How not to host an Auction

Published on the 27th of December, 2007

Recently looking at sitepoint we have come across 2 prime examples of how not to host an auction when selling your website. What makes this interesting is that a recent reader of this site emailed me saying that in part they disagree with what I said in my article, Selling - How To Sell Your Website, yet these two clearly show that in part my article was correct

Don’t mention a price

The reader raised an objection to me saying that it is better if you do not mention a price you are willing to sell your website for. I am a firm believer in this and will remain so.

In an auction for myspaceantics.com the seller posted a buy it now price of $2000. The seller received a considerable amount of interest given that the website was making over $700 a month and had quite good traffic.

A day later the seller increased the BIN to $5000 and the following was said;

Raising the BIN from 2k to 5k doesn´t sit well with me just as you had a lot of interest. I have NEVER known this to happen on a Sitepoint sale before and I will be reporting the thread."

"I agree [sic]. SP should not allow this. What is the point of a BIN of the seller will not honor it? It is dishonest."

As you can see by the two comments the potential buyers were not happy, sure they would have been in for a bargain at 2k but the biggest potential sales killer is the second comment. What is the point of a BIN if the seller will not honor it? It is dishonest. Here we go back to a point that we mentioned earlier. Trust! The seller has revaluated the value of their website, which under the terms of Sitepoint auctions is fully within the seller’s right to do, yet the seller has lowered the trust level with his potential buyers.

What happened with the sale? We have contacted the seller and as yet have not had a reply. The auction closed a day latter with two bids at the $5000 BIN. Had the seller not have mentioned a buy it now price he may have exceeded the $5000.

Get your financials in order

In an auction for a warez forum the seller says

Site has over 70 Donated/VIP members that have paid for this. It also has ads that get $100+ everyday, as i charge $60/Month for a 468 banner.

* $100+/Month from Banners
* $20-100/Month for Subscriptions

Now leave out the fact that there is a mistake in the first sentence the seller claims here to be making $100 + ($20-$100) yet in monthly revenue says the site makes $300 so far all he has shown is $120 - $200 worth of revenue. There is $100 unaccounted for so the site in reality makes $150-$300 per month. The sellers are left a little confused on what the site is making and add to that the seller posts a useless screen capture of his paypal account that says there have been 45 transactions earning $955. No mention of time period or where the income was sourced (ads/subscription?)

A far better method of displaying income potential would have been listing the last 3 months such as

December
Advertising: $120
Subscriptions: $280
Total: $400

November
Advertising: $100
Subscriptions: $100
Total: $200

October
Advertising: $120
Subscriptions: $180
Total: $300

Here the income says the same thing yet the sellers are a little clearer on where the income is coming from and how much of it is coming from a particular source.

Whilst this was sorted out and made clear in the discussion the fact remains that the information you are using to sell your website needs to be clear, error free and detailed!

Seen an auction go wrong? Let us know..

Selling - How To Sell A Website

Published on the 25th of December, 2007

It’s come to that time in your websites life where for whatever the reason may be you have decided to sell. For many the prospect of offloading a passion that they have toiled over for months or possibly years may seem daunting, for other’s it’s a chance to offload one of the increasing number of projects being worked on and receive a quick injection of funds.

It might take a little time and effort following our advice but by doing so you will ensure that you get the greatest return for all the work you have produced.

Time to spring clean

Think of your website as one of your valuable assets, such as a house or a car, you don’t use it for a year and try to sell it without doing any work on it! A good clean and possibly a fresh lick of paint will ensure that any potential buyers are not turned-off on first inspection. The same rule applies for your website.

Don’t mention the fact that you are trying to sell and hit up a few forums that offer “website reviews” such as Sitepoint. Listen to what is said and make the improvements that are suggested.

links are the oil of a website, a motor needs oil to operate and a website needs links to work so check your website for dead links and either fix them or remove the link. There is a multitude of free online link tools such as dead-links or anybrowser.

Last but not least if your website requires your attention regularly then keep your focus.  Sellers often neglect their websites when they are trying to sell and this is a big mistake! Buyers may be interested in a site that feels old or stale, but the price they are willing to pay for that site will be greatly reduced. This is imperative for content based sites and especially so for blog related websites.

Get Your Books in Order

This should be done from the time you start your website, yet many webmasters do not keep accurate records.

The financial aspect of your website is the single biggest influence of a websites perceived value. Presenting a prospective buyer with a comprehensive list of incomes and expenses over a wide period of time rather than the month prior to the sale gives the prospective purchaser a grasp of not only site income but also site growth, which then can be measured more accurately against traffic.

Traffic logs, where possible make these as viewable as possible if your software does not allow for second party viewing then take as many screenshots as possible and make these available to prospective buyers. Where possible include traffic from more than 1 month and include where your traffic is coming from.

Auctioning your website

The most common method of sale is to auction your website, this can be a good method of sale if used correctly however all too often the only step taken when listing your site for sale is to write a sales pitch and leave it at that. This simply will not give you the best sale regardless of where you place your auction.

 The approach to take is to get the buyers interest in your website first, try collecting the contact information of at least five serious buyers before auctioning your website. Ways to achieve this are; Listing your site on blogs, such as fowler Rd, Midascode  or forums like searchengineforums.

Contact owners of related websites to gauge if they might be interested, you can move horizontally to websites that are competing with you or vertically to websites that feed off your site. The chances of finding one serious buyer in your field are better than finding a random person to take over. This also has the added effect that it creates a rumour and rumours are always good for your bottom-line when you are trying to sell regardless of your websites size.

Once you have established at least five potential buyers, set up your auction with the most visibility you can. We recommend sitepoint, If auctioning is the way you want to go, for the simple reason that it is high visibility in a targeted forum. EBay is fine if you have several very keen buyers but avoid their websites for sale section, it is mostly full of junk and very few serious buyers read it.

The major disadvantages when it comes to auctioning online is that most are open auctions in reality you get an amount higher then the last bid, what you really want to try to do is to get a closed auction where bidders make there offers in private for what they are willing to pay, with a open auction you need 2-parties bidding against each other, in a closed auction you only need one bid that counts.

Valuing your website

Simply don’t do it, never admit to what you think your website is worth if you are serious about selling. Establish a figure that you are willing to sell your website for (a bare minimum) and stick to that figure, let the buyers approach you with an offer and more importantly let the open market determine what your website is really worth, all too often sellers over-value there website all this does is turn prospective buyers away and prevents you from any sale. We recommend starting the auction at $0 to make it clear that you want to sell and you want the onus to be on the buyer to decide how much they are willing to pay.

Information you should provide

Don’t try to fool the buyer, you should always include accurate information as this makes you more trustworthy. A more trustworthy seller leads to a purchaser with less fear of being ripped-off.

We highly recommend that you include your financial records, traffic logs, a detailed description of your site and how it works. As well you should include any notables such as high rankings in Google, your page rank, widely linked to pages from external sources and while personally we don’t put much reliance on it your alexa page ranking if you have one.

We wish you all the best with your sale and remember these key points:

• Don’t try to sell a broken site, if it needs some tweaking get busy
• Don’t neglect your site while you’re trying to sell it
• Get your finances in order
• Give sellers as much information as possible
• Let the buyers determine the value, if you’re unhappy you don’t have to sell
• Advertise your sale
• Get as many interested buyers as possible