here is the interview I had with her just a few days ago… Continue reading “What The Domaining Diva Has To Say About Website Flipping”