An Intro to Buying and Selling Websites
The digital economy is growing in so many ways at once it’s mind boggling.
When one thinks about making a living via the Internet the first things that come to mind are selling physical or digital products online. These are the most obvious eCommerce activities and both are bustling markets.
Whether one creates hand made clothing items, builds apps or online games, robust spheres are available to participate in. Some web entrepreneurs are taking a different tact and buying or selling websites themselves.
The good news is you can get in the game and earn while you learn in some cases.
If you have financial resources available it is possible to buy a website that is already earning an established income. The rule of thumb is that the asking price for a site is 10 times the monthly income of the site in question. If a site is selling for significantly less than that amount you have some questions to ask the seller!
The daily grind, or actual work required to keep a site up, running and earning can be outsourced quite inexpensively.
Successful web entrepreneurs develop a site, bringing it to a certain level of revenue generation and then sell or “flip” it. The revenue brought in by doing so gives the seller additional monies to put into other projects. Much like flipping houses, creating efficiency of effort put in and income coming out of these projects takes practice. While there are innumerable stories of folks who “hit gold” in such transactions it’s important to note the old adage “there’s no such thing as easy money”!
Expectations and Learning Curve
If you have interest in getting into the website buying business, the very first step is market research.
There is an avalanche of information available through any search engine on the “how to” for both buying and selling websites.
Don’t make the mistake of believing any single instructional site.
A few hours of reading will save you thousands of dollars! It’s particularly helpful to read an honest story of another person’s mistakes. Better to check out that story than to be writing your own tale of woe six months from now.
What is a reasonable expectation from your first purchase ? At the very least being educated will prevent you from falling prey to the most obvious scams in the marketplace. One fact is certain, there is a steep learning curve for any person not experienced in website buying or selling to climb before being ready to make an investment.
Marketplaces
There are many markets that have risen for the buying and selling of websites and domain names. Some are straight sales sites and others are auction based. A query on any search engine will reveal more, but here is a short list to get started:
Using known marketplaces for your Buying/Selling transactions is the mindful way to go. Most of the sites charge a fee for their part in the activity, but this is incremental compared to the revenue that can be earned when purchasing a website with established revenue sources. A few important points to keep in mind:
- Research all revenue sources and stats claimed by a website
If you are in serious negotiations to purchase a site, you should ask to be added to the Google Analytics account so you can drill down into the reality of where traffic is coming from, the “bounce” rate, and time spent on pages of the site.
If a site’s popularity and or revenue are based on a certain niche or a specific writer you need to have deep knowledge of the niche, and access to the writer. Everything that looks great about a site like this could be gone in an instant if you don’t have the same resources available to you.
For a beginner, websites that have established paying subscribers are a better bet than those that depend on traffic from Google, affiliate sites or social media. People in this game are generally not fools, and there are a number of tactics that can be used to pump up stats for the period around when a potential sale will take place. This is why you want at least 6 months of data on traffic and revenue for the site in question.
- Do you have the time or resources to maintain the site?
If the popularity of a site is based on blog posts on a particular topic, are you prepared to become an expert and spend time writing posts on a daily basis? Many people enjoy this activity, but if you are not one of them, give the site some second thoughts. Certain kinds of sites take a great deal of time to maintain. If you don’t have time to spare, the site is not for you!
- Are you an expert at growing website traffic?
If you have knowledge and experience growing social media communities and building loyalty among users of a site, you may be able to buy a site that you can improve statistics and revenue in a big way. Be honest with yourself on these points though. If your day job involved the activities mentioned, then you may very well have the skill set. If you are just learning about these concepts, this is not the time to try them out for the first time.
- Competition?
If you are thinking about buying someone else’s site, it’s a good idea to be certain the site owner isn’t going to launch a brand new site to whisk your traffic away. You can have a legal document drafted for a Non-Compete agreement. This is a really important fact to put on your beginning buyer’s checklist!
Are there any “Sure Bets”?
Some investments are safer than others. If you take due diligence seriously, you can avoid many of the pitfalls first time buyers fall into. That said, no site is a “sure thing” forever. Any website purchased will require time, resources and maintenance. If you are prepared to do what is required to maintain the relevancy and quality of the website you purchase, as well as build traffic for it, you could end up selling that site down the line for considerably more than you paid for it.
