Gathering Information and Making an Offer on an Adult Site
In our previous discussion, we explored where and how to search for your new adult website. Now that you’ve found a potential site to buy let’s talk about gathering the right information and making an offer.
So, you’ve found a website you’re interested in. What’s next?
Review the Information Provided
Once you’ve contacted the broker or seller, it’s time to review the details they provide thoroughly. A legitimate seller or broker should be transparent and offer comprehensive information about the site. If they’re hesitant to share basic, essential details, take that as a warning sign. A serious and honest seller will be forthcoming with all necessary data.
Here’s what you should expect to receive:
- Site History: Learn how long the site has been in operation, its backstory, and the reason the seller wants to sell. This can provide valuable context for the deal.
- Content Inventory: Find out how much content the site has and whether it includes modern formats like 4K or VR. Also, ask how frequently the site is updated with new content.
- Financial Statements: Request a profit and loss statement covering at least the last three years, and make sure the numbers are current. If it’s halfway through the year and they only provide data up to last December, that’s not good enough. You need to know how the site is performing now.
- Membership Stats: Ask how many new sign-ups and rebills occur daily. Dig deeper to uncover the site’s membership retention rate, and wherever possible, get the raw data to back up these claims.
- Content Access: If it’s a paysite, request a username and password to review the content firsthand. This allows you to assess its quality and uniqueness.
Content Production Details
Find out whether the site produces its content in-house or hires external producers. If they rely on an external producer, will that person continue working with the site after the sale? Understanding this will help you gauge future content costs, and the ongoing effort required to maintain fresh material.
- Production Costs: Ask about the production costs and find out if they are stable.
- Distribution Channels: Ask whether the seller has explored alternative distribution channels like clip stores, VOD, or DVD markets. Knowing this could help you identify untapped revenue streams.
- Content Exclusivity: Clarify whether the content is truly exclusive to the site. Sometimes, sellers may define “exclusive” loosely, meaning the content may have been distributed across various mediums like clip stores, VOD, or DVD in the past. You’ll want to be aware of any prior current distribution arrangements.
Site Operations and Management
Determine whether the site can run smoothly without the current owner. Some operations rely heavily on the owner’s involvement, and without them, the business could falter. If the owner is hands-on, you may manage the site daily, which is something to consider when assessing its value.
Advertising and Traffic Sources
Find out what advertising the site uses and where its traffic comes from. Request access to Google Analytics to verify traffic sources and performance. This data will give you insight into how sustainable the traffic is and whether the site relies on paid traffic or organic sources.
Making an Offer
Once you’ve reviewed all the above information, you can honestly evaluate the site. If everything looks good and aligns with your goals, it’s time to make an offer. The site’s value ultimately depends on what it’s worth to you. Still, without the information listed above, you’ll be making an uninformed decision, which is never ideal when purchasing a business.
If you’re working with a broker like Adult Site Broker, we can assist you in assessing the site’s value and determining a fair price.
In our next discussion, we’ll explore the final steps in purchasing a site, including due diligence and closing the deal.
If anyone has any questions about anything you see in this article, I’d be more than happy to help. Contact Us on our website.
