Lately it seems at least once a day someone emails or contacts us saying they just received an offer on their website and wonder if they should sell it or not.
Now many people will tell you its a simple as adding up its annual revenue and multiplying it by an amount. But I throw that to the wind. The asset has a value and depending on which side you are on it has quite a different value.
Let me explain.
On the buying end.
If I am buying something then I have a set price that its worth to me. I wont pay a penny more during the first negotiation. Usually I will pay less. I don’t care what people think the asset is worth to them.
The most money I ever paid for a domain was for Fighters.com. The domain broker originally was asking $250,000. I ended up paying $60,000 for it.(I had 75,000 in mind).
But more recently I purchased the domain freeseoreport.com for $250. The owner originally as asking $6500 for it. (I had $1200 in mind).
Linkcontrol.com was owned by buydomains.com and wanted $5200 for it. I negotiated it down to $1,000
Now some people will look at some of these purchases and say that I got ripped off. Some might say that I got a good deal. The bottom line is that I got it for what I planned to buy it for. The value I had placed on it (or less). and thats what this is all about.
Domains are pretty easy because you can do all the research yourself. Complete websites are totally different ballgame. Until you can get actual figures and stats from the seller its pretty much impossible to put a valuation on it.
On the selling end
On the selling side I look at things a little bit differently then most people do. I don’t really care about cash. In fact I view cash as a liability. I am not good investing money and I know that if I just put money away in a 2% savings account I am losing at least 6% on my money annually because the U.S. dollar is depreciating at a rate of 8% a year and I don’t see inflation going down anytime soon.
So now we go back to the original question – Should you sell your website for X amount?
I remember the first time I got offered a million dollars for a website. I could not believe it and wanted to sell it right away. But then after talking to a wealthy friend he said to me, “Why 1 million dollars?”. I had a hard time answering it other then saying, “But its a million dollars!”. That is not a good reason.
My answer is filled with questions. But it boils down to a simple answer.
Do you have an asset that is appreciating at the rate of the one you want to sell? If yes then sell it right away and focus on the up and coming asset. For those who do not know what an asset is it could be anything that is making you money. It could be another website, or it could be farmland. It could be a local business.
The point is don’t sell just to get money. Having money with no plan other then to say you are now a millionaire is stupid.
I know what your thinking…. Why did I sell AuctionAds.com 3 years ago when it was clearly a rising asset.
That is a good point. The company was only 4 months old and revenue was climbing at an unbelievable rate but there was 3 reasons why I sold that property.
- I was way over my head. At the time my company consisted of 2 employees. We were doing all marketing and all technical work. Nobody was doing customer service.
- We were floating millions of dollars a month and paying people all over the world. We now had to worry about things like currency hedging and shit like that. Shit I knew nothing about.
- The whole company was a house of cards that was riding on one card. eBay. If eBay were to ever shut down its affiliate program then AuctionAds was f’d. While I had no idea at the time that eBay would close down their affiliate program less than a year later… I didn’t like being so reliant on one company.
Recently we were offered over $250,000 for a website that is making less than 1k a month. I turned it down. While the site does not have a run rate of 10% of that valuation, it is growing like crazy and its less than 1 month old. I know a lot of people would have jumped in a minute to take that cash but this asset is appreciating much faster than what cash would.
So that was a long drawn out answer to a simple question. Hopefully it makes sense 
About the author...
Jeremy Schoemaker – who has written 2424 posts on ShoeMoney.com.
Hi I am Jeremy Schoemaker and ShoeMoney.com is my blog. 99% of the post here are done by me but you will see others occasionally make guest posts. This blog is fun to write but for my day job I run several online companies.
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{ 46 comments… read them below or add one }
Thank you so much for this post. Thinking through the valuation and considering your other assets is a great idea that I’ll put into practice in the future…Thx Again.
Yes its good to market your website as it increases traffic.
Selling a site can be a headache all in its self, but it comes down to whether you really want to move on or you just in need of money. Choose wisly..
“Black Seo Guy “Signing Off”
Hi
you made a very good point. A domain/website is worth what you or sombody think it is worth, not what it is making now.
i also have alitte projekt that ist making just a few $ a month. everyone is asking me for that amount an offers me about 10-times as much. i am not selling since i know with handfull houres of work i can make up to 10times – a month. i just don’t have the time….
If I ever get offered a million bucks for anything I’m sooo going to remember this post. Someday, maybe
If I ever get that offer, most probably I will just fell for the temptation. ^^
Questions to Jeremy: What value do you think your site possess to be able to get that 1 million offer? Was it the revenue? Or the hype? Or any other related factors?
Thanks
I think domain names were investment opportunity the century… you buy them for a couple of buck and sell them for thousands.
Wow. Can you share with us the recent website/business that you were offered $250K for??
I can’t believe someone tried to sell you a domain that makes less than 1k for 250k. They must’ve been smoking some of Charlie Sheen’s crack.
You misread the sentence. Someone was offering him 250K for a website making less than 1K a month.
So true. Build assets… not money… if you want to be rich.
This post is just in time. I want to sell my website (http://www.entrepreneurshipsecret.com). But i’ll want a buyer that’ll keep the dream. (Small business/Entrepreneurship training)
Ebay closed its affiliate program? Then who has been making those direct deposits from Ebay into my bank account??
They closed their CJ program and took everything in-house.
That’s the key, I’m trying to find a reasonable buyer who wants to make a good return on their cash investment. The asset might be producing $3k or $5k a month in profits, but I see that as a downside.
Case in point, my main site listed above. I don’t have the patience to acquire, launch, and deal with every client that comes through the door. I invested a ton on the domain and not enough on the business. My heart is not into it, and it would be nice to see the business flourish.
Anyone interested should contact me!
I like your thought process on this Jeremy. I’ve been operating in pretty much the same way, though I’m more of a buyer these days than a seller. If you come across anyone wanting to sell a forum, send them my way.
Hi Peter. I wanted to contact you on your website but your contact form isn’t loading. I have 2 websites (1 Forum and a Blog) I wish to sell. Do contact me.
I’ve been in the same boat before with some of the sites I’ve built, and I always shied away from selling because it seemed like too much hassle to deal with. Maybe 1 million is too low a bar. There’s gotta be a number where you just take the money. I don’t know what it is, 5 million? It is funny how things change when your perspective is not just about the money, throws people off too.
Guy kawasaki always said 3 times to sell a site:
Too Early
Just right
Too Late
I don’t put a price on things like… off if I had 5 million then I would sell it.
You have to take a TON of things into consideration.
Short term vs long term cap gains… Cashout value vs annual income etc.
The buyout number is always never really close to what you actually get… and its all somewhat relative. Not to mention the stress of a deal that is just probably someone fishing.
in other words, if your broke sell and if your rich then you worry about assents.
umm… not really. If your always selling then your never building anything.
Unless you can use the money to pay off debt that is losing you more money then your asset is appreciating. Make sense?
So how were you able to negotiate to the lower price for the domains you bought?
yes of course
Your response didn’t answer my question. I was asking about the steps you took to negotiate the lower price you bought for the domains. How did you do it?
No don’t unless your getting millions.
I am also want to sell my website but right now i could not find a best place for selling.
Shoe tips on bargaining when buying domain names could be helpful.
A very interesting post. I have sold other businesses over the years ( 5 restaurants ), but I don’t think anyone would give me much for any of my websites. $10 – $15 a month probabbly translates into a price tag of $50.00 if I’m lucky. Still, I’ll persevere, as so many of you obviously make a ton of money online.
I would never sell a rising website unless I had great financial difficulties.
What happen to the old design of this site..I want to do soem advertising on this site Icam here haven’t been here in a long time..and seen the new design. I think its REALLY bad why the change? I still want to do some advertising with you guys but are you guys keeping this design?
But mostly people would take the same action with you . Because that the first time to see that huge amount of money and sold it without consider much .
That why we also learn from a lesson and cause you grow faster.
Most of the website owner do not know that how much their website and domain able cost in the market.
“I would never sell a rising website unless I had great financial difficulties.”
I agree on that.
I’ve only recently started to monetize my site. It’s starting to generate a little money, but I have no idea how to value the site.
Is there any exchange where people buy and sell their websites ?
A website is hosted on at least one web server, accessible via a network such as the internet or a private local area network through an internet address known as a uniform resource locator. All publicly accessible websites collectively constitute the world wide web. Thanks for sharing.
hi inquiring reference my web/domain how much money can i sell for thanks for reply jack
Shoe, interesting post. As you know, I broker websites, so I may be a little biased. I like the thought about selling only if you have better use of the cash. But the other reason is diversification. If you’re outside net worth is $100k and someone offers you $900k for your website, then the website is 90% of your total portfolio. That’s not great diversification. I’ve seen countless websites that were great and then plummeted due to something totally unforeseen by the owner. In those cases, the owners would have done much better to sell the $900k asset, but a different site for $400k and bank the rest for a rainy day.
Best tip: “But more recently I purchased the domain freeseoreport.com for $250. The owner originally as asking $6500 for it. (I had $1200 in mind).”
But sometimes you can loose money not selling your website on time. You give good reason for auction ads. If you can not handle it then its better to sell it. By the way I am also selling my website- http://moneyvisitor.com for $50000. Hey shoe look at mine website. Tell me is it the right price or you will make less bid for it.
If you are not too greedy, selling your website is not so hard after all, it all depends on the right place, the right time…and the right buyer, I might add. As for buying a website, well, I guess it’s the same story.
Very interesting and useful article,thanks for sharing.:)
Sometimes it might be better to take the money. Really depends on the situation. However i agree that if you don’t have a better place to put your money than that it is probably better to hold on. However look at Mark Cuban 4 billion or whatever for broadcast.com he didn’t have anything to put the money into, however that was one sweet deal. And if he decided to hold onto the site he would have lost a whole lotta money !
Shoe, awesome post. I have many sites I want to sell and wasn’t quite sure how to go about it. Thanks for this info.
Check out Flippa.com for buying and selling websites. I have had some luck there.
Free Traffic X is what worked for me. I have read tons of articles and forums and listened to hours of videos. None of those “Gurus” told me about the free Google tool to find targeted traffic. This cool technique is how I find targeted traffic easily.
Interesting philosophy on money. How would you value a site that was making $500 per month and little chance of growth because of the niche.
Don