I’m excited to have Marc Andre from Profit Blitz sharing with us today.
He is so knowledgeable when it comes to marketing and growing a profitable blog. Which he has done time and time again.
I mean, he did sell one of his sites for well into the 6 figure range but more on that later in the interview.
Today, I’ll be chatting with Marc about things we should know in order to get as much as we can for the blogs we work so hard to grow.
First off, thanks for being here Marc! Before we get into the meat of things, tell us more about you and ProfitBlitz.com?
Thanks for the invitation Steven, I appreciate it. Well, I have been working online full-time for over six years now. Before that I had worked part-time for about a year or two to get to the point where I could quit my full-time job.
Most of my experience involves blogging in one way or another, and that is how I got started. Early on in my blogging I made the majority of my income from selling ad space and from AdSense, and then over the years I added other revenue streams like affiliate marketing, selling my own digital products, membership, and offering services. Even with things like selling products and membership I have made blogging a big part of my approach to marketing my sites.
Over the years I’ve had sites/blogs in several different niches, but I tend to gravitate towards popular and crowded niches like photography, travel, design, and now with ProfitBlitz I can add internet marketing to that list. I’ve sold several different websites ranging everywhere from $1,000 to $500,000.
I launched ProfitBlitz in early 2014 mostly because I wanted a place where I could write about the things I’ve learned through experience with my other websites.
A quote I find interesting is, “Your product is worth what you get someone to pay for it.” When selling a website or blog, what are some key principles that can give us a realistic idea of how much we may be able to get someone to pay for our site?
When it comes to selling a website or blog that statement really is true, because every potential buyer will have a different amount that they are willing to pay. I’ve learned from experience that sellers tend to value their own websites differently than buyers (myself included), and so selling a site can be a challenge because you either have to find someone who values it the same way you do, or you need to be willing to compromise.
The biggest mistake I see potential sellers making is overestimating the value of their sites based on factors aside from revenue and profit. Most buyers will base their offer on the average monthly profit of the site at some multiple. It may be 10 times the monthly profit, 20 times the monthly profit, or in some cases higher. For example, if your site makes an average of $1,000 profit per month that buyer may be willing to pay $20,000 for it based on a model of buying at 20 times the monthly profit.
Many sellers will think that things like search traffic, good reputation, links from quality sites, social media profiles, or anything else will significantly drive up the price. “Potential” is the word that is most often used. That is possible in very rare cases, but 95-99% of the time the buyer is only concerned about actual revenue and profit and is not willing to pay more for unproven potential.
Each buyer will have a different model when it comes to valuation, but in general 20 times the monthly profit is a pretty good starting point if you are looking to determine the value of your site. At Empire Flippers (a marketplace for buying and selling sites) they pretty much price everything based on 20 times the monthly profit, although some sites may actually sell for more or less.
At Flippa, probably the largest marketplace for selling sites, you’ll see a huge variation. Many smaller sites (typically less than $1,000 per month in profit) might sell for only 10 times the monthly profit. Some other large sites have sold for much higher multiples.
If you sell your site privately (without listing it at a marketplace or using a broker) you might be able to get a higher price, but finding a buyer is not usually easy.
I apologize for the shameless plug, but if readers are interested in learning more I cover the process in much more detail in my Complete Guide to Selling a Website or Blog.
I have read your Complete Guide and it is an excellent resource. What approach would best help us reel potential buyers in?
My approach when selling a site is to base the asking price strictly on profits. I’ll mention some other factors that might add value to a potential buyer (like established search traffic, an email list or customer list, etc.) but I use those more as extras and don’t really try to convince buyers that they should add to the selling price.
I would rather try to maximize the money I make from that search traffic or customer list before trying to sell.
For those ready to take the next step and begin to locate potential buyers, what would you recommend would be the best and safest places to start looking?
My approach is to start with my network. When I sold my site last year, I sent an email to about 10 or 15 people that I had developed some type of relationship with over the years. Some of those people I had known for several years and communicated with pretty frequently, others I had only limited communication with before that email.
I selected those people based on how well-connected they are. When I emailed them I didn’t ask if they were interested in buying my site, I told them I was looking to sell the site and asked them to get in touch with me if they knew of anyone who might be interested. Some of those people had bought or sold sites in the past, so I was hoping through that extended network to find a buyer. From the people I emailed I got interest from about three people and wound up getting an offer from one that bought the site.
Of course, this approach works best if you have a strong network of your own. In my case I had been building my network for about 5 years, so I had the advantage of having a pretty decent network. If you’re just getting started I recommend that you make networking a priority because it can help in countless ways.
I wanted to make this sale privately because I didn’t want to list the site publicly on a marketplace. I didn’t want everyone to be able to see that the site was for sale, and I didn’t want to list revenue and profit numbers publicly.
Also, I had sold some sites through Flippa in the past and I’m not a big fan of selling at Flippa so I wanted to try to do it on my own. Flippa is a good place for getting your site sold quickly, but it’s a better place for buyers than sellers. Most of the buyers there are bargain hunters (which isn’t a bad thing, that’s how they make money) so you tend to get a lot of low offers and people telling you that your site isn’t worth anything.
My recommendation for others is to consider listing your site for sale at Flippa if it is making a few hundred dollars per month and you want to move quickly. If you’re making $1,000 or more per month I would recommend listing with Empire Flippers over Flippa. I haven’t personally listed a site at Empire Flippers but I have heard good things and they have an excellent track record for getting sites sold quickly at right around 20 times the monthly profit.
If you have a site making $10,000 or more per month you may want to either use a broker or try to find a buyer on your own. I haven’t used a broker, but I have talked to a few and at some point I probably will try listing a site with one. The broker I know the best is Jock Purtle from Digital Exits, and he offers a free valuation (most other brokers do this as well), so you can get a good idea of what the site is likely to sell for.
After we find someone who is interested, what is the normal process between the seller and the buyer when getting the deal finalized?
Typically the buyer will want to get access to Google Analytics so they can check out the stats before finalizing the deal, and they may also need you to verify income. I recommend not doing any verification before you at least have a tentative agreement in place.
Some brokers will have Non Disclosure agreements that buyers will need to sign before doing any verification, and this can be a good idea, especially if you don’t know the buyer. You don’t want to give too much information to someone who could wind up not finalizing the sale and then using that information against you by creating a competing website.
Most of my sales have been to people I know so my process hasn’t been as formal. However, it’s important to always use a contract for the sale. I think you can find some free contract templates for selling a website if you do a Google search, and if you use a marketplace like Flippa or Empire Flippers, you can use their template. It’s also not a bad idea to have an attorney review the contract before signing it.
The process of transferring ownership will depend on the situation. In a lot of cases it will involve an escrow service like escrow.com. The escrow service will help to protect the buyer and the seller. The buyer will send the money to the escrow company and they will release it to the seller (after keeping a small percentage of it as their fee) after the website and domain name have been transferred to the buyer.
Many out there have never made it to the point of selling a website and you sold one for well into the 6 figures! Can you share more details about the journey you took to get your site to the point of being sold for that kind of money?
That site was basically my full-time job for about 4 years, so I put a lot of time and effort into getting it to that point. I did have other sites as well during those 4 years, but the other sites were more like side projects, although some of them did quite well.
I don’t remember the exact traffic numbers, but it was several hundred thousand unique visitors per month. The last year I owned the site I had gradually cut back the time I was spending on the site and by the time it sold I was only spending about 20 hours per week on it. The reason I did that was because I knew I wanted to sell the site and it would be worth more to potential buyers if it required less work to maintain. So I wound up cutting back on things that weren’t necessary or weren’t generating much revenue.
If I could sum up the work of several years and state what made the site valuable I would say that I worked to build the reputation of the site and build up an audience. That reputation and established audience led to things like repeat traffic, subscribers, and loyal fans. And those things translated into revenue. I worked on building the audience first and monetizing the site after it was established.
What did a sale of that scale do for your lifestyle?
It didn’t impact anything for the lifestyle of me and my family, although it should help greatly in retirement. I have a long way to go before that time comes. The one thing that it did impact now is that it helped to give me some credibility with ProfitBlitz. For example, this interview wouldn’t have taken place without the sale, so it’s helped me to get some exposure and credibility.