The content site you’re building right now might just change your life.
That sentence isn’t hyperbole.
Content sites are amazing investments, whether you’re building one or selling one. They require skill, practice, and patience (often a lot of patience when you’re starting out), but they’re worth more than almost any online business out there today.
Content sites can provide you with a great living, but selling them can also make you wealthy.
The good news is that digital asset investors are in love with content sites. Investor demand is currently keeping pace with the actual market supply and might even eclipse that supply in the coming years (or months!).
Between 2017 and 2018, we saw the average time content sites took to sell decrease by 45%. In addition, the number of content businesses sold during this period saw a 26% overall increase from the previous year.
Between 2017 and 2018, we saw the average time content sites took to sell decrease by 45%. In addition, the number of content businesses sold during this period saw a 26% overall increase from the previous year.
If you’re wondering, this data comes from our State of the Industry Report, in which we analyzed close to 500 businesses that we sold on our Empire Flippers marketplace.
Unlike data from other reports you might find, ours is real data that includes actual sale prices and the amount of time websites spend on the market (as opposed to data scraped from public listings).
Our data suggests that the content site market might soon become a full-blown seller’s market.
The huge increase in available businesses and the decrease in the time they spend on the market are positive indications of your likely success when you decide to sell your content site.
If you’ve ever thought about how you could sell your content site for a cool six-figure—or even seven-figure—sum, then keep reading.
Maybe you’re wondering why anyone would buy such a site.
The answer is very similar to the reason you probably started your site in the first place: established content sites can be very hands-off even while pulling in serious monthly incomes.
They often have immense room for growth if you have a good brand, and they’re set up for diversifying revenue across several different models between affiliate offers, display ads and other revenue generating opportunities better than most other online businesses are.
These aspects— and more—are attractive to the savvy investor.
But why would you ever sell your content site?
Keep reading. At the end of this article, I will discuss how your business doesn’t really begin, in my opinion, until you sell one of these sites.
Understanding website valuations
The first step in selling your business for the maximum possible profit is understanding how a content site is valued in the first place.
There are many moving parts involved in creating a solid valuation for your business.
These various (and often subjective) factors can make it hard to figure out how you should be pricing your business. After all, what is reasonable in the current market?
To alleviate this frustration, there is a free valuation tool that uses actual sales data to give you an accurate ballpark estimate of your content site’s value.
Multiples
Dozens of factors go into giving a website a multiple.
While we don’t have the time to describe all the factors that we use to judge a website’s worth, there are a few major ones we can describe.
The great news is a lot of these factors can be worked on and improved by you.
1. Diversified traffic
Most content sites get the majority of their traffic from Google, specifically through organic search.
Organic search is an incredible traffic source that keeps traffic coming in whether you’re monitoring it or not. Even better, you don’t need to pay per click or impression. While it is amazing, it isn’t flawless.
In 2018, we saw that Google was more than willing to change up its algorithms, sometimes dramatically. Many profitable sites suddenly became unprofitable overnight.
This can be a huge risk for a buyer—one that you, as a seller, should seek to mitigate.
The more traffic sources you have coming into your business, the more valuable your business is because you’re mitigating the risk for the buyer.
If one traffic source suddenly fails, you don’t lose 100% of your traffic.
Now, unless you have a giant media-like content site, it’s unlikely you’re going to be running any paid ads for your review articles. It often just doesn’t make sense to do this when you have such thin margins. But you can build up an email list.
Your email list can be optimized to expand those margins by leading people back to your informational and review content, and can even be used for special affiliate offers that can only be promoted via email.
Every email address you collect becomes an addressable market that you can choose to communicate with whenever you like.
It can be powerful.
Another traffic source we’ve seen become increasingly effective for content sites is Pinterest.
Pinterest likely won’t work for you if you’re not in a somewhat visual niche; however, if your niche is visual, it is a great source for you.
We’ve seen sites get tens of thousands of visitors every single month from Pinterest marketing.
The best part about Pinterest is that, unlike other social media (where the traffic attracted by new posts dies off quickly), Pinterest traffic has staying power.
Of all the social media out there and other traffic sources in general, only Pinterest acts and behaves like a social media version of SEO. That means you do the work once and reap the traffic rewards for months or even years to come. And, like SEO traffic, Pinterest traffic is completely free.
Another traffic source that is under-utilized but an incredible add-on is YouTube.
If you have the ability to outsource videos then you should.
Avoid making the videos yourself if possible. When you have someone in place already doing the video creation, then the business becomes much more attractive to an investor looking to take over the asset.
Hardly anyone in the content site space creates any kind of video or audio content. If your niche is dominated by competing sites who post long blog articles reviewing various products, imagine how much you could stand out with a YouTube show or podcast associated with your market niche.
And imagine how much more valuable your business would be when you decide to sell it.
2. Diversified revenue
The next big factor in giving a business a multiple is its revenue.
While many content sites are starting to diversify their revenue streams, many of them are still “one-trick ponies.”
It is not uncommon to see an Adsense site that is solely monetized through Adsense or an Amazon affiliate site that only features Amazon affiliate offers without monetizing its informational content.
You can often increase the value of your business by simply adding another monetization source to your content site.
Not only can this increase your average net profit (and, thus, your site’s overall valuation), but it also makes your business more attractive because you aren’t relying on just one source to deliver your income.
Keep in mind that content sites can implement a lot of creative monetization strategies. For instance, we’ve seen Amazon affiliate sites use their Amazon traffic to send converting buyers to new Amazon FBA products they’ve launched.
Depending on your niche, there is a good chance you could sell informational products, physical products (while double dipping on the Amazon affiliate commission), and even software.
We’ve seen all of these kinds of hybrids before, and they can do wonders for your final valuation.
Other factors
As we discussed previously, there are dozens of factors that affect your valuation.
You can control many of them, like those listed above, but others you can’t—such as your business’s age. You can’t control how long your business has been around. Thus, you should plan to sell your content site when it achieves a solid 12-month average and preferably a few more months before it turns another year older.
Buyers love to see a long and solid track record of profitability, so this can help you boost your multiple.
There are also other considerations to take into account, like your brand.
If a buyer is looking to buy a $700,000 website and another website valued at $650,000 has all the same traffic and revenue, but the more expensive website has the better brand, the savvy buyer will purchase the $700,000 site. That extra $50,000 is worth it to the buyer if it means they are purchasing an asset that they can expand upon.
For example, imagine you were selling red plastic cups.
Which domain has the better brand: BestRedPlasticCups2019.com or PicnicThings.com?
Keep in mind that both websites could be earning the exact same amount of money.
In fact, from a purely SEO perspective, the first site is likely to attract traffic more quickly than the second site is.
The problem is that the first site has nowhere to go; it is clear what the website is about (and that it only focuses on one product). In fact, there is even a timeline for how long the first site will be relevant; after 2019, it will be outdated.
In contrast, the second website can be expanded almost endlessly. There are so many directions you could go and so many different expansions you could implement with a brand like that. Thus, it is far more attractive and valuable to buyers.
If you are looking to make your first six-figure or even seven-figure exit and you want to be sure you get everything right, we can help guide you through the maze.
We have an Exit Planning Team that specializes in exactly this business aspect.
Your exit plan may only need to expand over a single month to correct a few minor things, or it might be a “month in, month out” exit plan that will last over the next 12 months. It all depends on where you are with your site and how complex your business is.
Why being the best can be the worst?
A common misconception sellers have is that everything must be perfect.
You might be thinking the exact same thing.
If you’re looking to sell, you might say to yourself that you need to optimize your website and ensure it is in tip-top shape, that you need to publish every possible article under the sun that’s in your niche, or that you need an up-to-date website design and CRO testing across all its pages.
But you’d be wrong and probably hurting yourself more than you’re helping yourself.
While all of those things are great and can lead to a higher valuation, it is a fine line to walk. After all, buyers also want to do those things so they can see a higher ROI after purchasing your website.
If an investor sees a website that is already highly optimized, they’re actually less likely to buy it than if it were less optimized.
Why?
Because they don’t see how they could improve it; you already did everything. What’s left for them to do, and what’s left to gain?
Now, if you’re building up a big branded website, this is less of a problem because the answer is clear: you start a new silo with all brand-new content to continually expand and accelerate your website’s growth.
I am not trying to advocate against optimization, but if you’re looking to sell your content site, keep it in mind that you need to position it in a way that appeals to buyers who most likely want to expand it.
Should you avoid investing in growth when selling?
It is an age-old question when it comes to selling: When do you stop adding expenses and start minimizing them?
Well, it’s never too soon to start minimizing expenses where you can, but that doesn’t mean you have to stop investing in growth.
In fact, investing in growth typically won’t affect your actual valuation.
We value businesses according to where they are in terms of their current average net profit and what it would cost to maintain them as they are. Luckily, the maintenance costs for most content sites are very low to almost nonexistent.
If you’re investing in such elements as web design or using your business’s credit card to attend conferences, these costs can be added back into the business profit and loss statement. In short, this means they won’t affect your site’s valuation. These add backs can also apply to new content being created and published by your team, as such content is, in essence, a growth investment rather than a maintenance investment.
Of course, you can scale down your content production as you get closer to selling to help you obtain the maximum amount of money possible from your asset. However, if you decide to continue investing in content during the sales process, you can use this as leverage to sell your business faster.
You’ll be able to assert that your website is about to rank a bunch of new content, so the buyer will be able to benefit from that investment if they buy your site now.
Now that you’ve sold your business, you’re in business
Many entrepreneurs view selling their content site as a kind of “end game.”
While it can be a fulfilling milestone, it should nevertheless be just that—a milestone.
When you’ve sold your content site for six or seven figures, you will be in a rare position in life. You will likely have the most liquid cash you’ve ever had on hand.
This liquidity can be a huge advantage for supercharging all of your other projects.
If you’re like most internet marketers, you probably have two or three other projects you’re working on. If you don’t, you likely have a few planned for the future.
Imagine how much easier it would be to make those projects a reality if you had a war chest of $200,000 or $500,000—or more.
