Sell Websites - The All in One

This resource is an all in one guide on how to sell websites, and combines knowledge and best practice from various parts of the site and blog, and my own experience online.

The idea is simple. When you decide to sell websites, you want to achieve the highest price possible and sell in the shortest timeframe with minimal disruption (and naturally, you also want to avoid being ripped off!) The guide below is modelled on past successful internet business sales and clearly explains the best strategy for a variety of scenarios. It's completely free, so if you appreciate it please show us a little love and share or tweet this page's link.

What are my Options?

The following routes should help you answer the question of where to sell websites. Naturally, your choice will be guided by your budget and the type and value of site you want to sell.

Brokers and Agencies

Brokers that specialise in internet businesses (also called 'Agencies' if their representative wears an expensive suit and has designer office furniture), generally appeal to sites with a higher valuation as naturally, they have to make money through their fees which are typically 5 - 10% of a site's final selling price. Brokers will usually take care of

• Creating a brochure, term sheet or listing copy for your business
• Listing the business in various different online or offline specialist sites and publications
• Sometimes preparing legal paperwork and issuing NDAs for prospective buyers
• Screening and filtering buyers and answering basic questions
• Sourcing and contacting specific buyers within your industry or on their own lists
• Assisting with negotiations and helping to value your business

Specifically with internet businesses for sale, brokers tend to be split between more traditional brokers that assist with sites valued above $50K (providing the services above) and a newer model of broker who will assist with lower value sites providing services such as listing in marketplaces, forums, answering buyer questions and helping you to achieve the highest price possible partly through their reputation within the industry.

If you need some guidance in choosing a broker, we have a directory of brokers specialising in online sales here

Marketplaces, Forums and Classifieds

Many people are still shocked to find out that there's a huge online 'ecosystem' for buying and selling internet businesses, where buyers and sellers frequently come together specifically for that purpose. Most marketplaces and classifieds will charge a fee, but this will often be around $10 - $20 per listing. The more popular marketplaces will also charge a success fee if your site is sold which will typically be 5 - 10%, so it can often be cheaper to go with a broker, providing your site fits the criteria.

You can find a list of 35 Marketplaces and Forums ranked and rated here

Forums are both wonderful and dreadful at the same time, and mostly depends on the specific forum you choose.

Considering there is usually no cost to list and no success fee, a forum can be a fast way to find a buyer within your specific niche (tip - use the miscellaneous section of industry specific forums rather than general webmaster ones), and there are some forums setup purely to discuss and advertise websites for sale. It's important to remember though that a forum is merely a way of creating a potential buyer list, and more often than not, you'll find many timewasters and occasionally some dishonest people who hide behind their profile.

Private Equity Brokers and VCs

Being in the 'business of business' these people or firms will usually have a rolodex that could possibly find you a buyer for your site, and better still - it's not (yet) common for them to charge a fee in doing so as it will often be in their parties best interest. Many VCs will have a portfolio of businesses that they currently or have previously worked with, and if you can find the right VC, one of these companies could have an interest in acquiring you and furthermore the money to do so, if this fits with their strategic plan.

Your business will most likely need to be above a certain value ($500K +) to make introducing the deal to one of their contacts worthwhile, and this is probably not an option if you personally have an aversion towards being rejected, as venture capital PAs and receptionists are known to be the fiercest PAs that ever lived.

Competitors and Suppliers

If your business has a structured and scalable system for delivering a product or service, and you can show a profitable lifetime value for every customer you recruit, then your competitors may be a great option for a potential buyer. Internet businesses often have the advantage of having no physical presence, so a buyer can easily integrate your customers into their own setup with little extra work on their part.

My advice is always to start with older established offline companies who have a limited  online presence (i.e. a website but no ecommerce), followed by offline companies who have invested money online (i.e. ecommerce, PPC), followed by online companies (if those options are available to you).

Website Valuations

This is a subject which has communities divided, but knowing how much to expect for your site can often determine how long it will remain on the market, and whether or not your sale ends in remorse.

When we talk about a 'value', there are two values that people often confuse but these are very different

1) The open market value - if I list my business, how much could I get for it based on current demand

2) Personal value - buyer A who is in your niche and owns a portfolio of sites like yours will probably hold greater value for your site than buyer B who is simply looking for an investment online.

Regardless of which value you refer to, it’s a fairly safe assumption that value is created and increased by

• Targeted Traffic
• Revenue
• Members / Subscribers
• A unique product, application or service
• Unique design and / or content
• A great domain with age and trust
• Good links, organic rankings or referrals

 

Typically, you have two options for valuing an internet business

Sites with a value under $75K

No amount of mathematical wizardry can value a smaller site accurately, simply because the market is far too new and prices are yet to stabilize.

The best way to value your site is with a lot of research to establish what sites with similar criteria to yours have previously sold for.

The good news? We've got the server to do it for you, drawing on over 50,000 auction results to find sale profiles similar to yours. Better still, it's completely free and doesn't require you to login.

Website Valuation Tool

Sites with a value above $75K

These sites will usually benefit from a professional valuation, from a business broker or website valuation specialist. Again, this is often more a case of finding a buyer that has a high personal value for the site rather than relying on a one size fits all market value.

Most brokers will give you a guide price as part of their service, but it goes without saying that they will naturally get as much as someone is prepared to pay.

How to Increase (and decrease) your site's value

When all the hype and speculation dies down, people will always pay more for sustainable, solid businesses (online or offline) and that principle will never change.

Here is a brief list of criteria that have been shown to increase valuations time after time; get these right, and you will almost always sell your site way above similar offerings that lack these factors.

• You have redundancy. When you sell your ‘baby’, you're thinking 'look at all the potential'. A buyer is thinking 'what could go wrong here'. Having redundancy to protect against something failing is crucial to getting a higher price.
  
  Try to make sure you have several sources of
• Revenue, especially if you rely on Adsense
• Traffic, especially if you rely on Google or Affiliates. Try to show traffic from Social, Email and RSS sources too.
• Links. One high PR link is nowhere near as 'safe' as several mid PR links from various subnets, although they may have the same 'link-juice' value
• Suppliers, especially if you are an affiliate or drop ship ecommerce merchant.
  
• You have a system. Buyers love systems so document everything! This includes how you manage the site, customers and customer care, development, outsourcing and marketing.
  
  
• You have scalability. If you can show your business does not involve you, but only uses outsourced non specialised talent, then you will always achieve the highest prices. Most buyers have the ideal of buying an asset that will continue to generate revenue if they are ill, on holiday or not around. Having a scalable workforce not only makes this vision clearer, but helps demonstrate that the business can grow with little 'pain'.
  
  
• You have clear financial records that document everything. Buyers will need to trust you, and this is done through clear financial records (with proof if required) of all transactions and expenses. If you work in the business yourself, remember to include the value of hiring a developer / writer to replace you, so the figure you claim as profit, really is just that. This extends to having clear proof of traffic (such as a legitimate Analytics system) too.
  
  
• You have assets. This is something that can't easily be bought or created elsewhere and includes proprietary software or apps, information products and content that you've created or member and email lists of qualified parties.
  
  
• You have a brand. Having a name recognised within your industry not only adds value but helps form a barrier to entry for potential competitors, and buyers should recognise this. This can be though the reputation your site has across blogs and forums, and any affiliations or mentions that you’ve had from prestigious sources.

Your Pre Sale Checklist

If you’ve decided that selling the business is still the best option, your next move is to start assembling all the things you need to ensure the sale goes as quickly and smoothly as possible.

Your goal is to be as transparent as possible; if there’s something to hide, any buyer worth their weight in 1990s dot.com stock will eventually find it, killing your credibility with them and with other buyers if you’re selling at a public auction.

Here’s a quick list that will ensure you not only have all the information, but you’ve managed to cover all angles that could cost you your sale.

• If you don’t have domain privacy, have you updated your domain’s registration record? Many of us have started a project on a whim and registered yet another domain to Mr M Mouse, but buyers will want to verify you truly own the site. On the contrary, be careful not to make big WHOIS updates just before you sell, as buyers can be weary of this.
• Have you installed Google Analytics? Whilst there probably are better analytics tracking software, GA is accepted as the industry standard and without it, you will have problems with certain buyers. Even if you use another package, install GA now and explain to buyers that you have only recently installed it, and some stats are better than none. Remember that Awstats or any free ‘server stats’ package bundled with your hosting is not going to cut it in the average buyer’s eyes.
• Look for any dips in traffic and revenue and include the reason why if they’re significant. Most buyers are savvy enough to recognise a short term problem and will admire your honesty.
• Gather together all bank statements, merchant statements or payment processing reports so a serious buyer can investigate your income if needed.
• Create a list of ALL your expenses related to the site, including an estimate for your own time. Even if you don’t think the cost is relevant on an ongoing basis, include details and let a savvy buyer see it as somewhere they can ‘trim the fat’ if required.
• Gather together the terms and conditions for all your affiliate programs and advertising agreements. If a potential buyer has a question (most common is ‘are they likely to be accepted from their country’), you can send them a pdf with all the T&Cs together for them to establish the answer themselves.
• If your business needs it and you decide not to use a broker, create your NDA and Contract of sale. This doesn’t have to be an expensive process, as you can find customisable documents that will be more than fit for purpose in most cases.

There many other more specific things you can do which vary depending on the type of site you have and the niche that you are in (and now would be the best time to shamelessly plug the blog, which goes into more depth on this topic).

Many of the sites that sell for the highest valuations are outstanding businesses to begin with, and no amount of hacking could create the value they’ve taken time to build. You can however take an average site and massively transform it and increase its value if you spend just a couple months before you decide to sell putting everything right. You may lose out on having that cash now, but ultimately you’ll benefit many times over.

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