A few months ago I decided to sell my website business. Established back in 2011, the site began as a hobby and a way for me to support the brands that supported me by way of discounted or free products.
Though the site started as a passion project, over the years it began generating an increasing amount of income by way of affiliate sales and product sales through Amazon and ShareASale.
Through this post I’ll tell you why I sold my website, how it ended up selling and lessons learned along the way. Of course, I am no expert so please do your own due diligence if you are looking to sell your own website.
The Catalyst for Selling
After a busy last 12 months of trying to juggle technical SEO consulting, starting to sell packaged SEO services and running my side-project website (that generates income), all while travelling and relocating to Andorra, it was clear that I needed some focus.
As much as I enjoyed receiving a direct deposit from Amazon to my bank account every fortnight while I was travelling or cheques from affiliate programs while hiking in the mountains, deep down I knew the site should be earning more. I could write more content, the product range could be expanded, and I could sell to other markets. In reality though, my effort was better spent elsewhere.
After taking stock of my future options it was clear that my website was high effort, modest reward. It was time to let go.
Digital Business Valuation: You Probably Won’t Get What You Want
Selling my website was a crash course in valuation of digital businesses. While I’d sold a website before, it was more than a few years ago now and a lot has changed.
It’s worth noting that valuation is entirely subjective. A knowledge of stock valuation can help you to understand how others may value your website business, but with a heap of different methods available to your buyer, you never know what offers you will receive.
This said, selling a website with no revenue is more difficult than one with revenue. When revenue exists, you’re usually going to get a multiple of that revenue. Without revenue, and the buyer may be valuing the content, domain name or the link profile.
The over-simplified general rule equation for websites with at least 12 months sales history and a sale price under $100,000 is:
(Monthly SDE) x (between 26 and 33)
For websites selling for over $100,000 and 3+ years sales history, expect:
(Monthly SDE) x (between 29 and 38)
These are of course only vague ranges. For lower priced sites, there’s a lot of documentation out there suggesting anywhere between 10-40 multiples, however they are obviously on the extreme ends.
Anyone looking to buy will interpret your financials/data in a different way and will either be optimistic or pessimistic on the future earning potential of the business. If you can prove that growth is going to be easy and profits can be significantly improved, you should see a higher valuation multiplier.
Valuation, Not Remuneration
When it comes to considering offers, remember that buyers aren’t interested in the time you spent working on the site or the amount of energy you spent on it. I never kept notes on the time spent maintaining affiliate links or writing content for my site, but I’m sure if I did it would be disappointing at best.
Though I managed to get a multiple that broke the rules above, I was never going to get an amount I was stoked about. Ask for what it’s worth and accept what the market will pay. The market doesn’t care how passionate you were about it.
Be Clear on What You Are Selling
When you are selling a retail store, it’s clear that you are selling existing inventory, trained staff, an established brand, shelves, light fittings, accounting systems and lots more.
When selling your website, you need to be clear on what is included on the sale. Just because it’s hosted on a virtual server and doesn’t physically exist doesn’t mean it isn’t valuable.
To maximise your valuation, properly document everything and ideally have the best financial information possible. This is really why your website should be built to sell in the first place. Make sure your buyers know why your site is worth the asking price!
For example, your sale may include items such as:
- Domain names
- Search engine optimized content,that was seeing an ongoing increase in traffic month on month (despite mainly ignoring the site for around 6 months)
- Search engine/performance optimized WordPress site
- Established social media accounts accounts
- A product with over 12 months of sales history
- Affiliate sales reports with over 12 months of commission history
- Existing inventory
- Future ideas for the brand/s (which are borderline worthless by the way)
- Limited handover assistance from the seller
Where Do I Find a Buyer for My Website?
Let’s be honest, the internet is shady. Grow a thick skin, because you’re about to meet vulture brokers, the classic lowballer, and of course clueless buyers that will expect you to teach them how to update WordPress plugins for 18 months after the sale.
- If you can deal with the volume of low quality buyers, check out Flippa.
- If you want to outsource the hassle, contact Empire Flippers.
- If you want to save on commissions, try this Flipping Websites group, get in touch with us over at Digital Dividends or hit up Richard Patey.
- If you have a website you expect to sell for $100k+, it’s probably best to find yourself a quality broker like Empire Flippers.
I met some great people during the selling process. One of these individuals was Coran Woodmass, a broker I got in touch with who gave me a huge amount of information at no cost. Though I didn’t meet the criteria to sell my website business through Coran, he opened my eyes to the value of brokers and the huge market out there for private buyers/sellers.
If you want to avoid disappointment for either party, it’s best to be clear in writing what will be included with the sale (covered above), what the handover process will be, estimated timelines and any expectations of either party.
Some suggest writing this up in plain English yourself and having both parties agree to it over email or digital signature. Others suggest paying a lawyer for a contract to make sure both parties are covered.
Everyone has differing advice here and no doubt the sale price will dictate how you handle things. DYODD.
How to Handle Payments
Once you have a clear agreement or contract, you need to accept payment. If you are selling through one of the brokerage websites, they usually have their own in built methods.
If you are selling privately, you could consider:
- Wire payment/telegraphic transfer
Really, payment comes down to trust and cost. Those being paid via wire payments or bitcoin will probably want to stagger payments to ensure limit the risk for both parties.
I personally, would not choose PayPal unless it was a deal breaker. Fees aside, PayPal have been known to refund buyers without justification or freeze accounts on a whim. It’s added risk I don’t need.
Expect to wait longer than agreed upon for payment.
Unless you manage to find a buyer that is willing to pay 100% up front, the buyer holds the cards here (and will pay when it suits them – or later). If you are using an escrow service, expect further delays and of course if that escrow service is wiring the funds, you guessed it – sit tight!
Selling my second website has been fun and a great learning experience, despite some understandable stress around payment time.
Now that I’m on the other side of the sale, I couldn’t be happier. A huge distraction is out of my life and it’s time to move on with some new projects.