Much like real estate and stocks, websites can be bought and sold for profit. In fact, many people make a good living from “flipping” websites; in essence, they purchase website “fixer-uppers”, monetize and SEO (search engine optimize) them, then sell these websites at a higher price. Alternately, some people build highly ranked and optimized websites and sell them to others. How is this done? This article details the first part of website flipping, which involves researching and buying the actual website.
Part I: How to Buy a Website
A. Where to go website shopping
Unless you already own a website, you first need to buy a website. There are many websites that advertise other websites for sale, including the following:
Flippa – This is arguably the most well-known website for buying and selling websites. Flippa works much like eBay, offering websites in an auction style setting. Members can see which websites are being bid on, how much particular websites are going for, and how much time is left on an auction. Flippa auctions can also be sorted by how much revenue the sites generate per month, how much traffic they attract, etc.
The site offers numerous tools and tutorials to help you get started with website flipping. New members are offered various deals like free oDesk credits, e-books and web hosting. Listing a website for sale costs $19 for a month plus 5% commission on your final sale price.
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BuySellWebsite – This site features websites for sale in a classified ad style setting. You can browse through many different websites and ask the owners questions about them or submit counter offers. If you wish to sell your website, BuySellWebsite offers a useful appraisal tool that helps assess the value of what you’re offering. Seller fees are $39 for a two week listing and $59 for a 3-month listing.
DealASite – This site offers websites organized by category, web host and PR (Page rank) in a classified ad format to buyers. You can also look up websites using screens like highest rated, ending soon, most active and highest offer. Currently, the site offers a promotional free listing of all domain names and websites.
Website Broker – This site is considerably smaller than Flippa, BuySellWebsite or DealASite; however, it offers some reasonably priced websites if you’re just starting out with website flipping. Website Broker also offers some useful tutorials to website buyers and sellers, such as how to complete a sale, using escrow to hold funds, etc. Listing your site with Website Broker is rather inexpensive; a 90-day standard listing costs $9.95.
B. Researching the website(s) of interest
Once you start shopping around on the marketplaces mentioned above, you’ll find a plethora of websites for sale. How do you decide which website to buy? Here are some steps you can follow:
Get the stats
Most website listings feature statistical figures regarding their number of unique visitors, PR, growth rate, backlinks, keywords, etc. Verify these numbers by using software tools such as Awstats and/or Webalizer, which often come preinstalled on website marketplaces anyway. Wayback Machine is also a good tool for checking a website’s history; the site loads snapshots of what a site looked like a month, year or even a decade ago.
Check for a community following
Even if the seller reports no actual income from the website, find out if that website has any kind of community forum/chatroom/comments area and how many members are listed there. The presence of such a community creates traffic, and this traffic can easily translate to ad revenue once you monetize the site. Community members also make for an instant customer base should you start marketing any products. On a similar note, ask the seller how many email subscribers exist on the advertised website.
Track the financials
Website marketplaces like Flippa allow sellers to link their websites with their Google accounts and display AdSense revenue and site traffic. Other marketplaces require sellers to list their site’s income, revenue and costs. Because sellers can easily exaggerate these numbers or just guesstimate them (depending on their bookkeeping discipline), you will need to do some research here.
The best approach to take is to first check the site’s advertised profit against its traffic. For example, if a website owner brags that she makes $250/month in income from a site that brings in only 400 visitors each year, something is definitely amiss. Another approach can be to request a screenshare session with the website owner to help determine how the site generates income and from what sources.
Find out what’s really for sale
Websites offer more than just content; they often include downloadable software, services, images, e-books, graphics, games, business contacts, etc. Before you buy any website, find out what the seller is actually trying to sell. Also, ask whether the sale will include the website’s source code, database, admin files, etc. Having access to these website “nut and bolts” will enable you to change the website layout and format and make it your own.
Analyze potential improvements
When assessing any website for sale, ask yourself what you can do to make it better (and thus more profitable). Does the site register a lot of traffic but lack in any kind of monetization strategy? Are the wrong keywords being used or are keywords just nonexistent? Could the site use more and/or better content? Remember that the goal here is not simply to acquire a website, but to acquire a website that you can quickly turn around for a higher profit.
C. Buying the website
Buying a website involves more than just handing over your money directly to the seller -which is actually not advised, by the way. To begin with, you should place your funds in an escrow service for safekeeping until the entire transaction is complete. Secondly, just as you might hire a mechanic to look over a car you’re buying, you may wish to have a website developer take a peek at the website you’re about to acquire. If you don’t know anybody offhand who can do this, sites like oDesk and vWorker offer plenty of webmasters and/or developers who can help you for a small fee.
There will be some work involved in a website transfer from the seller to you, the buyer. You will need to save and backup all the files located on the seller’s web host or server. DNS and affiliate settings will need to be changed. You should also download and backup all email/subscriber lists, software, graphics, images and vcasts/podcasts. Creating a contract that describes the website sale and its included items is a good idea, as is the inclusion of a non-competition clause preventing the past website owner from creating a similar site right after the sale.
It’s not a bad idea to agree to a time period wherein the old website owner will be available to help out with any website questions and/or issues. This can reduce the stress on you and shorten the time in which you get up to speed on your latest acquisition and start making improvements to it.
D. Renovating the website
If you are savvy about SEO, content creation, site indexing, plugin installation, etc., you will easily improve your website and its future value on the market. If you are not too experienced with such techniques, consider hiring someone (again, through a site like oDesk) who knows and preferably has some experience with website creation and improvement. Alternately, you can pick up these skills on your own and save yourself some money, but doing so will extend the time needed to complete the flip.
Once your site has undergone the needed renovations, you can keep it for a while and make back some of your investment or you can put it up on the market. Selling your website is, in some ways, the reverse of buying a website. As a seller, however, you are also obligated to verify your website’s statistics and to assess its fair market value. How is this done? Tune in next week for How to Flip Websites for Fun and Profit, Part 2.