So you are toying up with the idea of selling your website?
Sites that flippa.com have educated the market on the possibility of selling your website. However it can be hard to find the right buyer willing to pay the right price for your website.
However have you considered using a website broker? There may be some hidden benefits that you may not have thought of by choosing this option.
What is a website broker?
Full disclosure here: I am a website broker, so I can answer these questions in full. The primary function of a website broker is to help webmasters sell their web business. Your site will get evaluated and then presented in a way to gain the highest possible price to prospective buyers. The broker then receives a commission if he is successful in selling your website and will help with the handover of assets. In that process there are a number of tasks performed to try and maximise price:
- Determine an appropriate valuation range
- Compile an information memorandum (sales memorandum)
- Market the website
- Present the website to potential buyers
- Draft and present offers
- Assist in negotiation on behalf of the seller
- Protect sellers’ confidentiality
- Look after paperwork
- Provide after-sales support
How does it work?
The process is similar to that of a realtor (realtor/real estate agent). You approach a website broker looking to sell. You enter into a sales agreement with them. This is normally an exclusive agreement that is valid for 90 days. The broker will then prepare the an extensive document about the website to be used to show potential buyers. In this document is all the relevant information about the website, its financials, traffic stats and answers to general questions.
The broker will then go out and sell your website to potential buyers. Screen them with their screening process and present you the best offers.
The buyer will normally sign a letter of intent (LOI) and ask for a set period for final due diligence. It is your choice as the buyer as to whether you allow this to be exclusive or not
They will make a formal offer after due diligence, you will either accept or decline that offer.
Then the transfer process happens. Money is normally transferred using an escrow service. That can either be the brokers trust account, a lawyers trust account or an escrow service. We prefer our own service or escrow.com. The site is then transferred to the new owner, the seller receives their funds and the broker then gets paid.
Here are the top three reasons a website broker can get you more money.
- Network of Buyers – The more offers you get for your website, the more options you have of selling and the more competition that is created to drive the price up higher so you can get top dollar for your internet business.
- Incentive To Perform – Because website brokers work on a commission only basis, the more money you make, the more money they make.
- Specialization – A website broker is in the game of selling websites. Most webmasters aren’t. The day to day grind can give them a better insight into the market, your website and have special knowledge that you wouldn’t have access to.
Why would you hire a website broker?
9 Reasons why you would hire a website broker:
- Website brokers are good at selling websites
- You don’t get distracted from running your website
- Keeps the sale confidential
- Access to the brokers database of potential buyers and investors
- Most websites get sold using a broker
- Most webmasters don’t know how to find buyers
- Most webmasters don’t know how to prepare a website for sale
- Broker can control negotiations
- Broker can assist the seller through the process
How Long Does It Take?
Anywhere from one week to 6 months. Factors that influence timing of sales include getting access to the relevant website information from the seller, negotiation time and sellers getting finance available.
What’s The cost?
A website broker will generally charge 10% of the gross sale price for websites valued over $25,000 and 15% for websites under $25,000.
Are fees charged up front?
No. They are 100% commission based. They do not make any money until they sell your website.
What are the best sites for a website broker?
The best sites are established sites that are making solid monthly earnings. A good range is between $20,000 and $2,000,000 in value.
They also have the following characteristics:
- Established websites, not turnkey sites.
- Solid history of earnings
- Sites with credible traffic in their market. Buyers prefer sites with multiple traffic streams.
- Premium money is paid for:
- With premium domains
- Have an existing active community
- Make recurring yearly income
- Have multiple income streams
- That are highly systemized
- Have strong earnings history
What if I can’t sell my website?
Normally they will ask for a 90-day agency period. Good brokers have a clearance rate of about 80%. Main reasons for a site not selling is generally price related and the seller wanting more money than the market will offer them.