12th September, 2017 | Blog |

What to Look for When Buying Websites for Profit

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Just like any other investment, such as in the world of equities, businesses, or real estate, there's plenty of value to be found in buying and selling profitable websites. Of course, there's also risks to think about too. If you want to be successful at flipping websites, then you need to know more than how much of an asking price you should be looking for when the time comes to sell. You're also going to need to figure out what differentiates a website with potential, from one that's destined for the scrap heap.

To get yourself into the correct mindset for success, think about buying and selling websites in the same way you would think about flipping real-estate. A good house flipper looks for a chance to purchase under-valued property that could be improved at minimal costs, and sold on for profit after a small amount of time. In the same way, you'll need to look for a website that's been overlooked in terms of potential for powerful growth. Here are a few things you should look for when buying websites for profit.

Always Look for "Distressed" Assets

The chances are you won't make any money buying a website that already runs great. Sure, you might benefit from the traffic and other value that the website in question has to offer, but you're not going to get rich quick on a site that's doing well. Where you can make money, on the other hand, is when you buy websites for less than they're actually worth.

Most of the time, companies are happy to sell off a website for a price that's equal to about a year's worth of annual profit. In some cases, however, there may be reasons why a seller chooses to knock a price down slightly. For instance, someone might want to get rid of a website because they need cash fast, or they might be looking for a way to get out of an awkward business partnership.

To find a website with the most potential, look for "distressed" assets. That means you need a website that isn't frequently updated, doesn't drive much traffic, and isn't in the best condition. Basically, your aim is to buy a website that the owner doesn't really care about. If you choose to pursue a website that the owner is particularly proud of, then you're going to have to pay more for sentimental reasons.

Choose Websites with Growth Potential

Importantly, if you want to buy a profitable website, then you need to make sure that you're not just spending money on something because it's cheap. A website that's available for a low price isn't necessarily a great bargain. Sometimes, these sites are cheap because they're really not worth much - and nothing you can do will change that fact.

Ideally, you should make an effort to purchase a website that's part of an "evergreen niche". That means selecting a site that's involved with something that's crucial to human interest and need. For instance, while a website about typewriters is a little outdated, a website about beauty, healthcare, and other constant human needs has more opportunity for future growth.

One of the best things about buying an established site, is that you'll be able to look back at a history of performance over the years or month. Doing this will allow you to see whether the website had real value back when the host or website owner was actually making an effort with it. In other words, you can find out whether the website you choose just needs a little love to get it back on track, or whether it's destined for failure.

Select Something That Aligns with Your Interests

When it comes to buying and selling websites, a lot of entrepreneurs get stuck on the numbers. While it's important to make sure that the website you're buying has the potential to drive traffic and profit, it's also worth noting that you need to be passionate about the niche the website covers, if you want to make it worth more than you're buying it for.

People who flip websites for a living make the most profits when they choose resources from a market that they're interested in. Since you already have knowledge about the niche in question, you should find that it's much easier to start scaling up the website's potential. Just like a house flipper looks for simple improvements and fixes, you should be looking for websites that are easy to enhance.

Make Sure You Know the Important Details

Before you make any investment - in websites, real-estate, or otherwise, you need to make sure that you're prepared to do your due diligence. For instance, when it comes to choosing the perfect website, you'll need to know why the company is selling the website. If they're selling it because the niche is dying, or because the marketplace is changing and there's no room for growth, then you don't want to get involved. If the website is being sold because they don't have the time to manage it, then that's a different thing entirely.

You might also want to do some research into the revenue and traffic potential for the website. Some companies will provide screenshots as evidence that the website can drive profit. However, you should also do some of your own traffic analysis too. Find out if there were any periods when traffic was down, and discover why that was. Look for revenue proof and make sure that the seller was actually achieving the numbers he or she has claimed.

If you're not sure that you can trust the seller, and you aren't certain that you can trust yourself to make the right decision about which websites to buy and sell, you could always try speaking to a third-party company. There are website brokers out there that will offer services to companies and individuals who want to get started in the website selling market. Of course, if you choose to take this route, you'll have to agree to handing some of your profits over to someone else.

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