I am an ideas hoarder. Like many indie hackers, each new idea results in a new domain.
And I excel at that skill. Each new domain ends up with a fully customized website within 8 hours of my ownership.
I am a niche website hoarder too. I see little reason for NOT starting a new website. Actually, I see none.
I have been a full-time introvert since forever, and product marketing happened to be my vocation and avocation. When you mix up available time with “I don’t give a fuck, I’m doing it,” you end up with many websites and the bitter struggle of growing them up. Of course, simultaneously. Everything happens simultaneously, and nothing should wait.
Why I Sold Two Niche Websites from My Portfolio
As I am reflecting on my decision to sell and the deal right now, I want to insert the following insight:
Last night, I listened to Nate Green’s interview on calming the mind, balancing ambition with contentment, and defining success. And Nate read a small passage from Tao Te Ching by Lao Tzu, which goes like this:
“There is a time for being ahead, a time for being behind; a time for being in motion, a time for being at rest; a time for being vigorous, a time for being exhausted; a time for being safe, a time for being in danger.”
In this sense, I don’t believe in work-life balance, especially when these two things (hobby and trade) become one. I believe that there is a time and a season for everything. All I ever care about is now. Now I am eager to work 15 hours per day on a project - okay, cool. I’m doing it, and I’m not slowing down.
But also, there are times when my responsibility to grow all websites in my portfolio grows heavy on my shoulders. I reached that time in early winter 2020.
I wanted to free time and space in my head for projects I don’t have the knowledge of yet. These are the pieces that move our blood from the feet, through every vein, until it reaches the heart, and finally our brain (not insisting on being scientifically correct in the blood-flow path).
There is one more reason to sell both websites.
One of the websites sells very interesting and not that popular music instrument. The problem I saw is that the musical instrument was often out of stock on Amazon. And I couldn’t get my hands on affiliate programs such as eBay and Walmart - the only programs, besides Amazon, which stocked that musical instrument, because I didn’t live in the USA. The whole situation made it hard for me to monetize the growing traffic fully.
The other website (the smaller one) is selling another musical instrument. But I wasn’t fond of working on this website anymore. I guess you need to pick your battles depending on the fulfillment of the potential wins. You don't go to a battle for a territory you don't want to govern.
In early 2019, I reached out to Human Proof Design (HPD) to sell my first niche website through them. We talked about the potential sale, but I wasn’t emotionally ready to sell. Plus, during the conversation, they encouraged me to try to grow it slightly more, so I squeeze a bigger sale. And that’s what I did.
In December 2020, I reached out to HPD again and told them I was ready to sell two of my niche websites. They were happy to take the lead and negotiate both deals.
Let’s see how the whole process goes from website evaluation to closing the deal.
Where Do You Go to Sell a Niche Website
If you want to sell any digital or physical asset you own, you have two paths to take:
- Path 1: You sell to people you know. The advantage of this option is that you won’t pay any commission on the deal. The disadvantage is that you will have to deal with deal evaluation, writing the proposal, moving the assets to the new owner, and securing the payment.
- Path 2: You go to a marketplace or a broker, where thousands of people are flipping websites, applications, and other digital assets. The advantage is that you are working with experienced people who will execute the whole process from evaluation to sending your check. The disadvantage is that you will pay commission, which is usually around 20% from the deal.
It’s up to you to decide which path you will take. I took path number two because I like to outsource any job, which will cost me more time than paying for someone else to do it for me.
This is why we live in a world full of services. Today I may buy from your business, and tomorrow you may purchase from my company. I believe that this is the way to move money from the richest to the masses.
Evaluation Stage: Website Stats and Data You Need to Prepare
Obviously, I will describe what Human Proof Design required from me for both deals. I don’t know how other marketplaces and brokers work, but I assume the process is similar.
The most important aspect of the evaluation stage is to provide earnings and traffic proof.
I had to fill out a Profit and Loss statement for the past two years. Here is how the sheet looks like:
Also, you will be required to provide access to the website’s Google Analytics property. Thus, it is imperative early on to set up all the tools for your website if you plan to sell it later.
At the end of the article, I will summarize the best practices you need to apply when building a niche site with a sale in mind.
Who Will Buy Your Niche Website
Many website brokers offer a direct sale (to buy it directly from you but at a lower price) or a sale through listing (it may take longer to sell, but at a higher price).
I sold two websites.
The first one, the bigger one, was listed for sale, also called a consignment offer. Part of HPD business is to buy and sell websites. They have a good number of potential buyers ready to buy your business. When you use their listing service, of course, you have to pay a commission. In my case, it was 20% commission.
The second website was directly purchased by HPD, without commission; this is their cash offer. The price was good enough for me to reply immediately: “Deal!”
I won’t lie; I wanted both websites out of my portfolio. It was the time and the season for a change.
How Both Deals Moved On
After you provide all the necessary screenshots and you fill out the profit and loss statement, you will need to transfer the following assets to the broker, in my case, HPD:
- Domain name;
- Website (HPD did the whole migration);
- Google Analytics website property;
- Google Search Console property;
- Social Media accounts;
- Email accounts.
Why does HPD require up-front assets transfer?
Because it will be quicker to transfer the assets to the buyer when she decides to buy a website. It takes time for everything to be transferred and for the HPD team to confirm that everything works fine. You don't want a potential buyer to walk away from the deal because the assets' transfer took too much time.
Also, the buyer receives the assets once she pays the bill. And once you pay for your candy, you want to eat it immediately, not after two weeks.
Wasn’t I afraid that HPD will take the assets and never pay me?
Not at all. Human Proof Design is a well-known agency in the space of SEO, marketing, and niche website services. I’ve used their services for many years, and I trust them. Their team is easy to talk to; the communication is excellent, they are very responsive, transparent, and quick to answer every question you have during the deal.
In fact, my previous work with them and the trust I had were the reason why I chose HPD over some other similar services.
How Did We Close Both Deals
After you shake hands with the new buyer (you don’t know who she is, HPD is the mediator), there will be an approximately two-week transition period. During this period, the new buyer will check all credentials and if the website is what he actually purchased.
If everything is okay, you will receive your payment from Human Proof Design.
How Much Did I Sell My Websites For
So the website which HPD purchased directly from me was sold for $2100. It was earning around $70-$80 per month, and it had about 40 articles.
The website listed for sale was sold for $6500. I paid 20% commission, which means that my cut is $5200. It was earning around $200 per month, and it had approximately 50 articles.
How is the price for a website formed?
Without getting into many details, there is a term called a P/E ratio (comes from the stock market), or some call it a multiplier.
Basically, you take the average amount of money you earn per month for a given period, in my case, for the last two years. In the world of website flipping, a common perception is to multiple the average earnings per month by 36 (3 years of future income).
Or this is a PE of 36 or a multiplier of 36. Let’s say that a healthy PE for both sides is between 30 and 36. Also, you need to take into account the net earnings (earnings minus expenses per month).
Of course, there are cases where a much higher PE can be applied. In my case, with the listed website for sale, the PE was around 40. Many aspects of that website allowed for the higher PE:
- Aged domain;
- Good design;
- Well recognized in the niche;
- Good social media visibility (especially Pinterest);
- Growing traffic;
- There is a vast room for maxing out earnings by joining affiliate programs, available only to US citizens.
At the end of the day, was it worth it?
If I have to compare my expenses to the profits I received, then yes. I received more than I have spent.
If I have to take into account my own time invested in building and growing these websites, then, of course, the price I’ve received is x10-15 less. However, these two websites have never been built as a means to earn a living.
I built these websites to learn how to take risks when it comes to SEO. To learn how to monetize a website. To learn how to grow a digital asset. To make friends in this niche. So profiting from these two websites were nothing but a surprise and obviously, good work of mine. (thanks, no need to applause me.)
Important Tips to Apply When Building Niche Website for Sale
I asked the HPD team to give me the most important guidelines for building a niche website with a sale in mind and maximum profit.
To increase the value of a content business, do the following:
1. Clearly document earnings:
- Prepare a profit and loss statement.
- Take screenshots to prove earnings. (this should agree with the earnings shown in the profit and loss statement.)
- Make a walk-through video of earnings to help convince a buyer that the earnings stated in the profit and loss statement are real.
2. Generate income from multiple sources:
1) Affiliate earnings:
- Unless a site is created for a specific country, monetize with Amazon US, and optimize the Amazon affiliate pages for conversions.
- Add other territories where, based on traffic, it makes sense.
- Add non-Amazon affiliate programs with more profitable vendors. This is a big plus when it is easy to transfer the program/relationship to a new buyer.
2) Advertising revenue
- Add an ad network like Ezoic if it makes sense with the amount and type of traffic to the site.
To decide whether it makes sense, consider what type of content drives the most traffic to the site.
- If all the top rankings and high trafficked posts are for “best of” type keywords, then do not place ads on the site. Affiliate commissions from these review posts will most likely be higher than what can be earned from advertising.
- On the other hand, if the site has good traffic to “how-to” informational articles, then you most definitely want to consider an ad network.
3) Don’t sell too early
When you can demonstrate at least a year of consistent earnings, you’ll be able to negotiate a higher price for your content niche site.
And here are the tips, which I think will ease the process when transferring your digital assets:
- Host your website on a separate hosting account. Purchase the most affordable plan (NameCheap offers an excellent basic hosting plan for $20/year). This way, you won’t need to deal with website migrations.
- Create a separate Gmail account only for that website and use it to sign up for every service you will use: Google Analytics, Google Search Console, Social Media accounts, WordPress installation, plugins, themes, etc.
- Separate your business expenses from your personal expenses.
- Write down your time invested in building and growing that website, so later when you decide to sell your website, it will be easier to evaluate whether you should sell or wait.
- Keep all designs, articles, visuals, photos, keyword research sheets, and related-assets in a separate folder, which you can easily handle to the new buyer.
To Sum-up: Minimum Viable Product to Sell
- The minimum numbers you have to hit are to have 12 months with at least $500 a month average profit and 6 months of analytics. A site like this would be worth around $18,000-$20,000. When you are selling you have to determine which 12 months to use to show a good average net profit and it might take 18-20 months to get there.
- Content sites on average will take about 21-27 days to sell. If it's worth less than $100K and it’s a quality site, there's a good chance it will sell in less than a week. If it’s worth under $100K, there are many cash buyers.
- The average sales price is based on 12 months of data. Content sites are getting on average between 30-36X their monthly net profit.