And how to maximise your sale price
Just like you, I was fascinated at the thought of selling a niche site. I read about Wirecutter selling to the New York Times for 30 million and thought, “woah. I want a piece of that!”.
But I had no idea how the process worked.
Now I’ve sold two niche sites and wanted to share exactly how the process works.
Understand what you are selling
A niche site with zero traffic is worth zero dollars.
A niche site with 100,000 traffic but zero earnings is still worth zero dollars.
To sell a niche site, you need profit-earning traffic.
Sure, the buyer is buying the whole site and the many articles you’ve written, but the value comes from the articles earning money. Usually through display ads or affiliate links.
Traffic alone is a vanity metric. The real magic is in the profit margin you get from the traffic.
How the price gets determined
Your niche site’s price is a multiple of its monthly profit averaged over the last 12 months.
What decides the multiple? Well, a bunch of things. When I started back in 2016, the multiples were around the 25X mark, and people were sharing rumors of it going as high as 30X.
Nowadays, 30X is the minimum, and my second niche site sold last year at a 48X multiple! But for estimating if this is your first site sale, I’d stick around the 35X mark.
Maximizing your multiples
A higher multiplier can be had two ways.
The first is showing your site is stable, and the earnings aren’t likely to disappear. The second is showing growth potential. Because a buyer ideally wants to be able to boost revenue by 50% in the next 3 months.
Factors that make for a stable site:
- The site has High DR/DA site so big competitors won’t swoop in
- Traffic is evenly spread across posts
- Your site is more than 3 years old
- Income streams are diversified
- Traffic is diversified
If you can hit all of those, you’d have buyers lining up to buy your site.
Growth potential factors:
- Lots of keywords left to target
- Haven’t made private deals with affiliate partners
- Haven’t diversified income streams
Buyers love growth potential. They won’t just leave the site as is for 3 years to earn back what they’ve spent. They want to jump in and increase profit ASAP.
Advertise the plans you wish you could execute but didn’t have the time. Show all the keywords you haven’t hit yet. My second niche site had 350 posts, but the biggest site in the niche had 1200, tons of room for growth.
How do you find a buyer
I made a mistake with my first site sale. I went straight to the broker Empire Flippers and signed up to start the process. Yes, they were helpful and guided me through the sale until a buyer agreed upon a deal. In just three weeks at that.
But two days later, one of my affiliate partners phoned me up and offered me more money than my current offer. But It was too late. I was already locked in by contract.
However, going through a broker took care of the whole process:
- They verified the site’s earnings
- Found the buyer
- Took care of the transfer of the site to the new owner
A process I had no experience with so the help was needed.
But those are two places to start looking for buyers. Companies you already work with and a broker. Next time, I’d still probably go through a broker for convenience.
I’ve heard that there are Facebook groups where people buy and sell sites, but I’m distrustful. I don’t think I can hand over the keys to the castle without a middleman overseeing the process.
What fees are involved
Everybody wants a cut when large amounts of money change hands.
If you go private, it might be as simple as paying for escrow. Through a broker, 15% of the sale value is much more likely.
But everything is negotiable.
Challenge the 15% fee. The first time I got it down to 12%, and the second time, I got it down to 10%. That’s a big difference and puts more money in your pocket. If you don’t ask you don’t get.
How does the transfer process work
The transfer process is simple if you go through a broker, as I did. The buyer signs up for all the same affiliate and display advertising accounts as you. Then, the broker sends someone into your site to transfer over all your affiliate links to there’s.
Digital assets get handed over, passwords get handed over, and meanwhile, you sit there anxious as hell, waiting for it all to come together.
I take it as a “do what you’re told” moment. The broker will tell you what they need, and you give it to them.
Just take it step by step.
The dreaded 14-day cool off period
Once the assets are sent over, you enter the 14-day cool-off period. It’s 14 days where the new buyer checks sales are coming in as expected and that everything is as promised. It’s possibly the most tense you’ll ever be because it’s fully out of your hands.
Of course, if you’ve been honest, then it’s easier because you’re not hiding anything. But in those 14 days, anything could happen, and they could challenge the sale price if things aren’t as expected.
On the plus side, they would have to prove that was the case to the broker who’s acting as your escrow account. I haven’t heard of it going wrong at this point at all, but it’s still a tense time.
You Get Paid
After 14 days, you’re in the clear. The niche site is no longer yours, and you get a big fat cheque wired into your account. I always hear of entrepreneurs who get that payday and then feel nothing.
I felt fucking fantastic when the payment came in.
It’s not the easiest process, but if you have a blog and are getting fed up with it then it’s well worth considering selling it. My site sales felt like I was removing a stressful project I was no longer interested in while receiving a big payday for the trouble. A win-win situation.
I hope that was helpful if you have a niche site you’re considering selling. Or if you want to join the fun of niche sites I have a guide on starting a niche site in under 3 hours.