Selling a Website: 5-Step Framework
This 5-step framework explains how to sell a website. The steps include the valuation, must-haves, positioning your site, listing, and post-sale process.
Selling a website is a great way to obtain a large amount of funds upfront instead of collecting the monthly income. For many people, the idea of thousands of dollars a month of passive income for past work done on a website is a dream come true.
So then why sell a profitable website?
Multiple reasons exist, including the fact that since most content websites are valued at 35x to 45x the monthly earnings, that can lead to a huge one-time payout. Cash in the bank account is much more secure than trying to estimate three years or more of future earnings.
That can be a life-changing amount of money. Some of which could be invested in starting another website.
The process of selling a site can be broken down into a 5-step framework:
Check out the details of each framework along with further reading materials below:
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Content websites have a commonly used valuation process that can be used by both buyers and sellers to get an idea of what the general market value of a website would be estimated at. As a seller, understanding how this process works can help dramatically in getting a higher sales price.
As of 2022, the average market value for websites is 35x to 45x average monthly earnings.
This multiplier is known as the monthly multiple (MM). The average earnings are determined by taking the average of the last 6 months (L6M) of earnings unless a niche is seasonal, in which case the last 12 months (L12M) are used to figure out the average monthly income.
Here is the formula:
Example: if a site is earning $1,000 per month on average across the last 6-months, then the site can sell for around $35,000 to $45,000
A website with a long history, hard to acquire high-quality backlinks or heavy authority in a niche will be more likely to get the high-end of the monthly multiple thus valuation, while a relatively new site with less history or no special backlinks will be closer to the low end.
Most sites fall somewhere in between but understanding this formula and what impacts valuations can empower you to work towards moving that number towards the higher end of the scale when you decide to sell your website.
DealFeed.io is a discovery tool that aggregates sites for sale from the top brokers in the industry. As of today, a total of 1,992 websites have sold through the top brokers.
Here is a breakdown:
Using these statistics, you can understand roughly what has been the ideal multiple for different monetization structures.
To continue learning about how to value niche sites, read the following detailed guides.
6-step framework on how to value a website. Read more.
Analyze current sites for sale for reference. Use the tool!
Download: Website Portfolio Financial Model. Read more.
Framework to value starter sites (no revenue). Read more.
There are certain pieces of information that buyers expect to have access to. These aren’t optional - if you want to sell your website then these are non-negotiable.
You should have Google Analytics set up on your website anyway, and you will need to be able to provide this data. There are ways to share access so potential buyers can see the Analytics but not mess with anything else in the account.
This data is to confirm that the numbers reported are true and to look for anything that might be considered out of the ordinary.
This means all records for earnings. Display ad numbers, Amazon sales, other affiliate programs, etc.
Proving earnings is a crucial part of selling your website. Prepare those numbers for both 6 months and 12 months to meet all potential buyer demands.
Ideally, the idea to sell your website comes up 6-12 months before you move towards the actual sale. This is because the most effective practices to position your website for its maximum sales price will normally take a minimum of six months to pull off.
Here are the major tasks you need to do before a sale.
Small changes can make a big difference, especially when every extra dollar of revenue translates to $35 to $45 more on the sales price.
Look at the monetization, optimize for ads and affiliate offers, negotiate for better rates, and see what you can do to earn more money from the traffic that already exists. Even a $100 a month difference puts several thousand dollars into your pockets.
P&L stands for Profit and Loss statement, usually organized in a spreadsheet. This is your chance to show all your expenses, the investment put into the site to maintain it, and to show the net revenues.
This is a statement that investors want to see, comes across as professional, and lets you gather all the data they want to see in one place.
Try to target low-competition keywords that you can rank. This will generate new traffic thus new revenues. Try to find new products/services that you can embed into your articles to generate a new revenue stream.
Optimizing earnings and adding more traffic to maximize your total earnings is crucial to increasing website valuations.
Having a plan of attack that the new buyer can take and use to grow your site makes the deal more attractive to investors. This can also get them excited about buying the website or even make them willing to pay a higher sales multiple.
Looks matter. A good-looking site that looks good, looks professional, is going to get a better response from website buyers than one that doesn’t.
Even as simple as improving just the homepage, which includes the logo, feature images, layout, etc., can lead to more interest.
For further details on how to position your websites for sale, review the following write-ups.
Checklist of tactics to prepare your site. Read more.
Tactics to make your site into a real business. Read more.
Multiple options exist when it comes to selling your website to investors. The following four are the most common options.
Private deals happen all the time. Investors are always looking for good websites and will sometimes reach out to site owners. This might be an individual or even a private brand or media company.
If you do a deal with a private buyer make sure to use Escrow and ask yourself how much you can sell your website for to make sure the price you’re getting is a fair one.
Dealing with a private buyer means you do not need to pay broker commissions which usually runs anywhere from 5% to 20% of the sale price. This leads to more money post-sale.
Public marketplaces like Flippa are a place where a listing can get a lot of attention and often result in sales.
These get a lot of attention because of the public nature, but that extra attention and the work that goes with it separating tire kickers from serious buyers can be worth it if it leads to a higher sale offer.
Private website brokerage listings are some of the most popular ways to sell a site, and they can be incredibly effective. Private website brokers do not provide the website details (e.g., URL, earnings) openly; a buyer has to show proof of funds and the ability to close the deal to get the deals. A commission is paid once the sale is made and support is given to both buyer and seller during the process.
Popular private brokers include:
Website brokerages can also be public where the URL is revealed for all to see. In general, public brokers work well for sites under $100,000 valuations where there are many buyers available that can submit bids. Keeping the site details public leads to more bids.
Popular public brokers include:
Check out these detailed guides on where to list your site for sale:
List with The Website Flip for a quick sale. Read more.
A detailed hands-on rundown of each broker. Read more.
Getting a buyer to pull the trigger on buying your website isn’t the end of the process. There are still important steps in the post-sale process that must be done to take care of both parties in the transaction.
Here are the major steps to follow:
Escrow is 100% mandatory for every deal. This is done for everyone’s protection in a transaction with Escrow.com being the most common service used, although some brokers have their own preferences so keep that in mind.
Once the contract is signed and the money from the buyer is in the Escrow account, that’s when the transfer of the domain name and website takes place. You want multiple backup copies of your site, and the zip files to hand over to the buyer.
The buyer reviews the site, the files, and makes sure that everything is functioning properly with the new website. This can take 3-7 days on average, at which point funds should be released to the seller.
This isn’t always necessary, but it’s always a good idea to provide the support whether it’s help with some features of the site, an additional saved backup, or something else. Offering that support after such a major purchase only makes sense and can lead to your buyer being more confident in the deal.
Here are more guides to help you through the process:
Choosing the right Escrow service is key. Read more.
This is a personal decision but good times to sell includes:
When it comes to positioning a good rule of thumb is to always sell on the upside or after a long track record. The interest from buyers disappears if the traffic and revenue numbers are falling instead of stable or trending.
The selling process varies in large part based on the broker being used and the demand for sites in your niche.
Generally, it takes a few days to a week to properly prepare for the public listing, anywhere from a few days to a couple of months to get the sale, and then usually the transfer process and sale happens within a week.
This puts the total time frame anywhere from a week to several months.
Mostly, yes. For good websites with a steady income, there is a very strong demand and dozens of reputable brokers. Learning the process takes some patience and experience makes a big difference, but it’s not hard to find buyers for a good site.
Yes, website flipping is profitable when done right. There’s a high demand for profitable websites and since they sell for a large multiple of earnings, even sites with relatively modest earnings can result in sizable payouts.
Buying websites is an excellent investment if you know what to look for and understand how niche websites make money. These provide monthly cash flow and increasing the earnings makes the website as a whole worth much more when you go to sell.
Learning the skills to perform due diligence, website valuations, and then grow websites is crucial. If you develop these skills, then buying websites can be an exceptional investment.
Check out our other detailed guides:
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