It is a joyous time when you are ready to sell your website. While you will be fraught with questions and unknown variables when ultimately you decide to sell your website it can be like winning a jackpot and a big change to your life. You might have been building your web business for years, consistently working on it day after day and night after night. When it finally sells you get a (hopefully) big cash injection and move on to new projects feeling renewed and excited about your future prospects. But before this can happen you have to make the sale, which in and of itself is a tricky task.
I sold a website back in 2004 and at the time it was a pretty big deal for me. I had built the site for a hobby in 1998. It went through 3 different domain name and site name changes, at least 4 major design changes and I put in thousands of hours working on it over 7 years, but damn it was fun most of the time. Eventually it became time to move on and pass my baby on to new hands that would keep it growing and moving forward.
The funny thing was I didn’t really think about selling my site because it was making money so consistently. It had become so routine that it was just part of my life. One day it dawned on me – Why can’t I sell it? It produces revenue so has a value – let’s give it a go! I really wanted to move on to other projects and just the idea of not having to look after the site was a huge relief – I knew selling it was the right thing to do. But how on earth do you sell a website?
How To Sell A Website
I’m going to recount the processes I went through to sell my site. By no means should you consider what I did as hard and fast rules but they should give you some guidelines. Remember that there are many ways you can go about the process and you should explore all your options before deciding to sell.
How Much Is Your Site Worth?
Your site is worth as much as someone is willing to give you for it. Simple answer really. I know, that doesn’t help when you go out advertising a site for sale and everyone is asking how much you want for it and you don’t know what to say. You don’t want to undercut yourself especially after years of hard work, but then again, you are selling a website – virtual property – it just seems a little bit strange doesn’t it. That’s what my friends told me after I sold my site.
Friend: “You sold a website?!?”
Me: “Yeah”
Friend: “But a website isn’t anything, how did you get money for it?”
Me: “Well I took the average revenue the site was earning minus the costs of running the site and then multiplied by 2.5″
Friend: “Ahh, okay, well, umm, that’s great (walks off muttering about geeks…)”
As with traditional business, website business or even just a hobby site that brings in money, it’s hard to determine a selling price. What you need to consider are what you will be happy to walk away with and what the numbers tell you. Other variables that will come in to play are the industry your site operates in (competition too), how much labour and technical skill is required to manage the site, the costs (hosting, marketing, staff, etc), whether the business is growing and how fast, the future potential and whether the industry is a buyers or sellers market (supply vs demand). And that’s just part of it.
Some people will tell you a business should be sold for ten times it’s gross profit, or 5 times average revenue or 2 times last years total revenue. EBizBrokers state that generally an e-business website is worth three to six times earnings before interest and tax, so if your website profits are $100,000 you have an asset worth $300,000.
When I first decided to sell the figure of 2-3 times yearly revenue went through my head as a fair valuation given if the new owners kept things at least constant they would recoup the buy price in 2-3 years. I would be happy, very happy, to get that sort of price for my hobby site.
your site is worth how much someone is willing to give you…
In my case my website operated in an industry and had a target market that would be hard to extract much more revenue beyond what I already was getting from advertising. Yes it certainly was possible, but it would take a new income stream to make significant gains. My website operated in a small niche that would not present me with a lot of buyers – but you won’t really know demand until you try and sell of course.
I had a special personal consideration to think of as well, I didn’t want my site to go to just anybody, it had to go to someone that would look after it and keep the dream alive. I didn’t want some overseas buyer to absorb the site into their business and lose the great community that I had. The new owners had to share the passion I had when I first started and hopefully take the site to new heights. (In the end though I would have taken anything if I exhausted all options to find good owners – I wanted to walk away with something for my hard work even if it meant the site would die a slow death under new management. Yes this might sound heartless but I’m being honest and I didn’t really believe I would be forced to sell to a potentially bad owner.)
Preparing To Sell
The more information you can provide to potential buyers the better. Raw statistics are especially important to most buyers and if they don’t ask you for certain numbers then they don’t know what they are doing and are probably not really interested. You should prepare at least these figures:
- Your website traffic statistics including unique visitors (averages and totals), pageviews (averages and totals), growth rates over time, which countries they are from, how much traffic comes from search engines and direct bookmarks, which keywords your site is popular for and the PageRank of your site. I made available direct access to my log files with a statistics package like Awstats or Webalizer so serious buyers could get a good grasp on my site’s performance.
- Your financial figures. If you run a proper business then you should have these in some form of accounting package. The profit and loss statement is a popular choice for potential buyers but of course the more data you can provide the better. Because my site was a hobby I didn’t have any detailed bookkeeping records however I did record some figures including all the money advertisers had paid me for the last 18 months. I also had bills for expenses such as hosting and domain names and given those were the only costs and income for the site I provided those figures to serious buyers.
- You need a good sales spiel email letter introducing your website and you, your site’s history, why you want to sell your site, what your site offers to the new owner (current financial and future potential) and any other important factors. Don’t give away your asking price up front but certainly make note of the important factors, such as traffic figures and if your site is profitable.
Most web servers come with a statistics package. Ask your web host if you don’t know. The most common are Awstats (demo) and Webalizer (demo) which often are preinstalled on many hosting packages. Become familiar with these packages so you can accurately assess your site traffic.
Finding Buyers
Once you have decided a rough figure you would be happy with you can head out and find buyers and see how much demand there is. With my 2-3 times revenue figure firmly planted in my mind as a goal to work for I went off to find a buyer.
Searching Your Industry
My initial thoughts were to find a local buyer in my home country (my site was focused on the Australian marketplace). I figured the best place to start would be the retail outlets that sold products that my market was using. I emailed all the stores I could find contact details for, some of which I had already established relationships with because they advertised on my site. I also emailed some of the largest overseas online stores and websites that I thought I should at least notify that I was looking for a buyer to get some interest going.
When you first head out to find buyers you should look to contact individuals that will understand the value of your site because they will be the easiest to sell too (they won’t need to be “taught” about your marketplace). They will also be the most excited about the prospect because most likely they already sell to the same target market and you will be bringing them a lot of potential new customers.
Searching Outside Your Industry
Once you search locally with no success you might want to try and search simply for a buyer looking for a website. This could be a web entrepreneur that sees the potential in your site or simply someone interested in running a website and would prefer to buy one rather then build from scratch. Obviously with this method you are going to have to do more explaining if the potential buyer doesn’t understand your industry and even worse if they don’t understand website hosting at all you will have a lot of technical training to do if they buy it. You will also need a really good sales pitch and the numbers (financial details) will count for a lot more since that might be the only part of your web business the buyer will understand.
There are a handful of online places you can try and sell your site. EBay’s Business/Websites for sale section is a popular choice but remember eBay is an auction so the negotiation and haggling is all automated. Your auction listing page will have to be very good to get a good price and you will be very much at the whimsy of eBay’s traffic which might not be ideal for what you are selling.
A better option in my mind is try a few forums like the SitePoint SiteSell area where you can list your site for sale and get some exposure. The best thing about this is you can go in and search the archives to see what other sites have sold for in the past. By comparing the details of previous sales you can get a feel for what your site might sell for. Try hunting around in other forums such as SearchEngineForums – buy my website and businesses for sale/brokerage sites such as BusinessBroker, BuySellWebsite, WebmastersMarketplace.com and eBizBrokers) to drum up some interest in your sale and conduct research.
Making The Sale
Eventually you should find someone interested in your site and the negotiation will begin. As with any negotiation the mindset and “state of urgency” of the buyer and seller play key roles in determining who has the upper hand. If the buyer is not desperate or the seller is then the power can rest in the buyers hands and she can dictate the terms and price. Of course it can be the other way around with the buyer very eager and the seller not so desperate, or any combination. Each case is different but as a seller remember to stick to your guns and don’t sell unless you are happy with the terms. No regrets.
In my case I had my set price in mind but I was also new to selling websites so to be honest I was a little star struck to think about the numbers I could get from my site. In the end I presented my price, we negotiated terms and eventually I was discounted down $1,500 off what I presented, which I was quite happy with. We agree on details such as where the site would be hosted, how long I would make myself available to train the new owners and the transfer of ownership record changes. It took about three months for the new owners to get the hang of things and for about a year after the sale I would jump in and help now and then with technical matters.
When finalising the details of the sale I suggest you keep in mind these points:
- How and when will the money be transferred? I suggest an upfront partial payment (we did 50%) and a final payment once the transfer has been made. Are you going to use cheque/check? Direct bank wire? Cash in hand?
- Write up some form of formal contract with dates and agreed upon price and have all parties sign it. Of course if you are completing a big bucks deal then get yourself a lawyer to make sure you stay on top of the legal concerns.
- Define how long you will provide support for. I chose to make myself available for a long time and even today I still help out occasionally. You might want to play it safe and document the mandatory period you must provide support.
- Stay on top of all the technical little things. Web business is a complicated task and there are a lot of web tools that you might be using and have even forgot about. Don’t forget web hosting, domain names, autoresponders, mailing lists, software, subscriptions, paid directory listings and any of the host elements that might be used by your web business that you need to transfer to the new owners.
Moving Forward Post Sale
You’re all smiles, your pockets are laden with cash and the world is a wonderful place. Now don’t screw it up and blow all your money on partying too hard, stupid investments or get rich schemes. You’ve learnt what it takes to build a web business and sell it. No doubt you would like to do it again and you have more business ideas to test. Remember how hard it was first time round with no capital available? You had to bootstrap your business, provide your own funding or beg family/friends/the bank for funds. Now you have capital which you can use and invest wisely. Sure celebrate a little, have some fun and enjoy the moment, but remember you didn’t get to where you are by wasting money and you’re not about to start wasting it now.
Yaro Starak
Internet Entrepreneur
So I guess this isn’t factoring in the liabilities a business owns and the assets (that don’t generate cash flow but increase in value).
Really cool article!
Using this and a domain value calculator will help people drastically improve there sale price!
Thanks,
Andrew
Well, Yaro it might be a bit ridiculous to say that my website currently is (obviously) less than $100 bucks. But to me it’s worth more. It’s the time. I’ve put in 5 months at the site and I think it’s actually very near to start ranking. It’s not in the top 1 Million yet . . .
To add my own 2 cents article. I think a website’s revenue of just 2.5 to 3 times (in other words revenue of 3 months) simply can’t be the value of a website! At least not if the site is worth $100 Million. Maybe then you can say that it might just be about $300 Million considering the costs to keep it running.
Correct.
The revenue / cashflow is not the only factor in a potential buyer’s decision to buy. It may also be the smallest part of your asset.
Suppose you build a social community, a hyper-active niche forum, a new XYZ tool with 400,000 users worldwide, a GroupOn knockoff with retail partnerships in major cities across the states and 120,000 registered users, or your website has a domain name that is easily brandable (possibly even one word); or you built a high content property that you never monetized…
Brand, domain name, traffic, link-backs, community, lists, etc are all assets.
The cashflow, in many models, is the least important .. I say that because maybe you did a great job building the community, the content, the SEO, the brand … but you’ve been doing a piss poor job monetizing it. Then I wouldn’t care about your sad cashflow (in fact, your low cashflow would excite me)… I’d care about all the other assets you’ve already put in place for me.
That way once I buy it, I could get proper monetization in place and quickly be enjoying the revenues and recoup my investment.
As a silly example… imaging if Facebook still didn’t run any advertising. (I know, silly exaggerated example but stay with me). The brand, the domain, the community etc is, of course, extremely valueable even if they had never flipped the ad-revenue on yet.
So you’re right… cashflow is just ONE piece of the puzzle. Some buyers are looking for a cashflow business. They want to invest and make sure that with little (or no) work, they’ll be eventually making more back from the cash streams you’ve already setup.
That’s one type of investor. And it’s right for their mindset.
A more creative and aggressive entrepreneur though cares about your full asset portfolio… what else do I get? Email subscribers? Direct mail buyer list? Email/SMS list? Active community? Strong brand in the niche? A lot of organic traffic? etc.
Could anyone please help to sell my site. Its a eyewear E Commerce portal made on magento platform. Its includes all the advanced add ons like google base, google checkout, onestepcheckout, compare tool and lots more. Its just 3 month old portal which sell more than 50,000 USD product. So that comes around 18,000 USD per month. The monthly expenditure of the site is approx 1500 USD per month including everything. As every one is saying the cost of the site is revenue multiply 2.5 minus the cost of maintenance. So it comes around 43500. But i am not demanding that much amount. My cost is 20,000 USD. If any one help to get that amount. i will ready to pay 10 % as a commission.
Wow! What a great post! I’m in the process of trying to value my site. What makes it difficult is that the sales are for a product we also make ourselves. Many people want a site that is a site only. Or there are those who prefer to make a product and sell it offline. Bundling the two, which is how we’ve built our business, makes it more complex to set the right price and find the right buyer. Nonetheless, I found this article extremely helpful and will be pushing the pencil different ways tomorrow as a result. Thank you!
Great resource about the factors to be considered for selling a website.
Mr. Yaro, thanks for sharing your great resource about the factors to be considered for selling a website.
I sell websites for a living as a broker. In 2010, most buyers expect to recoup their investment in about 3 years. Therefore, they do an equation based on current income and decide whether it is likely to continue as is, increase, or decrease. If your site is rich in traffic, they will try to figure out what it will take to monetize the site and recoup their investment in about 3 years. If you have an ecommerce site, they will tend to discount it if you hold a lot of inventory since money tied up in inventory cannot be invested elsewhere. I actually built a free little calculator which gives fairly accurate ballpark estimations of the value of your site…but I don’t want to make this a commercial for my site. If I see others request the link, I’ll come back and provide it. Thanks.
Thanks for the valuable info on how to sell and value websites, when valuating a website you should also consider http://www.websitevaluebot.com as it will give you a value based on every aspect of the fundamentals of a website except for revenue which is the only real way to work out a websites value.
For true value of a website you should calculate monthly revenue times 6-12 depending on brand name, age and content and this is the reason no website estimator online is accurate.
Nice detailed post Yaro! this is an area of Internet Marketing that where there are one helluva lot of variables so thanks for flagging some of the potential pitfalls in selling web sites. I can see how this post has attracted so much link love
Great post by Yaro.
As a website broker, I understand the challenges a seller faces when wanting to sell their websites. There are a ton of questions that buyers ask that sellers need to be prepared for in order to sell their site for the highest price. Having a professional on your side is recommended for any site owner that has a valuable site they are looking to sell. If anyone needs any advice or guidance, feel free to drop me a line.
Wondering since this was written in 2005, if there are updated places to sell your website, such as Flippa, etc. Would love an UPDATE on this post. THANKS!
very nice post but would like to know few things about newly developed websites “specially” designed for selling purpose. I mean, such sites doesn’t have any traffic and authority. So what would be the price in that case?
Ovais
I have a driving school website which sells driving courses & products. This time last year i was probably getting double the amount of sales compared to this year, which i think is related to the current global financial situation. I think timing is crucial if selling a web based business as if sold the website last year it would have been much more appealing to a buyer. I have been re-designing the site to make it more user-friendly & appealing to my audience in the hope of generating more sales next year.
I have been looking for a simple answer to this question. Just like any business that is sold, the stats and numbers is what sells it and what price to point.
i have been using a site called value your own site free site to use to value your site http://www.valueyourownsite.com
to sell the valued site i would use http://www.quick-bidding.com it is soley for domain names and websites established or not
Other useful things you can do is analyse the links to your site (inc PR) and demonstrate their high quality.
Even better, if you can demonstrate why your links have better quality than your competitors, you’ll be giving an idea as to whter your revenue has a solid base – and you may be able to get a better multiple of it as a result.
Also, consider the ease of maintenance of your site. The architecture and on-page SEO of some sites is so complicated that a new owner will want to rebuild. This would clearly be a great destroyer of value.
People have been offering me 100USD/year to place an ad on my website http//www.justpacifictrading.com
Is this about the price I should be accepting? Can anyone help?
Nelson.
Lots of good food for thought here, we have quite a few sites that – though they make us money – really are a drain on our resources. Perhaps it’s time to bite the bullet and sell….
Really nice article, I enjoyed reading this very much indeed. I have sold a couple of websites over time, and have always made the price 3x the yearly income but the reason for this, is because the websites I make relies on search engine traffic. I do not post money in advertising of the affiliate sites, but if I did the figures would also look a bit different. Already now I have sites making six figures a month just from search engine generated traffic.
Me personally would not buy a website for three-six times what it is making a year. But of course it depends on the site.
Question to ask in these situations is why are they selling? What do they know that you don’t….?
Wow, this is a really comprehensive post. Will definitely come back when/if I buy or sell a site.
Nice article. I’m looking at buying AdSense websites at the moment, if anyone is interested I’ve got a calculator that gives a rough estimate of what I’m prepared to offer, you can see it here.
Thanks for the Greet infomation!
I am a website broker for Quiet Light Brokerage and I built a calculator which is pretty accurate based on numerous deals we have done that have actually closed. The URL is http://www.whatismysiteworth.info. Typically sites sell for a multiple of the owner’s discretionary income. That multiple for most sites is in the ballpark of 3x income. If a site has declining earnings, a short history or requires a lot of work, the price comes down. If a site is growing, has a long history and/or requires minimal work, the price MIGHT go up a little, but not by much.
i m intertested in selling my blog thephotofun.com the domain is 3 months old.
i want to know that i have to give google adsense a/c with my blog. do i get more money for giving that a/c ?
If you don’t have any adsense a/c on your website / blog then how can you determine the revenue of your website. Does website value checking website gives sufficient data to make an estimation revenue value?
Excellent Article. I really looking to sell one of my websites. I will sell my website using this article listed. Thanks a lot.
Ravi, I think mentioning escrow.com is a very good idea and one of the top places for buying and selling websites and things.
Is there any international site where you can buy and sell hot websites?
Thanks for sharing your great post,wish you have a nice day,happy every day!
I just couldnt leave your website before saying that I really enjoyed the quality information you offer to your visitors… Will be back often to check up on new stuff you post!
Hi, I have a small, service based website (so no need to write content) that has generated about $150,000 over the last six years. At this point, it’s almost entirely passive, taking a couple or three hours per week to run.
It gets about three phone calls for support each week, but it’s pretty easy to use, so most members don’t call.
If I were to want to sell that, what kind of a deal would I want to structure? What would it be worth, lump sum? Any ideas?
Thanks!
Oh, and the expenses are about $175/month for hosting, but I have it on a dedicated server that has other applications too. It could likely get away with about a $50/month hosting account.
This is still interesting stuff 5 years later.
a nice and very informative article, iam also into selling domains and websites and have sold a couple of domains in the past, iam of the view that no matter how good website/domain you have its price actually depends on the buyer willing to pay, this has been my own personal experience so far
There’s a company called, http://www.valueyourownsite.com, where it will give you information on how much your website can be worth. Though again it is literally up to yourself if you want to let it go for the amount that they’ve priced. As having created a website for o2 myself, where I got the thumbs up to do, they are now wanting to buy the domain name and have the website removed, where they are paying approximatelly 4 times the amount it was priced through http://valueyourownsite.com, due to covering the cost of my expenses for creating the website.
Also if you’re looking to promote your website don’t hesitate to email me and get advertised on my website http://www.non-stop-shop.com, that starts from as little as £5 per year and has had over 310,000 pages viewed, email me at: – logos@non-stop-shop.com
Getting money by selling our site is a good idea, but when it has become a part of our life it’s difficult to give it away for money!
I think it is incredibly difficult to value a website. First and foremost is it the website that needs valuing or the company as a whole, which if course will include the website.
You point out very important points to calculate the sale money of the site. Definitely, it will help for site owner to calculate the selling cost of their website.
Does anyone know of a Dutch website that gives advice about the value of Dutch websites?
Flippa.com is a good place to sell and buy websites. I’ve only every had experience buying websites from them not selling, but what I’ve bought so far has turned out ok. Organic traffic and original content is the first things to look for. Great post Yaro!
I always thought about 1 years net profit is a good price. Then why would you hear people say that they sold it for 2+ years profit? How important is the nice? I could imagine that the selling price is higher for something that is an evergreen?
Hi!
I would like to know bloggers opinion about Flippa! Some are saying that’s a dangerous option, because is being infested with scammers!
I have a MRR webstore, that i would like to sell, but just don’t know about flippa!
Best regards!
GR
Hi guys, hope you cool. I wish to sell my website http://www.entrepreneurshipsecret.com contact me if you are interested.
Selling websites can really be a great way to make money online. I am developing few niche sites right now and I’ll try to sell them when they’re finished. I hope I’ll make some decent money with them
Thanks for sharing your tips and guide, much needed and helpful 
I think that the value of your website will depend on the content and the traffic it gets through internet. With colorful presentation, relevant content and seo traffic your site will be the favorite one.
Thanks
I think the hardest part of the process is to find potential buyers that will understand the value of your website. Many wnat to be online entrepreneurs will not be able to understand the value of an established, developed site vs a brand new build.
Traffic these days is also hard to value and with so mnay web businesses out there, sale is the only hard measure of success. I agree with the commenter above that says there is value in potential, but selling this to hard nosed investors or ‘brick and mortar’ buisnessmen is a hard sell.
J
joyous? selling a site is anything but joyous…. it’s a pain and hassle the ONE time I tried it… and complicated.
Best wishes … C. H. Electronics (Cornwall, UK.)
try posting in http://www.popularbookmarking.com..
A another free bookmarking
Wow, so these posts started in 2005 and here I am in 2011 looking for info on how to sell my domain names. I’ve tried a couple suggestions listed but they no longer exist. (ironic) Maybe somebody bought them?
So does anyone know where is the best place to list just domains?