I’ve got a great website earning consistently, I wonder if I should hold it for the passive income or flip it for the upfront cash?
Hands up if that line of thought sounds familiar? I see you raising both hands! :-)
Oh for a dollar each time I’ve pondered that one myself….
And that really is the million-dollar question isn’t it.
Should I hold or should I sell? Let’s take a look.
Benefits of Selling
A Wad of Cash
Clearly, an up-front chunk of cash is a decent motivator for flipping a site, let’s not dance around that one!
There are two reasons this would be a strong motivator for you;
- You want the cash to invest elsewhere or retire personal debt
- You would rather sell out now and take 18-30x monthly profit upfront, than potentially risk the site’s earnings dipping in the future. So in a way, you’re trading the upside left in the site and passive income from it for the security of the now money.
So the question is, what are the future prospects of the site?
Taking the Safe Option
This has a negative connotation to it, but your websites are an asset after-all, so you need to consider if the safe option (cashing out now) appeals more than holding on and potentially seeing a dip in your site’s earning.
Passing on the website and any downside risk can be a genuine motivator for selling. The buyer weighs up this risk against the upside growth and how they feel they can grow the site beyond it’s current profit.
There are times where building an online income can be a grind and it is the little (or big) wins that spur you on to keep going. The satisfaction you get from building and flipping a site gives you a huge spike of motivation and confidence.
When you’re confident and motivated, you get more done and it doesn’t matter if it’s a $4k flip or a $45k flip, you’ll be fired up after flipping your first site! Heck, I’ve just agreed to terms on my fifth site sale and it’s still a buzz!
There are clearly a number of benefits to selling, but selling also comes with some downside and considerations to be thought through.
How Much Upside is Left?
If you’re going to sell, I believe in selling out prior to the site having reached it’s full potential. I mean, if you’re going to ride the thing out until you extract every possible sliver of growth left, you may as well hold it for the long term.
Further to that, you need to show incoming buyers that there are prospects for growth because they most likely have the currently monthly profit plus the potential capital gain in mind when comparing your site vs the many others on the market.
From what I’ve experienced in negotiations with buyers, future room for growth is one of the most important factors in their decision to buy your site or pass.
If you are relying on a single traffic source for the majority of your website visitors and therefore revenue, what would happen is that source was impacted severely or removed completely? Penalties for sites are common-place if you’ve done anything outside of Google’s Webmaster Guidelines for example.
On the other hand, what could you do right now to sure-up the traffic and make it a more “stable” site? If there are alternate traffic sources, are you skilled in that area and likely to capitalize on them and if you did capitalize, would it potentially make your site more profitable and therefore worth more?
Loss of Contacts
We tend to think of the lost monthly revenue when considering a site flip, but relationships in business are everything. When you sell your site, particularly if it’s an authority site (beyond your typical Adsense or Amazon site), you’re parting ways with the revenue plus the contacts surrounding the site.
You can certainly keep those relationships with other bloggers in the niche warm after selling, but you lose some sting in not being active in building that site any longer.
Loss of Niche-relevant Asset
If you held onto the site instead of selling, you could use it as a cornerstone piece in a network of sites. For example, if your site is in the fitness niche and you’ve formed relationships with other fitness bloggers, you could use your site’s traffic and those relationships you have in place to launch subsequent related sites in fitness or even health.
When doing outreach and networking to grow relationships in the niche for example, having the ability to do that across 2-3 established sites could be a significant help for you to fast-track your success.
So perhaps your current single site is more valuable to you as a cornerstone piece in a network of sites? Worth a thought!
Should you Sell?
I’m not a financial adviser and I don’t know your circumstances, but hopefully the balance of pros and cons above helps you to think through your individual circumstance and come to a decision. If I’ve helped in any way, it’s job done!
Would love to know your thoughts and mindset towards selling > let us know below!
I’ve just agreed to terms on my 4th website sale through the Empire Flippers marketplace and it would be remiss of me to write this article without giving Justin and Joe a mention here for what they’re creating at Empire Flippers.
The thing about those two guys is that they’re “one of us” > their roots are in SEO, building sites and flipping for profit. So they understand the IM/SEO industry from an “in the trenches” standpoint.
Their decision to channel all their efforts into their marketplace was a gusty move but they’ve now created a really important, proven monetization method for online business and website builders.
Sure, there’s other brokers and marketplaces out there, but these guys are doing a power of work in stimulating the site flipping and site buying industry and as someone that’s benefiting from their marketplace, I wanted to give them a shout-out and say thanks for everything you’re doing for our industry!
I know plenty of people that have sites listed with them now, or have successfully sold with them in the past, so reach out to the guys if you’re considering your options.