Buying and Selling Blogs: Adding Value

In the first part of “Buying and Selling Blogs” we looked at ways to see value over and above the traditional income and value of the domain. The next step after looking to see what value is there, is to see what value you can add.

It’s just like in the real world of real estate, website real estate can be refurbished and sold for a higher price than an uncared for dilapidated property.

All of the value elements can be improved upon apart from the domain. But wait, you can switch to another domain! Unlike in the real world, if you have a great property online in a bad location you can move it to a better neighborhood relatively painlessly! So there is little on a blog you can not add value to, but obviously some will have more room to grow than others.

Earnings

Many people value a site based on multiples of income. Different people use different multiples, I have seen “2x annual” and “20x monthly” both argued as fair, and both derided as over priced. So a site that makes $100/mo could achieve $1200, $2000, $2400. Any valuation using this method though multiplies any earnings you can prove. If you want to sell for the best price therefore you must boost your earnings!

This is no time to be picky about how you earn blog income. Put whatever you can into the pot. If it is an ethical direct monetization method then try it and leave it to the buyer to judge which to keep. Consider the difference $100/mo TLA sales can do to a 20x monthly valuation.

Design and Content

In bricks and mortar we have curb-appeal, online you can get your design refreshed to have the same effect. A great domain hosting a poor design and lousy content will only be appealing in the same way a burned out husk of a house would appeal to a developer who prices the sale based on land value. They will tear it down and drop the price appropriately. A great design backed by excellent content on the other hand will be seen as an asset.

Even if you have to pay for some flagship content, you only do yourself favors selling a complete site rather than a potential site.

Traffic and Links

While it is not ethical to inflate your traffic artificially (spamming, buying ads), the usual traffic building methods should be used to increase value. Do use linkbait, not to get to the front of Digg but to build long term links and traffic from other sites. A site with good, varied, deep links will be more marketable than a blog nobody has noticed.

Buy, Refurb and Flip – Low Money Down

I am sure you can think of many other ways you can improve on a site. When you get confident at it you can consider buying sites to refurbish and sell on. While you might now be thinking the monthly income is what you are looking for, consider there are deals where you do not have to pay out the full value of a site all at once.

It’s quite common now for sites to be bought with a deposit and monthly payment plan. This reduces your initial capital outlay and allows you to fund the purchase through the improvements you make. Obviously this is not “no money down” like in the big bad world of property speculation, but is close enough to keep more money in your bank.

Another option is to buy a share of a site, not the whole thing. Why would you do this? Consider when you buy a blog you are also taking on responsibility for keeping it going. Buy 50% of a blog in return for the blogger staying on and keeping writing and maintaining it. They get a cash injection and the benefit of your improvements, you get a 50% cut of the site and any revenue it makes. The percentage and price are down to negotiation, but you can see how the deal might appeal to some people.

I hear there are even blog networks who will buy a blog outright and pay you a salary for staying on. You swap ownership for steady income.

Sell or Hold?

I’m considering what to do with my raft of domains but I am leaning on building them into salable properties. The valuations after a small amount of work will be way higher. Possibly from the sale of those I will then be able to buy and refurb some others and buy and hold still more.

All this takes money and time, it could be one of the blogs in your portfolio could be sold now to fund investment in others. Is your jewel in your crown a seller or a holder? Only you can decide. One way to judge is what your gut tells you about the blog. Chrisg.com is my jewel but I could never let it go, while other topics don’t hold the interest and passion I once had.

Summary

Bottom line, the value you receive or pay is down to you and the potential you can see. If you can do more with a property than the current owner then you have the chance to make some money just with your time and expertise. This is why buying and selling blogs is a growth area of professional blogging.

Can you see yourself buying and flipping? Perhaps you already have? Let me know in the comments …