How to Sell a Website for Maximum Profit
If you’ve ever thought about selling your website at some point in the future, then listen up.
Most website owners don’t fully understand how to sell a website, let alone how to maximize their profit.
Having sold 447 websites and counting in the past three years on our marketplace, we’d like to think we know a bit about selling websites. But before we get into that, let’s begin with an exclusive overview of where the industry is now and what that means for you as a seller.
The Facts Behind Selling a Website
First, we should clear up what exactly we mean by a website. Over the past few years, a few online business models have remained consistently popular and profitable.
These business models are Amazon Associates, affiliate marketing, and display advertising. A website can be monetized with one of these or a combination of all three. Their versatility and ease of use are part of the reason that they’ve become so popular.
We do sell websites monetized in additional ways on our marketplace, but here, we’ll focus on these three monetizations since they’re the most common.
To learn how to sell an e-commerce website for maximum profit, see our e-commerce selling guide. Alternatively, if you have a SaaS business, take a look at our epic SaaS valuation guide.
When talking about websites using one or more of these three monetizations, we refer to them as content sites. In the past year alone, we sold 153 content sites on our marketplace.
To break this figure down, that’s 108 Amazon Associates sites, 27 display advertising sites, and 17 affiliate sites as determined by their largest revenue drivers.
The total number of content sites sold on our marketplace has remained fairly consistent for the past few years. In 2019, we sold 143, and in 2018, that figure was 151, which is a testament to the popularity of the model.
However, the rise in buyers of content sites is something to behold and makes for great reading if you’re considering selling.
The average sales multiple on our marketplace in 2020 was 31.6, which constituted an increase from 29.9 in the previous year and 27.6 in 2018. While this may not seem like a significant increase, it translates into a bigger win when you look at the average sales price for a website.
The average sales price on our marketplace in 2020 was $94,419. This is up 4% from 2019 and a massive 23% from 2018!
You also have to understand that the volume of deals that we do skews the average somewhat. Sub-$100K sites are much more common, and so we naturally sell more of those. These smaller sites bring the average down, even though we also sell websites in the seven-figure range.
There are two factors that could be responsible for this explosive growth. The first is that the quality of websites has improved over the years. This is likely to be true; we are seeing more high six-figure and even seven-figure websites being listed on the marketplace.
However, the most exciting growth has come from the influx of buyers looking to acquire profitable websites. More and more high net worth buyers and institutional investors such as private equity firms are purchasing websites. This is on top of the already active market for websites valued in the tens of thousands of dollars.
The average sales price of $94,419 and average sales multiple of 31.6 don’t even tell the full story.
When you analyze the multiple in relation to sales price, the average sales multiple rises even higher.
In addition to these price tiers, we also sold one site for $830K and one for $1.4M in 2020, with multiples of 34 and 35, respectively.
This all means that the market is in a great position for sellers. We’re seeing more buyers compete with each other to acquire businesses, which are driving sales multiples and prices up. There will likely be at least some leveling off in terms of the rate of growth, but now is a more exciting time to sell than ever.
When’s the Best Time to Sell?
Building on the previous section, you might be wondering if there’s a certain time of the year that you can get more for your website.
The simple answer is no; there’s no real way to time the market as it stays active all year round.
A better question to ask is “When’s the best time to sell for you?” This is a question many sellers struggle with; particularly if it’s your first time selling a website. Rather than trying to time the market, it’s usually more beneficial to sell whenever it feels right.
Sometimes your hand is forced, and you have to sell your site for personal reasons. Maybe you need money to pay for medical bills. In getting to know a lot of the sellers on our marketplace, we’ve heard many different reasons.
These have included a couple who used the money to adopt a child and one seller who got the chance to live their childhood dream of becoming a firefighter.
What it all comes down to is that a monetized website can be a very valuable asset to own. Selling can give you access to a lump sum of capital to spend however you wish. Many people use this to travel the world and live as a digital nomad, while others use it to buy property.
Another common reason for selling amongst online entrepreneurs is that they feel a new challenge is needed. Many sellers have multiple projects on the go and want to use the capital to fund new business ventures. Alternatively, it may simply be that they’ve become fatigued from working on the business and they want to cash out and let someone else pick up where they left off.
Whatever the reason, analyze how letting go of the website would make you feel and you can’t go far wrong. While content sites can typically be run with a few hours of work a week, not putting in the love they need will eventually lead to a drop-off in performance. If your heart’s not in it, it’s probably best to cash in while the iron’s still hot.
What if My Website Is Seasonal?
If your website’s business is seasonal, one question you may have is whether you might be better off waiting until the high season to sell.
This can be something to consider; however, it should be noted that a highly seasonal business will typically receive a 12-month valuation period, which will negate any potential increase in valuation.
Selling as the business is coming into the high season can be used as a tactic to persuade buyers to buy early. But more often than not, it’s best to go with whenever it feels right to you and when it reaches a valuation you’re happy with.
How to Maximize Your Profit
Before we get into maximizing your profit, you first need to establish how much your website is worth. Use our free valuation tool to get a five-minute valuation. This will provide you with an accurate estimate of what you could expect to receive on the open market.
How much your business is worth will be the biggest factor in deciding whether you’re ready to sell. Once your initial valuation has been completed, you can start working on improving it over time.
If you’re not looking for an immediate sale, then exit planning is going to be the best way to maximize your profit from selling your website.
Exit planning means implementing a plan of action to improve key valuation factors. We’ll get into valuation in more detail later in this post, but there are a number of ways you can boost the multiple your website receives.
To help with this, it’s beneficial to speak to an industry expert who oversees deals on a daily basis. If you want to receive exit planning advice tailored to your specific website, you can set up a free call with one of our business advisors.
This doesn’t mean you have to commit to selling, but speaking to an industry expert is ultimately the best way to increase your website’s value.
There are too many valuation factors to cover here, but we will go over some of the key factors that can make your business more appealing to buyers.
Diversification of Income
Earning via multiple sources is seen as a positive in the eyes of buyers.
This doesn’t just mean across the different monetizations but also across different affiliate offers if possible. This proves that your business is less susceptible to drops in commission or revenue for any particular affiliate offer.
For example, Amazon Associates has been known to make wholesale changes in its commission structure. If your website only earns from Amazon Associates, then you are essentially at the mercy of Amazon.
In contrast, a site that only earns a small percentage of its revenue from Amazon Associates would not be affected to the same extent.
Diversification of Traffic
Similar to the above section, spreading out where your traffic comes from will typically increase your valuation.
The majority of websites use search engine optimization (SEO) to drive organic search traffic to their website. This is usually the favored traffic source among buyers, but adding other traffic via other means, such as social media, will further increase the valuation and profit you’ll receive from selling your site.
Another part of this are the pages that receive the most traffic on your website. Buyers will want to see a breakdown of at least the top three pages by percentage of total traffic. One page driving the majority of traffic is considered a greater risk than a site that has an even spread.
Diversifying traffic is a great way to work on maximizing the profit you’ll receive.
Reduce Owner Involvement
While the hours the business owner works is not a huge factor in how much your business is worth. Most buyers will not want to buy a business that requires a huge amount of work or heavily relies on the current owner’s involvement.
The sweet spot is one to five hours a week. If you’re spending 10 hours or more a week on the business, then consider outsourcing some of the work. Tasks such as content writing and publication should be easy enough to outsource to freelancers.
Offering details regarding trusted freelancers or employees that are willing to work with the new owner will be seen as an asset in a sale.
PBNs vs. White-Hat Link Building
The use of private blog networks (PBNs) has become less widespread than it used to be. This is primarily due to Google releasing algorithm updates that have made the quality of links a much greater factor than in previous years.
Whether you decide to use PBNs will come down to the risk versus reward debate that every entrepreneur will have their own opinion on. But speaking strictly of valuation, a site that uses a PBN will typically receive a lower valuation than one that uses organic or white-hat links. This is because buyers see PBNs as an added risk so the number of interested buyers will be less.
Growing the Email List and Social Media
These two factors are more of a long play when it comes to improving your valuation.
The analogy that buyers use when assessing if a website has staying power is “How deep is the moat surrounding the business?” This essentially means how well it is protected from not only the competitors but also factors such as Google updates.
Having an email list and/or a social media following allows you to reach an audience outside of Google. In the case of an email list, it is a traffic source that you own completely. This means that if you can monetize it, it will become an even more valuable asset to your website.
Growing these things for a small site can be difficult, and buyers understand that. These factors are seen as positives rather than necessities, and so there’s no need to worry about implementing them before you sell. In fact, a lot of buyers are looking for sites with opportunities to grow and improve assets.
A well-aged domain that has been consistently profitable is one of the first things a buyer will look for.
If your website has less than a year of profitability, it’s almost always better to wait until it passes this threshold. Otherwise, there simply isn’t enough data for buyers to go on and it has yet to prove its staying power.
Once you get past a year, your site will start to become appealing to a wider pool of buyers, which increases your valuation. The valuation will continue to increase incrementally as the site ages, but it is likely best to concentrate on some of the quicker wins mentioned above.
Selling a Website Privately
There are two choices when it comes to selling your website: a private sale or using the services of a website broker.
A private sale will involve you finding buyers, negotiating a deal, and transferring the website to the new owner on your own. If you have a contact list of buyers, then this might be a suitable option for you.
There are also some unvetted marketplaces, such as Flippa, that can help you connect with private buyers; however, a sale of this kind should always be approached with caution. These types of marketplaces almost always offer no level of protection when it comes to displaying your website’s private information.
Withholding the URL of your website is the best way to minimize the risk of copycats, scammers, and tire kickers. This kind of information should only be made available to verified buyers who can prove that they’re serious.
To help protect yourself if you do decide to go down the private sale route, an escrow should be used for payments to help protect both parties.
The upside to a private sale is that you won’t have to pay the commission that a broker requires. If you’re prepared to do the heavy lifting, then this could be one option when it comes to selling your website.
Working with a Broker
The second option is to use the services of a broker to help you sell your website.
The main reason that people decide to use a broker is access to their extensive list of active buyers.
Placing your website in front of their audience immediately reduces the amount of work you have to do. Their sales team should also be reaching out to relevant buyers to drum up interest for your business.
The truth is that a broker should be doing a lot more for you than just emailing out your business to their list. As a brokerage, we don’t mind admitting that we have a slightly biased opinion in this debate.
However, we think it’s best to be transparent about everything we offer as a full-service broker. This way, you have something to compare us to when researching other brokers. We always recommend that you do your due diligence on brokers before deciding to work with them.
When deciding on a broker, you’ll want to work with the one that has the most experience in selling content sites. Empire Flippers is known as the largest curated marketplace for online businesses and sells around 150 content sites a year.
A large part of what we do is carefully vetting both buyers and sellers that want to work with us. When a website gets listed on our marketplace, we’ll show as much information about the site as possible without revealing any sensitive details.
If buyers want to see your URL, they must first verify their identity and provide proof of funds. This ensures that the high quality of the marketplace remains intact and no one’s time gets wasted.
We have a specialized team for each stage of the sales process. Our vetting team will work with you to value your site and compile a profit and loss statement on your behalf.
Once your business goes live on the marketplace, our sales team will step in and manage interest from buyers. This includes answering repetitive questions on your behalf and briefing you before any buyer-seller calls.
When you accept an offer, your website will move to our dedicated migrations team, who will work to transfer the website to the new owner. Currently, Empire Flippers are the only broker to offer this service inclusive of the commission rather than as an extra charge.
We also offer a low exclusivity period of two months (one of the lowest in the industry), as we’re confident that we can sell websites quickly.
We’re telling you this so that you have something to compare to other brokers. Don’t be afraid to ask a broker what they’re doing for you as well as what kind of deal flow they have in content sites specifically.
Preparing Your Website for Sale
Before you can sell your website on a marketplace, there are a few things you need to do to get the site ready. This will save you time and make you look more professional.
You may already have all of these things in place, in which case we’ll try to provide you with some of the common questions buyers are likely to ask.
Accurate Data with Analytics
To view traffic data, you need to have some kind of analytics platform linked to your website. Two widely accepted platforms are Google Analytics and Clicky.
Having one of these installed will allow a broker to verify your traffic stats and provide interested buyers with a great deal of information. It’s common to grant verified buyers read-only access to your analytics so they can complete their due diligence.
At the very least, buyers are likely to want to see the following information:
- The page views month by month
- The channels that are responsible for the traffic
- The countries that are responsible for the traffic
- The percentage of traffic by the top pages
Buyers will use this data to analyze what’s making your site successful and the opportunities for growing it.
Get Your Finances in Order
This one is very important because your website can’t be given an accurate valuation without a profit and loss (P&L) statement.
The P&L is one of the first things a buyer dives into when they start doing their due diligence. Any mistakes in your P&L, even innocent ones, will give a bad impression right off the bat.
The P&L should cover all the incomings and outgoings, including monthly gross revenue and monthly net profit. Additionally, include a breakdown of how much money is coming from each source if you are earning from multiple sources.
It’s possible to include some expenses as add-backs. These are expenses that are considered one-offs and unnecessary to run the business. An example could be a trip to a conference that the new owner wouldn’t need to attend, and so it makes sense to discount it from the profit.
We recommend that you hire a bookkeeper to give everything a once over, particularly for larger websites. If you decide to work with Empire Flippers, our vetting team will take care of this for you.
Standard operating procedures (SOPs) are essentially instruction manuals for tasks pertaining to running your business.
These help a buyer keep things running smoothly once they take over your business. They also benefit you, as the buyer is less likely to reach out to you to ask how to do something.
Pretty much any task that requires some kind of methodology could benefit from having an SOP. A task might seem simple for you to do, but what about someone who has never seen the inner workings of your business?
Link building outreach or a specific content writing template can be good uses of an SOP. Even if you typically have freelancers complete these tasks for you, an SOP will help a buyer hire more people. This is especially important if the current set of freelancers or employees aren’t transferring to the new owner.
Employee and Affiliate Contracts
Most content sites use some kind of help to keep things running smoothly. It may be freelancers rather than full-time staff that help with content creation, for example.
Speak to these freelancers and ask them if they would be willing to continue working with a new owner. The majority of people are going to say yes; if they don’t, the SOPs you create will make hiring someone new easy.
You could even include training a new person as part of your post-sale support if there’s a role that’s integral to your business. For the most part, it’s fairly easy to find someone to do the tasks needed to run a content site. It could be something as simple as including someone’s contact details as part of the sale agreement.
Also included in this category are any affiliate contracts that you might have. If you’ve negotiated any improved rates, then it’s considered a good business practice to reach out to the affiliate manager to ensure that the rates will continue with a new owner in charge.
This will be an attractive asset for your business.
How the Sales Process Works
With your website prepped for sale, we’ll give you an overview of what you can expect when you sell your website.
Throughout this process, it’s important to continue to run your business as if you were going to keep it. Now is not the time to relax and consider your work done.
You want to make sure that you’re maintaining the site so that there’s no drop in performance. This not only keeps everything as advertised but also shows that you care about the success of the site after you’ve sold it.
How to Value a Website
Valuation is the start of the sales process.
We recommend that every website owner get a valuation once they’ve built up at least six months of profitability and every few months thereafter.
The valuation formula is simple:
12-Month Average Net Profit x Multiple
The first part of the calculation is the net profit. This should be easy for you to work out once you’ve created your P&L statement. Net profit is revenue minus any running costs, such as hosting, domain name, and staff wages.
There are times when less than 12 months of monthly profit can be used in the formula. This is typically reserved for businesses that are in a sharp period of growth or decline, where the first six months don’t represent the most recent six months.
It should be noted that shorter pricing windows are not for websites that show growth only from seasonality. If a site is highly seasonal, a 12-month pricing window will almost always be used. A 12-month pricing window will also allow your site to receive a better valuation multiple than a site with a short pricing window.
For the second part of the valuation, we use a monthly multiple, whereas some brokers will use an annual one. The valuation multiple will typically fall between 20 and 50 depending on a wide variety of factors. Here are a few of the factors that go into a valuation multiple:
- Business age
- Traffic diversity
- Income diversity
- Email list subscribers
- Social media following
There are too many others to list here, which is why it helps to get a valuation to understand where you’re at.
After you fill out the valuation tool, it will give you three selling price points.
The typical valuation is a guide to what you could sell your website for to give you the best price while still keeping it attractive to buyers.
The absolute valuation is the peak of what you could expect to get if you’re willing to wait for a big offer to come in. However, it should be understood that you could be pricing yourself out of a sale by aiming for this peak.
If you want a quicker sale, then you could list with a valuation lower than the typical valuation.
While we like to think our valuation tool is pretty accurate, a valuation from an industry professional should be obtained for the most accuracy.
This is why we have a vetting team that will work with you to get the right valuation for your website. You’ll be able to access our vetting team upon completion of the valuation tool.
Finding a Buyer
When you’ve got a valuation that you’re happy with, it’s time to list your website for sale on the marketplace.
The vetting team will work with our marketing team to create your listing and get all the supporting documents ready. Listings go live every Monday at 10 am EST and immediately get sent to our list of active buyers.
We also conduct a seller interview with owners of websites that are valued at over $300K. This audio-only interview allows buyers to get to know you and hear you speak about your business in your own words.
This is not mandatory, so there is no pressure if you’re not comfortable doing this. However, we’ve had some good feedback from buyers regarding this feature.
It’s exciting when your listing first goes live, and you can expect the most interest during that first week. Our business advisors will be in regular contact with you to pass on any questions from interested buyers.
Negotiating a Deal
How our process works will vary slightly depending on the price of your website.
We have a custom-built platform that helps to automate a lot of the sales process, making it easier for buyers to connect with sellers. For listings that are under $300K, buyers will be able to make offers for your website in just a few clicks.
These offers will get sent directly to you, and you have the opportunity to counter or to accept. If you accept an offer that is below the asking price, then your business will enter into a 24 hour circulation period.
This alerts any buyers that have shown interest in your listing and gives them a chance to beat the offer. The circulation period is an important part of the sales process and one of the ways in which we work to get the best price possible for your business.
For listings over $300K, there tend to be more moving parts. This means that some buyers will want to set up a call with you to discuss your business in more detail.
Before you go into a call, our business advisors will do a pre-call with you to discuss the buyer and answer any questions you may have. A business advisor will also be in the buyer-seller call to act as an intermediary between the parties.
For larger websites, usually multiple six figures and above, deal structuring might become part of the negotiations. This may involve an earn-out, where the buyer will offer you an upfront amount and further payments over subsequent months.
Because of the large listing price, not all buyers will be willing to immediately pay the total amount upfront upon completion of the sale. Deal structuring of this kind has become a standard part of the industry. Considering offers of this kind will greatly improve your chances of a sale.
When you’ve accepted an offer, it’s time to take your listing off the market and move it into migration.
Transferring a Website
While the sale might be completed in terms of deal negotiation, there’s still work to be done.
An often-overlooked area of selling websites is the migration from one business owner to the other. This can be a challenging and time-consuming process if you’re not experienced with online businesses.
There are some unique factors involved with transferring content sites. Affiliate websites will have to have all their affiliate links changed. Google AdSense can be tricky to migrate, and so a buyer must have an AdSense account already set up.
WordPress is by far the most common and preferred platform for owning websites. This makes things easier when it comes to migration, but it shouldn’t be too much of a problem if you use other platforms or have a custom-built website.
However, each website will have its own set of challenges, and so it’s highly recommended that you use a professional.
At Empire Flippers, we have a dedicated migrations team that will take care of this for you at no extra cost.
When the transfer is done, the business will enter a 14-day due diligence period.
This gives the buyer a chance to verify that the earnings and traffic data are as advertised. A due diligence period of this kind is standard across the industry.
During this time, the buyer cannot make any major changes to the business. Because of this, some buyers will end the period early after determining that everything is running smoothly.
When listing your website for sale, it’s necessary to offer some level of support to the buyer post-sale. You will need to be available for the post-sale support you promised the buyer.
This typically includes 30 days of email support and possibly a few Skype calls. Most buyers are experienced and won’t take up the full offer of support, but it’s reassuring for them to know it’s there.
Being there for a buyer will go a long way to ensuring that the deal works out for both parties. It’s at this point that you’ll receive your money, and you can start to celebrate selling your website!
How Long Will it Take To Sell a Website?
The average duration that websites stay on our marketplace for a website is just 30 days.
This isn’t a guarantee that every site will sell in a similar time frame, as many factors are in play. Listings that are over $200K tend to take longer to sell because there are more parts to work through.
These time frames vary on a case-by-case basis, however, as evident from the fact that it only took 18 days for us to sell a $1.4M content site. Whatever the website, we feel that 30 days is a good average time frame for selling more than 150 websites a year.
How to Sell a Website
We hope that this post has given you a detailed understanding of selling a website from start to finish. All that’s left for you to do is sell your very own website to receive a lump sum of capital to play with.
To find out how much your website is worth, take a few minutes to fill out our free valuation tool. From there, you can sell your site with the largest curated marketplace for online businesses in the world.
You can also schedule a call with one of our business analysts, who will be able to give you free exit planning advice. This is the best way to sell your website for maximum profit.