Selling Your Web Site: How Much Is A Pound of Pixels Worth?

Sell Websites

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You’ve worked hard to get to this point – to the point where your web site is profitable. It has value. It generates income, has a stable client or customer base and generates enough to enable you to leave the 9-to-5 workaday world and become your own boss.

What may have started out as a hobby or experiment has grown, gone through numerous incarnations and changed its look, keywords and even its target demographic – but all that tweaking produces a web site that actually turns a nice profit every month.

Enough to consider putting your digital storefront up for sale? Maybe it’s time to cash in on all those extra hours, the expense of hiring a copy writer, a programmer, a CMS you understand and all of the other steps you’ve taken that have led to ultimate web success.

Selling an intellectual property (IP), that’s what a web site is since it doesn’t actually “exist” like real property (a house, car, boat – something you can touch and walk around in), may be more difficult than you think. On the other hand, if you do it properly, you can walk away with enough cash to live a life of ease and financial independence.

1. Do some housecleaning.

You know that glitch you’ve been meaning to fix? Fix it. You know that dead-end link you’ve been meaning to re-program? Call the programmer. Before you put your site on the market, make sure it’s optimized for SEO, conversion and for the site buyers’ market.

Like selling a house, the buyer wants things in tip-top shape.

2. Gather your numbers.

A knowledgeable buyer – the kind you want – is looking for a number of numbers:

* monthly gross revenues
* monthly expenses to determine net
* revenue sources (provide a breakdown of direct sales, AdSense, paid adverts and other revenue sources)
* number of customers/clients in the IP’s database
* complete site metrics

3. Contact competitor site owners.

All contact information can usually be located using Whois, the registry of ownership of all public web sites. Some owners prefer anonymity so they pay a fee to protect their privacy, i.e. not all prospects can be reached using Whois.

Also, sites may be registered under “company” names, making it difficult to track down a person to whom you can speak.

Of course, in most cases, good web sites have a CONTACT US page. You can always drop a note to the company asking for contact info. Mention you have a site for sale but keep it brief. Your email will probably be read by a couple of customer service reps before reaching the decision maker’s desk.

4. Contact businesses within the topicality of your site.

If your site sells nutritional supplements, Google nutritional supplements and start making contact with the major corporations operating within your sphere.

I also recommend contacting your wholesalers. These companies already know your site moves product, making the sell a lot easier. You don’t have to explain the market or your numbers. Your wholesalers already know you’re doing quite nicely, thank you very much.

5. Finding buyers outside your business realm.

Once you’ve combed your industry and parallel industries targeting the same demographic, you may have to turn to a web site investor. They’re out there and they’re savvy. In fact, the good ones can valuate your web site at a glance, identify problems and missed opportunities and even figure out how to integrate this new site into their existing on-line IPs.

However, these web property investors are looking for the best deal and may not recognize the intrinsic value a site has within a niche industry. If your site is the “yellow pages” for your narrow industry sector, that has a great deal of value to a potential buyer.

That’s why a punchy sales letter is so useful when working with a prospect outside your industry or business sector. A good sales letter details the intrinsic assets that add value to a site – things like reputation, industry positioning, expanded service offerings and other features that make your site more valuable to an investor.

6. Setting an asking price.

How do you valuate your profitable web site?

I’ve seen lots of formulas: 2X annual gross earnings, 5X five-year net earnings and so on. The simple fact is that your web site is only worth what a buyer is willing to pay. And that may not be the figure you had in mind, nor does the offer fit any formula.

That’s another reason to shop the site around your industry. These business owners understand the value of your site, and the site more easily dovetails into that company’s off- and on-line marketing activities.

7. Put it in writing.

Most likely you’re selling to someone you don’t know. She may sound like a total professional over the phone but, as they say, “No one knows you’re a dog on the W3.”

The contract can be simple. Be flexible with your terms to sweeten the deal. Expect 50% of the total agreed-upon price at signing and the remaining 50% upon successful migration of the site to the buyer’s host server.

Maintain a back-up copy of the site on your server and don’t hand over the keys to the back office until final payment is made and the check clears. Because there’s virtually no regulation or oversight in the buying and selling of a web-based IP, make sure the money is in the bank before making the arrangement 100% rock-solid permanent.

8. Offer to serve as a consultant.

This is a great selling point. Agree to remain available as a consultant, either as part of the purchase price or on a retainer basis. This makes buyers feel a lot more comfortable knowing that they can turn to you with questions and suggestions.

And all it costs you is time. In fact, if you stay on as a consultant you can continue earning from a site you sold. How cool is that?

Selling a web site takes a lot of thought and planning to avoid low-balling yourself out of thousands or, worse, getting ripped off by somebody you’ve never met and never will.

You’ve worked hard to create value on line. Make sure you get what you deserve, make sure you get what you want and, finally, remember: there’s no deal you can’t walk away from.

There’ll be another deal, another offer, tomorrow.

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