Website Buying Tips and Insider Secrets
The potential sale of Blogtrepreneur is causing waves around the Internet, so today we have asked website buying and selling experts Barry Dunlop and Dean Hunt to give their thoughts on buying and selling websites, and a look into the exciting world of virtual real estate.
Hi all, we have been buying and selling websites and web businesses for over a year now, and we have bought and sold numerous web real estate in that period.
We have bought anything from webmaster blogs, to celebrity portals, and everything in between. We have bought and negotiated sites from as low as $200 and as high as $90,000 and one site in particular was bought when it had 23,000 visitors per month, and within 3 months it had over 250,000 per month. 🙂
So today we are going to share our tips and advice on buying websites and blogs.
Stay in your Industry
If you are going to buy a site, look for websites that match your current niche or industry. You can use the traffic, the link strength and the contacts to feed into your current site, thus making both sites stronger.
For example, if you own an online affiliate store that sells “shoes”, why not buy a forum about shoes and use the forum to build your brand, make sales, and feed traffic into the store?
Consider Site Flipping
This is essentially the art of buying a site, doing some work to improve it, and then selling it (flipping it) for a profit. Site Flipping is not for beginners, but you can make large profits very quickly if you do it correctly. We are going to be releasing some free site flipping guides very soon, so make sure you are a part of that.
Build a portfolio of websites
Do you think people just invest in one type of stock? Of course not! They spread the risk and build a portfolio. Do you remember the rules you learnt from playing Monopoly as a child? The same applies here, invest, and spread the risk.
You can do the same with websites and blogs, don’t put all your eggs in one basket, if you currently own just one active website, you really should look into building your portfolio ASAP.
Don’t use eBay
eBay is a great place to find a bargain, but don’t bother looking for websites there. From my experience it is like finding a needle in a haystack, there are thousands of terrible script based websites on there, and there can be some sneaky site sellers who may be out to trick you out of your money.
Don’t just use Sitepoint.com
Sitepoint is a good marketplace for websites, much better than eBay. But everyone knows about Sitepoint, so your chances of getting a good bargain are slim. Check some smaller sites like for buying and selling websites
Don’t be afraid of emailing site owners
A website doesn’t have to be listed in a marketplace, sometimes site owners will happily make a deal, even if they had no previous intentions of selling. So if you see a website or blog that you like, contact the owner.
We have prepared some questions that you will need answered before doing a deal:
– What is your current revenue?
– What % of this is profit?
– Do you have any ongoing liabilities?
– What methods do you use for revenue? (revenue model)
– What is your position in the industry?
– What is the value of the industry?
– How many unique keywords do you rank for?
– Do you use PPC? and what is the CPC average?
– How many major competitors do you have?
– What is your Alexa rank?
– Are you in a niche with Alexa bias? (e.g webmasters, SEO etc)
– Do you get any traffic from type ins?
– What are the current traffic levels?
– Do you have an estimated value per visitor? (uniques per month divided by monthly profit)
– Have you built a brand (reputation)?
– What are your conversion figures?
– How hard would it be for a competitor to re-create the site?
– Do you have a members base? (opt-in, registered members etc)
Use these questions to help build a realistic valuation.
There is no exact website valuation multiple
People like to use monthly revenue multiples to value websites.
Example: Site earns $200 per month, x12 = $2400 valuation.
This is a flawed model. For instance, it is possible that a site has $200 revenue per month, but it spends $199 on Google Adwords, so then what is the valuation?
That said, if you are looking for a VERY rough estimation, I find that x10 for small sites and x36 for huge sites is a rough indicator. There are always extremes, but applying offline business multiples (e.g x5 years) to an online business, is simply naive and unrealistic.
Never, and I repeat NEVER use a domain or website appraisal tool
Have you ever seen a blogger who says something like. “hey, according to this site, my blog is worth $38,900”?
It happens all the time, and it makes people look very stupid! Often the sites are worth x100 less than these tools predict.
This is a trick designed to boost your ego, so that you go and tell your friends about how much your blog is worth, and therefore you give them a free backlink.
You can read more details on this here: Domain Appraisals but in summary, anyone with any knowledge of the marketplace should never use these gimmicks. There is no way any tool on the Internet can value your sites, they simply don’t have access to enough data, so don’t fall for this scam. It could make you look very silly.
Future potential is not very relevant today!
One of the most common things we hear on a daily basis is “my website is not making any money now, but I believe in three years it will be making a LOT”.
Here is the thing, if you are buying or selling a website or blog, then the value is the value from today, not in 3 years, not even in 3 weeks, if you want our money today, then you use today’s value.
That is not to say we don’t factor a small % for future valuation, but basing your site’s value on some dream of future riches, is irrelevant and time wasting.
Another common myth we hear regularly is this: “Well, I could sell my blog, or I could just continue making $500 a month for life”.
We all know that blogs are very volatile, you can be a hit one day, and have a dead blog two weeks later. It only takes a hacker, some neglect from the blog owner, a change in Google rules, a form of revenue becoming dangerous (e.g selling text links) etc… and $500 could become $5 overnight.
Do not presume that your website will continue to earn the same amount for years to come. Unless you are willing to work on the site every single day, there is a good chance it will be neglected, and neglected sites are almost worthless.
Do your research before you pay for the site
There are many areas you will need to look into before you hand over your hard earned money.
For example, here is a list of trademark and legal issues tools. We personally bought a blog in late 2006, and two months later it was shut down by a major drinks company. Learn from our mistake and check for trademark issues etc.
Also check for things like the WHOIS of the site owner. If the details seem suspicious, then be careful.
Site buying and selling is red hot right now, but there is a lot of inaccurate information on the Internet. If you are interested in selling your website to raise some funds, then we may be interested to hear from you: contact us.
We are also happy to answer any of your questions.
Oh, and we would be happy to list your websites or blogs in our website marketplace 100% FREE from now until Christmas.
We look forward to your feedback.
Dean Hunt & Barry Dunlop from MidasCode Ltd – Buying and Selling Website Specialists.