What it cost you to make is usually irrelevant. That money you've invested in making the site is only worth what it can recover in earnings. More
What it cost the seller may be somewhat irrelevant, but what it costs -in more or less objective terms- to build such and such type of website or web business is relevant to a seller's price expectations; as, if potential buyers were to venture into this line of business themselves, they would face similar costs.
So, like it says in the linked, what matters more is what comes out of the site and an investment of $20,000 put in GUI design may seem like an overkill to most buyers, however, it can't be scratched over as nothing either. The common sense lies in between there, somewhere...
The buyer may not venture into the same line of business. Even if he does, the buyer will pay for that prior work based not on what it will save him but what he can get away with. Unless competing buyers step up to push the bidding higher, a buyer would feel no sympathy paying $100 for something that cost $10,000 to construct. The maximum he would stretch to, if competing buyers bid based on their intention to use the prior dev work, is what that work would contribute to (net) earnings - which is what I pointed out. This could come either in direct earnings or saved costs.
We see numerous auction examples in the marketplace of sites that have invested huge resources in back end programming that don't get a single bid.
If he wasn't going into the same line of business - or intended redesigning - the buyer wouldn't be willing to stretch to even that $100 for the design.
Last edited by FruitMedley Post; Sep 9, 2008 at 05:19.
I'll add a plug here for Sitepoint's contract. Even given that there are jurisdiction issues involved it is better than having no contract at all. OK, it costs about $100 so not ideal if you're selling a $100 site but if you're a regular seller it pays to have a good sales contract (in addition to a good NDA and a sound Sales Memorandum template).
Hello, I'm interested in selling my site here. I've been doing research and have a question. I see several interested potential bidders asking the following question:
"Could you please kindly send me the reserve price and a BIN if you have one? Thanks!"
Can a seller tell the reserve price privately?
Even if I use Escrow.com, is it better to create a contract sheet and have a buyer sign when I sell my website?
Contracts are all very good but there are two problems. First is that if the other party is in a different jurisdiction it may prove impossible to enforce. Second, even if he lives next door to you the sums at stake make it uneconomical to sue. If you aren't getting any rights which you can and will enforce legally what's the point of the contract?Even if I use Escrow.com, is it better to create a contract sheet and have a buyer sign when I sell my website?
I agree with 3Six, contracts usually only delay what would otherwise would be a smooth transaction. They are slow to sign and nearly impossible to enforce.
Then again, I operate with 5 figure deals, anything bigger and it might make sense.
A buyer venturing into a new project would have the site designed to his own ideas and convenience. If it's a bought site he may have to spend the same price or more converting, redesigning and repositioning the site to meet his requirements.What it cost the seller may be somewhat irrelevant, but what it costs -in more or less objective terms- to build such and such type of website or web business is relevant to a seller's price expectations; as, if potential buyers were to venture into this line of business themselves, they would face similar costs.
After reading all the way thru this excellent thread can I assume that:
1) Using escrow for selling a site for $500-$1000 is a waste of time?
2) If I'm based in France and selling to a US buyer a legal document e.g. the Sitepoint contract ( which I have) is basically not worth anything.
And a question -
Do you feel there is a market for 'Start Up Websites' with unique design and content (I'm a designer first and foremost) with no history but with monetization built in? Good design values, unique content, premium WP theme and fully SEO'd, pluginized(?) etc.
e.g. site I'm working on to list ( first auction for me !): Spiritask dot com
I realise this is really low end for most of you guys but we all have to start somewhere right?
Thanks for the advice here - which I am using to create an informative sale pitch and a more informative .pdf list of 'bells and whistles'. Also considering a quick Camatasia walk thru. I know that sounds like overkill but if all goes well would like to sell one similar site, different niche, a week. so could re-use those selling tools.
Even under $1,000 it is worth using an escrow if that's a large sum to you and you can't afford to lose it.
If there's a problem are you going to sue the buyer under the terms of the contract? If not, then your contract isn't serving the legal purpose it was designed for.
The market for start ups and templates is pretty saturated. I would advise you to concentrate on something else if you're looking to make money.
Thanks for the great thread.
I have my first SP listing up at the moment. It's received bids up
to 65% of it's reserve in the first 2/10 days.
I was asked in a PM to sell at a BIN price. We *tentatively* agreed on
selling for the reserve price (5k).
I don't think the auction itself will hit 100% of the reserve price, so
this seems like a good option.
The buyer is in the USA. I am in Australia.
The buyer is willing to use Escrow dot com or PayPal.
(I'd actually prefer to use PayPal, escrow dot com fees are so high)
However, they don't want to bid on the listing itself, and want
to continue discussing it through Y!IM...
I'm trying to figure out how on earth I can lose, if they're willing
to use Escrow... but I'm just boggled why they don't want to
bid on the listing, or continue discussing through SitePoint PMs.
And with using PayPal... I can see how *I* could rip them off,
but I don't see how they could rip me off, seeing they send
the money first (or are there loopholes?).
Any thoughts from those more experienced would be greatly appreciated :-)
(..and if the buyer in question is reading this: no offense intended,
this my first sale, I just want to make sure..!)
Hi abisko, welcome to SP. A good approach would be to start a thread about this rather than sticking your question here.
I sold a site in Sitepoint recently. While I may have written the original post here on how to list your site I make no claims to be the world's top expert, and I'm sure there's a lot in my own listing that can be improved.
However, today I discovered a post on someone's blog referencing my sale thread. He analysed how I presented my site for sale, what was right with the thread, how I built trust in me and the site, how I addressed unflattering facts about the site, how buyer objections were met before they arose and a lot more.
I was originally reluctant to make a post linking to him as he paints my presentation skills in too flattering a light and it may look self-promotional of me but I'll link to him because I believe it would really benefit readers of this thread to read various analyses he's done. Across his various posts pay particular attention to how and why he loses trust in sellers. It's a masterful lesson on what to avoid in your own listings.
Glad you liked it
Well conducted auctions are more the exception than the rule, so it was a pleasure digging around yours. There are plenty of bad ones, so no shortage of material there!
LOL, so it's you! I should have known - there can't be a new kid on the block with that level of market understanding and savvy.
What if I said I liked the grey?
At post 44 I explained that escrow.com is not suited to handling transactions for websites. I had spoken with escrow.com management at that time and they assured me that this was changing.
It has now changed.
And my advice remains exactly the same: escrow.com just ain't right, use an alternative.
The problem was that they were geared to transactions involving just domains (selling whole websites is a lot, lot different). As far as escrow is concerned, the buyer needs to release the funds if the domain has been transferred to his name. It doesn't matter if the site files, database, passwords, hosting, content, code etc is not transferred - the buyer still has to release the funds. If you've just spent $100K on a website, the domain has transferred, you have nothing else from the seller but has released the funds ...you'll be justly peeved.
escrow.com needed to include a facility where the domain and the site files could be included in the same wrapper. They've finally added a fourth option to their offering of vehicles, domains and general merchandise and... it ain't "websites"
The new type is "Services: Professional services including IT programming, consulting, home renovation, etc". It's a separate category and cannot be bundled with a domain name to make one consolidated transaction.
Escrow.com, you missed a trick.
On the topic of selling your site, let me just say: Be Scruplously Honest.
Don't claim your turnover or total sales as "Revenue". Claim only REAL (net) profit. It's not the headline figure that's going to grab the real buyers but the bottom line figure.
Don't try to hide anything - your dropshipper going bust, your private arrangement with your top advertiser coming to an end, losing your high PR backlinks - buyers can suss all that.
And disclose the negatives - or at least the ones that people can easily find on their own. It gives you credibility.
Please, please, please, STOP THE HYPE. Give facts in your auction, not opinions.
- This will get PR5 in the next update... or this is a "strong" PR4 is BS. You don't know that it's "strong".
- If you do a bit of promotion you can make a lot of money with this site. BS
The more you try to "sell" your site the more you sound like a liar.
And, as a recent thread has uncovered, if you've put the site up for sale before, it's better you disclose it before someone does a search on your posts and sees that you failed to sell it on the previous occasion. It raises unnecessary suspicions which you can dispose of creditably if you're the one making the disclosure.
Hopefully this is the right place for this.
This sticky talks about how to sell but nothing after the sale.
What I am getting at is after I have found someone to buy my site what do you do?
Do I just give him the user name and password to the host company?
(That just does not sound right) I have multiple domains hosted with the same company.
I am looking for a step by step process of what I the seller should do so I have a very good 1st time experience in selling the domain/ Website.
So basically task conditions and standards.
Task : Selling a website
Conditions: Step 1 - ??
Standards: If you complete steps 1 - ?? Both you and the buyer will be happy.