Buying and selling websites is big business. Visit Flippa, the popular online auction site, and you’ll see sites selling for as little as $100 up to hundreds of thousands of dollars. But you wouldn’t buy an offline business without checking the books first, or taking a look at the infrastructure. The same holds true for purchasing an online business. Here are some tips for buying websites, with an eye toward making a profit.
Look At The Domain Name
Look for a domain name that’s short and easy to spell and remember. Ideally, it should resonate with visitors and be relevant to the website and the brand. Also look at the age of the domain name and find out what its ranking is.
But even more important, you want to make sure that domain name hasn’t been blacklisted by Google. In some cases, no matter how good the site looks to you, Google may have blacklisted that domain because the previous owner was using it for spamming or had malware hidden in the links. Once a site’s been blacklisted it’s almost impossible to bring it back to life.
Look At The Traffic
Don’t just take the seller’s word for it – check the traffic stats. The most reliable source for traffic statistics is Google Analytics. If you’re considering purchasing a website at Flippa then the seller should already have this installed on his site and he can easily email you the reports. If a buyer refuses to allow you access, then walk away from the deal because there’s something fishy going on. Important: Don’t accept anything other than Google Analytics statistics. Everything else is too unreliable and easy to fake.
Look At The Monetization
How is the site monetized? If it’s with affiliate products, are all of those products still available and are they still in demand? Will you be able to establish your own relationship with those advertisers or will you have to search for new sources? If the seller is promoting his own products, are those products included in the sale and who will control the rights?
Look At The Income
As a rule of thumb, website selling prices are usually based on one to two times the site’s annual revenue. So, if the site has made $1,000 in sales over the last three months, the average selling price would be $4,000 to $8,000.
However, this is another stat that you can’t just take the seller’s word for. Don’t be afraid to ask for proof including traffic and sales reports from the various advertisers, Paypal statements, whatever it takes. Be aware, these figures are easier to fudge and they may not be as reliable as the Google Analytics reports you receive. However, a conscientious seller will generally be as cooperative as possible. Again, if you sense there’s something going on, there probably is. Walk away. There are plenty of other sites for sale.
Can You Operate The Site?
More than one buyer has purchased what appears to be the perfect site, only to realize it’s so packed with technology he has no idea how to run it. Then you have to pay the seller to transfer it for you, and possibly give you some training on how to upload new content. All that eats into your profitability.
There’s no harm in buying a loaded site, especially if it looks like a good, profitable business. Just be aware that you may need to hire some tech help and include that in your calculations when you’re bidding on the site.