With over 15 years of experience buying and selling online businesses, I‘ve seen first-hand what it takes to successfully sell a website or ecommerce company. It requires planning, preparation, and patience to maximize your valuation and find the right buyer.
In this comprehensive guide, I‘ll share everything I‘ve learned about selling websites and online businesses for top dollar.
Contents
Know Your Motivations
Before you begin, think about why you want to sell:
- Are you bored and want a new challenge?
- Is the business no longer profitable?
- Do you need capital for a new venture?
Your motivations impact the approach. If you need money urgently, a quicker sale at slightly lower valuation may make sense. If you want maximum profit, invest time to optimize before selling.
Be honest with yourself, as it dictates priorities like speed vs selling price.
Realistic Valuation Range Is Key
Accurately valuing your site is crucial – price too low and leave money on the table; too high and you deter buyers.
Here are the best valuation methods I recommend:
Multiple of Seller‘s Discretionary Earnings (SDE)
This is my preferred method. Take your annual SDE (profit after all expenses and owner salary) and multiply by 2-5x.
The higher the multiple, the faster the buyer recoups investment. 2-3x is common for established sites. Higher multiples for growing, scalable businesses.
Valuation Example
- Annual SDE: $200,000
- Multiple: 3x
- Valuation range: $600,000
Online Valuation Tools
Valuations from Flippa] and Empire Flippers provide a baseline number to start with.
But these tools rely heavily on self-reported metrics. Verify their estimate using other methods.
Web Traffic Valuation Calculators
Tools like Worth Of Web and Site Worth Traffic estimate value based purely on traffic stats.
This method is fast but fails to account for revenue, margins, growth, assets. Only useful as a benchmark.
Get Multiple Valuations
I recommend combining valuations from:
- Earnings multiplied
- Online valuation tools
- Web traffic valuations
- Asking prices for similar sites recently sold on marketplaces
Getting multiple data points gives you confidence in a fair asking price. Don‘t rely purely on what you want or need from the sale.
Optimize the Business Before Selling
Time invested improving your website or online business prior to selling results in a higher valuation. Here are proven ways to maximize value:
Increase Organic Traffic
More visitors naturally leads to higher valuations. Focus on on-page SEO and content optimization to boost organic search traffic.
- Improve page speed – sites with under 3s load time have 35% higher organic traffic
- Create linkworthy, sharable content
- Refresh old content that still gets traffic
- Target new keywords with content gaps
Boost Conversions
Higher conversion rates directly impact profits and demonstrate income potential to buyers.
- A/B test product pages and landing pages
- Improve checkout experience – Amazon saw $1.6 billion more revenue from a 1% improvement
- Offer coupons and limited-time discounts
- Reduce form fields and friction in purchases
Grow Email Subscribers
A loyal email list is one of the most valuable assets when selling a site.
Dedicate effort to growing your subscribers:
- Offer lead magnets in sidebars/popups to capture emails
- Send “abandoned cart” email sequences
- Promote signup options on social media
Buyers look for sites with proven channels to reach customers. Email marketing increases the value.
Scale Social Media Marketing
Big social media followings represent influence and reach that transfers to new owners.
- Post consistently – Twitter sees 5x more engagement when posting 3x daily
- Utilize paid promotions – Facebook ads can gain followers for $0.10-$1 per fan
- Go live frequently – Instagram Live video drives 2x more comments than standard video
The more eyeballs you can deliver, the higher the valuation.
Ensure Smooth Transfer of Ownership
I‘ve seen many sales fall through because the owner was too entangled in daily operations. To demonstrate transferability:
- Document your process – Create manuals on how you create content, handle DevOps, manage projects. Update regularly.
- Train staff or VAs – Even if you outsource a role already, work with the person on capturing your workflows and methods.
- Hand off access – Grant staff access to all critical business accounts so you’re not a bottleneck.
- Automate where possible – Tools like Zapier can connect apps to automate tasks, minimizing reliance on you.
The goal is illustrating that the business can thrive without you. Buyers want turnkey income streams, not full-time jobs.
Prepare Extensive Documentation
Buyers will scrutinize documentation during due diligence. Expect to provide:
- Detailed financial statements
- Tax returns
- Analytics reports
- Ad performance data
- Customer lists
- Access credentials
- Legal documents
I keep an organized, up-to-date Google Drive folder with all these docs ready to share. Makes it easy to share with brokers or buyers.
Understand the Sales Options
You can sell your site either directly or via a broker. Here are the key considerations for each:
Online Marketplaces
Selling through marketplaces like Flippa, EmpireFlippers, or FEI offers benefits like:
- Huge buyer audiences – Flippa sees over 2 million monthly visitors
- Low fees compared to brokers – Flippa charges just 10% of sale price
- Knowledgable buyer base – At least 77% of buyers have purchased online businesses before
But you manage everything from listing creation to due diligence and transfer. Can be time intensive.
Business Brokers
Listing with an established broker like FEI, Quiet Light, or Digital Exits has advantages including:
- Broader exposure – They market to their network of qualified investors
- Higher sale prices – Average 30-40% higher valuations
- Expert negotiations – They handle all buyer interactions and negotiations
- Dedicated support – Guidance optimizing assets pre-sale
The tradeoff is higher commission fees, usually 15-25% of sale price. And less control over the process.
Weigh the benefits of reach/convenience vs higher costs to pick the best option for your needs and goals.
How to Transfer Ownership Securely
To ensure secure, smooth transfer:
- Use escrow services like Escrow.com to protect funds until after assets are transferred. Fees are around 5%.
- Transfer domain registration and web hosting access to buyer.
- Only provide buyer admin access to sites and accounts after payment clears.
- Cancel your own admin access to apps and services to prevent future access.
- Follow tax, legal, and regulatory requirements in your jurisdiction.
Leaning on the experience of the marketplace or broker can give peace of mind through the transfer process.
Conclusion
Selling a website or online business is rewarding yet complex. With patience and diligence, you can maximize your valuation and find an excited buyer.
Accurately value your company based on objective measures of profit and traffic. Pour time into optimizing assets before listing. And carefully weigh the sales options to pick the right path for your goals.
With the tips and best practices outlined in this guide, you can successfully sell your online business and look forward to your next entrepreneurial adventure.
