If you are planning to sell your website, make sure that you really have no other option. Selling your site is a worthwhile way to escape from income or traffic fluctuations. This is why you rarely earn more than 20-25 months’ revenue when offering your site for sale. Brokers know this, and you can’t expect them to behave any differently. Before I move on to my strategy, allow me to demonstrate with an example: a couple of months ago I sent an enquiry regarding www.aqua-fish.net to one company. They were generous and offered me £16,000. I chose not to accept this offer for a few simple reasons. Firstly, I had plans for the site, including an investment of £3,500-£7,000 in order to increase revenue (I am now finished with the investment and it is generating revenue as time goes by). So, from this point of view, when you know that a minor investment will generate more money in the future, why would you choose to sell the site now? Secondly, I was aware that the time is the best factor in SEO, and that therefore my current traffic was not the peak for the site. Now, several months later, I can honestly say that I was right. Traffic has increased by an additional 20% since then. Third, what would I do after receiving this £16,000? It is easy to spend it then, but my website would no longer belong to me, so I’d have to create a new project. No-one knows how things will develop in the future: there is no guarantee that I can build a website with similar success. These three reasons played key roles in informing my decision to reject the company’s offer.
Instead of trying to earn a smaller amount right now, you should always think about potential. Once you understand the potential, and can accurately appraise your website, then should reject any offer lower than 25 times the net monthly revenue. Of course, an important prerequisite is that your website must be worth investing in. Don’t wait for someone to offer you £100,000 if the site only draws 1000 visitors per month.
The first rule of selling your website
Always sell a fully-developed website with real organic traffic. Organic traffic, as frequently mentioned in this blog, is free traffic from search engines. It is very difficult to attract thousands of unique visitors to your website each day, but this is the first pre-requisite to succeed in selling. You could have developed a fantastic core with unique features and technologies, but as long as there are no visitors, such a website has no value.
The second rule of selling your website
Original ideas are worth much more than duplicate websites. If you’re starting just another phpBB forum, it can be hardly worth millions. I can buy a web-hosting and a domain-name and install phpBB there. Then I can start an AdWords campaign in order to generate some traffic and some active members. But you can do the same thing, and the guy next door can too. Anyone can do it. In the past, when web-hosting wasn’t available to everyone, it was easier to think of a unique idea. Now, times have changed and anyone can start a website, copy and paste articles from other websites (although it’s illegal!), and make money on the internet.
Unique websites are the only ones worth buying.
The third rule to sell your website
Now we’re finally coming to “how” instead of “why” and “when”. After your website becomes more established, you may start to receive offers from other websites in your site’s niche. Often, these offers come from online stores. For example, if your website is focused on mobile phones, then you’ll receive offers saying, for example, “place a link pointing from your website to ours and we will pay you” since online stores all want to be well-ranked in search engines. After 5 or 10 such enquiries, it is clear who has money and who has not. For example, if one website offers you a link for £5,000 per year, and another offers £500, it’s clear which is the one with the funds, and the potential to buy out your site later.
At this point you should create a list of potential buyers. In order to succeed, they must clearly understand your website’s traffic. Nowadays there is nothing better than Google Analytics for tracking visitors. Be prepared to offer them access to these statistics (Google Analytics allows you to share your websites’ data with others). As you probably understand, it’s a good idea to sell your site to a company whose business is focused in the country that generates most of your traffic. It makes little sense to sell a website with a primarily UK-based traffic to a company dealing with customers from Australia. Always make sure that you’re handing over your site into the right hands.
You can start building your list of buyers using Google, though you won’t have any idea about ability and willingness to buy. Companies which are ranked above your website are unlikely to be interested in the additional traffic, especially if your site’s traffic is lower than theirs. And companies which are ranked below your website could be having difficulties finding money to invest (as rankings determine traffic and traffic determines sales). This is why I had to mention the first two points: your site will only be bought when it’s worth it.
Now let’s analyse why it’s wiser to offer to companies instead of brokers. A broker doesn’t usually sell online. That’s why they’ll often offer 25 times your monthly income. They will just take the site and let it earn, without further development. Compare this to a company dealing with real products: again, we’ll use the mobile phone example. If you’re earning £50/day from advertising, then the company would turn off the ads and use the space to sell their own products. In this case, I guarantee they’ll earn more than £50 a day. Even though some days will be better than others, they are unlikely to lose money, assuming you sold them a website of good quality, with organic traffic and search-engine authority. Moreover, such a company will continue selling well beyond the next 20-25 months.
The fourth rule of selling your website
As stated above, you should contact potential buyers directly, preferably through email. I don’t like auctions because they tend to be full of brokers and worthless websites. Instead, establishing a personal contact will help lead to deeper discussion. Your email should contain these facts: when you started the website, where it is located right now, how much your hosting fees are, what technology is used (PHP and MySQL for example), and how much bandwidth per month it uses. These details should be mentioned after more important facts, such as why you want to sell your website, why you started it, and how it can help the buyer to reach new customers. All this information is more crucial in the initial email than discussion of price.
Never mention the expected price in your first email. This is not advertising, you’re not selling ad space or links. One seller could offer you more than you can imagine, and another one could offer you a tenth of what you expected. You must be prepared to accept that the sale may not happen. It all depends on what the potential buyer wants to do with your website, and their plans for monetising it.
Payment
As in every business, payment is the most dangerous part of the deal. It’s hard to know when to transfer the domain: after receiving ½ of the price, ¾ of the price, when? It is very difficult to make this kind of transaciton online, so ideally you should meet the buyer personally. Sign an agreement, have it verified by a third party, and never trust the buyer 100%. I strongly recommend that you transfer the domain only after receiving full payment. If buyer is serious, he will understand this point of view. Otherwise, you’re taking a huge risk.
Further support
Many unique websites are built upon specifications that differ from ordinary scripts available on the internet. In order to ensure continuity, you will be probably asked to create some kind of documentation, or to help the buyer after the sale. Depending on traffic, core and plans, you could spend 10 days helping the new owner with maintenance, or 200. You must clarify these terms before selling: either that you will be paid per hour for any further help, or that you will include futher help in the selling price. If you don’t, you could yourself spending many days working for free.
The final word
Selling a website isn’t always a wise solution. If your site works and still generates traffic, you should consider maintaining ownership for the next few years, as you never know what’s going to happen in the future. As time goes by, more and more companies will invest in their online presentation, and may need links or advertising. Also, methods of revenue-generation may change and the income could improve. Selling is only really right for those who are being offered £75,000, but preferably £500,000 or more.
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