OK this question applies to people who do not just create sites for the whole purpose of selling them. This also doesn't apply to people who need to sell the site due to a life changing event where they can no longer maintain the site. I have a couple of successful sites and people have contacted me over the years offering to buy it for 2 - 3 times it's annual worth. Here is what I do not understand.... why would I sell a successful site that keeps making money for 2 - 3 times worth what it brings in, when I can just keep the site for 10+ years and keep making money from it? Unless someone offers me so much money for a site like those people you hear about on TV who sell their site for multiple millions, then yeah. But if my site brings in $40,000 per year, I will not sell it for $120,000 when I know in 10 years it can bring me $400,000+ dollars. Please help me understand this. On another note, I plan on selling a couple of my sites that are not as successful, only make $500 combined this year mainly because they are directories that Google wants to destroy and I can free up some resources on my server since my host is very limited.
There could be many reasons, and some of them are: 1. They are broke and I need the money 2. They are raising funds for a new project 3. They have lost interest 4. They just don't have time 5. etc.
A lot of people just enjoy making sites! And they need to make them have some form of income to sell them. Imagine selling 100 sites over the year which each sell for £500. Money soon ads up
Flipping websites can be very profitable. It's so easy to setup a micro niche one, do a bit of SEO, then sell it when has even as little as 50 visits a day.
The problem is you ant ensure that your earning is consistent for 10 years. And you are not consider the value of the money, the value of the money is dropping time to time. a meal may cost you $5 today but it may cost $10 after 3 years
Its all upto the seller only,that why he is keen to sell his own site,it may be need of money,or raising fund or something else.
If you sold a site that makes $40k/year for $120k, then the buyer would not recoup his invest for at least 3 years, unless he has some genius idea that will triple his income after purchase. Sites that make money sell for much more then sites that earn like $1-$10/mo. a site that earns $100/mo could easily sell for $1000. personally, if I had a site making $40k, and I wanted to sell it, then I would not sell it less then 10-12 times what it was making, once you unload that $40k/year site, then its gone... but your time of making so much more in 10 years is a bad example, because our economy is so screwed up, and I would not be surprised if we went through another dot.com bust, so your expected $400,000 in 10 years could be $10,000, just because you are making money now, well, the future is always uncertain, you have a lot of competion, what you are making now is not guaranteed to be making in 10 years, you just hope you are making much more in 10 years. I am sure those guys that went bust during the dot.com thing thought the exact same thing you are thinking now, but a lot of those guys are no longer in business anymore.... It just takes a few sites doing something better then you to run you out of business... you are right, sometimes I ask myself the same thing, why does someone sell a $40k site... could be a few things...maybe he is tired of spending $10k on advertising, maybe a death of a family member or even the owner, maybe they want to retire out of the internet business... Dont think just because the site was making $40k that there was no advertising involved, often enough I hear these people spend money in order to bring in those sales, and advertising cost money.... so spending $$$ on advertising could be part of it, but not always. It would be great if you could just setup a site without paying a penny on advertising, but that is not always the case... I have heard some selling off their sites because they got into an accident, or health issues and they needed the money to pay their huge hospital / medical bills....
Nice reply dscurlock. Yeah like I said in my original post "other" than a life changing event like death in family or illness or unexpected large expense. I meant if everything in life is normal and people just want to sell their site. I feel like my site is a part of me since it has all of my personal touches. Plus I am a programmer so I added features that you cannot find anywhere else. Every time I am contacted to sell my site, it is for 2 - 4 times more than its annual worth and I agree with you I would do it for 10 - 20 times more.
People sell sites due to the following reasons, 1. They feel that they can't handle the site 2. They think that the site is going down 3. They need instant money 4. They have a better project in mind 5. They created the site only to sell it