How to Buy and Sell Websites: Expert Advice on Maximizing Your Profit
Although I’ve been blogging for five years, I only recently became aware of the fact that you can buy and sell blogs and websites for actual money. Every day, I see sites left abandoned by owners who didn’t know they could sell them to willing and experienced bloggers who want to build their online portfolios.
Over the last year, I’ve purchased two blogs and sold one, and it’s been a great -- and profitable -- experience.
Essentially, I use my network to find bloggers who no longer want to blog. They might be moving, starting a new job that is a conflict of interest or simply unable to commit the time anymore. I offer to buy their sites, so they can get out of the business with something to show for their efforts, and I have a new way to make money.
Sound intriguing? Here’s what you need to know about buying and selling blogs and websites.
How Much is My Website Worth?
Blogs and other sites typically sell for about 12 times their monthly income. So, if your blog makes $100 a month from ads or affiliate links, it’s worth approximately $1,200.
This number certainly has some wiggle room. In fact, “24 months of income is becoming more common,” says Tom Drake, who owns a whopping 25 blogs, “but I still negotiate down to a 12-to-18-month price point.”
This varying scale is consistent with my experience. For example, I sold a blog that made only a few dollars a month for a big profit because the design was highly customized and it had a lot of potential. I also bought a blog that wasn’t making any money at all because I knew, based on my expertise and experience, I could quickly make it profitable.
So, if you’re reading this and aren’t making money from your blog yet, don’t underestimate its worth. Someone still might want to buy it. Here’s what to consider when you’re estimating a site’s potential value -- whether it’s your own, or one you’re considering buying.
Remember: Location, Location, Location
Brent C., owner of Vosa.com, is an experienced online entrepreneur who is in the process of selling one of his websites for over $200,000. That website “has generated six figures of passive income annually for the past couple of years” and Brent is using the sale to help shift his focus to a new online venture.
When I asked Brent what buyers or sellers should consider when determining the worth of their online property, he said, “I've been investing in rental real estate for more than a decade and what I love about online real estate is that a lot of the same principals apply. Just like houses and apartment buildings, online real estate comes down to ‘location, location, location.’”
What does he mean? Brent recommends owning a “.com” versus a “.net” or “.org.” He also advises that prospective buyers or sellers get several opinions from other website owners in the site’s niche to determine the worth of an online property.
Take the Emotion Out of It
“The owners of websites always think their sites are worth more than they probably are. Either out of emotional attachment or ‘the potential’ they see with it,” says J. Money, the blogger behind popular personal finance site Budgets Are Sexy. He’s brokered the sales of more than 30 websites, including the ones I purchased, working with both buyers and sellers to evaluate a website’s value.
“But here's the thing: You can't pay the bills in emotions or potential! So always do your due diligence and negotiate where you see fit,” he recommends.
If you blog, you’re likely nodding along with his statement. My primary website is like my baby! Selling it would be extremely difficult because I place such a high emotional value on it. If you run into this situation as a buyer, remember to negotiate and let the income numbers speak for themselves, rather than being swayed by a site owner’s emotional attachment.
Consider Your Business Goals
It’s easy to get caught up in the excitement of big payouts, but before you delve into the world of buying and selling websites first sit back and determine your goals. Online buyers usually come in two types.
“A financial buyer is looking to get a return on their investment. They buy the business and look to reap a percentage return each year,” says Jim Wang, an online media expert who has bought and sold online properties for profit. “A strategic buyer is looking to acquire a business that adds to their existing business. They're looking for a one plus one equals three situation.”
Financial buyers are generally more concerned with income and hard numbers, whereas strategic buyers are less focused on the income and more interested in what an additional web property would add to their current portfolio. For example, I recently purchased a site that didn’t have very strong metrics by itself, but when added to my portfolio of sites, it gives advertisers more options for package deals.
If you want to sell an online property that doesn’t earn a lot of income, try to find a strategic buyer. If you want to get into the business of buying and selling websites for profit yourself, first become a financial buyer so you can make a profit. Once you have a solid portfolio of money-making web properties, you can switch over to being more strategic and creative with your online property purchases.
How to Buy a Website or Blog
Ready to buy your first site? Follow these steps.
1. Make Money With Your Own Site
Generally, you don’t want to start buying blogs or websites until you understand how to monetize a site. I would recommend only buying an additional blog once you learn how to make money from your own blog.
2. Look for Dormant Sites
Use your network to find blogs that have not been updated for months or even years. Tweet out a message saying you’re looking to add a blog to your portfolio. Check blogs you regularly read to see if one of them has a big delay in posting. Once you identify a few options, send the owners a simple email email like, “I noticed you have not posted on your blog lately. If you are interested in selling your site, I would be interested in buying it.”
You can also look on websites like Flippa, which regularly sells online properties and domain names.
3. Research the Site’s Value
Got a bite or two? Make sure to do your due diligence. If you’re buying through a site like Flippa, a site’s listing notes everything included in the purchase as well as its stats and history, which the seller agrees is truthful and legitimate. If you’re buying independently, ask the blogger to prove their income and traffic using screen shots.
Regardless, always ask for second and third opinions from friends in the same niche or industry. More experienced bloggers will be able to look at a site’s metrics and ascertain if they’re legitimate. They can also help you brainstorm ways to improve the site and get more income. This is why it pays to establish yourself as a blogger and build a network before starting to buy other sites!
Flippa also provides a service where you can pay for a professional review of the site before buying it.
4. Make the Deal
When you buy through a website like Flippa, you can send or receive payments in a variety of ways. I recommend using escrow. As the buyer, you’re protected because you actually receive ownership of the site before authorizing your payment, and the seller can see you’ve put money in escrow, meaning you can afford the purchase and aren’t going to take the site and run.
When you buy independently, always have a contract. When I bought both of my websites, I was more casual about both contracts because I knew the sellers. Our negotiations were recorded in emails and because they were both bloggers I knew well, I trusted them to have quality sites. However, be as safe as possible by getting everything in writing and if you feel more comfortable, having an attorney look over the contract.
5. Transfer Ownership
Actually taking over the web property might include moving servers and transferring domain names. You can work with the seller to manage these technical aspects, or you can hire someone to help you. I used iMark Interactive to help me with the technical side of my website purchases.
How to Sell a Website or Blog
Once you’ve built up your site, you might be ready to cash in on your efforts.
1. Establish Your Site’s Value
Ask a few fellow bloggers in your niche what they think your site is worth, or multiply your monthly income by 12.
If you don’t have any monthly income, calculate what you spent on the site’s design. Collect supporting information like traffic patterns, social media accounts associated with the blog, and other features that might demonstrate value to a buyer. Even if you don’t make an income from your blog, it could still have value.
2. Advertise Your Site for Sale
List the blog or website on Flippa.com, or contact a trusted blogger friend if they know anyone who is selling a site. You may be able to find a buyer within your network.
3. Negotiate and Close the Deal
Be as helpful as possible while discussing the deal, including being quick with emails and answers to the buyer’s questions. See the “buy” section for more details on how to finalize the deal. Get everything in writing, and if you need technical help to release your domain name, hire someone to ensure the transaction runs smoothly.
Case Studies of Real Blog and Website Sales
Does all of this still sound too good to be true, or at the very least, overwhelming? Here are a few case studies to illustrate the process -- and the profits.
Case Study #1: $2,000 Profit in 6 Months
Robert Farrington bought a personal finance website from an owner who was burnt out and didn’t want to maintain his blog anymore. He paid $2,400 in June 2013, hired a freelance writer and updated a few technical aspects of the site.
“In the remaining six months of 2013, I was able to gross $4,626.55 in total advertising sales -- turning a profit immediately,” he says. “Since I acquired the site, I have had total gross sales of $12,089.50.”
After taking out fees for hosting and hiring the freelance writer, Robert’s net profit is $10,347.50 so far.
Case Study #2: Look for Profitable Potential
Michelle Schroeder-Gardner started buying websites a little over a year ago. “I recently sold three websites for $30,000, and that $30,000 was almost all profit, as I bought the websites for less than $1,000 altogether,” she explains.
After buying the sites, Michelle regularly added new posts, improved the websites’ search rankings and built income streams on them. Then, she mentioned to an online colleague that she wanted to sell the sites -- and he immediately offered to buy them.
“My top tip for readers is to look for a website that has potential,” says Michelle. But that potential must be backed by numbers and your own experience. “It has to be something that you can build up so that you can flip it for a profit. I like to look for a website that is undervalued so that I can build it up and flip it for a significant profit.”
Case Study #3: Investing in Help Leads to Immediate Profit
Aaron Crowe purchased a new blog for $5,000 in January 2015. Because he was new to blogging, he hired a writer and virtual assistant who knew the ins and outs of placing ads and writing excellent online content.
Hiring someone to help fill the gaps in his own knowledge helped his website be profitable from the beginning, earning $225 in January, $655 in February and $804 in March. Although he does need to pay his assistant, he hopes to make back his $5,000 investment by the end of the year, making all future years of owning this site pure profit.
Could You Buy or Sell a Site?
Whether you build up and sell your own site or purchase an established blog, it’s clear that you can make serious money from sales of online properties.
Buying and selling blogs can be a worthy business venture, but like any business opportunity, it’s not without risks. The key is to be passionate about your sites and work hard to make them succeed: Hire help when you need it, get second opinions and learn from your mistakes.
Your Turn: Have you ever bought or sold a blog or website? We’d love to hear your experience in the comments!
Catherine Alford is a full time blogger, personal finance freelance writer, and mom of newborn twins. She writes about how to balance life and a budget all across the web including her own site, Budget Blonde.