In this writeup, I will be sharing my insights on successfully selling 39 content website assets from January 2018 to date. I use these insights to ensure I always have an exit strategy when I start due diligence on buying a website (regardless of size).
I’ve been buying, growing, and selling sites since 2008. On Flippa, I’ve done 135 transactions on both the buy and sell-side. Privately, I’ve done 76 transactions via Escrow, Paypal, or other third-party brokerages.
This report is a conglomeration of my findings of selling website assets, either my own that I’ve grown and sold, quick flips, or as a broker.
I cover the following in this guide:
- High-level insights,
- Types of deal structures I have done as both a seller and a broker,
- Common reasons why sellers sell,
- Actionable tips to position your site for sale.
💰 Sale Insights from 39 Transactions
Here are the highlights of the closed deals. These are all averages:
- Final Sale Multiple: 25 times (i.e., 25X)
- Listing to Close Time: 7.12 days
- Listing to Offer Acceptance Time: 2.58 days
- AHREFs Domain Rating: 9
- AHREFs URL Rating: 9.8
- Referring Domains: 132
- Backlinks: 3,025
- Final Sale Price to List Price Ratio: 0.910 (expect a 9% reduction after listing due to buyer negotiations and/or adjustments)
I did not run any detailed data analytics since my sample size is too small. However, we can still draw high-level insights from the data.
My thoughts are valid for the sub-$50K range of content sites. Anything higher I do not get involved in usually and is left for brokerages like Empire Flippers, Investors.club, FE International, etc.
If you would like access to a Google Sheet with a breakdown of all my deals, you may request access below. It's invite-only:
Let’s get into the insights.
Most common monetization sources?
Answer: Amazon Associates
Of all the deals that I have come across, more than 80% are Amazon Associates. Of the 39 deals, I’ve closed, 30 of them were Amazon Associates as a primary source of revenue.
Why is this? It’s historically been easy to monetize with Amazon. Slap on a few Amazon links and send traffic. They are the king of conversion rates so you are bound to make money.
This may not be the case post-April 2020 commission cuts though. We will see as the market evolves.
Highest multiples by monetization source?
Answer: not Amazon Associates
Amazon Associate focused sites had an average sale multiple of 24x. Whereas, Display Ad sites and other private affiliate focused sites had larger multiples upwards of 30x.
Niches that sell quick?
Answer: Kitchen, Home, Sports, Technology, Automotive, Pet
Most consumer goods focused niches sell quick. Most of these niches are also monetized via Amazon Associates, to begin with.
Going forward with the major Amazon changes, we may potentially see a shift where other non-traditional niches take the helm.
9% Price Reduction
Buyers, unless it’s a very clear winner, will always want to negotiate down.
On average, from the initial listing price, around 9% of the sale price was reduced through either buyer negotiations or adjustments since it may have been overpriced, to begin with.
👀 Insights into My Exit Strategies
There are four exit strategies for deals I’ve been involved with:
- Buy, Grow, and Flip (BGF)
- Buy, Grow, and Partner (BGP)
- Buy and Flip (BF)
- Broker (BR)
Each of these has different characteristics and benefits. But first, let’s draw analogies to the real estate industry which most people are familiar with.
Analogies to the Real Estate Industry
I do own a small portfolio of single and multi-family properties that I've acquired through retail channels (e.g., MLS) and wholesale. I also participate in apartment syndications as a passive investor.
The website investing world is in its infancy compared to real estate. However, many similarities can be drawn from it.
These are the common transactions in real estate we can draw analogies from:
- Wholesale to Wholesale: wholesalers buy properties pennies on the dollar, then sell to another wholesaler for pennies on the dollar and make a small risk-free spread
- Wholesale to Retail Flippers: wholesalers can sell to “fixer-upper” investors who fix-up and sell to retail consumers through the MLS
- Wholesale to Direct Retail: wholesalers buy undervalued assets, fix-up themselves, and then sell to retail customers through the MLS
- Wholesale to Rental: wholesalers buy, fix-up, and then rent out long-term. This is value-investing.
There may be variations of these transactions but for purposes of comparing to website investing, these are sufficient.
✔️ Buy, Grow, and Flip Strategy (a.k.a. BGF)
- Analogy: Wholesale to Retail
- Pros: buy low and sell high through value-add, high-upside, the horizon is 12-24 months
- Cons: low-value assets can be risky and volatile
This is by far my favorite but also the one I do the least amount of deals on.
Why? Well, these are deals where I am tying up my own funds for a long period of time. I only tie up my funds if and only if I truly believe in the website.
This means it has to be an authority site (or expired domain) with excellent backlinks, the potential for multiple monetization opportunities, multiple traffic sources, unpenalized, among a plethora of other factors.
I also only get involved in these deals if I see immediate Quick Wins. If I am not able to 10X revenue within 3-6 months, I do not buy that site to hold long-term.
All of my active case studies utilize the BGF principle.
✔️ Buy, Grow, and Partner Strategy (a.k.a. BGP)
- Analogy: Wholesale to Rental
- Pros: buy low and sell high through value-add, high-upside, continued upside long-term
- Cons: still holding equity in the asset after liquidating to partner
This is a continuation of the BGF strategy above. Once a site has been stabilized, I either flip (i.e., BGF) or I find a partner.
The BGP structure for me is done if and only if I know there is still more growth potential, but I would like to cash out as a majority shareholder to diversify.
In BGP, I usually retain around 15-30% of the deal as seller-financing. The investor purchases the remaining equity.
It’s on the investor if they would like for me to continue managing the asset (for a fixed monthly fee), do it themselves, or hire another operator.
✔️ Buy and Flip Strategy (a.k.a. BF)
Cash is King. In the website investing world, this is even more true.
In real estate, even if you have cash, transactions can take 30+ days for closing.
For web assets, I can source a deal and find a buyer all within 24-48 hours of each other. Then as stated in the highlights, it can take 7 days to fully close.
There are two main reasons for cash being important:
- Quick close: Sometimes as quick as 24-hours to transfer assets, earnings screenshots, Google Analytics, website transfer, etc.
- Negotiating power: Having cash on hand gives me negotiating power where I can push the seller to reduce multiple with the promise of quick funding and no inspection period.
✔️ Broker (a.k.a. BR)
As a broker, I am representing the seller and finding a buyer. I receive a commission for a successful transaction.
Most of my deal-flow is brokered. I vet at least 25-30 deals a week and maybe (just maybe if lucky) one of them I represent to buyers (you) through this newsletter.
Why only one? Most websites do not pass my critical due diligence. They either use PBNs, have bad content that cannot be fixed, recently penalized algorithmically or manually, or are not in an easily monetized niche.
My quality control standards are strict as they should be if I am fully representing the deal. However, there may be a market for deals that do not pass my standards fully.
💡 Why People Sell Sites and Strategies I Use To Close
“Why do people sell income-producing sites?” This is a question that goes around in the industry. Empire Flippers did a podcast on this topic in November 2018.
While vetting deals I get to chat with many website creators. Some are just getting started and are looking to sell their first site. Others are experienced operators with portfolios. It’s all across the board.
Below I discuss the top reasons people sell sites and then partner that with the best/worst strategy deal structures (from above) that I deploy.
Creativity is key in this ever-growing industry.
Tip:For every website I buy (for a flip, short term, long-term hold), I have a preconceived best- and worst-case exit strategy. I use a mindset of an investor not a creator/hobbyist/enthusiast.
✔️ Seller needs funds…
- Best Strategy: Buy and Flip (BF), Buy Grow Flip (BGF)
- Worst Strategy: Broker (BR)
This is the most common reason. The goal of the buyer/broker is to understand the deeper reasoning though. Essentially, are they hiding something through an excuse or it’s legit.
I’ve bought (and brokered) sites where the seller truly had an emergency (e.g., lost their job, family medical emergencies, etc). Of course, I am not physically verifying this but it’s easy to tell who is honest and upfront, versus those that just want to rush through things.
These deals can be had for low multiples, and then either a BF or BGF strategy can take place. Brokering is out of the question here. The seller values a quick close with the least amount of headaches.
✔️ Website is growing fast…
- Best Strategy: All
- Worst Strategy: Buy and Flip
Out of all the deals I’ve sold the ones that received the highest multiple and quickest liquidity were the ones on a high-growth curve.
The sellers also know this and are happy to wait for the right offer at the highest multiple possible.
The buyers are also excited to buy since they pay based on the last 6-month (L6M) value which averages out the revenue over lower-earning months in the past. Thus there is an immediate upside if the growth continues or even flattens at current revenues.
Here is a site I personally did the Buy, Grow, and Flip (BGF) strategy in 2019. Here was the revenue curve for this site when I sold:
This site was earning $1,566 in March 2019. However, the Last 6-Month (L6M) average revenue was $651. The typical multiple for a content site like this in 2019 was around 30x (i.e., 30 times monthly average revenue).
At 30x, I should have received no more than $19,530.
However, due to the growth trajectory in earnings, traffic, and the quality of the site, the site sold for $25,500 on Flippa. That’s a 39X multiple on L6M and a 16X multiple on last month’s earnings.
This is also due to the auction-nature of Flippa which drives up the price.
✔️ Seller is not “interested” in the niche…
- Best Strategy: All
- Worst Strategy: N/A
When a seller tells me this, I look deeper. The sellers in this situation also say the site has huge potential (every seller says that).
Most people lose interest in a site because (1) it’s tough to write or get content outsourced, (2) there is something wrong with the site, (3) they have other businesses to manage, or (4) they were a “hobbyist” writer and truly lost interest.
In this situation, all acquisition strategies work. These deals take more due diligence to find out the real issues, and if lucky, it really is a legit site.
Depending on the seller, they may sell for lower than a market multiple to just get rid of it and move on.
This type of deal has many opportunities.
✔️ Potential has been maximized…
- Best Strategy: maybe Brokering (BR)
- Worst Strategy: Buy and Flip (BF)
Once in a while (rarely) I find sites that have truly been maximized in terms of Quick Wins. There just aren’t any easy levers to pull to increase income.
I actually stay away from these in terms of buying for myself or even brokering.
Why? If the Quick Wins are maximized, there isn’t an immediate upside available. Without upside, the ROI is typically 30-35 months which in my opinion is too long. I prefer the buyers that I sell too to have a clear strategy for growth with the quickest ROI.
However, these deals may still be ideal for you. Fill out this Google Form if such deals interest you.
🔥 Expert Insights to Position Your Site For Sale
There are several ways to position your site for sale for maximum value. There are the obvious tips for positioning your site, but these are my insights I’ve found to provide the maximum ROI for your time.
✔️ Leave upside for the new buyer
If you have plans to sell in the next 6 months, don’t tap into ALL potential sources for growth. Instead, document the strategy for the new owner.
A new owner will love to see, for example, that you did not optimize the top 10 pages for conversion rates, or that you did not target a handful of lucrative keywords, or that you did not add display advertisements on your site.
These are all Quick Wins for a new buyer.
Leave upside if you want a quick sale!
✔️ Make your site presentable
All too many times, I see sites that just have horrible theme design, a bad logo (or no logo), bad site structure, or bad content formatting.
A seasoned website investor will see these as Quick Wins. However, another subgroup may see these as headaches.
The ROI on your time as a seller to fix these up pre-6 months of a sale is worth it.
✔️ Analytics is key
Make sure you are tracking your traffic and revenue properly.
Ensure your Google Analytics tracking ID is set up correctly. Ensure you are using unique affiliate ID tags per site.
These are easy fixes that will ensure quick due diligence by the buyer. It also ensures trust in your deal from the buyer’s perspective.
✔️ How much do you really need?
Sale multiple is a vanity metric.
When exiting, think about how much do you need financially. Listing a site at a peak multiple for the highest sale price will require you to wait for the right buyer.
No one wants to buy anything at market value (period).
If the amount of money you need to be satisfied means a lower multiple, then go for it. You will get a quick sale and it’s a win-win for everyone involved.
Don’t chase the multiple!
When purchasing make sure to plan for one of the following:
- Buy, Grow, and Flip
- Buy and Flip
- Buy, Grow, and Partner
- If you have the network, then you can Broker
What about Buy Grow and Keep? Of course, you could buy websites, grow them, and keep in your portfolio. Nothing wrong with that! However, you need to always be positioned for a sale. You never know what will happen either personally or in the market. Ensuring your site is always in a position for a Flip or Partnership means you are set up for success.
Thanks for reading. Please leave any questions, concerns, and suggestions in the comment section.