Another guest post to share some of the learnings from the Flippa user community. This guest post to help website sellers is from Danny Batelic, founder of BBSformula – a guide to buying, building and selling websites.
I’ve been a website seller for a few years now and I continually see sellers on Flippa make the same mistakes, so I thought I would share my top seven with you.
Website Seller Mistake 1: Poor Record Keeping
Let’s start at the top, as this is the number one offender when it comes to selling.
Buying and selling is a numbers game and “potential” really means nothing. It’s all about the proof.
There is no excuse for poor record-keeping.
When you sell your website, the onus is on you to tell an authentic story and backup any claims you make with proof. If a seller can’t prove any claims, then as far as I’m concerned, the claim never happen. If I can’t get the information I need, I’ll just walk away. There is so much opportunity online that I’m not going to waste time on something that triggers alarm bells.
When I buy a website, I like to see at least six months worth of traffic stats. The simplest way to keep traffic records, is to install Google analytics. This should be installed as soon as you either build a site or take ownership of any you have purchased. There is no excuse for not having analytics installed.
Then there is proof of income. You’d be amazed at how many sellers can’t substantiate income claims they make.
If your site has been making money through AdSense, affiliate commission, or from your own product, most sales will come via PayPal and you should be able to show buyers the PayPal history. If there have been sale spikes through promotions you’ve run, explain that to buyers, don’t wait for people to point it out to you in the comments section. Being transparent helps remove suspicion, which can hurt your auction, particularly if you have a string of comments pointing out any irregularities.
Website Seller Mistake 2: Not Knowing What Your Site is Worth
A lot of website sellers simply undervalue their sites and consequently so many sites are undersold.
Flippa is a relatively new marketplace and as a seller, it’s your job to understand how to value websites and then convey that value to potential buyers. The best place to learn valuation is on Flippa itself. Study the “just sold” section and develop a feel for what people are paying, but more importantly look for patterns. I learnt this from bricks and mortar real estate, where any new investors are encouraged to study at least 100 auctions before they even think of buying property.
The more you understand why sites sell for the prices they do, the easier it will be for you to educate buyers as to why they should pay the price you are asking.
Website Seller Mistake 3: Weak Sales Copy
This is where you get to tell the story. You want buyers to feel comfortable, knowing that they are buying the real thing. The number one fear buyers have is being ripped off and it’s your job to remove those fears.
You need to talk about the site’s history. How did it start? Did you build it from scratch, or did you buy it as an established site? Explain what you have done to the site and what will be required by the new owner to maintain it.
You need to discuss all features and benefits. Explain the traffic. Is it organic, or is it mainly paid traffic? A lot of sellers will try and hide the fact that they pay for traffic, but if a site is making more money than it spends in traffic, then that’s a good thing. If I can make $2 for every $1 I spend, I will buy traffic all day long and as much of it as I can.
Explain the monetisation. Show how the site makes money and how the new owner can continue to make money. This is where you need to show proof of any claims you’re making. Proof always trumps potential. Even if your site makes $20 a month from AdSense. As long as you can back it up with proof, your site will be more authentic than one that claims $4000 a month income potential, with no proof.
The sales letter is where you get to avoid all those after sale hassle. You need to clearly outline what happens once the sale is complete. Be explicit with what you are prepared to do from your end as part of the transfer process. I’ve seen so many disputes arise here because buyers expected certain things that never happened. The sales letter is the perfect place to explain the whole after sales process.
Another example of why it pays to study a number of auctions before you start to sell, is that you can answer any potential questions buyers might have, in the sales letter itself. Covering potential questions helps having to answer question after question in the comments section, which can be time-consuming.
The headline is a great opportunity for you to grab people’s attention and so many people get this wrong. Again, a great tip here, is to study the just sold section and take note of headlines that grab your attention. Avoid headlines that just sound too good to be true.
Website Seller Mistake 4: Mismanaging the Whole Auction Process
So many auctions just don’t run for long enough. I know, at times sellers are very motivated and after a quick sell. I think 5 to 7 days is the ideal listing for most sites. You need to consider people’s online habits. We all access the Internet at different times. Some people are only online during work hours, others at night and some only spend time online on the weekends. You want to cast your net as wide as possible, so I recommend including at least one weekend in your listing cycle.
A common mistake is not replying to comments regularly and efficiently. Once a day is okay at the start of an auction and as things heat up towards the end you need to answer any comments as soon as you can. Answer all questions honestly and if you don’t have information, just let people know that you will endeavor to find out and get back to them. This is where you see so many people caught out trying to cover for mistakes or misinformation. High end sites can run longer, as they have more traction.
A great tactic towards the end of an auction is to post a comment or two of your own, just to alert any watches or last-minute bidders that the auction is about to end.
A huge mistake I see in the auction process, is when sellers lose their nerve. This is where mistakes are made and money left on the table.
The auction process isn’t linear. Things start with a little frenzy in the beginning and then there is always a dip in the middle, with things really heating up towards the end. A lot of sellers get to that dip and panic. This is where reserves are dropped, low BIN prices are put in place and lowball offers are accepted.
I’ve spoken to so many website sellers who have dropped their prices, only to learn that there were buyers waiting to enter towards the end of the auction and were willing to pay top dollar.
“PM ME THE RESERVE!”
Do this and you lose. You would never go to a house auction and have the seller come out and reveal to everyone their reserve price. It just does not happen. It shouldn’t happen on Flippa either. You will be asked this question and the best answer you can give, is that revealing the reserve defeats the purpose of having one in the first place. Remember how I wrote about emotion earlier? This is the chance to use it to your advantage. People buy on emotion. That’s why the auction process is so successful. No one likes to miss out, so it can become more about winning the auction, rather than buying a website.
Website Seller Mistake 5: Confused By All Those Upgrades
With all the listing options available to sellers, things can get a little confusing
Upgrades can get a little expensive on lower end sites, but using just one or two can really help drive traffic to your listing. Most sellers ignore upgrades as simply a waste of money. No matter what price I’m selling at, I personally always use the highlight option when I first list. It’s a simple way to stand out from the crowd. On mid to high end sites, the rest of the upgrades do help, but it is a matter of using them strategically. It does require a little experimenting on your part to find what works best for you. I find using the featured listing upgrade towards the end of an auction really helps attract last-minute bidders.
Website Seller Mistake 6: Not Using Video
The option to attach a video to your listing is a fantastic selling strategy that hardly anyone employs. With so many free video tools available, it only takes a few minutes to screen capture a walk-through of your website and even your traffic and revenue accounts, which is a great way to show proof. A video walk-through is like a guided tour of your website and I have had fantastic success using video.
Website Seller Mistake 7: No After Sales Support
I touched on this earlier, but this is where any disputes will arise and headaches occur This is a trap the new sellers. If you have been very specific in your sales letter as to what happens post sale and deliver on what you have promised, you will avoid almost all problems. For a lot of buyers, this is probably the first site they will ever own and it can be daunting to manage a website the first time.
It’s important to contact the buyer as soon as the auction has finished letting them know what the next step is and what you expect from them in order to move forward smoothly. I personally never start any transfers until the money has cleared and once I’ve been paid. If this is your approach, remember that it is mentioned in your sales copy to ensure buyers are aware of your expectations – having consistently positive feedback will make this less of an issue. Once the funds are cleared, I work as fast as possible to transfer everything and finish the process. I’ve heard so many stories of things falling apart at this point, because of poor communication and sellers not working with the buyer to finalize everything.
If a buyer is happy with dealing with you, there’s a great chance that they will buy again. As part of the whole follow-up process, it’s important to ask the buyer’s permission to add them to your email list and then follow up with any future listings you have. Once everything is finalized, touch base with the buyer after a few weeks, and then a few months. Find out how they’re doing with the new site and if they’re ready for another. You’d be surprised at how many buyers become repeat customers.
Danny, is a seasoned website seller and buyer, and is a founder of BBS Formula, the complete step-by-step process to buying, building and selling websites.