Have you ever wondered how much your website was worth and how you can go about selling it? If so, then this article will cover the most important aspects of website buying and selling from my own personal experience.
Just to give a brief introduction as to how I got into this business, it all started when one of my websites exploded with traffic and started generating a few thousand dollars a month through Google AdSense. After a while, I realized there was real potential there, so I started my company to manage, create, and sell websites.
Should you sell your website?
If your website is making money, it is really up to you to determine if it’s best to keep it or try to cash out and sell it. Once you sell it, you are no longer generating revenue, so you are essentially swapping a revenue-generating asset for a lump sum of cash.
However, if you hold on to your website, you don’t really know if it will generate more or less revenue in the future. So both decisions carry a significant risk.
Learn how to determine your website’s value and the best resources to find potential buyers.© GEORGEJMCLITTLE – FOTOLIA.COM
How much is your website worth?
The first thing you’re probably wondering is how much your website is really worth. Although this can be tricky to determine, it is usually not an exact value but rather a range. Even though we all think the worth of our own websites is based on their potential, that is not true in the real world.
Website brokers (of which I’ll talk about more later in this article) rarely evaluate a website’s worth based on potential. The most important factors are the revenue and traffic it generates.
Depending on the type of website, a good general rule of thumb is 24-36x the monthly revenue. So if your website makes $1,000 per month, a good range for its value would be $24,000 to $36,000.
Now you might be wondering why such a big range in valuation. The reason depends largely on the type of website. Subscription-based websites, whether they’re software-as-a-service (SaaS) offerings or any recurring membership-based business models, tend to fetch higher valuations because of their recurring payments.
In contrast, affiliate and content-based websites, which are largely dependent on organic traffic from search engines and social media, tend to go for lower valuations.
There are several other things that go into website valuation such as the age of the website, revenue trend, traffic trend, sources of traffic, and so on.
How can you sell your website?
Even though you can look for potential investors and website buyers anywhere, the safest way to sell your website is through a website broker. The three website brokers I’ve used are FE International, Empire Flippers, and Flippa.
The biggest difference between those three brokers is the seriousness and size of the website. If your website is worth under $10,000, Flippa would be a good marketplace to sell it on. For websites valued above $10,000 and under $100,000, Empire Flippers becomes the best option. And for the big authority websites that are worth over $100,000, FE International is the most obvious choice to go with.
The most reputable website broker is FE International. We have sold a mid-6-figure website through this company and the experience could not have been better. They handle all the legal documentation, marketing of your website sale, and facilitate all interaction with potential buyers.
Although their commission fees vary, they are usually around 15% for large websites. But the best part is that you usually do not pay anything upfront to list your website on their marketplace.
Empire Flippers is similar to FE International in that the company manages a lot of the things, so it’s very hands-off for the seller. However, I found that the process was not as smooth or thorough as FE International.
Empire Flippers also charges an upfront listing fee of $297 for first-time sellers and $97 for repeat sellers. You can expect to pay around 15-20% commission if your website sells.
Flippa is the only marketplace on this list that’s more of an auction rather than a straight-up sale. You can try to sell your website for any amount of money you want, but there is no guarantee that it will sell. The company also does not really advise you on anything the way FE International and Empire Flippers do.
As you can probably imagine, since Flippa is such a free-for-all marketplace similar to eBay, there is a bigger risk of scam. The websites listed on sale are not really vetted and all due diligence falls on the buyer. That’s why I only suggest using Flippa if your website is under $10,000 in value.