I’m not big on selling sites myself–I’m more of the buy-and-hold type than the buy-and-flip (or build-and-flip) sort, but I’ve sold a couple of my sites over the years. Sometimes it just makes sense.

Reasons for selling one of your websites

1. You’ve lost interest in the niche

It happens. Some folks are lucky enough to find their passion early on and also make that passion profitable. Then there are the niche-hoppers like me. I started with history (no money there), moved onto fitness, then got into home improvement. Today my interests are changing again, and I’m trying new things while I continue to maintain the “pay dirt” sites.

A shift in your interests doesn’t necessarily mean you should have a fire sale and liquidate all your old websites. Even when I’ve slowed down on (or quit) producing content in a niche, I’m loathe to sell. These quasi-abandoned sites still bring in tens to hundreds of dollars a month with Adsense, and I always hate to see my bottom line go down. Also I like to allow the possibility that the interest will one day be rekindled. If I decide to delve into that niche again, it’s easier to bring an established site back to life than start one from scratch.

But if you’re tired of looking at a site, or it’d be too much work to revamp it and bring it in line with your older-and-wiser standards, then it might be a candidate for a sale.

2. Future trends aren’t looking good for your niche

If you’re immersed in your niche, and you pay attention to the news, you may have a good idea of what the future will bring. And it may not be looking good.

For example, let’s say you have a blog on SUVs. It was a star for you for a few years, but things changed last summer when gas got so expensive. Readership dropped and advertisers stopped paying well. Gas prices have since come down, but if you believe that we’re heading into an era where oil demand will outstrip supply, it might make more sense to start blogging about hybrids and alternative-fuel cars instead.

Don’t just give up on the old blog though. Sell it if you want to cash out. There will likely still be buyers.

Often when you’re immersed in a niche, you see trends that aren’t apparent to outsiders or newcomers. Also someone might want to buy your established, authority site even knowing the trends (people sometimes buy sites in niches they have no interest in just to sell links).

A note on trends: just because something may go out of fashion, that doesn’t necessarily mean you have to abandon it. A solid site with a lot of incoming links is going to be an authority in the search engine’s eyes no matter what popular trends are. Rather than starting over, you might be able to use that authority status and just shift the focus of your blog to the new trends. The SUV blog could expand and cover hybrid SUVs or smaller vehicles. The search engines really don’t care if your niche evolves over time.

3. Your site has become more work than its worth

Sometimes its our success and not our failures that create hurdles in this business. When you get a site that becomes popular, suddenly you can be inundated with news tips, email questions, comments to moderate, requests to buy advertising, the pressure to blog daily, etc. etc. etc.

If you’re the entrepreneurial type, this is usually when it makes sense to hire someone else or at least outsource some of the simple things. However, let’s be blunt: a lot of us writers aren’t that interested in becoming business owners.

I know I fall into that category myself. I actually prefer creating the simple article sites that may rank well for a couple of search terms but that aren’t going to turn into the next Gizmodo. My style is to make a good living while committing myself to as little time at the computer as possible (which is why I have a stack of email in my box right now that still needs to be answered…).

There’s also the chance that your site, though popular, isn’t making much money. This is often the case with sites where the owner didn’t set out with a clear monetization plan in place from the beginning. In this case, outsourcing may not be an option.

If the site has grown popular, you’re always going to be able to make money selling it. If it’s taking too much of your time for what you’re getting out of it, this is a third case where it might make sense to sell.

4. You’ve been plugging away at your site, but it just isn’t making you money

Speaking of sites not making much money…

I’m sure I’m not the only one who came to realize that my first niche wasn’t profitable. Looking back, the reasons were obvious, but we often need to learn the hard way, no matter how many expert bloggers there are out there to advise us otherwise!

If you’ve been religiously writing content for–and promoting–your site for several months or even a year, and you’re just not seeing the earnings you hoped for, then it may be time to walk away from the project. It’s worth getting outside advice to see whether you’re just missing something obvious (ad placement, not enough commercial tie-in, etc.), but there are plenty of niches that just aren’t that easy to monetize.

Again, rather than just abandoning the site, you may want to see if someone would be willing to pay for it. You ought to get something for all the work you put into it after all!

5. You need the money

I’d be reluctant to sell a site out of desperation, but we are living in desperate times. One of the perks of having multiple websites–and multiple streams of income–is that selling off one is always an option in tight times.

To make up for the monthly income you’d lose, you can make a deal with yourself to put more work into your other sites (ones that have the potential to become good moneymakers but perhaps haven’t hit their full stride yet).

And if your spouse has lost his or her job, and the mortgage payment is due soon, you might be surprised how much you can get for your original content, especially if you’ve focused on one niche and built up links to your site. Just make sure you give yourself a few days to market the site and a few more for it to “close.” Buyers will often insist on using escrow, and it takes time for money to transfer. Also, it usually takes a couple days with both parties going back and forth with emails and transferring files and domain names and what not.

If it is in your cards to sell your website, you can try auctioning it on the Sitepoint or Digitalpoint forums, or–if you’re not in any hurry and will only sell if you get an offer you like–you could just list “this site for sale” or some such in the menu. You never know what kinds of offers you might get that way.

Post from: Writing for Your Wealth

When Does It Make Sense to Sell a Website?

Fortunately, this probably isn’t as much of a concern as you might think.

The first two sites I bought were mistakes. They were mistakes because I wasn’t knowledgeable on–or even interested in–the niches. But I still made my money back, just from holding them, doing a few hours of work, and then selling them about a year later for more than I’d purchased them for. (I’d actually made my money back before I even sold them.)

I hadn’t set out to be a site flipper, but sometimes that’s what happens when you lose interest in a site or topic. My point is that even if you screw up (i.e. pay too much or get into a niche that isn’t right for you), it can still turn out to be a profitable experience.

As long as you buy an established content site with incoming links and search engine traffic, you’re probably not going to lose your investment moola. Unless you buy the site and then abandon it completely, it’s mostly just a matter of how long it will take to make your money back. Of course, the less you can get the site for, the sooner you’ll reach that break even point.

So, what’s a fair amount to offer? What’s a site worth?

Ultimately a site is worth whatever someone is willing to pay for it, but the industry does have a few formulas that might guide you in making an offer.

Industry Formulas

The folks who buy sites regularly will often quote 10x to 12x monthly profits. A savvy seller with a good content site will usually hold out for more, and rightfully so. For an established, original content site, 18x to 24x monthly profits is not uncommon.

Of course, if you can find a motivated seller who needs cash and is tired of working on the site (and maybe hasn’t updated for a while), you could get it for significantly less (this is more likely to happen when you’re out there looking for sites rather than simply shopping on auction forums).

These rules are pretty loose and don’t cover everything. For example, how would you make an offer for a site that isn’t currently monetized (but could be)? Or what if the site is under-monetized and you know that simply shifting ads about would double the monthly income? How much would you offer then?

Other factors to consider in valuing a site:

• Monthly Traffic — Search engine traffic is particularly desirable.
• RSS Subscribers (for blogs) — I wouldn’t put a lot of weight on this, as existing readers can actually be a hindrance. If they’re there because they like the current blogger’s writing style, they might bail when a new writer comes on board.
• Domain Age — The older a site, the better, because it’s more likely to be considered an authority by the search engines. A 10-year-old site probably isn’t worth 10 times more than a one-year-old site, but age does increase value.
• Links — The more links pointing to a site, the better. In particular, old, aged links are highly valuable.
• Good Domain Name — Keyword-rich domain names are great. If you’re buying a site, a “brand” type domain name probably isn’t going to be as ideal (another case where folks loyal to the brand may be irked when a new owner/writer takes over), and something like someone’s name dot com is horrible.
• A Niche You’re Interested in — This “factor” doesn’t come up a lot when talking official site valuation considerations, but it’s worth mentioning. If a site is right up your alley–you know you’ll enjoy writing for it and marketing it–it makes sense to pay more than you might for a site you’re just going to flip or hand off to another writer.

How much are each of these factors worth? It’s hard to say (there probably aren’t any hard and fast formulas out there), but they’re definitely worth considering, especially when you’re dealing with a site that isn’t currently monetized. Valuing a site by its Google Adsense revenue can make things simple, but some of the best deals will come in the form of sites that aren’t easy to put a price tag on.

Sometimes, you just have to go with your gut.

Now, good luck and good site buying!

Post from: Writing for Your Wealth

Buying Websites: How Much Should You Pay?

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]]> http://www.writingforyourwealth.com/empire-building/buying-websites-how-much-should-you-pay/feed/ 3 http://www.writingforyourwealth.com/empire-building/buying-websites-pt-2-research/ http://www.writingforyourwealth.com/empire-building/buying-websites-pt-2-research/#comments Tue, 27 Jan 2009 22:27:57 +0000 Lindsay http://www.writingforyourwealth.com/?p=523 Last week, we started talking about buying established websites to kickstart your empire building (or add to an already existing “empire”) and get the monthly checks rolling in a bit sooner. Once you find a site you’re interested in buying, it’s time to do some research.

Note: It’s easy to get bamboozled as there are a lot of folks out there trying to pass off new sites as old or low traffic sites as high traffic sites (amongst other things).

Okay, you’ve been warned. Now let’s talk about what you should check up on and how to do it.

How Much Traffic Does the Site Get?

It probably goes without saying that you would prefer a site that already has visitors coming to it.

Not only do you want to see how many visitors the site is getting a month, but you’ll want to see where they’re coming from. If all of the traffic is coming from paid advertising, you really have to question whether it’s worth it to pick up this site. If the current owner pays $100 a month for pay-per-click traffic and makes $200 a month, this kind of scenario could work, but I definitely prefer straight search engine traffic coming in through a variety of keywords.

When it comes to measuring traffic, ask to see the last 12 months worth of logs. Ideally the owner has Google Analytics set up, and you can look at that, but seeing screenshots of the site’s Awstats readouts may have to be enough, especially for smaller deals.

To double check (and make sure the traffic screenshots aren’t fudged), you can use an outside source such as Alexa.com. While Alexa isn’t a very reliable measure, especially outside of techy niches (the company’s data comes only from folks who have the Alexa toolbar installed, and if you’re not a webmaster, there’s a good chance you’ve never bothered), you can get an idea of whether or not anyone really visits this site. An Alexa rating in the high millions means visitors are few and far between.

How old is the domain name?

An aged domain name is worth more than a brand new one, so you’ll want to know when the site was originally established. If the domain name isn’t more than a few months old, there’s little point in researching further. If you wanted a new site, you could build it yourself, right?

Don’t just take the owner’s word for the domain name age. I always take a peek at a site with the Wayback Machine, an archive that goes back for years and shows you snapshots of what the site looked like back in the day.

Though this doesn’t necessarily tell you when the domain name was first purchased, it’ll show you when pages were first placed on it (and that’s all we really need to care about anyway). Also, it can show you if the site has changed over time.

These days it’s common for people to snap up an old domain name when it expires, put a new site on it, and then try to sell it as some great resource that has been online for 10 years covering such-and-such topic. Suddenly a domain name that originally hosted a site about astronomy has been switched to a site on (the more profitable topic of) home loan modifications.

This isn’t the kind of “established” site you want to buy. You want the original content with old links pointing to it.

Speaking of links…

Are there good links pointing to the site?

Google, in particular, likes not just links but “aged” links. If a five year old site didn’t start getting any links until last month, then it’s not as valuable as a five year old site with links that are three, four, and five years old.

There are tons of resources for checking how many links are pointing to a page and where they’re coming from.

This link checker does a decent job.

What you want to see here is a number of links coming from different domains and from sites that are (ideally) related in topic to the one you’re thinking of buying. Links from blogs are nice, since the post date gives you an idea of the age of the link.

Is the content original?

Even though we’re writers and we’re planning to improve the site by adding articles, blog posts, etc. of our own, we’d ideally like to get a site that already has original content. If the content is good, it’s a clue that the links we found in our earlier research were given naturally instead of purchased.

One way to check whether content is unique or has been copied far and wide is with CopyScape. They do charge five cents a search, but it’s certainly worth investing a few nickels before laying down hundreds or thousands of dollars to buy a site.

The downside to programs like Copyscape is that you’ll often come across a case (especially with blogs) where the content may have originated on the site you’re looking at buying, but other sites copied it via the feed. I wouldn’t worry too much about such a scenario, as long as the original site has more links to it, more Google PageRank, etc.

And since I mentioned it, let’s cover PageRank briefly.

Does the site have Google PageRank?

PageRank used to be a lot bigger of a deal than it is today. Briefly, it’s a 0-10 value that Google assigns based on the strength of links going into a site.

If you don’t have a toolbar or plugin installed that displays a site’s PR automatically when you’re surfing the web, you can check PageRank here.

While PageRank isn’t the end-all/be-all of valuing a site, especially these days, it can be worth taking a look. An established site should have at least some PageRank on the index page and maybe some of the back pages too.

Go forth and do research!

These are some basic resources that should help you find out whether a site is truly as “established” as the owner says it is. If you have other methods or tools for researching, feel free to mention them in the comments!

In the next post, I’ll wrap things up by covering how to value a site.

Post from: Writing for Your Wealth

Buying Websites: Researching the Site

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