buying-websites

Whenever I’m in “work mode” I spend most of my time looking for websites to buy. I genuinely feel that the internet is one of the best places to invest your money and get a great ROI if you know what you’re doing. Not only that, the simple fact of making money on the internet means you can run your empire from anywhere in the world.

Since December I’ve spent over $100,000 on purchasing websites and I’ve made a similar figure by selling the ones I’ve built so today I’m going to cover both sides of the process in detail. In short, here’s my position: I like to buy websites I can automate through outsourcing and I sell websites that I no longer enjoy running or have a desire to grow.

 

buying-websites

The process of selling websites is quite sporadic for me right now so I’m going to cover buyingwebsites first as this what I do most. There are thousands of people who purposefully build websites to sell them (known as site flipping) but that’s not something I’ve ever gotten into.

If you want to buy a website that is making a decent amount of monthly income then be prepared to spend at least 10 months revenue to take ownership. The “work” involved in running most websites can usually be outsourced very cheaply so sellers are often selling because they want a large lump-sum that they can invest into other projects.

There are a number of website marketplaces online which you can think of as an eBay for websites. People who want to sell their sites go here and list all the relevant details they feel prospective buyers need. Those who want to invest in websites browse for and purchase the types of sites they want.

My favourite website marketplaces include sites like Flippa and Digitalpoint. There are many more and a Google search will uncover plenty of smaller ones for you, but these two tend to be the most active. I don’t purchase too many sites from Digitalpoint as they’re generally too small for what I’m looking for but do find some worthwhile investments on Flippa.

There are tons of new websites being added to their site everyday so I don’t mind sharing these resources with so many people.

These marketplaces are generally the best way to buy sites but note that places like Flippa charge up to 5% of the transaction fee simply for being the ‘middleman’ in the process. If you find a site that is a worthy investment, however, the fee should be small compared to the potential income you could be making.

I don’t always buy websites in marketplaces; sometimes I’ll go to site owners directly and see if they are looking to sell. For example, if I find a site on Flippa that is ranking well for a certain keyphrase in Google and it’s making a lot of money, I might not always be able to purchase it for what I consider is a fair price — some bidders are happy to wait over 3 years for a return on their investment.

In cases like that I may type the phrase into Google and contact the owners of the sites on the second page. I know that if I can get them onto the first page of Google then I can make a lot of money and I also know the site is probably not making a great monthly income so I can get it for a good price.

I’ve only purchased 2 sites by contacting website owners directly (most will simply ignore you or ask for extravagant fees) but if you take the time to do it, you’ll find far better deals than you’ll ever see in one of these marketplaces.

If you browse around these marketplaces or even the search results for popular keyphrases, you’ll see that there are lots of different types of websites out there. Some of the most common you’ll find for sale are:

  • Blogs
  • Clickbank ready affiliate sites
  • Popular Clickbank products & sales pages
  • Niche content sites
  • Dropship product sites
  • Forums
  • Paid Membership sites
  • Niche communities

The ones I have highlighted in bold are the ones that I usually go for. Clickbank affiliate ready sites are great if you know the niche and have an audience, but otherwise they’re a lot of work and you’ll need to put the time in to get a return on your money.

I also don’t want ownership of popular Clickbank products as you’ll find that slowly but surely their monthly income tends to die off, rather than stay constant or improve. The reason for this is that usually there is a large marketing campaign prepared for when these products launch and many affiliates send emails to their lists.

They have great stats initially and it looks like you may have hit a goldmine based on their recent monthly income but don’t forget about the obvious launch tactics that have been used.

Although I build blogs myself and I’m fairly good at increasing their number of subscribers and making money with them, they require a lot of work to grow. And, unless you can find a great writer who knows the industry well, it can be expensive (both financially and in time) to keep them making a consistent income.

I like communities that already have large paying audience because the income they are generating is quite safe. You aren’t relying so much on traffic from Google or social media sites for them to continue earning revenue. If you can increase the traffic to these sites then you can earn more money on a monthly basis.

Most recently I’ve been buying niche content sites as I’m very confident with my SEO abilities and can usually tell when there’s more money to be made from an industry. These have been set-up very similar to the process I talk about in Cloud Living and if you can improve or sustain search engine rankings then you can easily automate their income.

When I’m buying sites there are a number of things that I look for. The first thing I want to know is whether I can grow the monthly revenue from the site in any way. Generally, making investments online is fairly safe and if you know what you’re doing you can see a return in a year or so. Because I have skills in this area I want to use them for maximum profits.

For that reason I generally like to buy sites which are making money, but that also have a number of things about them that sucks. This may be in terms of design, SEO or even structure, but I like there to be problems which I know I can fix or improve. The simple reason is that even if the current income the site is making were to drop, I’m still confident the changes I want to make will build that up and hopefully increase the monthly revenue.

As I highlighted recently there are a number of questions I’ll ask the seller of a website before considering a purchase. Some of these include:

  • How much time do you spend on the site per week?
  • Where is that time being spent?
  • What are your monthly expenses?
  • Will you sign a 6 / 12 month non-compete agreement?
  • Why are you selling?

Often times there are listings that look too good to be true so make sure you get a clear idea of how the site is making money and learn the business inside out. If you’re going to be spending a lot of cash then this is crucial. A non-compete agreement is rarely necessary but if a lot of traffic relies on connections that the seller has then this is a must. There are a lot of scammers out there, sadly, so you have to watch out for this kind of thing.

Obviously another thing I must have if I’m spending a substantial amount of cash is at least 6 months stats and income proof. If a seller is using Google Analytics then I’ll ask to have them add me to the account. Similarly, make sure you consider any fees from Paypal or other payment processors which the seller may not have accounted for in the monthly revenue stats.

If the seller is involved in the website themselves then you should also account for the expense of hiring someone to fill their position, if you don’t plan on running the website yourself. Most expenses generally come from staff costs, hosting costs and fees from any payment processors that are used.

I will always try to speak to a seller on Skype before buying anything but once I’ve decided that I really want a site, the two options for payment I use are either Escrow or Paypal. Because I am spending so much cash I also have 3 different currencies in PayPal so I don’t lose any money with exchange rates, depending on who I’m purchasing the site from.

Escrow acts as a middleman and in essence you pay them, rather than the seller directly. Once Escrow see that the Whois info has changed on a domain and it matches your details then they will release funds to the seller. From there you receive the website files and set them up on your own servers, on that domain.

A smart strategy a friend taught me when buying large sites is to offer slightly more than your agreed purchase price but split the payment into two parts. Half will be sent upfront and the other half after one or two months, providing that the site is still making the type of monthly income it’s supposed to.

Not all sellers like this and I don’t always do it, but if they are very against the idea then consider it a potential warning sign that there may be something fishy with the deal.

>> Source http://www.viperchill.com/buying-selling-websites/