One of the important questions that is always asked by brokers and buyers of niche sites is “if your site is doing so great, then why do you want to sell it”?
The answer to this important question can provide clues to the health or hidden risks of the site. It can also support the thesis that the site provides untapped potential for traffic and earnings growth.
WIth over 175+ successful website flips to date (and over 1,000+ deals analyzed), I’ve personally experienced all types of reasons why a seller may sell their niche content site.
In this write-up, I share common reasons from three sources:
- Empire Flipper Seller Interviews,
- Polling members in Website Flip Club Facebook Group, and
- Personal experiences.
Let’s get into it!
Data-Driven Analysis of Common Reasons from 89 Sellers
For Empire Flipper sellers, I found that the most common reasons provided for selling were:
By far the most common reason given was to focus on other projects or websites. This makes sense since many sellers are “website flippers”, i.e., those who are continuously growing sites and then selling.
I also ran a poll in Website Flip Club, which is a dedicated Facebook group to discuss buying and selling of websites. Here are the results from 32 participants:
“Focus on other projects” came out on top again.
I resonate with this main reason; “shiny object syndrome” or a more lucrative project is one of my main reasons why I sell sites.
Let’s dig deeper into the reasons below.
9 Major Reasons Why People Sell Sites: My Experiences
Being around in the industry since 2008 analyzing well over 1,000+ deals, I’ve come across any and all reasons for why sellers sell sites. For more insights, check out my article on what I’ve learned from a subset of my exits.
Here are the common reasons I’ve come across personally and from the data analyzed.
1. “No Time”/ Focus on Other Projects
At first it may seem contradictory that someone who says they spend 1-2 hours per week on a website would want to sell because they have “no time”.
However, one of the most common stated reasons for selling was to have more time and resources to focus on other projects or websites. In general, it is difficult to focus on growing more than one or two websites at a time especially if the owner has a day job or a family. Some sellers wanted more time to focus on school, their career, or their primary business.
If the site for sale has clear signs of neglect and infrequent content updates, it may be a great opportunity if you have the time and energy to add a lot of fresh content and make other improvements.
This reason could also indicate that the seller doesn’t believe in the potential of the site if they rather focus their efforts elsewhere.
2. Other Investment Opportunities
While content sites can have a very high return on investments compared to other investments, there is always the risk of a site losing most of its organic traffic overnight from a Google update.
A good example of this is GearHungry, a large established affiliate website that reportedly sold for $10 million last year and then got hit by the December 2020 update and lost almost 98% of its organic traffic from its peak according to Ahrefs data.
Some sellers are looking to put their proceeds into a different type of business like a marketing agency or in more traditional investments like stocks. One seller from Empire Flippers said he wanted to put his proceeds into cryptocurrency.
3. Purchasing Other Assets (e.g., a Home)
The second most common reason given by Empire Flippers sellers is to buy a home. This was also my primary reason when I sold a 75% stake on my dating site (see case study) in order to cover my down payment on my first personal home purchase.
Many sellers said they wanted to buy a home for their family and some sellers wanted to buy a house in an expensive city like San Francisco or buy a house entirely with cash. One seller on Empire Flippers said he was selling his site to raise capital to buy an apartment complex with his brother.
4. No Motivation
Sometimes websites can slowly die because the owner has lost interest in publishing new content.
Check any list of top blogs and you will likely find a graveyard of sites that haven’t published anything new for a year or more. People often get bored after a few years of publishing on a specific topic and shift their focus to a different project or to another shiny object.
For many site owners, a few hundred dollars per month is not worth their time and effort. I know it isn’t for me and is a primary reason why I liquidate sites if they do not perform to my standards.
One seller on Empire Flippers said “I’ve lost interest in this site and am trying to get to the next level. I’m looking at other opportunities and I am just ready for a change at this point in my life”.
5. Maximized Growth + Good Time to Exit
Some sellers are more comfortable growing a website from scratch to a few hundred or a few thousand per month and don’t have the skillset to scale it further.
They may be unwilling or unable to do the things necessary to compete with larger publishers such as link building, PR, hiring a team, finding new monetization opportunities..
One Empire Flipper seller said he views site building as a five year cycle where he focuses the first three years on adding lots of content and the next two years on selling to someone who can take it to the next level. “I’m a creator,” he said. “I like to create things from scratch rather than sustain growth”.
A few other sellers also say they enjoy the process of starting a website from scratch. One seller said “I’m more of a startup guy. For me, it’s very exciting to build something, especially from the ground up, watch it grow, and just get it to a good place.”
6. Website Downtrending
Although most sellers will not admit it publicly, some sell because the traffic and earnings are on a downtrend. Sites that have been hit hard by a Google algorithm can be found on a few marketplaces, especially Flippa.
This may be a good opportunity if the site is priced based on recent earnings, but often it is overpriced because the seller includes the time period before the algorithm update.
7. Tax Benefits
For some individuals, selling a site can lower their tax rate because the sale of an asset may be claimed as a long term capital gain rather than earned income. If they are paying the highest earned income tax rate on their site’s income, it might be a good tax strategy to sell based on the advice of their accountant.
This was a primary reason given by one seller on Empire Flippers who said “In the UK you get taxed 40% on anything that you earn over a certain amount. So financially, it kind of makes sense to sell the website.”
8. Exiting Niche Website Building
One seller on Empire Flippers was turning 70 and wanted to retire and get out of the website business. Another seller on Empire Flippers built her site while retired and then wanted to sell her site to get her time back. Another seller said she just wanted to “get off social media”.
9. Other Personal Reasons
There are plenty of personal reasons for a seller to want to trade monthly cash flow for a lump sum of cash.
A subset of the sellers I’ve personally dealt with needed lump sum cash to pay for their undergraduate university degree and others for medical reasons.
If the seller needs cash, you may be able to get a better price by offering to close quickly with a fast cash payment. In the past, I’ve successfully closed on many deals at significant discounts on the final sale price by promising the seller that I will close quickly and handle the entire site migration process.
Should I always ask why the seller is selling?
When conducting due diligence, it is always worth asking for the reason for the sale. The seller’s response can provide additional useful details or even help you uncover critical issues you should know about.
Does the reason for selling really matter?
No, the reason to sell a site does not matter.
In my experience, I ask “probing questions” on why someone is selling. But ultimately, it does not matter to me the reason. My due diligence will unveil any issues with the site and then it’s my decision whether I want to acquire the site.
Almost no one will ever admit if they are selling because they think the site will decline in the future or that they want to take money off the table to reduce their risk.
Wrap Up: What’s Your Reason To Sell?
The reasons covered in this write-up cover most if not all of the common reasons why sellers may sell a profitable niche site.
Since it is difficult to tell if someone is being honest about their reasons, I personally rely on objective data found during my due diligence process. However, I still ask sellers why they are selling to see if they share anything that may be a positive or a red flag.
Next time you are discussing an acquisition with a seller keep these reasons in mind.