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Selling Without Website Broker? You’re Leaving Money on the Table

Posted By Guest Blogger 14th of October 2011 General 0 Comments

This guest post is by Jock Purtle of digitalexits.com.

So you want to sell your blog?

Your site is probably making more than $3,000 per month and you know that it might be worth a decent amount of money.

It's a deal

Image copyright Rido – Fotolia.com

Recent sales like that of the Huffington Post give you confidence that your content-based site has value to other webmasters or investors. And with the growing move of advertising dollars to the web, you could be the next person in the sights of cashed up buyers.

You have collected all the basic information that you think might help sell it, like domain age, monthly revenue, monthly expenses, growth trends, time to run the site, unique visitors and page views, income sources, and income proof.

You think you’re ready to sell, and are looking forward to a big payday.

You’ve heard of sites like flippa.com and you are thinking about listing the site yourself. However, have you considered using a website broker?

There may be some hidden benefits that you have not accounted for when selling your site this way.

What is a website broker and what do they do?

Full disclosure here: I am a website broker, so I can answer this question in full. A website broker is a business broker for websites. They help webmasters sell their ebusinesses. They evaluate the website, and position it to sell for the highset price possible for the vendor.

Here’s a list of general tasks that a website broker performs:

  • determine an appropriate value
  • compile a business memorandum
  • prepare a marketing strategy for the sale
  • interview, educate and show the website to potential buyers
  • assist in negotiation
  • assist with due diligence
  • draft and present offers
  • control information flow
  • protect sellers’ confidentiality
  • look after paperwork
  • help complete the sale (including contracts and funds transfer)
  • provide after-sales support.

What’s involved?

Website brokers assist in the entire sales process. When selling a site, the brokerage process is similar to that of a real estate agent. There is an agreement between the agent (website broker) and the vendor (website seller) for selling an asset (the website).

A broker will normally do their own due diligence before listing a site for sale, to make sure it is saleable in the current market. Once both parties are happy, and the seller gives instructions for the broker to sell the site, the broker will then prepare a sales memorandum (sales document) to be used to market the site and create competition between buyers. This document contains the website financials, traffic stats, and a general overview of how the website works.

Buyers then view this document and decide whether they want to make an offer for the site. They sign a letter of intent (LOI), and then get a set period for final due diligence. Then, if all parties are happy and a price is agreed on, contracts will be signed, the seller will receive their funds, and the buyer will take ownership of the website.

Why would you hire a broker?

Brokers normally have a unique method of selling a site. This includes specific marketing channels that the average webmaster doesn’t have access to, like a network of buyers, subscriptions to business classified sites, and investment firms.

Generally, a website broker will fetch higher multiples than auction sites or owner listings. If you look at our websites for sale you will see the general asking price is around multiples of two to three and a half.

An example of this is a site we recently sold. The owner was a single mom who built up a great blog about parenting. It had over 4000 pages of unique content, 30,000 monthly uniques, a strong community with lots of repeat traffic, and was monetized through advertising and affiliate sales.

The site was getting to a point where the business was putting pressure on her family time, and she wanted to sell. Her 12-month net income was $25,203. She came to us thinking that the site was worth about $30,000. We eventually sold the site for $68,000.

How long does it take?

It normally takes about two months to finalize a website transaction. However some sites can take a week and some six months—it really depends on the site in question. The longest part of the sales process is normally the due diligence and the back-and-forth between buyer, seller, and broker.

Some buyers need more time than others. If buyers request things like tax returns or older financials, it usually takes a little while longer.

How much do they cost?

On average, a broker will charge around 10% of the total selling price for handling the sale of your property. Some charge more, some charge less, but that figure is a good signpost to run buy.

This fee is due after the site is sold, and you have the money in your bank account.

Do they charge fees up front?

No. Brokers work on 100% commission basis. If you don’t get paid, they don’t get paid.

What type of sites are good for a website broker?

The best sites to sell through a broker are those valued between $50,000 and $5 million. That’s generally a site with $2,500 or more in monthly revenue.

What happens if they can’t sell my site?

A typical exclusive agency agreement lasts around 90 days. Good brokers will provide you with a 30 day out clause that basically means that in the first 30 days if you aren’t happy with them you can cancel your agreement, no questions asked.

Have you ever used a website broker, or bought a site sold through one? We’d love to hear your experiences in the comments.

Jock Purtle is a Senior Broker at Digitalexits.com. They are a full-service website brokerage specializing in website sales and acquisitions. If you are curious as to what your business is worth checkout the free in-depth website valuation guide

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Comments
  1. This sounds like a great service. However, if my site was worth $5 million I probably would debate whether or not to sell it. Why? Becauase that would mean it was making a lot of income and I might not want to give that up to start from scratch again. Of course, that much money may change my mind if it was really in front of me! 10% commission is pretty low too.

  2. I have never heard about Website Broker before. :D
    I’m selling some websites on Flippa. Maybe I will consider to try your service. Thanks for this informative article!

  3. Wow, I would never think there was such a job as a website broker! Judging by that blog of the mom working at home, you guys are doing great in this field. Good luck! :)

  4. Sounds interesting, had heard about this a bit but not so much in detail, and that too straight from the horse’s mouth. But still a long way to go for me i think, but will be interested in the service for sure.

  5. It’s like using an attorney or a recruiter (which is what I am), or an agent. A “middle man” is objective, probably has more knowledge of the industry and has the time to invest in addressing all necessary points of the deal. I sold an offline company with a broker and he saved me money in the end
    Good post
    Mark

  6. Hi Jock,
    Just like athletes have agents, bloggers would benefit greatly by having a broker handle the deal for them. I have never heard of a broker for selling a website until now.

  7. For those unsure I’ll weigh in my 2 cents here. I had a blog that was reasonably well followed but was getting in the way of my primary business timewise.
    I didn’t have a clue even how to get rid of it and little to no idea on value.
    Did some online research and found out about site brokers.
    I ended up clearing about 8k and got the site off my hands in a matter of weeks.
    Didn’t get rich or anything but I’d doubtless still be sitting on it if it weren’t for my broker Kevin.

  8. That’s a great deal of information. I’m glad you’ve shared this with us, because I myself have recently received new deals where I’ve sold almost all of my ad space and now expanded into affiliate marketing. I don’t think I’ll be ready to sell my blog yet because I definitely see the potential in it, but it’s a nice reassurance to see the sort of prices they’re going for.

  9. Looks nice B2B concept. Happy to know these kind of tools and will make sense when we can really make use of it. Thanks for the post Joke.

  10. very diffrent if you can get money from your hobby

  11. o im sorry this my link and blogger broker like the broker of property

  12. I know flippa.com too. It is a good website. But somehow, some of the site claim that they are making certain amount of money per month is hard to verify.

  13. Wow never heard of a website Broker before now,thanks for the post might need one soonest.

  14. Broker is a thing of the pass now. Flippa kills the career of all brokers.

    • Jeremy says: 10/21/2011 at 5:23 am

      Flippa is a great service for people who have sites worth under 50k. It’s especially good for sites that are selling for the 5-20k range. If you want to sell an established website for a much larger number, lets say 250k – 5 MIL, using an experience, and reputable broker only makes sense. We have access to the type of investors who have the money and experience to buy your website. We can negotiate you the most favourable deal, and help you get the maximum dollars out of your website sale. When you sell a website for 5k the process may be straightforward. You simply show your adsense account and your analytics and a deal is done. Once you start getting into the 6 or 7 figures things become ALOT more complicated, and less transparent. That is where website brokers come into play.

  15. I’ll be checking out the website. The business broking industry has been quite established for some time so it is probably about time the website industry catches up. The problem I see with the web flipping sites is that you can never be really sure of what you are getting.
    Cheers

    Neil

  16. Interesting subject!. What happens if your biggest asset is a YouTube channel?.

    • Dave it is possible to sell your youtube channel. However this is something we don’t do. I suggest doing a search for something like “sell my youtube channel”

      Having said that, the basic principles of buying and selling apply. It must be making revenue and the buyer must see future maintainable earnings for the channel so he can get a return on investment.

  17. Question for Jock (or anybody/everybody)-

    In order to sell a blog, do you need to be invisible? Meaning – could someone like a Steve Garfield sell his blog even though he’s the primary face of the videos that occur on that site?

    I imagine it’s easier to sell a HUFFINGTON POST where it’s an actual business being run LIKE a business. …thoughts?

    • Yes a site like that could be sold, however the sale price that you would generate would be largely dependant upon the new owners ability to take over the role of the personality or find a suitable replacement.

      On the other hand if the blog was based on content from a variety of sources that were all paid as staff (like pay per article) then that site is starting to be a proper business and will attract higher values because it requires little time for the new owner.

  18. Great to know that there are intermediaries in this also..wondering if can do without brick and mortar models even in virtual world.. we need brokers to sell websites too..

  19. You can easily sell your website without broker..

    • well, website selling is not a big thing as such , but the reason one needs a website broker is that, one cold get the right value while selling a website, moreover if the market value of a website is less, a website broker works n order to increase he market value of the site and then sell it at a higher price..

  20. Its amazing to know there are website brokers out there working just like other brokers to help people find the right choice. The article is really informative and new to me in every aspect. Great information, great article.

  21. Site valuation must be done, before selling the site to get the rough idea about its price, then only go to website broker, and choose broker accordingly who can give you maximum profit…..

  22. I have to agree that no all sites needs brokers to sell them successfully, for instance site in $50k rang is better to sell without the broker as there are plenty of buyers at flippa that are willing to buy sites in this range, but if the price goes above this level then Flippa usually is not the best place to sell the site unless you have great credibility there and you know what you are doing.

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