So, you have an incredible website, but want to retire, or make some money by selling it. How do you price it? How do you find potential buyers? In this video, Eric Spellmann shows you how to calculate the value of your site.
In addition, he shows you his favorite sites to list your online property. Want to get top dollar for your site? Watch this video!
Note from Eric: Below, you will find a word-for-word transcript of this video. I provide this as an aid for the hearing-impaired and for those who might just want to read it rather than watch the video. This conversational style is not reflective of how I write. Be nice!
Hey I am Eric Spellmann. And today’s topic is How to Sell A Website? Yeah that’s right. Some people actually may want to sell their website! And we’ll talk about why.
First, maybe you built it to sell. There’s a lot of people out there who have an entire business around building a website, building it up, generating revenue, generating value and then selling it! And then go on to build another website to do the same thing. I mean it’s just like people who build companies in order to simply sell them and make money from that. So that’s one reason people want to sell.
Another reason, you’re just done. I mean you’ve been working on this website forever. You have this community of people and it makes some revenue but you’re just tired and you want to go retire or you want to do something else. And so you want to sell it so that it maintains it’s value and that you make a buck.
So, let’s talk about that. Let’s talk about both of these reasons and if you’re looking to sell your website or to sell any website, you definitely MUST ask yourself the right questions and you MUST follow the right path or you could run into trouble.
So, what is the value? That’s the biggest question I get asked when it comes to selling websites. You know, how do I price my website? What is the value of my website? Well let’s talk about that.
First, and I’m gonna go over each of these individually. What is the value of your domain? The “dot com”, the web address, does that have a value? What about SEO results? Does your website show up well when highly popular searches are done? Is it a subscription based website? In other words, are people paying you monthly to access whatever it is on your website?
Does it have product sales? Does it have sustained product sales (e.g. next month it’s probably gonna sale this many products)? Is their advertising revenue? In other words, do you provide information and then you sell advertising to people who have banner ads? So let’s talk about each one of those.
First, domain value. That is the “dot com” part. Believe it or not, there’s a lot of large companies who may want your domain, and they’re willing to spend money on it. Whether the website itself is worth anything, your domain may be worth A LOT!
So, one of the things I do in trying to figure out if my domain has value, is to go to the auctions. There’s a lot of domain auctions out there. My favorite ones are GoDaddy.com. That’s probably one of my biggest one I would check first! Sedo.com, Flippa.com, SnapNames.com are the other notable ones.
There’s also some value bonuses. Keep in mind that if your domain is short, you can ask more for it. Keep in mind that every single (3 and 4 letter dot com) has already been taken! And so if you have a short one, and I’m not saying it has to be 3 or 4 word, it’s just that it has to be a short one and easy to spell!
If this is true, then there’s probably someone out there who will pay you just for the domain, whether you sell the website or not. So, check out the auctions and see what the current domains are going for. What people are asking. And then also, take a look at your own domain and see if it’s short and easy to spell. Maybe back in the day, you bought some really cool dot coms simply because they were available. Well this would be a great time to sell them!
Trending keywords would be another issue. If there’s something going on today and if really ties into one of your domains, then that would make that domain more valuable.
SEO results – this is one of the biggest ways to generate money in selling your website, mainly because if you show up well in Google results, people want that! And a lot of times people out there aren’t that willing to put in the work necessary to gain that high ranking in Google!
So they would rather just buy it, the website that already ranks well and then maybe put their product or their link on it to generate that. We saw that a lot back in the day when the Gulf Oil Spill occurred and a lot of law firms wanted to show up for obvious reasons. And so they actually bought some websites that were already ranking high for Gulf Oil Spill litigation or Gulf Oil etc, and simply re-routed them to their own websites!
So, it’s really fascinating sometimes what you can get based on how you show up in Google. Keep in mind that these have to be reproducible Google searches, which means you’ve got to go incognito. I don’t want you to just pull up Chrome, go to Google and say Oh yeah look we’re number 1. Because keep in mind I’ve told you this before. Google looks at your local search results in creating the search engine results page for you! So what I recommend before you say Yes we rank number 1 for this, is you should clear your cache. And then you go incognito in Chrome (My favorite web browser) by pressing “Ctrl Shift N” and that will bring up a new incognito window.
An incognito window is one in which no traffic is measured. Google really doesn’t know who you are! And so you’re more likely to get an accurate result of whether you’re really number 1 or not. Also know that up in the search results in Chrome, you can say that you’re from Los Angeles, you’re from Amarillo etc and you’ll see the results that they would get. So verify that you actually are number 1 and not just seeing your local result and assuming that you’re number 1 globally! You know my company is at the top on “how to rank well on Google”.
But before I started bragging about that, I looked around and made sure that no matter where you are and you type in “how to rank well on Google”, that Spellmann was there! So don’t think you’re number 1 when you haven’t checked yourself. And you call and tell someone about it and they say “No you’re not!” Make sure that you’re doing this right. And it must be provable. I mean someone should be able to pull up their Google, type it in and see it themselves!
Make sure you have valid backlinks. Back in the day a lot of people would create what we call link farms. And these are totally illegal in the Google world. How this worked was that you could pay someone and they would generate 200 links into your website. Now Google used to not look at the value of the backlinks. They would raise the SEO, raise the ranking of any site depending on the number of backlinks it would get. But today Google actually looks at the value of the backlink. Let me give you an example.
If I linked to your website, you would get some sort of value with that. But if CNN or FOX or any other major news website links to your website with their website, you would get a lot more credit from Google than if I linked to your website. So it’s got to be a quality backlink. There’s a way to know what links are coming to you. Just type in ( links: your dotcom ) and Google will show everyone that’s linking to you. Kind of cool.
You need to prove your inbound traffic with Google Analytics. If you don’t have Google Analytics on your website, which is totally free by the way, you need to get it. Because in selling websites and in selling domains, a lot of people depend on Google Analytics to know. Google Analytics is kind of a stats package. It involves you putting up a little bit of code on every page of your website. One of the cool things about that is that Google will show you the incoming traffic to your website and how it got there. And so if you’re claiming to be number 1 for this search, people are gonna wanna know how much of your traffic to your website was based on that search, and Google Analytics will show you. So, remember if you’re gonna be selling your site to people and if they have any common sense, they’re gonna be asking for proof that you get a lot of traffic from people typing in this search on Google. And you got to be able to give it to them.
Next is subscriptions. Maybe you have a website where over a period of years you’ve built in a number of subscriptions where people are paying you every month for access to something. Either it’s information which you provide in a protected area or maybe it’s a product or maybe it’s something. You’ve got to be able to prove your subscriber count.
You’ve got to be able to show you actually have this many subscribers who pay this many amount per month or this per quarter or this per year. Because people want to know what are they going to make at the starting point, when they purchase this website. You’ve also got to be able to show growth rate.
It means you’ve got to be able to go back a period of months and say 3 months ago you had this many subscribers, 2 months ago you had this many. And so this is your growth rate. I would recommend going back at least 6 months. So that you can show that there is a steady trend and a steady climb that will heighten the value of your website in a person’s mind and it will allow them to project future earnings.
Engagement – There has to be engagement on subscriber sites. It’s not a matter of just people paying their money and you not doing anything obviously. There’s got to be engagement. So be able to show them either from a social media standpoint, or even on a subscriber page maybe you have content where you write articles and your subscribers can comment.
Show them those comments. Show that people are truly engaged with you and aren’t likely to just quit after their subscription period is up. You’ve got to be able to show that people love you. And the way you do that is through social media. And also through any kind of social plants you’ve put into the website itself.
Product Sales – Let’s say you sell products on your website and you do quite well. But you’re done and you want to sell it. So, you’ve got to be able to show eCommerce stats. If you use something like shopify.com or one of the major eCommerce platforms, you’ll be able to print reports out that show what your sales actually are from the website. And people are gonna wanna see that.
They’re also wanna be able to see what kind of competition you have. If you’re the only one making this really cool product, then obviously the value of that website is much higher. But, if there’s a lot of competition, they need to know about your competitors. Now you’re saying “Eric why would I ever share details about my competitors when trying to sell my website?”
Keep in mind that people would rather do business with someone who is totally above board with someone who is totally honest and about everything they would need to know before they buy this business. You would never want a situation where they felt it was bait and switch, where you said Yeah we’re the only ones in this market and we sell this. When they buy the site they discover that you’re not the only one and you’re the higher price and someone else is getting all the market. So be honest.
Tell them what the upgrade path is, on this product that you sell. In other words, where do you see it going? How do you see it being improved in order to stay competitive? Or how to re-sell it to those people who bought it this year? You’ve got to be able to say “Here is what this product is and here is the product expertise that I have. And what I predict will be what people want in the future.”
Do you have any patterns on it? You know some investors many times will buy a website and they care less about the website and they’re all about the patterns! And so if you have any patterns on the product you sell, or even on the way you sell it using your website or on the process of your website selling it, these could be highly valuable.
And you’ve got to make sure that the client knows what those are. And keep in mind that pattern pending also still has a value. Not as much as an approved pattern, but at least it shows that you’re in line ahead of everyone else who may be trying to pattern the same thing.
Advertising Revenue – This is probably the biggest reason people sell websites. Banner ads. In other words they’ve built up a website full of information, maybe they’re a blogger and they have this huge readership, huge amounts of traffic. And so they’re selling banner ads or Affiliate Advertising on their website. You need to be able to show what those Ad revenues are. One of my favorites, and you’ve seen this before on my “How to Sell Advertising on Your Website” video. Commission Junction (cj.com) is one of the easiest ones to go to. They provide a number of banner ads you can throw on a website and you can then start making money.
Extra money by people going on your website and reading what you have and maybe clicking on the banner ads. Now, as you grow, if you’re a really big blogger and you get lots of traffic, you probably just want to have your own ad rates. And probably vendors will be contacting you saying “How much for a banner ad on your site?” And then you can just come up with any price you want, but heres the key. If you’re selling that website to someone, then they need to be able to see what those agreements are that you have, whether it’s with with Commission Junction or whether it’s with just individuals.
And you tell them “Hey this is what we’ve been charging this vendor and and it’s been based on impressions, or it’s based on clickthroughs or it’s based on even a percentage of a sale. And here’s how we measure that.” So you’ve got to be able to clearly explain what your revenue model is, if you’re gonna sell a site that has advertising on it.
The clickthrough rate is the most common way. Basically it works this way that every time someone clicks on his ad and goes to his website, I get 5 cents because the banner ad is on my website. Or it could be $5 a click. It just depends on what your clickthrough rate is.
Most people when looking to buy a website when they think of banner advertising, when they think of affiliate advertising they’re usually thinking of the clickthrough rates. So, if you’re looking to sell your website, you’ve got to consider what the revenue models are and what you’re currently making.
So, we’ve got to the big question. How do you price it? How do you price a website? When we look at world we live in today, typically people look at websites the same way they look at a business because a good working website is much like a business.
You’re just changing the CEO. And so the way we measure websites in the majority of time, is that the overall price is gonna be 1 times or 2 times the yearly income of the site. So whatever your website makes in real money, over a period of 1 year or 2 years, then you can say that’s the price of the website. That’s the starting point, I’m not saying that’s what the value of your website is. But the way we came up with that formula is that it’s usually based upon the ROI of the person wanting to buy the site. In other words, they want to know how long will it take to pay back the price I paid to you for this website. So 1 or 2 times yearly income for the website is typically what we see in the market. However, you could pull a number out of the sky!
Keep in mind people don’t know what your website is worth. And it may not be based on what it makes now. So a lot of times if you’re lucky, the buyer coming to your site sees a bigger use for it. They see taking it in a new direction or expanding it’s reach or doing a lot more with it than you were doing with it.
And making a lot more money. So what you might do is if you think they’re a big buyer, and they’re really gonna run with it. You may look at that 1 or 2 times yearly income, and jack it up a bit. Add an amount to it. You’re saying “Well how do I know how to add to it?.
You don’t! Okay. So a lot of times you’re just gonna pull a number out of the sky. And then see what they do. If you’re gonna use this strategy, I would always wanna start a little too high, and then be able to negotiate down. Keep in mind that whenever you’re selling your website, you never want to start with the price you want to get.
You want to start higher so that you an negotiate down, and eventually get to the price that you want to get. That is your bottom level that you won’t go below. Okay. So, always ask more than what you truly expect you’re gonna get.
Where do you sell it? In other words how do you put out a “For Sale” sign on your website? This is one of the easiest things of all. Believe it or not there’s a lot of sites out there who make it easy to sell your site. Think of them as brokers. The biggest one of all is flippa.com. That is probably where I would start.
And there’s a lot of good advice they give on the site on how to list your site and how to measure its value and sell it. And then of course Flippa gets a piece of the action. So keep that in mind when selling it. Websiteproperties.com is another, iAcquisitions.com, websiteclosers.com and then of course webuywebsites.org. But the biggest one out there right now as of the filming of this video is Flippa.
And that would be where I’d go. Now, the other advantage to go into all these sites is you can get kind of an idea is what people are selling their websites for. So go take a look at some of the auctions, go take a look at some of the sales. Go to some of the websites and say My website is better than that and they’re charging this. You follow me? So if you’re trying to get kind of a pricing range, this is one of the best ways to do research. Go to these sites, find sites similar to yours and look at their pricing! This also gives you the ability to turn around and provide an example to your customer if they say your price is way too high.
You can say you can find sites similar to mine that are selling about this much. So it give you the ability to tell a customer or tell someone who might buy your site how you even came up with the number.
You’ve got to be able to proof of the value. You’ve got to be able to proof of the value! Monthly Income Statements, Bank Statements etc. People want to see something that you can’t doctor like PayPal statements that actually show money going into it. They want proof that you’re not trying to trick them. So you’ve got to start thinking right now about the proof that you’ve got to give to people to satisfy them that this site generates income or this site generates value.
Google Analytics is one of my favorites because in Google Analytics it’s not just a matter of printing out reports and sending to people. If you have a serious buyer, now listen up. If you have a serious buyer, you could actually give them read-only access to your Google Analytics.
You’re not giving them access to change anything, you’re giving them read-only access. And that way they know this isn’t faked, these are real numbers. And that’s probably what they gonna ask. Another reason I highly suggest you have Google Analytics on any website you might ever consider to sell.
Another good one, and a lot of people don’t know about this little trick. Go to alexa.com. Now Alexa was bought by Amazon. But Alexa’s job back in the old days was to kind of measure the popularity of websites. And they kind of have their own little ranking. Now Alexa doesn’t have access to your Analytics, so it doesn’t know true traffic. But believe it or not, Alexa has some ideas.
And some of these are really good. One of the other cool things about Alexa, is if you create an account with them, you can certify your results with them. So if someone goes to Alexa, they can see the Alexa certified statistics even using Analytics. Alexa is also a good way to kind of look at any website and get some very basic information on what the world thinks about the website. You know what searches are popular that that website keeps showing up on.
Eric keeps saying he shows up on “how to rank well on google”. But is that what Alexa thinks too? And by the way it is! You can put any website in there, costs you nothing. Unless, you want to register with them and then put your website up there and it’ll ask people to kind of see the stats of your website if you’re trying to sell it.
It’s another way of saying what are similar sites selling for? Kind of like going back to the Flippa and the GoDaddy Auctions for domains and you can kind of see what things are actually selling for and you can kind of come up with your range.
Well, as always if you have any questions don’t hesitate to give me a call or shoot me an email or just contact me in someway, I’m more than happy to help. I’m Eric Spellmann; I’ll see you in cyberspace.