How to Buy a Website

How to Buy a Website

If you’re an online entrepreneur, you might realize that you need multiple streams of income to significantly make money online. Just like having multiple hooks in the water increases your chances of catching something when fishing, having multiple websites increases your chances of making some money via the internet.

This blog is but one of many online ventures I have, and it basically relies on AdSense to make a few bucks each month. But it’s not a real money-maker. I have a few sites that are far uglier and far less interesting…but far more profitable. In fact, I would never sell them or the domain names – because they are established money-makers for me.

Which brings me to today’s topic. What if I bought other people’s websites in order to increase my online portfolio? There are some interesting reasons for doing so…

• The owner might not have time to maintain his site
• The site might be one of many sites the owner has, and he wants to clean house
• The site might not have been profitable for the owner
• The owner might have simply grown tired of keeping up with the site
• The owner might have moved on to other vertical markets (niches) and wants to sell off certain sites
• The owner might have tried making money with the site, but simply didn’t know how

There are many possible reasons why someone might sell their web site – just like with any business. Your job, as the prospective buyer, is to buy smart and buy something that can make you money. You might not know how to get there though…so here are some things to ask when considering purchasing someone else’s website…

Why are they selling?

This is the first thing you need to find out. What reason do they have for trying to dump a website onto the market? Is there something wrong with the site? Or, is there something else going on with the site owner? It can make a huge difference in how you bargain for the site when you are discussing the price with the owner. If they need to sell due to some outside factor, they might be a “motivated seller” and you might get a great deal. Or, they might have created the site solely with the goal of selling – and you are being set up! Another possible reason they might be selling is that they were doing some unethical promotional techniques for their site, and got de-indexed by Google. (Awwww…boo-hoo!) There are all sorts of possibilities – in your favor or against you – so you must find out why they want to sell and what is prompting them to put their site on the market. Be wary of the “profitable, established” sites for sale on eBay. Be wary of people who are asking ridiculous pricess for a “so-so” website. Why are they selling…and how did they arrive at their asking price? Find out. (The value of a site is only what a buyer is willing to pay, by the way…there is no formula for calculating a site’s intrinsic price value.)

What is the state of the site?

This ties into my last point, in that you must investigate the site’s state of health before even considering a purchase. Whether the site is indexed or not is one issue. Also, you’ll want to find out how the site ranks for it’s main keywords – is it in the top 10 or 20 results, or is it off the radar for Google searchers? What does the traffic look like for this site, and how long have the numbers held up? I would personally ask to see their server stats as well as their Google Analytics or StatCounter numbers. (Preferably I would want access to log in and look for myself, but most people are gonna want to send you screen shots probably.) Hey, if you’re going to pay them money – perhaps a lot of money – for a property, you need to have access to look around first. It’s only reasonable. You should also check the PageRank, the backlinks, and if the site sells something you should get the stats on their sales. You should look at the age of the site. How long has it been around? Look at the archives of the site. How long has it looked the way it does? Oh…and look at the actual coding of the site too – is it sloppy, or well-coded? These things matter to a smart buyer.

What is the ROI for the site?

You’re not in this business because it feels good or because it’s helping change the world. You’re trying to make some cash. If you’re an affiliate marketer like me, you might sell everything from stupid blankets that people wear like Jedi robes (have you seen these hideous things?) to cell phones for the elderly (named after a dance they used to do back in the olden times) to other stuff you might actually be interested in yourself. I sell web hosting, domain registration, vintage pin-up images, SEO software, ummm…”plant seeds”, baby and toddler clothing, trendy t-shirts (you know, like da college kids wear), books, DVDs…you name it, I’ve probably tried selling it via an affiliate program at least. But all I’ve ever cared about is pretty much one thing: is this campaign or site or product converting? And, how much money am I making? For the things that are profitable, I keep ‘em. For things that are dead – I abandon them, and if a domain name is involved I turn off automatic renewal and let it expire (in most cases). I believe every site should pay for itself, and if that means I make a measly few bucks with AdSense and that’s all…well, fine. But I want to know how much a site makes. If it’s ZERO, it’s worthless. So…I said all that so you make sure and find out how much money the site will pay you. You don’t necessarily have to get rich off the site, but you should see a return on your investment within a reasonable amount of time. So let’s say the seller wants $1200 for their site, and the site sells propeller beanies for $10 each. You look at their sales records, and see that they sell an average of ten per month. The numbers are consistent, and there have been two years of records. Based on those numbers, you can feel pretty confident you’ll pay for the site in a year, and then it’s all profit. Make sense? You need to see the ROI and know how long it’s gonna take to pay for the site.

Now, some final website-buying advice. If you find an acceptable site to purchase…

• Don’t pay the asking price…but just like buying a car or a house, make an offer you can live with and that is fair to the seller. If you try to low-ball them, you’re being unfair. And if they’re trying to ream you, they’re being unfair – don’t entertain their rudeness.
• Try to keep as much as possible the same. This means content, design, web host, contact info, registrar, and whatever else can change. The reason is so you don’t upset the site’s rankings. (Unless the rankings stink, then who cares – you’re starting from scratch anyway.)
• Use a third-party escrow service if you don’t know/trust the seller. The two best and most well-known are Sedo and Escrow.com. (Here is an article about a teen who sold a site using Escrow.com. His site was about the Zune, which sucks, but it sold for $62k!)

So, if you’re planning on updating your “online real-estate” holdings by buying sites, I wish you the best and I encourage you to do it smart and ask the right questions as you make your decisions.