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Should I Keep A Website Or Sell It?
By Max | June 26, 2007
Once you have taken on the risk of purchasing a website, there is really only two reasons to want to sell. Either the website takes too much time to run or you can reinvest the proceeds of a sale at a higher return.
Buying a website is risky. Sellers often don’t give enough information to give the potential buyer a complete picture of the risks. Because of this, websites often sell for lower prices than they otherwise would. This is one reason I believe that an online business sells for somewhat lower multiples than brick and mortar businesses. Once you have taken on this risk and have determined that you are making good money, there are few incentives to sell. Just sit back and earn.
One reason you might choose to sell is because the site requires too much time to operate effectively. This can be a problem. If I have 5 websites all earning $500/mon, I may consider selling one if it is the one that requires me to work twice as much as the others. Why not try to get rid of that one and replace it with one that requires considerably less time? Unfortunately if buyers are aware of how much time it takes to effectively run the site they are going to factor that in to their valuations. You will get less money for such a site.
The second reason to sell is simple. If you need to cash out to invest the money into a potentially higher yielding website or business, then you have to sell. Your goal should be to maximize the return on your investments, and sometimes the situation will require you to sell one thing to invest in another. This is the reason you should look for when evaluating whether or not to purchase a site.
Sellers give many reasons why they are selling, but really the only one that warrants a sale is needing the money for a better investment. All other reasons given for selling a site are generally bad attempts at covering up some problems.
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June 26th, 2007 at 9:00 pm
I tend to agree with your last paragraph. In browseing the listings on sitepoint I have noticed an awful lot of sites for sale that talk about how great they are but they are selling anyway.
My favorite excuse is “I just haven’t monetized the site yet”. Okay, I can be lazy but monetizing a site is not hard or time consuming. Granted there a some skills involved to be more effective. But if the only reason you are selling is because it just needs to be monetized, give me a break.
June 28th, 2007 at 12:08 am
Frankly I don’t really care what type of excuses they make up for selling the site. Even if he says he needs the money for a wedding or to buy a house, you should not assume the person is trying to cover up something. You have to judge the data, links, traffic, compare what other websites in the similar catagory are making.
As for undermonetized comment. Not as easy as it looks. You have to try many ad networks in different spots to get the right income mix. The thing is no website is the same. Most people slap adsense and expect to make money. But adsense is good for alot of sites it might not be the best for certain sites or cannot be used on the site because the site violate’s adsense TOS.
I know a 18 year old who was making $3000-4000/month off of his anime site in March, now he is making $8000 / month. Why the difference? Well because he added cpm ads. He is definately no amateur he has been doing this for a couple of years. Don’t dismiss a site because it is not monetized to the max as some sort of scam. Because there are lot of sites that are like that.