How to Sell Your Website

by JasonYelowitz on June 21, 2011 · 50 comments

In the mid-2000’s, I was killing it, and literally making millions per year as an affiliate marketer. I was generating real estate leads, and from the incredible climbing traffic on my websites, I felt with certainty that America was in a housing bubble. I wanted to sell my company while I could. The problem is I had no idea how to do that. Eventually the housing bubble popped and you can guess the rest of the story.

Fast forward to 2009. I discovered Internet-only website brokers and I bought and sold a few sites. Then I became a broker myself and closed over twenty deals my first year with about a 75% close rate. If you think selling your website(s) is a possibility at any point in the future, here is what you need to do today:

Think About Transferability: If you run a site that is dependent on you personally, it will be hard to sell. Personal blogs and sites that sell products you personally create come to mind as being dependent on the owner. Also, sites that do not feel like they will be around in five years are hard to sell, so if you have the word “Obama” or the name of some technology which is likely to become outdated in your URL, you should consider 301’ing the traffic to a new URL at least a year before the sale. Affiliate sites, Adsense sites, forums and drop ship ecommerce sites are the easiest to sell, as long as the products and content are “generally acceptable.” (Not porn, guns, drugs or anything else that’s fun!)

Keep Good Records: It’s a buyer’s market and buyers are in no mood to take your word on anything. Hold on to proof of payments and proof of expenses and enter them into Quickbooks or at least onto a spreadsheet in the format of a profit and loss statement. Getting an offer is one thing; getting the deal to close is another. Make sure to keep the dates and amounts accurate. Buyer’s get really nervous if they feel you are guestimating the numbers or the dates.

Keep Good Web Stats: Buyers pretty much universally want to see Google Analytics, so if it’s not already installed on your site it makes sense to do it now rather than waiting until you are ready to sell. The more history, the better.

Be Realistic: Just because LinkedIn is worth 36 times sales doesn’t mean your site is. The vast majority of mom and pop websites sell for a multiple of the owner’s income. Currently, that multiple is typically in the range of 2.5x – 3x what you made in the previous 12 months as long as the site has at least a 3 year track record. If income is declining or if the site is less than 3 years old, the multiple goes down. If income is increasing, you may hit the top end of the multiple scale, but probably won’t go much above it.

Prep it for Sale: Consider anything that would make you hesitant to buy your site if the roles were reversed, and try to fix that before you go to market. If the site is dependent on a content writer you have, make sure he’ll stick around after the sale. If you sell products, make sure your vendors are willing to work with a new owner. Buyers don’t like surprises and will exit a deal quickly if something unexpected and bad pops up.

If you can get through the criteria above and your expectations are reasonable, the odds of selling your site are pretty high. To get a sense of the value of your website, check out my website calculator here.

Jason  Yelowitz is a leading Internet business broker and author of The Bathrobe Millionaire .

full disclosure

About the author...

– who has written 1 posts on ShoeMoney.com.

Jason Yelowitz is a leading Internet business broker and author of The Bathrobe Millionaire.


Justin recommends you check out these amazing posts:

  1. IMG_0247 The Pursuit Of Happyness
  2. twitterrich-20091020-085652 How I made 15,000.00 In 1 Month Just By Tweeting
  3. obama3-1 Obama’s whitehouse.gov Squeeze Pages

{ 47 comments }

1 Chris

I recently sold my first e-commerce Website and I must say that it pays to be organized. The transaction was so smooth that we didn’t even need to speak on the phone to close the deal. From initial request, to sold within 1 month. Gotta love that! Wire transfers FTW!!! =]

2 DylanC at CashJournals.com

That is good to hear. Buying and selling sites can be really profitable, especially those monetized by Adsense.

3 M.K. Safi

Hmmm, I was told most sites –even established ones– sell for 1x annual income. Also, looking at Flippa, this seems to be true…

I have a site making $700/month reliably from AdSense alone. I couldn’t find a buyer for $20,000. That’s why I’d rather keep it.

4 Dentedmind

Safi… Shoe is right on the money…. 2.5x-3x is EXACTLY what a website will sell for (especially an adsense site) In my experience, avoid Flippa and any other “website for sale” listing website like the plague. And for God’s sake, forget ebay.. Find a broker. Nuff sad.

5 M.K. Safi

Thanks a lot for the advice and email — will reply back to your email.

6 Jon

Has it made at least $700 every month for the past 2 years?

7 M.K. Safi

Not for the past 2 years. It was on a different business model. I switched to AdSense more recently, and it’s been making $700+ for the past 6 months.

8 Todd

If it is making easy money for you, why sell?

9 M.K. Safi

When I was trying to sell I needed the cash. Now I don’t need it anymore but I still would like to know where to sell the site for 2.5x-3.0x the annual revenue, just in case.

10 Neony

Good article and good work.

11 Cristian Mezei

If you have a business (online or offline), behind the website, and a solid background, the multiplier is usually 5-7X depending on the niche. I’ve sold businesses up to and around that figure.

12 Daniel Scocco

If you are look to sell your AdSense earning website you can get in touch with me. For established sites I sure am willing to pay above what you’ll get on Flippa.

13 Jason Yelowitz

Hey Guys,
I’m the one who wrote the article. The multiples on flippa tend to be significantly lower than what you will get listing with a broker. The reason is that on flippa, the good sites are mixed in with plenty of subpar ones so buyers tend to make offers in line with the subpar sites. Also, flippa requires virtually nothing in the way of pre-documentation whereas brokers like me will require P&L statements, better descriptions, calls with buyers, etc. So the market really is striated. For sites that are only 12-18 months old, flippa is the best bet. For older sites with more reliable earnings, talk to a broker.

14 Peter St Onge

I’m amazed how many people go it alone in buying (or selling) online businesses, no broker no accountant no lawyer.

It reminds me of the real-world markets in expat small businesses (eg bars in Thailand). Which makes me wonder what those two markets have in common.

15 Dave

Is the income multiplier typically based on net profit or gross sales?

16 fas

Site selling = Flippa :)

17 Home Solar Panels

We need more blogs like yours. Great post, I’ve shared it on my facebook profile.

18 Frank

This is a great one for me to file away for the future.

I run quite a few niche sites and some inevitable end up being much more or less successful than the others.

I’m getting to the point where I’ll need to decide how and when to sell some of these sites. This article came up at just the right time for me.

19 Bil Smith

I’ve always wanted to get into creating content sites, but I’ve never really put much thought into an endgame strategy. I guess you could go on the idea that you want to run them forever but really considering an exit strategy at the start would help streamline the process. Good tips, glad I read this.

20 How to meet women

Great stuff, thanks for the awesome article.
Keep up the good work!

21 Courtney

Thanks for the tips. I love Analytics, so I am glad that the tool I use to understand my visitors now will help me in the future when it’s time to sell.

22 Dentedmind

Sorry Jason… I didn’t mean to say Shoe in my reply to MK Safi…hence the name Dentedmind. Btw.. Thank you for your thoughts back in Dec 2010. You gave this dented mind a little peace during the sale of our site. I still have your contact info and you will be the first person i call on our next sale…Thanks again!!

23 TECNIFIBRE SQUASH STRING

I’m not so sure about how to set up squash strings. I’m using prince squash strings, could you give me some advice on string tension?

24 Kathy (who's learning how to decorate a cake these days!)

Hi Jason,
I’ve been selling on line for about 4 years and have several sites – affililate sites AND a drop-ship site where some fairly large hard goods are shipped via freight (in the US). The drop-ship ecommerce site was only my 2nd site, and I learned a great deal creating it.

On the subject of selling a site, this is of GREAT interest to me – primarily for my drop-ship site (I’m not identifying that one here because I’m not really certain if trying to sell it is the way to go).

Because I’m becoming more inclined to run affiliate sales sites, the idea of selling the drop ship site is getting more appealing. Reason: When the phone rings (which it does – especially in certain seasons when folks buy these items more often) and I spend up to 1/2 hour with a potential customer, I feel like I’m taking time away from developing different or more diverse income streams.

In 2010 (my 3rd year) I had actually sold almost 195k worth of product – but because it is a drop-ship arrangement, my net profit was just under 10%. Not bad, to be sure, and showing steady growth (>30% over 2009). But, it’s hard for me to think of selling it for 2.5 times $17,000 since I put so much effort into it to begin with (I know…I know… can’t think about that! :) )

So, in order to monetize the site further, I added Amazon, AdSense, and a couple of info products (ala Clickbank). Those have certainly paid off – but since it’s only been a while, there isn’t a ton of money pouring in from THOSE additions yet (a couple hundred in 2010). But is IS paying off some already, so that’s promising.

I do well in organic search, and am getting approx 150 unique visitors/day to the site,

So, I looked on Flippa and didn’t really see a lot of activity around sites like mine. I honestly think that for the right person – ESPECIALLY someone who is handy, can talk a bit of construction, and might even have room for stocking a few of these items, it would be awesome.

I talked with the hosting company about transferring it to a new owner, and they said all that was necessary was a form. They were NOT at all helpful. The new owner would also have to have a merchant account and be able to talk with customers – or at least return calls. Average sale (based on my stats) is $700 – $800 with some up as low as $300 and up to about $3,000 (or more if a large unit is sold).

In a case such as this, I would be a little nervous trying Flippa since I would want to be SURE I was handling everything perfectly. In your opinion, would THIS be the type of transaction best handled by a broker?

If I do try to sell that site, I do NOT want to mess it up, and I really want to get it into the right person’s hands. (The company, who knows me VERY well since I’m probably their top dropshipper or at least in the top few – would also appreciate it!).

I guess you can see I’m very nervous about it. Because if I do make the decision to sell, I can’t back out.

Any further thoughts on something like this? And… sorry for being so longwinded. It’s just that this is very important to me.

Thanks Jason!
Kathy

25 Jason Yelowitz

Hi Kathy,

Sorry for the delay. Since your post is on Shoemoney, I just stumbled upon it. First the bad news…no matter how much sweat-equity you’ve poured in, the market it pretty brutal and buyers tend to be very bottom-line focused. Therefore, they’re likely to value your site as a multiple of your income.

Now the decent news…there is a good market for dropship ecommerce sites. Many buyers are interested in dipping their toe in the water with something that a “non-techie” can understand and dropship ecommerce often fills that need. Since your margins are not that high, I would expect buyers to be a bit apprehensive unless they become convinced that the site really is growing and that the addition of Adsense, etc. will ultimately help the bottom line rather than cannibalize it.

Regarding the flippa question…in my experience, sites listed with brokers usually sell for more, and for enough to more than cover the broker’s commission. (Which is typically 10%, but is sometimes subject to a minimum fee.) In your case, I would suggest talking to a broker or two. For me personally, the site is a little too small to reach my criteria (meaning my minimum fee would eat up too much of your net proceeds to be worth it) but I do know other good brokers who may be willing to take it on. Please feel free to drop me a line via my website that is named in the article and I’ll forward your request to an appropriate broker.

Anyway, I understand the nervousness. A good broker should be able to guide you through the whole process and also provide you with the correct paperwork (contracts, letter of intent, etc.) so that you don’t need to spend much if anything in legal fees.

Hope this helps!

-Jason

26 Kathy (who's learning how to decorate a cake these days!)

Hi again Jason,
Your reply is VERY much appreciated! And, yes, it helps a great deal. I did go over to your site and popped in the info – I was pleasantly surprised at the calculator’s indicators and have since heard from someone there (hopefully that’s someone associated with you).

You gave me good information, and also realistic expectations. The Adsense is paying a little, as are the Amazon links – but not enough to make a real difference in the bottom line yet.

I’ll take this one day at a time, and for now will enjoy the income that it brings while I also learn more and more about the marketing aspects of not only THAT site, but the other sites I have.

And, Yeah… I know that the hard truth of the matter is that I could work 5,000 hours on a site and it’s still only worth what a buyer will pay. I’m ok with all the truth and facts. I’m growing in the business and industry day by day, and the sweat equity from that site will serve to lessen my learning curve on other ones!

Jason, thank you, once again, for taking the time out to respond to me. You have my gratitude and respect.

Cheers!
Kathy :)

27 business meeting

It actually depends on the scope and vision of the website, and growth in earnings month on month.

28 day trading courses

You made some terrific ideas there. I did a explore on the point and found the majority of people may consent with your blog.

29 bggotvach

will try it but do not know if there will be a result

30 Pilotgardens

Good blog. Most people don’t think about the saleability of their site until they are ready to sell it and your points make sense. Good to see your thoughts on the worth of a site also as most people seem to open their mouths to wide when trying to sell.

31 tory

there is a great website for all of this\

http://bidstornado.com/

32 Rodney

websites go for huge amounts of money. even some that are relatively small because of the potential..

33 Usman

I am looking to sell an online business of mine http://www.techtwurl.com. It makes steady income (I’ve made an average $1.5k per month steadily) yet I cannot expand due to lack of capital so I need to sell it before I have to shut it down. My initial price to sell at is at least $20k but I tried to sell on Flippa and a business of this magnitude it is hard to sell on a website like Flippa that has a saturated market.

I am not sure how to sell this business because unlike a small home business it can be operated anywhere, and it is a website at the same time. If someone is a broker or knows how to sell this website, or is even interested, send an email to webmaster at techtwurl.com. Thanks

34 Internet Marketer from London

You can also list your website on a number of sites and portals such as Sitepoint marketplace. Many websites have sold on such market places for tens of thousands.

35 carno

Outstanding – I ought to certainly pronounce, impressed with your site. I had no difficulty navigating by indicates all the tabs also as linked info ended up being genuinely simple to accomplish to accessibility. I lately discovered what I hoped for ahead of you understand it whatsoever.

36 Jock

At the end of the day the most savvy buyers are just looking for an ROI. They will pay less money for something with a higher risk and more for something with a lower risk. Justin I read your book mate, great stuff really great story. I’d say the biggest factor in the price a site get’s is the way that it is presented when selling. The sales document can really make or break a good site. That is why you see massive professional sale documents for IPO’s to give the buyer all the information they need to make the best decision.

37 Yvonne

Great info…..Will help anyone who is looking to sell a website

38 John Anderson

Exceptionally challenging appreciate it, I do think your current visitors could perhaps want considerably more stories like that carry on the excellent work.

39 Cosmetic Surgeons Austin

Good article. Odd as it may seem, I have never even considered using a broker. I’ve used flippa on several sales over the years. I’ll probably keep using them for low end sites, but the next time I have a large net revenue site I will definitely contact a broker. I currently have a ecommerce site that is still being developed, but my exit strategy is selling it in a year.

40 Vince S

A very informative post Jason but in my experience I found that dealing with a professional business broker can really pay off. When I sold my last site I paid them ten percent on the sale but they already had a large pool of established buyers who wanted a site with a proven track record of traffic and earnings. I agree strongly about stats but would also consider an open source stats pacakage like open web analytics if you’re not happen putting google code all over your site:)

41 Michael Anderson

Surprisingly revealing appreciate it, I’m sure your current readers could quite possibly want even more writing such as this keep up the great effort.

42 Online Video Directory

Great Article but I just hate when someone says re realistic:( My idea is the best thing since sliced bread! Fo real! And the future is HUGE!

43 Fiko

Waw This Is So Impressive Man, i would Give It 50K

44 Iram

thanx for advising me

45 maria

i am a web page disnger i want to sale my web site.. plz let me know how i can sale it..

46 Alex

Related to this great article I have developed a website worth estimation algorithm that you can try here:
http://www.webuka.com
Keep up the good work!

47 Daniel Adetunji

Cool post bro!

I love this

Daniel

Previous post:

Next post: