Update on the sale of Spendlessonline:

So firstly, the site is still mine. Offers have come in, but nothing I would be willing to accept. If you missed the post about the sale then you read it here.

Is price set too high?

I have been in touch with 10 “serious” people about the site so far. Sure a number of them claim the site is over-priced (I guess all buyers do). The reasons vary from “websites rarely sell for more than 15X monthly profit” to “if I can’t determine where your sales come from (ppc/seo) then I can’t pay your asking price”. I am in the fortunate situation of not needing to sell the site, so people looking to push down the price are out of luck. Let’s take a look at a few of those arguments and I’ll give my two cents on them..

1) A Site is worth a max 15X monthly profit.
At the beginning of 2009, before I left for 9 months of travelling I considered selling the site. I wasn’t sure how much time I would have to update the site, and how much it would therefore suffer in terms of earnings. If I had taken 15X the monthly profit of 2008 then I would have sold the site for £83k. In the end profits for 2009 were roughly £85k, so it would have been a poor decision to sell. Sure that might not happen next time there’s such a decision to make, but I have faith in the site I’ve built and in my mind anything less than 24X monthly earnings is selling the site unnecessarily cheaply.

2) How much profit comes from PPC and how much comes from Organic.
Since I’ve provided a full revenue breakdown including ad spend, I don’t get how not knowing this information lowers the value of the site. Sure you can stop the ads, but my figure of 85k is profit not revenue, it’s after ad spend. If the new owner didn’t want to spend a % of the revenue on ads then that’s fine. However I am providing the buyer with my full adwords campaign, and the seo traffic has been consistent throughout the life of the site. Surely it is better to have 2 or 3 sources of traffic than one? I know the PPC annual spend sounds scary, but as the site is very profitable then it makes sense to keep running it and putting some of that revenue to work, and if not then the buyer could make their money back faster by improving/stopping the ad campaigns. This will be my next project should I keep the site, to get a better idea how much revenue comes from PPC and Organic traffic.

Why hasn’t the site sold yet?

Kieron sold ukoffer in 2 days. Spendlessonline is still available after 1 month. What is the difference? I reckon it is mainly down to 2 (maybe 3) factors.

1) Kieron has a huge network. He is well known and trusted within the industry. Aspiring affiliates look up to him, so if he is selling one of his former projects then there is bound to be a lot of interest. On the other hand I am relatively unknown, and whilst the blog post about the sale of the site was popular, I don’t think it got in front of enough eyeballs.

2) Spendless is over the magic 100k price barrier. I think this means that is it too small for any big investment companies to be interested in, yet too much money for most individuals to afford. I did have 2 people very close to buying the site but both couldn’t get the loans approved from the banks. Maybe pre credit crunch those sales would have happened..

3) UKoffer has been around since the dawn of time. Spendless is just comfortably middle aged.

What next?

The good thing is that I still have a fair number of options open. I have had a broker in touch who would work on a commission only basis to try and sell the site. This might be next best approach if i am still looking to sell.

But is selling the best option?

I have had loads of brilliant emails from people offering advice. A lot of people have been questioning if it a good idea to sell. One of the best bits of advice came from the awesome John Lamerton who has been there and done that. John raised the interesting point that it is great to have the money in the bank but then it can be quite a struggle to find new revenue streams. See blog post here.

The other major issue is tax. I live and pay taxes in Germany. And as is the way in Germany, they like to tax you on EVERYTHING! Having spoken to my tax advisor it turns out that i would have to pay 45% of the sale price in taxes. Ouch. Not ideal.

So the other option is to keep the site and just scale up the outsourcing. Chatting with potential buyers is a great way of honing where the site needs to be improved. If the day to day running of the site was taken off my hands then I have several exciting projects to help take the site to the next level.

Wow, long post. Anyone still reading? Any feedback/comments would be appreciated.

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9 Responses to “Update on the sale of Spendlessonline:”

  1. Andrew
    March 17, 2010 at 9:23 am #

    Hi Peter,

    Good post and cheers for sharing the sale details with us. Here in the UK and elsewhere things are beginning to turn around financially wise, so perhaps issues with people getting loans to purchase or taking the plunge will change shortly.

    Look forward to more updates on the sale or your next steps forward with spedlessonline.co.uk .

    Best Regards

    Andrew

  2. Matt
    March 17, 2010 at 9:40 am #

    Hi Peter,

    The price isn’t too high because the site is ‘worth’ whatever you say it’s worth (& it’s not a commodity… there’s only one). If you find a buyer who agrees with you then you have a sale, if you don’t then you’ve got a great asset.

    Agree John Lamerton’s points too.

    – M

  3. Peter
    March 17, 2010 at 3:43 pm #

    Hi Matt and Andrew,

    thanks for the comments. Now that so many details about Spendless are out in the open i might as well continue to blog about the progress with the site. I think it is something that people might find interesting.

  4. jonthetourist
    March 17, 2010 at 4:04 pm #

    It’s a long story, but 8 years ago I had to give up a site. I offered to sell it for £100k, or lease it for 2 years while they stripped the traffic to a new domain, for a nominal £1. I am so glad they went for option 2!
    In your shoes I would hire someone bright and motivated. They get to build a career by taking your knowledge and applying a lot of newbie energy. You get to spend less time on your site while making more money.
    In 2 years time you have had 2 year’s profits minus a low salary, which could be more than your asking price, and you still have the site!
    Only a belief that voucher code sites are doomed would make this a bad scenario, and that’s a whole other debate.

  5. john smith
    March 23, 2010 at 8:06 pm #

    No the reason why ukoffer sold in two days is its no2 on google.co.uk first results page for the keyword “offers” which is searched for 5million times a month and with spendlessonline is on page 6 for the keyword “discount codes” which is search for 450,000 a month.

    Thats the only reason why Advanced System Technologies Limited snapped up ukoffer due to its google listing, just look at one of their websites comparestoreprices.co.uk they know what they doing with SEO so their could take ukoffer to the next level, just look at ukoffer know its all pure seo keywords post with all the tags and google ads to take adavange of the organic traffic from tags for google ads then affiliate links.

  6. Peter
    March 23, 2010 at 8:29 pm #

    @jonthetourist – i think hiring someone might be a good idea. Definately something i will consider more closely.

    @john smith – i personally think the long tail keywords are far more valuable then generic, but you are probably right about the massive potential of ukoffer.

  7. Vouchers
    October 15, 2010 at 2:47 pm #

    Hi – is the site still for sale? Thanks…

  8. Peter
    October 15, 2010 at 2:50 pm #

    Hi, the site sold a few months ago. Sorry

  9. Vouchers
    November 5, 2010 at 11:44 am #

    Oh ok, no worries! Can I ask how much you sold it for in the end as I would be interested to know? Thanks Peter

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