The following article about selling an affiliate website (or any website in general) is a guest post from Adam Grunwerg. Thanks for the helpful post Adam!
At some stage when running your affiliate business, you’re going to want to sell one or two sites in your network in order to raise some cash and invest in newer projects. If a large proportion of your income is coming from one or two smaller sites (which could be destroyed in a future Google update) then it might also make sell to sell up now and keep the income for a rainy day.
I’ve had to sell affiliate websites under a range of circumstances (from trimming my network, to raising cash for new projects), so here are a few tips for your next website sale.
What should your MIN/BIN amount be?
For a really good affiliate website, you should be asking for anywhere between 15-24 months’ income for your site as a BIN. I usually like to set a MIN for just over 50% of my BIN. For example, the last website I sold (mosesbet.com) had a MIN of $3.5k and a BIN of $6k. You always have to be prepared to sell a website at your MIN in case you get a last minute offer, so don’t bother setting a reserve price that you’ll then renege on down the line,
In terms of valuing your website, this is something that comes with experience really (hence why experienced affiliates tend to get good deals when browsing auctions and market places). Every site is different, and there’s no single way of doing this, but if you feel your site is achieving its potential in earnings then looking for 12+ months income, possibly with a floor of 10 months.
In the modern climate of affiliating, I think it’s unlikely a small affiliate site will fetch more than 12 months income unless it offers something really unique (such as great content, a huge social media following, shed loads of aged content, a unique odds script etc.). Building a site on a premium domain will increase its value. You can check previous domain sales by searching in Bing or going to Upname.com.
Setting a price also depends on how desperate you are as a seller and how much demand you think they’ll be amongst buyers. If you can get two serious buyers to go head to head with each other than anything can happen.
Setting an Auction or Headhunting for End-Users?
If your site is high quality and unique then it’s always worth sending an email out to potentially interested buyers and setting a premium price. End-users such as operators or online businesses tend to pay 2-3 what an affiliate would, so it’s always worth trying this first. For example, if I was going to sell my own site BuyGold.co.uk then I’d try contacting a few premium UK gold retailers before I listed it on an affiliate forum. In addition, if I was ever interested in selling BinaryOptions.net then I might contact the owner of BinaryOptions.com (or even a large affiliate business like The Poker Company who own similar generic domains such as Craps.net, Poker.org and Blackjack.org). Whenever I contact an end-user like this I’ll pretty much double my asking fee in comparison to listing it on an affiliate forum.
If you fail to secure a private deal with a media company or end-user then you’ll want to list your website in an auction (e.g. Flippa.com) or forum which gets as many interested buyers as possible. If you have a gambling website, list it in a forum such as PokerAffiliateListings.com. If you have a product reviews website, list it at Flippa.com or even DNForum.com. If you have a UK website for sale, try looking for interested parties at AcornDomains.co.uk.
Another really useful tip I’ve used in the past is to check the “WTB Website” threads in the major forums. By contacting someone who is already looking for a specific type of site, you’ll be able to charge a little more than if you just listed it in a generic auction.
How to Pitch your Website to make it more Attractive to Buyers
I think most buyers are looking for the following five things: value, potential, low-risk, how it fits into their overall network and ROI.
Proof of long term earnings will be extremely important for premium website sales. As a rough figure, most buyers will value a site based on its most recent 6 month earnings. Therefore, it’s a good idea to try and maximize earnings now if you’re planning to sell a website a few months down the line. Just because something has “potential” doesn’t mean others will see it that way. Most buyers want to see an ROI as soon as possible and simply switch the affiliate links around without having to make too many changes to the site.
It helps to provide some basic information about how to site is making money and what buyers can expect to make from the affiliate programs. For example, make buyers aware of the $150 CPAs in your niche or the fixed fee monthly deals you’ve done in the past. I also like to add little things that build trust such as the natural forum links I’ve accrued in the past or lots of blog comments to show engagement on my site.
How to Accept Payment for Website Sales
In the past I’ve sold websites to people that I know well, which lowers the risk when dealing with large sales. If you don’t know the person that well, I definitely recommend using Escrow. The standard payment fee for Escrow is 3.25% (transactions of $0 – $5,000), however this can be split between buyer and seller. The obvious advantage to using Escrow is that it acts as middle man, protecting both buyers and sellers. If you sell a website through Paypal or direct Bank Transfer then the risks are a lot higher, since the buyer could technically create a chargeback at any time (these take months to resolve).