Welcome to WebmasterWorld Guest from 188.8.131.52
1. No hot links. None. No domain or websites listed "for sale". This thread is only about general info for someone seeking to sell a website.
2. No "votes", i.e., "X broker rocks", "It sucks" and the like. If you don't have something positive to say about a site then just say nothing.
3. Anything that looks and smells of spam or self-promotion gets nuked and badness points are assigned. :(
Okay, here's my first 3:
Based on my experience the first 2 cover a good bit of intelligent, fairly well moneyed traffic from buyers and sellers. I'm less well acquainted with NP.
Have stats ready and be prepared to verify your traffic stats, including a "test period".
[edited by: Webwork at 2:07 am (utc) on Jan. 15, 2006]
1. Domain/s and what's been sold with the domain (mailing list, Adwords lists, copyright to content and design, stock, additional domains in other TLDs, custom coding, merchant accounts, ongoing deals with advertisers, extent and length of old stats available.... )
2. How long you've had the business and what the business is about (it's important you make this clear. Very often people are so familiar with their own businesses they assume everyone else understands exactly what it's about - they don't!). Also disclose any connected businesses/websites that are NOT part of the deal.
3. Where the money comes from (if it's multiple income streams also mention the percentages: 15% ads in newsletter, 25% affiliate programs, 10% ads on site, 30% Adsense, 5% fastclick, 5% Cafepress sale of T-shirts etc)
4. Where the money goes (this is important. Cover not just hosting and advertising but allow for a fair salary for the time actually spent on it even if it's your own time)
5. Breakdown of profit for the last few years but definitely at least the last few months and show it as Net profit
6. What's involved in maintaining the site and how much of time and skill it takes. Things like writing a weekly newsletter, answering emails, fulfilling orders, handling customer support, adding content etc should all be in there.
7. Technical details: Stats (be honest - quote uniques rather than "hits", exclude bot figures... that sort of thing), # of PR8/7/6/5 pages, IBLs in Yahoo and MSN and URL mentions [google.com] in Google. Number of pages indexed in various SEs, Alexa rank (with standard disclaimer),
8. Any known problems - 302s, www/non-www duplicate problems, Google/Yahoo bans, being on SPAM blacklists... that sort of thing
9. How much you want for the site and what support/training you're offering. Other terms, like willingness to sign a non-competition agreement.
10. How the transfer will take place. For example, via escrow on payment of 100% of agreed price into a pre-agreed escrow service the WHOIS, passwords, and site (in zip format) will be transfered to the new owner within 72 hours
Though all that takes time it saves the buyer having to do research and asking questions to which you have to find answers. With half a dozen or so potential buyers each raising 20-30 questions it could take up a lot more of your time that you expect and can really drag the sale out.
Get a non-disclosure agreement [en.wikipedia.org] signed before any info is passed if confidentiality is important to you. Get other stuff ready like a copy of the final Contract of Sale to save time later.
eBay is quickest and if you're posting a one day auction there please sticky me the link ;)
Warning: Be prepared for some intensive grilling if you post a site for sale in any webmaster forum. If you haven't fiddled your figures or exaggerated traffic or tried to bluff your way - you have nothing to fear (except the crankpots and trolls). Don't underestimate what a little forensic work can throw up about your site and business. Always assume there's at least one smart member who will do the detective work and post his conclusions.
Preparing your site for sale is a vital ingredient in maximising your sale price. I've got some tips on some simple things you can do. I'll try to put that together within the next couple of days or so as it's a long weekend here and I've got stuff to catch up with in the garden.
Website-for-sale forums like Sitepoint, Jimworld, Geekvillage, etc are flea markets filled with lots of turnkey websites and other scams (not the fault of the forum). Some of the small commercial business-for-sale sites that specialize in internet businesses (names withheld since I'm dis-ing them) are also plaqued with the same "it has lots of potential!" ads. And worse yet, most of the buyers that do their shopping on these forums are bottom-fishers looking to get something for nothing.
If you are trying to sell a real business (ie: one that actually makes decent money), you need to advertise it where real buyers (ones with $$) are. If you see that a business-for-sale site is used primarily by brokers, you can usually assume that the the site attracts the right kind of serious buyers. Examples of sites used primarily by brokers are bizbuysell.com, bizquest.com, bizben.com, ebizinvestments.com, businessesforsale.com. Most charge for their ads, but you can typically ask more when you're advertising to a larger audience.
Who Is the right person?
Q: Who would be prepared to pay the most for your site?
A1: People in related niches looking to expand horizontally
A2: People already in your niche
I have a site about Green Widgets. I dominate that field, and have all the traffic there is to have. Where can I expand? Red Widgets look good. If you have a site about Red Widgets, your site about Red Widgets would be of great interest to me because the sites are related, and they can send traffic to each other thus buying your site can boost the value of my existing site as well.
Look for those sort of people to approach. Contact them privatly by email. Also post a note in the page header of your site with link to a page of details explaining your site is for sale.. chances are your best potential buyers already read your site ;)
While 6-18x seems to be what sites sell for - yes, that is true for most transactions - there are some sites that may sell for a lot more or a lot less.
1. Adsense site making $1,000 a month net for the last two years now banned from Adsense (or took a big hit with Smartpricing). Unlikely to sell for 10x
2. dmoz.org (or a big non-profit authority site in your field) comes up for sale. Chances are it will sell for more than 10 x the $0 earnings.
Every site that ever sold would sell for a higher price if the owner waited for the "right person" so it may be worth setting yourself a deadline beyond which you'll accept the highest offer.
Preparing your site for sale
1. Tidy up the site. Remove that folder of personal pics you put up so Aunty Joan in South Africa could see how your new baby looks. Run a Xenu or other bot to find broken int/ext links. Remove orphaned pages. Run a spell check on all pages again.
2. Tidy up the technology. Redirect between your www and non-www versions. Run a new validator [validator.w3.org] check on your html and CSS. Remove any SPAM blacklisting on your IP/domain. Make sure none of the SRC or hrefs point to images/files on your hard disk. Still left with the odd bug in a cgi script/shopping cart? Consider disclosing it to the buyer in your memorandum of sale (or the risk section of your business plan) before he finds out himself. Don't change your registrar or WHOIS details in this pre-sale time. Some buyers will pull out solely because your WHOIS changed!
3. Get your figures together - raw stats and compiled stats, gross earnings together with expenses (both actually incurred - like hosting, and those you haven't actually paid out for - like your own salary) and net earnings. The figures and their presentation decide over 90% of successful sales. Keep all figures ready (in zipped format if necessary as stats can be several GB on their own). Then, should your host lose your stats - or CJ lose your earnings history - you've got it all backed up.
4. Put together a business plan [en.wikipedia.org] if you don't already have one. It discloses figures above, yes, but also discloses how the site ticks, what work/skill is involved in maintaining it, and other factors that may be obvious to you but not to all potential buyers. It's an affilate site is a summary that doesn't say very much about how you get your traffic, who you send it to, what the agreement is with that merchant, how regular the payments are, what the prospects (and risks) of that relationship are etc. How detailed your business plan is would really depend on the kind of price you are expecting, the complexity of your site and its operation/profit generation, and the target buyers.
5. Extricate yourself from the site. Remove all the data/files/content/db/images etc that are not part of the sale. Make other arrangements for all the email addresses you have at that domain.
6. Do the due diligence [en.wikipedia.org] yourself. Put yourself in the buyers' shoes and check out the kind of things he'd check out. See what archive.org [archive.org] has to say about your site, run some searches along the lines of yoursitename + forum to see what the general talk is about your business in forums and blogs. Do a company check [companieshouse.gov.uk] on your company name if you're a limited company and check your/your business's credit history. Check similar URLs in other TLDs and SLDs. Run some link and linkdomain checks in various SEs to locate bad neighbourhoods. Check sites sharing your IP.
7. Create some buzz yourself. Get mentioned in news articles, blogs, feedback sites etc. It always helps when potential buyers come across content about you that gives off good vibes. Just don't get caught planting stories.
8. Don't start posting your site for sale in forums/business for sale sites till you know you'll have time to compose the fairly detailed answers that some prospective buyers require. List your site in the right places and always be polite and professional in dealing even with the rudest 16 year old brat who you know has neither the money nor interest to buy your business.
WebmasterWorld's Commercial Exchange [webmasterworld.com]
Most of the discussion has focused on "marketplace" sales - auction sites, etc. What about selling a fairly valuable site, e.g., $1M & up? These kinds of sites are more likely to be sold to a larger industry player (as opposed to an investor/speculator). Is there a threshold where using a broker makes sense? And how does one identify a broker with the right kind of knowledge and contacts, vs. one who will do some ads or mass-mailings and then take a percentage of the sale?
Some information about brokered sales can be found in the archives of DNJournal, where sales of big ticket websites are also reported, such as the sale of CreditCards.com for $2.75 million. Brokers are often identified in the reports of high value sales.
According to DNJournal DomainSystems has played a role in a number of top dollar sales. DomainSystems is run by a WebmasterWorld member. An nice example of this member's skill in analyzing sale values can be found here:
When it comes to analyzing high value websites there's a real need for a higher level of accounting analysis. The analysis of the value of high value websites is not that far removed from the analysis of brick-and-mortar businesses. However, unlike a brick-and-mortar business a great deal of value is derived from traffic and the reasons for that traffic: Quality of content, quality of the operational end of the website (software, staff, etc.), robustness of domain (type-in traffic), quality and quantity of IBLs, etc.
From what I've seen mass mailings are not the best approach to selling a website.
It's my impression that the sale of websites - just like domains - is often initiated by an inquiry from interested party.
Regarding the role of a broker, whilst so much depends on the capacity of anyone to "right price" the web entity for sale, the seller's rep also needs to have a firm grasp of the issues unique to the website and how those unique qualities drive - or may drive - reliable and/or expanding commerce. The sale of a membership site (paid/unpaid), an ecommerce site (uniqueness of "the product"), a content site (loyalty of readers and those crafting the content) are as different as the sale of a restaurant/bar, a construction company and manufacturing plant. It's one thing to have a price based upon a model. It's another to be able to negotiate around the robustness of the assumptions that underlie the pricing model. Therefore the person or company that "sets the price" may not be the same person who actually negotiates the final deal, though they might well be as the market for brokering website sales matures.
On the "sell end" the channels for finding buyers of significant properties can be found by 1) wading into the world of V.C.; 2) posting the "for sale" notice at certain domain forums - where word of mouth can get the ball rolling; 3) by highly targeted inquiries based upon real (not superficial) research of the likelihood of a match and by "right pricing".
Right pricing is the essential ingredient for finding buyers and making a sale.
I've never bought or sold a site at $1M+ but have dealt with business brokers on the sale of B&M businesses in the past.
For the higher value sites this is what I see happening: Either you are approached by a competitor or other interested party in which case you rush to appoint an accountant and lawyer to handle the valuation/legal negotiations. Or you appoint a business broker to find you a buyer.
Business brokers are typically expert in B&M and you may need to trawl through a few before you find one who knows a SERP from a DMOZ. I've very rarely been impressed with BB. They don't come across as a competent bunch. Maybe I'll do another post on how to choose business brokers but, for now, bear in mind that some want money up front and others will settle for a percentage of sale price on a no-sale-no-fee basis. It's not about what threshold a broker makes sense but at what threshold they'll take you on. They're unlikely to take on low value prospects. I'd say that under $10K is a definite no, $10-$100K possibly, $100K-$1,000K most likely (but not guaranteed), $1000K to $5000K almost all will take you on. They pay "wholesale" prices to buy large chunks of ad space on specialist business for sale websites and print press like the Financial Times / Sunday Business and business/franchise exhibitions/fairs. They use other means to attract potential buyers... but I don't think any of them would use mass mailing.
There are other routes as well. You may have contacts in the industry and could drop a few hints that a competitor may pick up on. Your accountant and banker may know of businesses in your sector looking to expand. If you have employees you may even be in a position to consider an MBO. As Webwork says, there are also VCs (and big tax breaks for VCs in the UK) and posting a "For Sale" sign on your site itself (if confidentiality is not an issue)!
>> One of my concerns is confidentiality.
That is indeed a major concern for some. You can buy legal forms online but I know where you can download a free NDA template (Webwork, can I give a link?). Bear in mind that an NDA does not guarantee information won't leak, it just creates a legal obligation. Leaks can happen so do not disclose any information that could ruin you if it became public.
Though it's a 100% informational site, I make money from advertisement and some specific affiliate sales, but the problem is that my advertisers will only place their ads on my site if the content remains the same. If a buyer changes the content, they will not advertise anymore.
I know nobody is going to work on that kind of content, this is a very specific content that requires knowledge of the subject (plus knowledge of some foreign languages), for that reason my site gets a lot of traffic, for being one of a kind.
But unfortunately I cannot do it anymore and don't know anybody who would be willing and capable to take over. What to do in this situation? Do you think anybody will buy such a specific site?
Once you openly list your site for sale you need to be ready for the copy-cats. Every Adsense site that I have sold has created new competition. Depending on the situation, ecom sites are also targets. The price of entry is just too low - rewrite each page (or just copy them)> solicit backlinks > you're in business.
If you put your site on and off the market a few times I guarantee you'll create competition. There is a cottage industry surrounding these forums and websites that sell online businesses. They watch for profitable sites and explore the commercial viability of jumping in themselves versus buying the site. If you have HTML, coding skills and are a deft hand in SEO you can replilcate most sites. I am *not* saying you can easily copy a site and make the same money on all sites, but if you can easily copy a site and make *some* money - you just need to repeat it over a hundred or so sites to make momma happy.
Currently, my site sits in its little niche with just a few competitors. If I list it for sale, that's it. I may not be able to sell it anyway, but will create myself a competition.
One of my webpages (NOT the one I want to sell, btw) is about online scam, so after doing that page for a while and dealing with scammers on a daily basis I'm kinda paranoic, don't trust anybody anymore and smell scam in every corner LOL