“Build an email list” is one of the major pieces of advice given to website owners and online marketers, and it’s a good one. Another common saying is “The money is in the list” and there’s no denying the profits that can come from a large email list of people who love your website’s content and want to engage with consistent updates.
An email list can not only make a lot of money for the list owner, but it is a valuable asset that can make a business or website sale more attractive to potential investors.
While selling and transferring an email list can be extremely profitable, there are also many important cautions, regulations, and issues that need to be worked around to do it right.
Let’s jump right in and parse out the details.
What is an Email List?
An email list is a list of collected email addresses from visitors who give their email, permitting the site owner to contact them in the future. The owner of the email providing that information is them giving you permission to send email campaigns to them in the future.
There are multiple ways to build an email list. Many sites have pop-up boxes offering a free report or ebook in exchange for the email, some have a signup form on the sidebar, and many sites do both and even run special campaigns on top of that to add more email addresses to the list.
Since people who are willing to give their email address liked the content enough to give that information, they are more likely to buy or interact in the future. This is why email lists are so valuable.
Selling an Email List With a Website
A website that has a healthy email list can be a major selling point. If an email list has been created specifically with one website then the investor will want that email list with the website sale.
Whether the list is valued separately or as part of the deal might be up for negotiation depending on the size of the list, but most of the time that will be a package deal. A good email list may help get a higher monthly multiple when connected to a site sale.
While most email lists will add value, this isn’t always the case. Especially if the list hasn’t been mailed to or actively maintained.
Many factors affect how valuable an email list is. Some of these factors include:
- How responsive the email list is
- How active the list is
- Whether the list is used to getting offers or not
- Is the list attached to a website, sales funnel, social media account, or something else?
- The size of the email list
Selling an Email List Without a Website
While most email lists are attached to existing websites, not all of them are. Selling an email list without an attached website can be a bit more of a challenge but it is still possible.
One of the most important steps is to show value and to show that regulations were kept in mind when getting the list. The markets have been inundated with low-quality email lists, and proving value is crucial.
How do you improve your chances of selling an email list without an attached website?
- Have crucial statistics available (size of list, open rate, etc)
- Show clear activity from the email list (value)
- Have the legalese in order and avoid potentially “problematic” phrases
- Approach potential buyers by showing them the value your list adds to their current site, business, or holdings
Keeping these important strategies in mind will give you a better chance of getting a great offer on that email list being sold.
Email List Valuation Framework: 4 Points
There are a few major points that are used to create the framework to get a good valuation on an email list.
1. Number of Subscribers
When it comes to email lists, size matters. The number of total subscribers will be one of the first questions a potential buyer has and it’s a major part of the valuation. While pure size isn’t everything, it is a huge factor.
Assuming all other factors (open rate, purchase history, success/unsubscribe rate) are equal, a larger list will be more valuable than a smaller one.
2. Open Rate
The open rate will be the next part of a valuation. Smart investors would often rather see a moderate-sized list with a very high open rate versus a large list with an abysmal open rate.
The open rate is a good indication of the health of the list and how reactive it is likely to be to future offers from the new owner. A healthy open rate is a great sign that the list is open to offers and will be potentially very profitable to new owners.
3. Purchase History
Has the list been grown from scratch? Was part or all of it purchased from someone at some point? The purchase history of the email list paints a fuller picture of what the addressees on those lists are used to.
This can also refer to the conversion percentage of offers that were sent out. If there were one or two successful email campaigns run with the list, that is great information to include.
This tells potential investors that emails not only get opened but that action gets taken.
4. Unsubscribe Rate
If the list is hemorrhaging email addresses, that’s a really bad sign. List retention tells a lot about whether this is a list that is primed for more offers or information, or one that has a lot of people tired of being a part of it.
A low unsubscribe rate is a good sign, especially if there’s a high open rate.
Is It Legal To Sell an Email List?
The answer is “It depends.” Because while there are some broad-stroke answers to the legality of selling an email list there are many regulations, rules, and other common practical issues that someone looking to sell an email list will want to make sure to stay on top of.
According to Legal Beagle, the United States does not have a law that specifically forbids selling email lists. This generally holds true with state laws, under the condition that no email list selling is involved with spamming.
The water is muddled a bit in the European Union where the ePrivacy directive and GDPR give strict protections to consumers and some argue those protections make the selling of EU-based emails illegal under those protections. (Source).
The best practice when lists change hands is for the first email to be a “re-subscribe” or confirmation email. Especially to email addresses associated with citizens of the EU.
There’s also a “loophole” of renting an email list to an interested company or advertiser which doesn’t have as many regulations around it in the EU and Canada, as the actual selling and transferring of an email list from one owner to another.
Where to Sell Email Lists?
There are two main options for selling email lists: auctions and private sales. Both have pros and cons to them.
Auctions are often easiest when the email list is connected to a website as part of a package. In that situation, the email list often adds value by increasing the multiplier used on the final sale price.
The best auction sites will be ones that specialize in online businesses and websites like Empire Flippers or Flippa.
If the email list is without a site then the best option might be private sale.
Private sales can be a good choice with or without a website. These often start with the owner of an email list approaching a website owner or company in the same niche who might have interest in the list and begin negotiations from there.
Even if there is no website with it, a private buyer will want to know if there was a sales funnel, landing page, or how the list was compiled and continues to be maintained.
Email List Transfer Process
There are a couple of ways to tackle the transfer process for the email list. How this is going to be done should be agreed upon during the negotiation. That way there’s no confusion and the process is as smooth as possible.
The two options that make the most sense: direct access via server account or the classic CSV export.
Direct Access to Service Account
If the email list sits on its own account then transferring the account or granting full access to the service account is a common way to transfer the email list. This way the buyer has full access to the entire list where it was compiled and nothing else needs to be done.
This is a convenient way to handle the email list transfer when it’s viable since this keeps the list intact but simply changes ownership.
Export as CSV
Exporting the list as a CSV file is the second option. Keep in mind that when selling the list, it’s important to sell the list and not just a copy. If you sell an email list, you can’t just hit up the same list the next week.
If that’s the plan, look into renting an email list instead to avoid gray legal areas.
Exporting all the emails as a CSV allows the delivery of them to the new owner who can then add them to whatever email list software he or she uses. The nice thing about a CSV file is that it’s easy to copy to make a backup.
What major takeaways should you get from this in-depth look at email list sales and transfers?
- Email lists are powerful and potentially
- Having an active and responsive email list is crucial
- Email lists can be sold with or without a website
- The four most important valuation factors are: subscribers, open rate, purchase history, and unsubscribe rate
- Minding the details is crucial to stay on the legal side of regulations
Email lists can be a valuable asset. The selling and transfer of an email list needs to be done carefully but if you mind the details and follow the advice outlined in this article, you are more likely to have a good transaction that both sides are happy with.