Sell Your Website When It’s Hot and the Market Wants to Buy It
In a previous article, I explained how experienced website buyers build financial wealth by buying distressed websites. These buyers then turn these websites businesses around for huge ROI.
But experienced buyers form a small part of the buyer market out there. Most established website buyers are not professional buyers and hate distressed websites. They fear that they don’t have the knowledge or expertise to turn a distressed website around. As such, if you wait to sell your website when it’s in decline, you have a smaller pool of buyers to sell to, and there is a significantly lower chance of selling it.
Most sophisticated buyers specialize in acquiring distressed websites in specific niches. Your website may not be in their preferred niches. The average buyer won’t usually be interested in a website with declining traffic and revenues. As such, you’d be offering your website for sale to a smaller pool of buyers. This is what makes it much more difficult to sell.
You should always sell your website when it’s hot; when its traffic and revenues are increasing or, at least, stable. This enables you to reach a larger pool of buyers.
Think like a successful stock trader. Most successful traders use a strategy of buying quiet, sleeper stocks and selling them to other investors and traders when the stocks become hot stories in the news. They buy a quiet stock and sell a hot stock for big profits.
The same applies to websites. Don’t sell your website when you’ve lost interest in it, stopped working on it, stopped adding content to it, and it has suffered traffic and revenue declines.
Unfortunately, this is precisely when most website sellers try to sell their websites. They attempt to offload these cold, distressed websites on to the next person. These websites almost never sell.
By the way, we’re talking about established websites with years of operating and financial history. We’re not referring to distressed websites that can be found in popular marketplaces for a few hundred or a few thousand dollars. Those distressed websites sometimes sell for small sums of money to the average buyer because the financial risk to the buyer is minimal. Even if the buyer can’t turn the website’s fortunes around, he only loses a little money.
In order to avoid finding yourself with a distressed website on your hands in the first place, you must follow these 2 simple rules:
1. Start or buy websites only in niches that you’re passionate about or familiar with.
Because it’s so cheap to register a domain name and build a website, so many people launch or acquire websites in niches that they don’t care about. Inevitably, they lose interest and stop adding content to the website and stop promoting it. The traffic drops, the revenues drop, and they try to sell it to the next person unsuccessfully.
Do not make this mistake. Only get involved in website niches that you’re passionate about. This passion will fuel your work during the tough periods. This will enable you to build a solid business over the long-term in spite of any short-term difficulties.
2. Determine whether you really have the time to manage the website effectively.
Before you acquire or launch a website, you must define exactly what operational and financial results you expect to produce from it. Then, you have to be honest with yourself about how much time and energy you have to give to the website operations to produce these results. If you cannot give the necessary time and effort, you should not get involved in the website in the first place.
Too many people assume that a website runs passively. Yes, websites produce passive income. But this passive income is a result of the active work of the website owners. If a website is neglected, it drops in rankings with search engines, visitors stop visiting the website, traffic drops and revenues follow.
For example, let’s say you buy a website and the previous owner wrote and published 5 articles per week on it. You must assess whether you can realistically do the same to maintain the website’s traffic and cash-flow. If you can’t, then you probably can’t replicate the website’s performance. The website’s traffic and cash-flow will drop and you’ll be left holding a distressed website.
You must manage your website regularly. Even if you do decide to sell your website, you must manage it actively until you actually transfer its assets over to the buyer. Operate the website optimally throughout the sale process until your very last day of ownership.
If you still want to launch or acquire a website but you don’t have the time to manage it, hire a contractor to manage it for you.
Sell your website when it’s hot. This is when the market wants to buy it. Always listen to the marketplace and give it what it’s asking for.
Author: Kris Tabetando
Kris Tabetando provides mergers & acquisitions (M&A) advisory and brokerage services to Internet companies. He also partners with investors to acquire & manage Internet businesses.
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