Today I sat with Blake Hutchison, the CEO of Flippa, to better understand how to determine the value of blogging companies.
Flippa is the # 1 market online business for sale market. This includes websites, online businesses, and applications. With more than 3 million buyers and sellers on the platform, users discuss and negotiate deals, and buy and sell digital assets.
One of the main types of websites they sell is “content / advertising” properties, also known as income generating blogs.
In my interview with Blake, we discussed how blogging is valued, what makes it valuable, blogging monetization, and what you should do if you are looking to increase the value of your blogging business.
Adam’s interview with Blake Hutchison, CEO of Flippa
Adam: Thanks for your time Blake. First of all, how many blogs are sold each month on Flippa?
Blake: Much. We sell lower value “blogs in a box” for beginners and higher value blogs for those looking for something more established.
The number varies, but we sell between 500 and 750 blogs each month.
This month, the top-value blog was a political news site with a asking price of $ 300,000. The site was making nearly $ 8k per month at its peak and was attractive for its strong authority score, topical content, and large email list. With over 8,000 visits from buyers, it sold out pretty quickly.
Adam: How is the valuation of a blog determined?
Blake: There are many factors that influence the price. Five are probably the most important.
There is years. Blogs older than two years are considered less risky. They are easier to assess and historical trends establish a pattern of performance.
The following is the finance. Blogs, like other digital assets, are evaluated based on financial performance. The more consistent the return and the better the net profit, the better the multiple.
Traffic is another indicator. Sites with strong organic traffic and a healthy database of repeat readers will be valued higher than something less organic.
Also, most buyers will accept Domain Authority (DA) in consideration. You can see this with an SEO tool like SEMrush. To make it easy we connect Flippa to SEMrush data when ready.
Adam: What about future performance indicators? As if a blog is growing or its growth is flat?
Blake: Yes, growth trends are really important. Sites that are stable and growing are the most coveted. It sounds counterintuitive, but hockey stick-like growth in small business sales can be a red flag. This growth is unlikely to be sustainable, so it becomes controversial.
In this case, a buyer is more likely to consider an average. And blogs that are declining are penalized from a valuation point of view.
Adam: what about actual valuation and sales multiples?
Blake: Buyers often look at Flippa’s historical sales to get an idea of how much a site should be valued, so that drives market expectations. At the time of this interview, blogs worth more than $ 100,000 are selling for an average of 2.53 times their annual net profit.
So a blog that generates $ 1,000 per month in profit (not income, this is after expenses) could sell for around $ 30,000.
The best way to determine the valuation is by using the Flippa rating tool. Take into consideration historical sales data and all the items listed above.
Adam: A frequently asked question is “what should my niche be?” What are some of the most popular blogging niches sold on Flippa?
Blake: There have been over 10 million keyword searches on Flippa so we have a lot of data on this.
I see a lot of demand for blogs on health and wellness, cooking, technology and finance. This appears to be a reflection of customer demand. These are popular markets and they have a lot of customers to attract.
Adam: Based on all the factors you shared to determine the value of a blog, can personal brand bloggers sell domain names under their own names if they ever want to go out?
Yes, I must also clarify this point. Domain (or branding) can be important in determining value, but only if it’s good (short, memorable, simple) or recognizable. And a bad one won’t detract as long as the rest of the asset is financially sound.
Domain authority is certainly important, but it’s more about links from trusted sources than the actual quality of the domain.
In short, absolutely: a personal brand blogger can sell their blog. It all comes down to how inextricably connected they are to the day-to-day running of the site, customer acquisition, and the credibility of the site.
Adam: So what should bloggers focus on to increase the value of their blogs?
Blake: First, establish a strong content presence and optimize revenue opportunities. This sounds oversimplified, but it is critical.
Buyers are looking for blogs that are already generating substantial traffic and have at least one, but hopefully, multiple sources of income.
Adam: What forms of blog monetization are most valuable?
Blake: This can be considered a bit moot. It depends on your blog and the direction of the content, but certainly sites powered by Adsense (advertising) and Amazon Associates (affiliates) are the most requested. People are looking for consistent and passive forms of income, such as ads and affiliate income.
Adam: What is the actual process of selling a website like?
Blake: Selling a website is truly an all-consuming process. Good blogs can receive a lot of interest, so prepare yourself emotionally for the process first.
Once you have decided that you are ready to sell, you must first determine blog value and why you are willing to sell it. Again, the easiest way to do this is with the Flippa rating tool.
Then you will want prepare your finances. You should have the details of your income and costs handy. For more established blogs, profit and loss statements are required.
Then you build a list. Just like listing a rental property, you need your ad to appeal to most people. Use high-quality photos and try to use effective sales copy to make your blog list as impressive as possible.
Once your list is ready, you just have to talk to buyers and negotiate. Flippa has the largest buyer database in the world, so you will be assigned to the right people. Buyer engagement and response to people in a quick and constructive manner are crucial.
Finally, you have to be reasonable with your assessment. While your online business is like your baby, it is not someone else’s. Your sale price must be based on market value and must be reasonable as with any other type of sale.
This concludes my interview with Blake Hutchison, CEO of Flippa.
He had many interesting and insightful points about buying and selling blogging business. After thinking a bit about our conversation, here are some of my main takeaways:
From my experience, niche selection is the number one hurdle bloggers face, hands down. You could write an entire novel about why traditional niche tips are outdated and wrong.
The niche does not matter, starting matters. Getting to monetization is important. Give yourself the freedom to turn things around. Most bloggers fail to get there because they go for a narrow niche and quit when it doesn’t work out. Success comes from not quitting smoking. And not quitting comes from giving yourself the ability to swing your niche when things don’t work out.
As Blake said, there are a lot of customers to attract. Focus on building your personal brand around what YOU want to write about and YOUR experience. There are many niches that make money.
Just get started, write content based on your experience and transactional keywords that make money, and spin as many times as needed.
Don’t get stuck choosing the “perfect niche”, it doesn’t exist. Build a brand around yourself. That’s a niche to get excited about.
Good Blogs Get Buyers Interest:
It is definitely true that good blogs get a lot of interest. I get a few emails every week asking if I am interested in selling my blog. And with an income of over $ 80,000 a month (and Blake’s 2.53x median annual net profit, I could sell my blog for a few million).
But my blog is an extension of my personal brand – It is a digital resume, a starting point, an investment that continues to grow over time. If you want to sell your blog in the future, know that you CAN still do it with your own name as the domain name.
As Blake said, it’s about age, growth, traffic, finances, and Domain Authority, actual business metrics, not the domain name.
The best ways to monetize:
Buyers want sites that generate constant and stable income. The most consistent and stable types of passive income that blogging generates are advertising income and affiliate income.
Ad revenue is directly correlated to traffic levels and niche value. So as long as a website continues to maintain traffic levels, advertising revenue will remain stable.
Affiliate marketing income is also passive, consistent, and based on traffic levels, but not as guaranteed as other business models. For example, SaaS companies selling on Flippa have active and paying subscribers, who are a bit more guaranteed – they are not affected by fluctuations in search traffic.
Consistency and diversification of income are essential. I am currently in over 200 affiliate programs and I don’t have all of my eggs in one basket. While I have some posts that perform better than others, I don’t rely on ranking some posts to make money.
In general, if you are looking to create a valuable blog, your goal is to generate passive income with advertising and affiliate marketing.
But to get there, you have to blog around it, write transactional keywords, pivot, adapt, and keep moving.
What did you think of the interview with Blake? Have you ever thought about selling your blog? What questions do you have about selling your own blog? Let me know in the comments below.