Dear Website Owner,
If you have an existing website or domain name you no longer need and wish to sell it to an interested buyer for a one-time profit, or if you& 8217;re a speculator looking to build a steady source of revenue by buying and reselling valuable domain names, this helpful guide will explain the steps you need to take to ensure a quick,easy,profitable sale.
Step 1 & 8211; Establish a Reasonable Price for Your Site
How Much Can I Get?
Before you sell, it's a good idea to know how much the domain is worth. Market prices for domain names can run from a few dollars to thousands of dollars for premium names. The domain name "Loans.com", for example, sold for 3,000,000 just a few years ago. The key to deciding whether or not to sell a domain name you own is to determine its worth to you if kept and, alternatively, how much a buyer is willing to pay. You may have heard & 8216;rags to riches& 8217; type stories of cheap domain names resold for hundreds of thousands of dollars. During the good old days of the Internet boom this was possible. However, things have slowed down considerably since then and there it is very rare to hear of a domain name sold for more than 10,000. However, while big deal domain sales do occur less often in today& 8217;s domain market, selling domain names can still be very profitable. Short, catchy, top level domain names are selling for upwards of 5,000 on the domain aftermarket. Other longer, but still usable, names may be worth hundreds of dollars.
Pricing is relative. Relative to your desire to sell, the type and timeliness of bidder inquiries (individual or corporate) and how well the sale price is negotiated. Don't try to fit your domain name into some 'proprietary pricing model'. Every domain name is applicable to a different target market. Determine who your potential buyers are before determining your asking price so you don't over or under estimate that price. Most names ( 85 ) sell for between 15 -40 of the asking price. Exceptions to this trend:
Fantastic names - Truly great names can command what a seller requests, unless that amount is unreasonable.
High asking prices - Names that have ridiculous or greedy asking prices rarely sell. Important!
Poor names - Names littered with hyphens, adult names, "4"s for the number "four", "2"s for the number "two", "U"s for the word "you", etc. Don't waste your time listing names like these. They rarely sell.
How Do I Determine My Site& 8217;s Worth?
Selling virtual real estate is a lot like selling physical real estate. Just like with the housing market, website & 8220;homes& 8221; (also known as domain names) can be purchased for a low cost, remodeled and decorated to look very attractive to potential buyers, and sold for a considerable profit. To understand how this works, first consider that you were in fact selling an actual house built on land instead of an abstract entity on the web. It would be impossible to price your home without doing extensive research to determine its worth. You& 8217;d need to take many factors into consideration, such as: size, landscape, curb appeal, the value of other properties in the area, the current buying market, and & 8211; perhaps the biggest factor & 8211; location, location, location! You& 8217;d never dream of arbitrarily assigning a sale price to your home without having some idea of its worth and what buyers might be willing to pay. If you underprice your home, you could be missing out on a substantial profit opportunity. However, if you overprice your home, you might not be able to sell it at all. That& 8217;s why it& 8217;s so important to have all the facts before putting your home on the market & 8211; and the same holds true for selling your virtual home on the web.
When determining your site& 8217;s value, you may need to do some research online. It is often a good idea to compare different websites on the Internet and to see which sites catch your eye. You can make a mental note of the methods used on websites that were appealing to you; then you can use those ideas when creating or updating your own website. The design of a website is very important when you are trying to sell an existing site online. The design should be bold and colorful, but should not be too busy. You may want to use colors that relate to the theme of the site as well. For instance, if you are selling bottled water, it would be logical to use shades of blue on your website. However, no matter how brilliant the website design is, the purpose of the site must also be useful for the website to sell. A good website will revolve around an interesting idea or useful type of business. To reflect the purpose of your website, you should include clear, informative content that is easy to understand. A website with a clear and interesting purpose is very likely to sell on the Internet.
What Makes a Site Valuable to Buyers?
These days most websites are valued by the number of visitors they attract. One common yard stick is your domain name is valued at 10 to 30 per hit per day. If 1,000 people land on your front page each day, your domain could be worth 10,000 to 30,000. Another optimistic way of looking at domain values is each unique visitor you get over the course of a month is worth 250. If the visitor clicks to a second page on your site, her presence is worth 500. By this measure, a site getting only 10 hits per day could go for 15,000. This strategy is a lot like the way traditional businesses have always been sold. The more customers a store has, the more it is worth to a buyer. That is a pretty solid way to value domains. It is a model that is likely to be around for a long time to come.
Here are some of the main questions a typical buyer will ask him or herself when considering whether or not a website is worth purchasing & 8211; and at what price:
Is the site making any money? Is there proof?
What is the potential for future profits?
Does the site have traffic? Is there proof?
Is the site attractive/well designed? Is it functional and user friendly?
When was the domain name registered?
How is the site ranked with the major search engines?
What does is take to maintain the site? i.e. hosting fees, content addition, promotion, etc.
Why does the owner want to sell the website?
If you& 8217;ve purchased a unique domain name with a great deal of potential value, it may not be necessary for you to have an existing website in order for you to sell your domain name for a profit. Typically, domain names will sell based on its performance in four key categories:
- Commercial Development Potential & 8211; The ability of your domain name to be used as a brand, redirect, campaign address, etc.
- Recognition & 8211; The relevance of your name to the market and how easy it is to remember.
- Length & 8211; In most cases, shorter is better. However, a longer more obvious name can sometimes be more valuable than a short classified-ad contraction style domain.
- Extension Value & 8211; This refers to the .COM part of your domain name. Currently .COM names still command the highest values followed by .NET, some national domains (such as .UK) and .ORG names.
How Can I Guarantee I& 8217;ve Priced My Site Correctly?
Unless you are a true domain name expert, we strongly recommend having your site professionally appraised. In fact, this is probably one of the most important steps you can take towards ensuring a successful sale of your site. Appraisers are professionals and experts in their field, and they have the means and methods to conclude what your domain name is worth. As we mentioned earlier, if you place an exaggerated price on your name, potential buyers will be scared away from making a reasonable offer. If you undervalue your name, you may end up kicking yourself when your newly sold name rakes in millions & 8211; for someone else. Furthermore, an appraisal is a very handy thing to have when buyers want & 8220;proof& 8221; that your name is as special as you claim. In the end, it is an exceptionally valuable asset, available for a very small price.
For information on UK Website for Sale& 8217;s professional appraisal services, visit: http://www.ukwebsiteforsale.co.uk/appraisal/. We offer a 20+ page Website Appraisal that can dramatically increase the value of your website. No one on the Internet offers a more complete or cost effective Website Appraisal, and certainly no one offers all the extras we do that are included for FREE!
Step 2 - Prepare your Business Information for the Sale
After you have decided to sell your business for whatever reason and chosen an asking price that you can support (hopefully with some advice from research or, even better, through a professional appraisal service), you are now ready to talk to some potential buyers. Or are you?
Much like the asking price, the art of preparing your business for sale is not that easy. So, what do you need to successfully prepare the business and information? The list and needs vary greatly over business types, revenue sizes, verticals, and so on. For any business, the basic requirements for what you will need are quite similar. At the very least, you should have the following items:
- Business Summary -- what it is and why you are selling
- Business Plan/Marketing Plan -- if you have them
- Asset List -- both tangible and intangible
- Search Engine Rankings
- Website Traffic Reports
- Any Technical details
- Financials (previous years and Current YTD financials)
- Most recent completed year's Profit & Loss or Income Statement report and Balance Sheet -- if you have it
- Sales Forecasts
- Supporting documents for the Financials -- Tax, Bank, and/or Merchant Statements
The previous items will give all potential buyers a good idea what is for sale and probably a good idea if they are interested in pursuing the sale or not. However, that is usually just the beginning, so be prepared for many, many, many more questions.
Also, please keep in mind that your materials, presentation, and responses will be graded as part of the business in a way. Why? Because, how can your business be successful if you are unorganized, not well presented, and not able to respond quickly and concisely? This is what the buyer will be thinking. And in my experience, this is pretty accurate.
Step 3 & 8211; Market Your Website/Domain Name
There are various methods of putting your domain name up for sale. Decide whether you would like to sell your domain by owner or simplify the process and significantly increase your chances of receiving the best offer in the shortest amount of time by listing your domain name with a third party, such as http://www.ukwebsiteforsale.co.uk.
What if I Want to Market My Site On My Own?
There are 101 different ways to promote your domain name. One way we don't recommend is blanketing companies with unsolicited email. Writing mail to 200 banks asking if they want to buy FasterInternetBanking.com is not likely to win you many friends, nor make you any deals. Your time would be better employed using the methods listed below:
a) Update the domain name registration information
Many potential buyers will look at the information in the WHOIS database as a first step when investigating a name that they are considering buying. So make it perfectly clear that the name is for sale. Update the owner's name to include (This name is for sale) after your own name. Make sure all your contact information is current and accurate. Contact your domain name registrar to update your WHOIS listing.
b) Put a promotional website up
The other obvious way for a potential buyer to find out if a domain name is for sale is to visit the website. Don't disappoint them. If you don& 8217;t have an existing website, get some web space from a decent host provider and put a simple, one-page site up, showing that the name is for sale. Include a form or at least an email address so that interested parties can submit offers.
c) Get the Word Out
There are two different types of e-marketing strategies that may help increase your sales.
Direct Marketing: Identify and Address Your Audience. What types of businesses or individuals would be interested in your name? When you have identified your specific audience, you can take the next steps:
1. Visit newsgroups related to domain names and the nature of your name for sale. Post messages and begin discussions.
2. Subscribe to ezines related to the topic and find out where these people are on the web, and how you can contact them.
3. Once you have contacts, you can send out emails to potential customers.
Mass Marketing: Address Many. As opposed to direct marketing, mass marketing targets a large amount of people, hoping for a small response. Some ways to do this are:
4. Participate in domain forums, ask questions and seek out domain resellers or people who may be able to offer you more tips.
5. Use search engines. Although search engines differ in their methods of operation and website submission, you can often submit your site for no cost. To find out more information about different search engines and how they work, visit http://searchenginewatch.com/.
What are the Benefits to Registering My Site With a Third Party?
For a small fee, you can list your site with a reputable third party, such as http://www.ukwebsiteforsale.co.uk, and greatly enhance your site& 8217;s exposure to qualified buyers and ultimate profit potential. Among the many benefits you& 8217;ll receive by registering with ukwebsiteforsale are:
- High visibility & 8211; Reach 1000s of qualified buyers every month
- FREE 3-Month Featured Listing with purchase of professional appraisal
- Professionally written ads
- FREE email newsletter
- A professional appraisal to accurately determine your sites worth and increase your chances of selling & 8211; ready in three to five business days
- The security of working with a trusted, experienced and highly recommended company
- The opportunity to connect with a recommended site broker, who will further simplify the process by handling payment, escrow, and domain and registrar transfer.
Visit http://www.ukwebsiteforsale.co.uk/exchange/sell-a-website.htm to learn more.
Step 4 - Make The Deal
You could get lucky, and receive an offer just days after listing your name. Typically, though, names are listed for months before any offers arrive. The key here is to be patient. Think about it - a party needs to come along who believes that the name is right, even essential, for their new Web site. The only other offers you will get will be from domain resellers, who will typically offer you 20-25 of a name's potential value. Unless you really need the money, turn down these offers, but note them anyway, as they are external confirmation that your name has resale value.
Once you have agreed a deal with the buyer, then you will have to complete the deal. They send you payment, and you transfer the name to them. It's best to use an escrow service here. It protects both parties, but adds to the cost, so make sure you have agreed beforehand who will pay for it. Normally the buyer pays, but sometimes the cost is shared. Please note: to sell a domain name by owner, through a private transaction rather than a trusted third party, is risky business unless you completely trust the buyer.
There will be some wait time as money switches hands and the domain name ownership is transferred. Unless you are selling your domain to your mother or selling it for a very low price, we recommend using an escrow service to take care of the money transaction.
Manny Avedissian, President - UKWebsiteForSale.co.uk
Copyright 2004 - UKWebsiteForSale.co.uk
Short note about the author
Manny Avedissian is the President of UKWebsiteForSale.co.uk. Manny has earned his degree in Business Administration. Mr. Avedissian has over 22 years of professional business experience ranging from private corporations to governmental agencies. Mr. Avedissian has owned and operated previous internet businesses. Manny is also a member in good standing with the prestigious International Webmasters Association ( IWA ).
Author: Manny Avedissian