How to sell a website

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How to sell a website

Here is an article based on my experiences on how to sell a website. This information should not be construed as legal nor accountancy advice, merely just an informative piece to get started you on your website selling journey.

Selling a website can be a huge, and sometimes, life-changing event if a transaction is successfully completed. Since the beginning of the internet, we have witnessed sellers cashing out in the millions or more by selling their websites. From small bloggers to big corporates, anyone can sell an online brand or website that generates worthwhile traffic and profit.

In order for one to make a decent income from a website sale, several preparations should be made. The seller has to ensure that their website is in functional and capable of generating income or other tangible value to a buyer.

There are many platforms that one can use to sell their website. There is also an increase in prospective buyer, who want to generate income from a website, yet who do not want to put in the work of building one from scratch. These conditions have helped the market for website buying and selling to thrive over the years.

Reasons for Selling a Website

[1] Money

The main reason why many individuals sell their websites is to generate income. Building and selling websites is a good way of generating income. Individuals, as well as small businesses, can make good money creating websites and selling them to various entities

Sometimes individuals are motivated by their financial situation to sell off their assets. If a person owns a viable website, disposing of it generates a liquidity event where they get a cash injection. Thee money from the website sale can be used to fund essential purchases, other other investments, or lifestyle purchases.

[2] A change in lifestyle

Being a website owner requires you sometimes to have a unique lifestyle. Many of your website visitors or customers may be in different locations and need attention at odd hours. The demands of running the business may start to act as a burden on your lifestyle so selling the website is a good way out of having to continuously meet those demands. Being a business owner has it’s perks but keeping customers and visitors happy is full-time job, whether you or a team are handling operations.

To be a successful website owner, you must be ready to dedicate a lot of time and effort to the site. Many people may be willing to put in the work, but as time passes, some begin to look for a way out. A seller might, therefore, choose to sell off their website and change their lifestyle to something that suits them better and their future lifestyle goals.

[3] Loss of interest

There are many reasons why one might lose interest in a business. Mainly people lose interest in business due to a lack of motivation to work on building the business or the website. For many entrepreneurs, the initial thrill of building a startup business is the only enjoyable phase of running the business.

During the startup phase of the business, there are lots of challenges and exciting opportunities to conquer. Once all these challenges have been overcome, some entrepreneurs may lose interest in the business’s normal day-to-day operations. In such cases, the business owner usually hands over non-essential tasks to another party or team so that they can focus on other priorities. However, entrepreneurs may still get tied down to mundane tasks or other obligations which may start to become burdensome.

However, selling a business can bring about a new sense of freedom. Once the site has been sold or transferred to another entity, an entrepreneur can launch another website, where the thrill of bootstrapping a business and conquering new challenges will be a welcomed change.

[4] The seller feeling they have maximized their growth potential

Many web entrepreneurs master specific skills. For example, some are good at coding, while others specialize in Search Engine Optimization (SEO) or social media. Although these skills help them to initial success, lack of other skills to expand the business may hinder their business’s ability to grow and develop.

Many entrepreneurs prefer to sell their website after growing to a certain point once growth has stalled. A new buyer, with a more suitable skill set, can takeover and improve the website to increase revenue or profit.

Sign up to a sales marketplace or brokerage

If you feel the time has come sell your website, then you should consider signing up for a marketplace or broker that can handle the marketing and negotiating on your behalf. There are several website brokers that you can research as part of the selling process. A few online website sellers are Flippa, Empire Flippers, or FE International.

These three brokers operate differently. But the major difference is based on the size and scale of the website. If your site is worth under $10,000, then Flippa would serve as the ideal broker. Flippa operates more like an auction house as opposed to a straight-up sale.

However, if your website value is more than $10,000 but below $100,000, experts recommend that you settle for Empire Flippers. Empire Flippers deals with a lot of aspects involved in the transaction. Therefore, you will not do a lot of work yourself during the sales process. However, if your website sells through Empire Flippers, you’ll be contracted to pay a commission of around 15% the price paid by the buyer.

Lastly, if your website is worth well over $100,000, or if it’s a high domain authority site, then FE International could be a suitable choice. FE International is a reputable broker, and doesn’t require you to pay upfront fees to get your website listed on its marketplace. Better yet, this broker handles all the interactions with your potential buyers, the marketing, and legal documentation. When your website sells, you should expect to part with a commission of about 15%, but these fees can vary.

Reach out to prospective buyers online

Selling your website through brokers may seem like the easiest way, but there is another option. You can reach out to prospective buyers online by yourself, and seek to make a direct sale. Contacting buyers directly often expedites the sales process. You also can bypass broker commission fees if you reach out to buyers directly.

What if I don’t have time to reach out to prospective buyers?

If you don’t have the time to reach out to prospective buyers, you can hire a freelancer and pay them by the hour to contact prospective buyers. The freelancer would need the website opportunity summary, along with a list of people or businesses to contact. Nothing proprietary or sensitive should be sent in the early stages to potential buyers when trying to gauge a potential seller’s interest.

What other methods of direct selling are possible?

Other forms of selling directly involve traditional methods such as cold calling to reach out to businesses and presenting the acquisition opportunity. You could also reach out to potential buyers directly via LinkedIn or Twitter messaging. Most potential buyers will appreciate a casual 2-3 line proposal about the opportunity rather than receive a 500+ word pitch with attachments. For example:

Hi there, I see you own eggs.com. I am the owner of toast.com, we are experiencing double digital growth over the past two years but I’m looking for a bigger and better home for my business as I’m getting stretched. eggs.com looks like it could be the place for good synergy. Can I send you the opportunity summary?

John Doe from toast.com

Research successful website sales before listing your own

Before you list your website for sale, you should research demand and previous sales data for websites that have been sold in your niche. By doing so, you’ll manage to better gauge the value of your website prior to listing it. You need to look at sellers who have achieved high prices for their sale. Particularly, those who also managed to sell their websites in the shortest amount of time.

How do I market my website to potential buyers?

If you wish to sell your website quickly and at the right price, then you should carefully your consider your ideal buyers. What types of synergies exist between your website and those of the acquirer? Each type of buyer requires a different type of sales approach depending on the size of the business, industry, culture, and the people involved in making acquisition decisions. Thus, you will need to tailor your sales pitch accordingly.

Should I prepare an opportunity summary pack for marketing the sale of my website?

All website sellers should make an effort in generating an opportunity summary pack prospective buyers. The pack should not disclose confidential company information, but should include some basic high level metrics, financials or statistics. The point isn’t to divulge too much detail here. Merely to generate interest so the buyer wants to engage in further discussions. These data points are discussed in more detail below.

Should I prepare an NDA for interested buyers to sign?

If you foresee potential issues with sharing sensitive information, you can require prospective buyers to sign a Non-Disclosure Agreement (NDA). This will legally bind potential buyers from disclosing or misusing information about your website to another party. If they breach the NDA, you will likely be able to seek damages in line with stipulations of the NDA. Just make sure you get the signed NDA back before sharing any proprietary or confidential information.

What metrics, financials or statistics do I need to prepare to sell a website?

Owners considering selling their website will usually need to prove vital performance metrics, financials or statistics spanning a period of 12 to 24 months. These metrics, financials or statistics are based off of website traffic data and financial statements such as Profit & Loss, Balance Sheet and Cash Flow. Website traffic reports can be obtained from website analytics provider (e.g. Google Analytics), and sales reports can be obtained from your payment process (e.g. PayPal). and liaising with your business accountant to provide the financial reports.

Profit, traffic stability and channel distribution, across social media, organic and direct traffic, are usually the main determinants of how much a website is going to fetch on the market. Other factors that affect the price of a website include:

  • The monetization strategies employed
  • The quality and quantity of backlinks
  • The size of the email or newsletter list
  • The age of the site or domain
  • The “Domain Authority”. This is a score calculated by Search Engine crawling tools such as Ahrefs and Moz that score a website across multiple criteria.

There are also additional factors that can influence the value. These include ownership of registered trademarks and the number of monthly unique visitors to the website.

Analytics are crucial in a website sales process since most sites are valued mainly based on their income. On average, standard websites are sold two to four times its annual revenue. In some cases, the website’s price can be higher compared to its income due to potential future growth opportunities.

Are there any necessary contracts and sales agreements when selling a website?

Yes, the seller should ensure they have written a sales agreement that is enforceable in the legal jurisdiction of their business or website. This can help to protect you in case of any issues that may arise during the process. You can thereby seek relief in a court of your preferred or business jurisdiction. The sale agreement is also essential as it usually dictates the terms and timelines on transferring ownership of the website.

If you are using a broker or marketplace website, you will usually be provided a sales agreement template whereby it can be edited to include the details of your transaction. For any online sales traction, you should consider having a solicitor or lawyer review the contract or agreement. This helps ensure there are no terms that could give rise to unforeseen liabilities, costs or other adverse outcomes.

What are safest payment methods when selling a website?

One thing that you need to know about making online sales is that there are fraudsters out there. So, sellers should be aware that cyber crime is a risk when selling websites to other parties on line. A seller can reduce the risk of fraud by using a broker that has an escrow service, or using an escrow broker outside the broker’s platform, if allowed and if safest.

To ensure the payment is processed in full, you should consider using a platform such as Escrow.com. If you are selling the website to a trusted buyer for an amount below $1,000, then escrow may not be a suitable method. An escrow platform provides buyers and sellers with greater security, flexibility and without the risk of chargebacks.

The money is usually held in escrow account by a third party. This makes the entire process secure, which not only protects you the seller but also the buyer. Before the money is released, there’s usually an inspection period for the buyer, which takes between 14 and 30 days.

Once the buyer is satisfied, he or she will accept the transaction and the funds get released to you.

Wrap up

Selling a website can provide an instant income boost and help cushion your long-term savings and investment options. Interested sellers will enquire about your reasons for selling the site as well as request to view proof of ownership, traffic, revenue and other documentation, analytics or statistics. There are plenty of marketplaces to sell your website, so choose wisely based on their expertise, commissions and level of service. You can also protect yourself by using escrow services while transferring ownership when a suitable buyer has been found. Hopefully your website selling journey goes smoothly. If you need any insight into selling your website or just want to chat about it, you can contact us.

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