Some bloggers are making a living as much from blogging as from buying and selling blogs. I talked to three veteran bloggers who have successfully bought or sold more than a dozen blogs. If you’ve ever dreamed of cashing out - or building a portfolio of money-making sites - here are their secrets.
Tips for buyers
1. Treat it like a business. If you got into blogging because you love writing, monetizing a site may not be your strong point. Crystal Stemberger wanted to quit her $35,000 a year job, but to do that she and her husband agreed her site, Budgeting in the Fun Stuff, had to make at least $2,000 per month for three consecutive months. So for her, making money equaled freedom, and was a focus early on.
As part of her business model (more on that below), Stemberger hired writers. Original content written by a native English speaker that required little editing was cheap - $20 to $40 per post for about 800 words. Virtual assistants abroad were cheaper, but required so much double checking it ended up costing her precious time.
2. Have a business model. Stremberger’s model was simple. She made low offers on sites that were abandoned, then built up traffic and monetized the site through direct ads. The more times she was able to this, the more confident she got. She found blogs by perusing her RSS feed for dormant sites.
The sweet spot was blogs she could buy for $400-$1,000. “If you can find a site as cheap as possible, you don’t have that much to make back,” Stemberger said. She has been able to make all her sites profitable, most within the first month. On a good month, she and her partner have both cleared $1,300. Her other revenue sources include sites she wholly owns, her eBook, freelancing, and commissions on ads she sells for other bloggers.
Plenty of buyers look for bigger sites. Mike, a Canadian personal finance blogger who declined to share his last name because he has a day job in the finance industry, looks for blogs that consistently attract at least 10,000 visitors a month. His main site is TheFinancialBlogger. “With all the Google updates we try to find something that is stable,” he said. And with more traffic, it’s possible to make income from affiliate links and ads. Mike’s favorite affiliate programs are FlexOffers and Commission Junction.
In addition to size, Mike looks for blogs that have been under monetized, with few ads or affiliate links. “Most people don’t have enough time to optimize their blog,” he said. “But it’s not that hard to increase that income by 50-60% in that first year.”
3. Partner up. Stemberger had a little extra money to buy blogs, but not the time to run them. So she teamed up with Jessie Michelsen of ManTresting.com. She was the investor; he handled the day to day tasks. They split profits 50-50.
4. Know your costs. Because she approaching blogging as a business, Stemberger posts once a week - just enough to keep the search engines happy. With fixed writing, hosting, and maintenance costs, she was able to calculate each site’s bottom line.
Tips for buyers and sellers
5. Multiples. Selling a site for a multiple of revenue is common. Smaller sites, especially if they’ve been abandoned, typically fetch a monthly multiple. Sometimes as low as two or three months revenue. A bigger site - one that draws 25,000 or more visitors a month - typically garners a yearly multiple. Anywhere from one to five years is common, with the high end of that range reserved for strong brands, especially hot sites, or sites desired by more than one buyer.
6. Gross or net? Everyone I’ve spoken to has a strong opinion on whether the revenue multiple should be based on gross receipts or net profit. The problem is, as many agree the “correct” model is gross as insist is it net. The answer that suits you depends on whether you want to push the price down or up.
7. Focus. Mike, the Canadian blogger, has a virtual assistant so he can focus on making money from his most popular pages. “Just your top 10 pages, they can generate 10 times the income they are now,” he said. The trick is to play with AdSense until you find the right ad. He toys with the color scheme, the size, the placement, and the type of ad. He creates separate ad channels in AdSense so he can track how each iteration performed. With 2,000 unique visitors a day, he collects enough data to judge how an ad performs, drilling down to the best performing ad in a day or two before moving onto the next version.
He also deleted most of his ads. “Instead of having ads all over the place, I have ads on specific posts that are ranking well.”
Tips for sellers
8. Prepare your data. Serious buyers will want to know three things. Your traffic. Your revenue. Your costs. Why not grab that data, plus other numbers that will help you make the sale, and create a tidy sell sheet? Consider including your Google PR, the average time readers spend on your site, the percentage of your traffic that comes from search engines, and the size of your social media following.
9. Create a brand that’s sellable. Dana Adams rebranded her narrowly focused site FrugalInVirginia into the nationally-focused MrsMoneySaver before selling the site. As part of the redesign, she created a cartoon character that was more tied to the site than her own personality. “I wanted that persona to be sellable,” she said. Now Adams blogs at ChumMom, a lifestyle site for moms.
10. Play hard to get. When a buyer approached Stemberger about her site Totallymoneyblogcarvinal.com, it was just three months old. She hadn’t monetized it, but was getting plenty of carnival submissions and traffic. They buyer asked her to name a price. “I threw out some crazy high number, and we settled on $3,000 for a blog that wasn’t making anything,” Stemberger said.
Similarly, Mike played coy when he responded to a potential buyer. “I’m not really that interested in selling, but if you want here is the price.”
11. Put the word out. Once you’ve decided to sell, let potential buyers know by posting on the top forums within your niche. Unless you want to pay a broker fee, Flippa is one of the most popular sites to list your blog for sale. Flippa takes a five percent fee and verifies stats before listing. “It’s really very detailed,” Adams said. “I think it gives a lot of confidence to the buyer.” If you’re selling a high profile site, publicizing your for sale sign may not be the right move.
12. Let go. “When I first sold [MrsMoneySaver] I was checking it all the time,” Adams said. “I was addicted to seeing what was happening to my baby.” As the founder, she had a lot of ideas about where the site could - and should - go. But the buyer had other ideas. After weeks of obsessive checking, Adams cut herself off. She has not been back to the site in months.
This blog is made possible by a grant from the John S. and James L. Knight Foundation.