How to improve the value of your website

How to improve the value of your website

When you list a website with the intention of selling it, a major concern for you is receiving bids that don’t truly reflect the value of the website. While it is normal practice for buyers to try and bargain for a price that is lower than the actual value of the product, a website with top value will eventually get sold on the higher end of the valuation spectrum.

If you plan on selling your website or blog, your principal objective should be ensuring that it is sold for the highest price possible.

Here are a few ways to improve the value of your website for prospective buyers:

Create Good Content for Your Website

If you want your website to be highly valued, you must invest in creating good content that will be both engaging and compelling. The expression, “content is king”, still remains relevant today since the content is the principal component that determines the success of a website or blog.

Regardless of the type of web business you intend to sell, whether it is a blog, a web application, or a service website, one way you’re guaranteed to increase its value is by adding relevant content that will actually be useful to internet visitors

Good content also increases search engine visibility and ensures that your web platform is highly placed on SERPs. If you’re unable to create the content yourself, you can simply hire an expert from freelance websites like Upwork Freelancer, and Peopleperhour that will handle the whole process for you.

The costs of content writing services are actually quite affordable due to the proliferation of freelance websites. On average, you can spend between $10 to $20 for a 500-word article, though articles of very high quality go for premium rates that reach up to $80 each.

One aspect of content creation you must also focus on is the proper use of clickbait titles. This practice helps drive loads of traffic to a website; hence, properly implementing its use will certainly increase the value of your website.

Establish Multiple Sources of Traffic

The amount of traffic a website receives is one of the key parameters used to determine its value, which is why sites with impressive traffic often get sold for lots of money. This is because traffic has a direct influence on revenue generation. In e-commerce sites, high traffic ultimately transforms into high conversion rate, which leads to an increase in sales. For blogs, traffic indirectly leads to the generation of revenue by various marketing and advertising mediums; hence, if the blog you’re selling has lots of traffic, then it is bound to be highly valuable.

If a website, however, doesn’t have much traffic yet, its value can still be raised by establishing multiple sources and channels that will bring in the desired traffic with little effort. Buyers looking to buy websites with huge potentials often look for those that already have traffic generation mechanisms in place. Whether it is setting up one or multiple active social media channels or having SEO tools in place on the web platform, you must ensure that your listed website has a traffic source that can be exploited to bring in web visitors.

Engage in Lots of Link-Building to Increase Backlinks Value

The value of a website can also be gauged by assessing the ease with which it ranks on the first page of Google’s result pages for specific keywords. This is usually done using the popular Moz metric, Domain Authority.

If the website you wish to sell has little or no inbound links pointing to it, then there is a good chance that its domain authority value will be low. Buyers who have a broad knowledge of SEO understand why it is important for a website to have a respectable DA value. Even if the website doesn’t receive much traffic, its high DA value still guarantees top placement of well-written content on result pages of the search engine giant, Google.

One proven method that is used to increase the DA of a website is link-building. By having numerous links from very reputable websites or blogs point to your website’s URL, you automatically increase its reputation and thus, boost its DA value considerably.

It may take some time for the effects of the link-building process to be noticed, but most often times, increase in DA value can be seen within a few weeks.

When engaging in link-building practices for your website, you should only ensure that white-hat techniques like guest posting, blog commenting, and defective link replacement is used to acquire links.

Guest posting remains the most effective link building method to date. As the name suggests, it is the process of crafting an article or blog post for a reputable website. Though the primary purpose of engaging in this practice is to inform and educate the site’s audience, you can also benefit from writing the content by inserting a link that points back to your site.

To begin guest posting, all you have to do is send outreach emails to multiple websites that belong to your site’s niche and ask kindly if they would like you to contribute with an article or a post. Doing this increases your chances of scoring very good link-building opportunities for your website.

Using any link-building method frowned upon by Google may lead to your website being at the receiving end of a penalty, which will only harm your DA value even more.

Make the Website Highly Responsive

Before listing a website, you should ensure that the site isn’t lacking in the area of website responsiveness. With mobile devices now accounting for nearly half of internet visits, responsiveness is a website quality that is simply non-negotiable. Buyers now also know the value of having a website that is optimized for mobile access, which is why it has become one of the principal components of the Flippa checklist.

If your website’s mobile display is very poor though, the chance of it being purchased drops drastically. Not only does Google prioritizes mobile-friendly sites when ranking web platforms, sites that are highly responsive are also likely to have and retain more traffic than those that are unappealing to mobile visitors.

Change Your Website’s Domain Name…When Applicable

There are times when a strategic domain name may be the factor that seals the deal on a website purchase. So you must not discard the idea of changing your website’s domain name when you want to sell it.

Unless the revenue generated by your website is attractive enough to bring in bids from buyers, the option of upgrading to a domain name that is commercially viable is always open. A catchy domain name can be a defining factor that compels a hesitant buyer to make a purchase; so do not just see it as expenditure but as an investment.

Improve Revenue Generation

Since generating revenue is the main goal of a website, listing a website that has consistently made lots of money is certainly going to see many buyers show interest. Website buyers, however, prefer the plug and play model when it comes to revenue generation, and many will turn down the chance to purchase a promising site in favor of a site that consistently rakes in money.

Depending on what the focus of your site is, you can improve its revenue generation with a little hard work and dedication. One way to boost your site’s revenue is by marketing affiliate products to visitors. Other revenue generation channels are ads, e-commerce, and sponsored content.

Study your website well and choose a revenue generation channel that will be perfect for it. You can also apply two or more channels together to further maximize the traffic your site receives and earn more money.

Conclusion

While you have the right to ascribe any value to your listed website, you must understand that buyers’ valuations are based on applicable factors that they can assess themselves. These steps may take some time to establish, but the end result can be well worth it if you want your website to meet and surpass these valuations, which is why upgrading it to its highest capacity is the best option for you.

Transferring an Amazon FBA account

Transferring an Amazon FBA account

It’s no secret that Amazon doesn’t like talking about transferring Amazon FBA accounts. In fact, their terms of service technically do not allow FBA accounts to be transferred, but this hasn’t stopped people from being able to buy and sell their FBA businesses. Our goal at Flippa is to remove the barriers between buying and selling of all online businesses, including Amazon FBA businesses. In one of our more recent sales, we worked alongside Amazon Seller Central representatives and were able to capture the exact steps necessary to transfer an FBA business. Here are the steps to transfer an Amazon FBA business:

Step 1 – Update the Primary Email

The first step is to update the primary email of the account over to the new owner. This can be accomplished by going into your account settings and under the related links section, selecting “Login Settings”. Once you’re on the Login Settings page, you can edit the primary user email ID and password. It is recommended to discuss with the new owner which email they prefer using, and then setting the password (and making sure to write it down!). Now that a new email and password has been set, the new owner should be prompted with an email saying the account has been transferred to them. Now provide the login information to them, as they’ll need to finish out the rest before the transfer is complete. (Note: If you’re also transferring the email account, it is recommended to change the password and then give them the login information.)

Step 2 – Have New Owner Complete Tax Interview

Now that the new owner has control of the account, it is up to them to complete the tax interview. This is standard process when updating the business information of an FBA account. The tax interview can be found by going to account settings page and clicking “Legal Entity” within the Business Information section.

Step 3 – Update Bank & Credit Card Information

Once the tax interview is completed, the new owner will need to update both the “Deposit Methods” and the “Charge Methods” which can be found on the Account Settings page underneath the Payment Information section. Once these three items have been completed, the new owner will now have full control of the seller account! If you’re curious about the original contents of the email from Amazon Seller Central, here it is:

I would like to inform you that the seller of a particular account can provide all the authority over the account to someone else by simply updating the primary email address and re-taking the tax interview and updating the bank and credit card information of the other person to whom you would like to sell.   Kindly know that, to update the primary user email ID, all you have to do is go to account settings> Login settings (under ‘related links’) section. Once the page is opened, you can edit the primary email ID and the password. You can update the primary email ID section with that of the email ID of the person that you wish to sell to.   Secondly, ask the other person to go through the tax interview once again (tax interview is nothing but the initial process that you had to undergo to update the business name.. etc..) in the Legal entity link under the ‘Business information section in the account settings page.   Once the other person completes the tax information, he can go ahead and update the bank details and the credit card details in the ‘Deposit methods’ and the ‘Charge methods’ respectively under ‘Payment information’ section in the account settings page.   Once the other person completes all of this process, the account will be under the other person’s control with the bank, credit and email information all will be under the other person’s name.

It’s important to note that the transfer process may differ depending on the circumstances of each Amazon FBA business. It is always recommended to contact Amazon Seller Central before transferring ownership of an FBA business.

Sold on Flippa: Cases Tech

Sold on Flippa: Cases Tech

Platform: Website

Business Model: eCommerce

Business Age: 1 year

Sell Price: $30,000

 

What is Cases Tech?

Cases Tech is an eCommerce business that sells high-quality phone cases and phone accessories. This fully automated, dropship business model sells over 40 different types of covers and phone cases. These include leather cases and phone covers in animal print, glamour, floral and other more simple designs. Cases Tech best selling products include a leather case that fits credit cards, a magnetic phone holder and an ultra slim silicone cover.

The business has enjoyed strong sales, with annual profits of $29k. A well laid out website, high-quality products and excellent customer service have all contributed to this.

We asked the buyer of Cases Tech a couple of questions around why he bought the business and what’s his plans are for Cases Tech. 

 

What was attractive about this business?

I was interested in the business strictly because of the seller. I follow Irene and received notification that she had another listing for sale. I was in the running for one of her previous listings and her communication with prospective buyers in the comments section was excellent. While I didn’t win that auction, I knew that she produced a quality product and was determined to acquire her next project. So when CasesTech hit the market, I performed quick due diligence on the site and contacted her to negotiate a BIN price. The rest was smooth sailing and the site is running great.

 

What are your immediate plans for the business?

My immediate plans are to enjoy the turnkey site as it requires minimal effort. As a working professional, I needed something that was already running smoothly. I plan to scale the business by adding new products and implementing Facebook marketing.

 

How long have you been looking for a relevant business?

I have been looking for a business for about 5 months and will continue to evaluate quality assets in the future.

 

 

To find other great businesses like this one for sale, check out Flippa.com

Seller interview – Business selling cremation urns and jewellery

Seller interview – Business selling cremation urns and jewellery

Looking for an established business, in a booming industry with monthly profits of $38k? We recently sat down with the Asha Martin, the founder of an eCommerce and wholesale business sells cremation urns and jewellery worldwide. In its 12 years in operation, the business has continued to grow and evolve. Their pets category which includes urns, keepsake pendants and tags, is currently experiencing significant growth. 

Asha started a funeral products business and was inundated with requests for urns and cremation jewellery, seizing a gap in the market. What does it sell?

The business sells funeral accessories and memorial books, cremation urns and keepsake memorials. Their collection can be used for adults, pets and includes a selection of biodegradable urns for the environmentally conscious. 

Interview with seller Asha Martin 

What is your background and why did you start Life Cycle Urns?

At the age of 23, I started my first own small business as a furniture upholster. A year before selling the upholstery business I started the funeral products business. The business first opened as a retail online store. It grew steadily over the first few years and soon enough I added B2B wholesale sales. 

We kept getting requests for funeral urns and cremation jewellery. The funeral homes wanted better quality products at cheaper prices. There are only so many times you can hear the same request over and over again before I thought RIGHT, I’m going to find a way to make it for you!I set about designing a range of different funeral products which we continue to have made at our factories in India and China to this day

For many, this industry will be unfamiliar. Tell us a little about the industry and why people choose Life Cycle Urns?

We operate from a medium-sized warehouse with upstairs office. We hold bulk stock of over 130 different types of funeral urns for ashes and jewellery that has a hidden void for storing ash. Cremation jewellery is very popular, we sell thousands of pieces a year. 

Our company has grown and gained momentum over the years because of our constant focus on supplying high-quality products, great customer service and shipping out orders at lightning speed.

How does the business make or acquire the product?

Over the past 12 years, we have formed trusted relationships with our factories in India and China. Its first name basis stuff and that’s the way we like it. Having good communication with our factors is so important, otherwise, it would be very difficult to manage. We have independent QC on the ground in each country to check each other which means we get the high-quality finish we are after.

 Who are your paying customers?

We supply a range of different customers from the general public via our retail eCommerce store, funeral homes, pet crematoriums, cemeteries, crematoriums, jewellery stores, online stores. We are also about to start supplying a US wholesale funeral products distributor which is very exciting. The market in the US is ginormous compared the to Australia to the potential for things to explode over there is unreal.

How have you acquired customers to date? Where do they find you and why do they use the service?

Our main way of acquiring new customers has been a combination of direct mailing our catalogues, website SEO and trade shows.

What are the biggest challenges in this business? What would I want to know if I was starting this business from scratch?

The biggest challenge is keeping track of stock and manufacturing all of the different lines we carry and supply wholesale. Some weeks certain products just fly out the door like hot cakes and we can’t keep up.

What do you think you have done really well to date? What have customers been really happy with?

I am most proud of our range of exclusive designs. Seeing these items sell really well and having happy customers who buy them regularly really is a pleasure. Our customers have come to rely on us for being able to provide them with high-quality funeral products and the fact that we delivery so fast just makes the service so much better

 What is your best seller?

We have a number of best sellers. Our range of premium cremation jewellery and also our stainless steel cremation jewellery sells really well. Our pet crematoriums love these items and buy large amounts regularly from us. They are small and cheap to ship so I like it when the jewellery sales come rolling in.

Where do you distribute to?

We distribute Australia wide which is our core market. We also distribute to HK, NZ, USA, UK and Canada.

Why do I want to sell if you love it so much?

I’m a creative, this business is built now and is ticking along nicely. I need to build and create something new. If I’m not learning, I’m not living life to the fullest. This is a brilliant industry, the people are warm and easy to deal with. 

What sellers need to know about valuations

What sellers need to know about valuations

There is no shortage of motivated buyers on the lookout for great online businesses. While the stock market is highly volatile, there is increasing enthusiasm for investment or purchase of online businesses. So, the potential appetite for buying is enormous. However, by far the major brake on buyers committing to a final purchase decision is their uncertainty about pricing. There is little understanding of sound valuation principles and buyers are wary of what they see as pricing based on an arbitrary multiple of net profit. Not to put too fine a point on it, buyers believe that sellers generally over-value their businesses and they find it hard to define a reliable and objective valuation method. The outcome is that too often an enthusiastic and highly motivated buyer fails to follow through with a final purchase because of the understandable anxiety about paying more than the business is worth.

How to value an online business

Typically with an online business, there will be little or no inventory to value and only a very limited if any physical asset base. Accordingly, the business will generally be valued almost entirely on the projected profits, calculated on the basis of current and relatively recent past profits.

While there are various alternative techniques for valuing an online business, including the traffic valuation method for sites with high traffic as a business asset but with no or incomplete monetization, many of these methods are highly technical and yield disputable outcomes. They are often suitable only in highly specific situations, depending on a precise definition of the particular revenue model, current and projected OR you are the next Facebook which is highly unlikely.

For that reason, online businesses are almost always sold on a negotiated value based on an earnings multiple or a price to earnings ratio. While it is very common to define the ratio in terms of a multiple of average net monthly profit, it is simpler for most purposes to quote the ratio as a multiple of annual net profit. Using this basis, average asking price multiples have increased from 2.4 in 2010 to around 3.4 now (sourced from our good friends at Centurica), with final selling prices typically at around a 10% discount to the asking price. This suggests that generally speaking sellers who value their businesses realistically can expect to achieve a sale outcome within reasonable range of the asking price. But putting a realistic value on the business is complex and there is an understandable tendency of business owners to over-value their business.

The average net profit multiple varies markedly from one kind of online business to another and also depends greatly on the specific market niche. However, the absence of highly consistent profit ratios can cause buyers to be both surprised and sceptical about the valuation proposed by a vendor. On objective grounds SaaS and e-commerce businesses sell for a significantly higher profit multiple than content-based or media businesses, because of the higher reliability of recurring income in the former models and the generally much higher operational time demands in the latter cases.

As an example, a currently listed relatively small SaaS business (not on Flippa) with a claimed $55k net annual profit has an asking price of $250k, a hefty earnings multiple of 4.55. You would expect that ratio level to make any buyer hesitate. Let’s assume it doesn’t have rocket ship growth (doubtful because they are selling) a buyer simply will not pay that amount.

Vendors who are seeking to sell at an earnings multiple above the prevailing average need to factor in the understandable buyer nervousness and be sure that the audited income and expenses figures are going to stand up to serious interrogation. While there is never an absolutely guaranteed success in any investment decision very few buyers overall, and virtually none in the six and seven figure range, are interested in taking a wild gamble on getting value for money.

The valuation factors that buyers will weigh up

Because it goes without saying that buyers generally regard sellers’ asking prices as inflated, it’s important that the vendor has realistically priced the business having regard to all the considerations which the prospective buyer will be factoring in.

The income figures must be accurate and cover the duration of the business operation, including only those income streams which will fully transfer to the new owner with the sale. Gross and net income trends will be crucial to the buyer’s assessment. All expenses must be transparently declared in detail, including all payments made to service providers and suppliers of goods and expertise. It is vital to new owners that they will be able to maintain all of the necessary business operations within the same cost structure, or ideally achieve some savings where possible. Any outstanding expenses or other debts transferring with the business obviously must be declared.

Absolutely all operating expenses need to be disclosed, not disguised, by the seller and discoverable by the buyer. Often overlooked, the full value of any unpaid work which has been invested in the operation of the business will be accounted for in the buyer’s own valuation of the business. The predicted cost of the new owner’s time, and any specific technical expertise required, will significantly affect the buyer’s business valuation. It is absolutely essential to the prospective buyer to be able to rely on an honest declaration of the time and expertise required to manage the business, as the new owner will need to put a dollar value on this expense.

The prospective buyer will need to analyse all the financial indicator trends over the longest time frame for which the figures can be produced. Sources of customers and the cost of gaining them will be important factors for the buyer, as will the effects of any changes to attracting traffic such as Google algorithm changes or even penalties which may affect search traffic.

The buyer will need to assess how competitive the niche is and whether there are barriers to the entry of competitors, which raise the business valuation, or the likelihood of increased competition in the absence of any significant barriers to entry, which will lower the valuation. It is crucial to the buyer to ensure that any licences required are fully transferable, or readily obtainable by the new owner, and that any branding, trademarks or other unique advantages will transfer with the sale.

The seller needs to appraise the business through a buyer’s eyes

The seller will be keenly aware of the time, energy, money and vision which has brought the business to its current status and positioned it for a successful sale. Naturally the vendor wants to achieve the highest possible price. However, seller over-valuation is the prospective buyer’s biggest turn-off. It really enables the sale process if the current owner evaluates the business using the same valuation indicators that the buyer will be applying.

It is worth mentioning that some buyers will apply a discounted cash flow (DCF) measure in their valuation. This is a somewhat less relevant consideration in an era of low inflation as at present, but put simply the principle is that a dollar of profit now is worth more than a dollar will be in the future, so a formula is applied to compensate by lowering the notional future profit value, given that the buyer will be paying in advance the equivalent of some years of projected net profit.

The bottom line for the buyer is that the online business acquisition must be fully transferable, it must be sustainable, it must have scalability, and above all it must be purchased at a reasonable earnings multiple. While it is still relatively unusual for an online business to be bought using funds from an institutional lending source, lenders may place a ceiling on the multiple, determined by the actual business model and specific market niche.

Overall, to achieve a reasonable pool of potential buyers interested in undertaking onerous due diligence and finally negotiating a fair sale price, sellers need to keep their initial asking price close to buyer expectations. Avoid ambit claims with the view that eventually you will negotiate down. The process of carefully considering a purchase is time-consuming for the prospective buyer. The factors outlined above will determine where the buyer expectation sits in terms of an earnings multiple. There are so many variations in play that the ratios will vary between around 2 and 4. There would have to be exceptional circumstances taking a selling price outside this already wide range.

Know exactly why you have decided on your own seller valuation, and understand what the buyer will be factoring in. Your initial asking price should not be more than 10% higher than you believe on reasonable grounds the buyer will consider fair after all due diligence and consideration of all the factors covered here.

It is very clear that a reasonable seller valuation is always the key to a successful sale.

 

Why buy an online business if you can build it from scratch?

Why buy an online business if you can build it from scratch?

Many potential buyers ask themselves this question when they are considering the seemingly high cost of an online business purchase. The average monthly net profit multiple is affected by many different factors, but as a general guide the purchase price is usually around a 30x multiple. As a simple illustration, an established online business generating a dependable monthly net profit of $10,000 will typically sell for around $300,000.

This multiple equating to, in some cases, as much as three years of the foreshadowed profit naturally causes buyers to pause for thought. Why not invest a much smaller amount building a business in the same general niche from the ground up?

It’s a lot to do with time

Yes, the short answer is time, in two different senses. Firstly, there is the significant period involved in building the business from scratch given the basic requirements for clarification of the niche and precise product or service focus, establishment of the site, the creation of content, the development of relationships and formal agreements with suppliers and content creators, the building up of a critical mass of customers or subscribers and the attainment of a recognised brand presence with a reputation of trust. During this lengthy establishment period there will still be significant outgoing investment, although obviously lower than the alternative of a straight-out purchase price, and with initially little or no cash flow in return. Secondly, the establishment phase will also require an enormous input of the developer’s time on which it is essential to place a dollar value. This valuation will depend, of course, on the individual circumstances of the business owner. For investors whose time is scarce or of high value if deployed elsewhere, then starting a business from scratch makes no sense at all – unless the vision for the business is highly original with virtually no existing equivalents.

Advantages of buying an existing business

By contrast, there are numerous advantages to buying an established business. Provided the business can demonstrate reliably audited income, expenses and net profit figures, along with levels and sources of traffic, then there is proof of concept from the outset of the acquisition. This certainly doesn’t apply to any totally new business, regardless of the level of confidence the developer may be feeling. An existing business when acquired should come with the primary domain, all files and codes including product or service codes, transfer of agreements with product or service suppliers including content producers, verified email accounts of customers or subscribers, and marketing methods including social media accounts.

The expertise of the seller as support during the transition period should also be part of the purchase agreement. If an earn-out provision is negotiated this will provide additional confidence in the viability of the underlying business performance and in the continuation of the seller’s active support for the agreed period, as well as somewhat reducing the payment required outright at the transfer date.

Barriers to success if building from scratch

Unless your online business concept is genuinely very highly differentiated from existing businesses in the space and you believe on reasonable grounds that it will meet a significant unmet need or want, then it makes little sense to invest some of your money and more importantly enormous amounts of your time to build the business from scratch. There may also be significant barriers to successful entry into existing niches. ‘Copycat’ barriers are largely informal but nevertheless effective through searches favouring established businesses and those with existing agreements or affiliations with the larger service suppliers. Industry registration standards and other regulations or terms of service agreements can effectively put a moat around well-established online businesses against which you would be attempting to compete, so that it becomes more difficult to simply enter the field and replicate their offerings.

The only good basis for building an online business from scratch is that both of these two following conditions apply. Firstly, the concept is unique and not simply an emulation of an existing successful business. Secondly, you are confident that you have the expertise and most importantly the time to build it. The actual cost of this time, which could be spent on alternative pursuits, needs to be realistically valued. If your primary reason for building a business from scratch is that you simply cannot afford a purchase, then it’s important to ask yourself whether you can afford the long hours, the delayed cash flow at the same time as the necessary establishment costs are invested, and the perhaps exciting but nevertheless highly stressful processes of establishing your website and systems, sourcing product or service inventory, developing a customer or subscriber base, creating business relationships, developing fulfilment systems and building a brand and its social media presence. Sure, it’s initially a lower financial outlay but a massively greater time and effort investment, with little or no cashflow for a prolonged period and no guarantee of success.

The case for buying

On most counts it’s clearly better to buy than to build from scratch. And of course this doesn’t exclude building further on the existing business performance so that the asset continues to grow in its eventual resale value. If feeling a little daunted by the seemingly high purchase price of an established business, never overlook what is taken for granted by traditional investors: it’s the potential capital gain value on eventual resale which is as important as the regular profit returns. Additionally, while a greater outlay is required for buying than for building from scratch, a financial loan if required is generally much easier to source for an established and proven business than for a new and unproven online business proposal.

As always when buying any business, whether traditional or online, doing the due diligence is essential. It’s not just a matter of checking on the revenue, expenses and profit figures. It’s equally important to thoroughly evaluate the agreements and systems already in place. It may be difficult or even impossible to change unfair agreements or inefficient systems which are in place once you have taken control of the business. So, ensuring that the level of control over change which you will have is sufficient for your plans for the future is a vitally important detail, although one which is often overlooked in the intense excitement of an online business purchase. Just a little extra time invested here will allow you to sit back and enjoy your income stream and future capital profit with confidence and, if you wish, little ongoing time demand after settlement and transfer is completed.