Buying a Web Site vs. Starting from Scratch

If you had the choice between having $10,000 to build a web site from scratch, or to buy an established web site that is generating $500 a month, which would you choose? The market for buying established web sites has always been hot, but it’s always a tough decision as the auction clock counts down… especially if you get into the high five and six figures sales! The million dollar question is, if you took the time and had the resources, could you build something better, vs. buying a web site, or are you just wasting time?

After buying  few established sites over the past several months, I’ve had my fair share of stressful moments and going over the numbers time and time again to make sure I was making the right decision. Through my experience, I’ve broken down my decisions to a few major factors.

Here’s a list of my top reasons why I would rather purchase a solid established web site for 20+ times earnings, then build my own from scratch.

TIME IS WORTH MORE THAN MONEY

We all have great ideas. Unfortunately we get side tracked, have problems executing and get overwhelmed… which leaves most of our ideas on the back burner. Hence, time is more valuable then money. If you are already established and making money online, you may already have the resources and money to purchase a web site, which saves you the time from starting from scratch. If you buy an established web site, the design, infrastructure and establishment is already there.

IMMEDIATE BRANDING, AUTHORITY AND DATA

Depending on the size of the web site you purchase, you may be paying for the branding and authority already associated with a site. One of the biggest problems with starting a web site from scratch, is having to get people to your web site and building a solid presence. This can easily fall into the “time issue”, but is actually a whole set of problems/solutions in itself.

The data from picking up an established site is also a huge benefit. These days every site has a mailing list, a twitter account and a social appearance. While these advantages usually don’t have a dollar figure on them, they definitely do contribute to the growth and exposure of your site. The time itself to build up traffic, collect newsletter subscribers and study these numbers is quite a hefty number.

OUTSOURCE YOUR NEW SITE COMPLETELY

How is your business doing financially? If your numbers are doing great, picking up an established site that is already generating a few hundred/thousand a month in revenue is a good idea. Actually, if it’s a site that you can completely outsource and keep profitable, then it’s a great idea! Web sites that may fall under this category are media/video entertainment sites, blogging and web forums. Even if the cost of outsourcing is 75% of the profit made from the site, you are still earning a potential 25% profit while increasing in size month over month, while not having to manage the site.

PUTTING YOUR EXPERTISE TO GOOD USE

The last and most important factor in deciding to buy an established web site, or create your own… is if you can put your expertise to use. Whether you specialize in affiliate marketing, social media, web design or search marketing… it’s tough to find an established web site that is doing their best on all of these, and that is your advance. Find already profitable web sites, what they are lacking, and most importantly what you can improve upon.

PLACING THAT WINNING BID!

In the end, it all comes down to a few deciding factors on whether or not you are going to be the TOP BIDDER when that auction clock counts down. (I hate that 4 hour extension on Flippa!) In realistic terms, it might come down to the size of your wallet, but if that’s not the case… then it’s the following. Do your research and make sure the site is legit. Think really hard if this is a site/niche that you want to dive into. If you’re going to drop a few thousand or more on a site, make sure you are ready to take it to the next level… or you may find yourself putting out a fire, losing money and cost yourself even more time than before you picked this site up.

WHERE TO BUY & SELL WEB SITES?

There is a huge demand for the buying and selling of web sites, but also a big lack of competition. So where is the best place to buy and sell web sites? Right now Flippa.com (formerly SitePoint) is leading the way… and by a mile I may add. Since their launch, Flippa has done over $28 million in web site sales. Where is all of the competition for Flippa? Sure, you have sites like ebay.com, that usually have crap sites. Then you have a bunch of “in the mix” sites, that just don’t compete. Right now Flippa is KING.

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53 Comments

  1. This is something I had to think about when I started my new website @addtodesign. It was either purchase an existing design blog from Flippa (which I wasn't too fussed on doing) or start from scratch. I chose the latter and while I don't have the established traffic or subscriber count, I'm sure in the long run it will turn out better and there will be a greater feeling of accomplishment if it turns out to be a success. Great post, Zac.

    1. I almost ended up buying a big "design" site for high five figures. The owner ended up not wanting to sell, which in the end makes me happy. This would have been a niche area I would not have wanted to get into. I love "design"… but am not skilled in photoshop enough to run a full site on it.

  2. Well, buying an established website is easier, but costs more… it all depends on how much money you have, you wish to do, and what is your time frame…

  3. Hey Zac,

    You raise some good points there. I am a victim of a 1000 ideas and a tight schedule to fit it in. I agree that outsourcing is the key. However as you say, being profitable is the key, without that the asset becomes a painful liability.

    Thanks for the post.

  4. The main thing is that a lot of people do not have the money to invest – so they invest time and start their own. I personally start my own websites and blogs instead of buying, because the startup/luanch time is the most exciting and rewarding part.

    1. Exactly. When I first started out I was doing all of my own web sites and have since built up a network. Now I fortunately have the luxury to jump on a few offers when I see them.

    3. Hello Great informative article! Thanks so much for sharing your wealth of information. I certainly appreciate the effort! keep up the good work!

  5. ===

    Since their launch, Flippa has done over $28 million in web site sales.

    ===

    That $28 million dollars in sales comprises all the sales including the several years of Sitepoint Marketplace sales, not just since the launch of Flippa.

    1. @:

      Seems like they should have included that nice little tidbit. I don't think Sitepoint should count in the statistics.

  6. But lots of sites sold in flipa is outright worthless. The name should be a guidance. Flipa, derived from flipping. Scamers build a simple site for less than $20 using WordPress and then wait for a month or so for being indexed in Google. Then they sell it on flipa. They manipulate alexa ranking, incomes, and every thing to tell you the income potential of the site.

    One guy was even selling his banned sites on flipa for $2500. You will see sites that 1 link with Alexa ranking of 10,000

    Some people will tell you they are' getting 600 visitors a day and theur Alexa ranking is 9,000,000

    It is jungle filled with wild animals who will eat you in every chance you get.

    There may be a few flowers, so it is not easy to find and the bidding can go up very quickly.

    You're warned about flipa.

    There was a blog post published somewhere that talks about all sorts of scamming going on in flipa. Do a Google search.

    2. Like any money making process, people are going to take advantage and there will be suckers. It does come down to the due diligence and work put in by the buyer to make sure what they are buying isn't crap. It is hard to come across the golden gems, but more and more are showing up lately.

  7. In my opinion if you have resources to buy a established site then its much better than starting a new site from scratch.

  9. I think the value of an established site with PR and Link juice will get you up and running much faster.

  10. I would pay for an established site. As you said, time is everything… It takes time to create certain loyalty and brand of a website, so in this case I think is smarter to get a website that has all that included.

    2. And requires lots of time. I wonder if it would be better to invest in a site that is fresh than buying a site that is a low profile and never been optimized.

  13. Buying an establish website is always better since you don't have to put a lot of effort n it but if you don't have teh money to buy one then you are left with making it from scratch.

  14. Since I am an webdeveloper i start from scratch, build it from my head but for an internet novice I advice to buy an established website but after he reads your post! Great info!

  15. i rather build from scratch, i've seen peoples success with flipping sites with only little work and cheating alexa, income, etc. the method is simple.

    but i won't do that, just make me so guilty, but the money is attracting right?

  16. A very interesting topic Zac, some good pointers to take away.

    The thought of selling up has never crossed my mind actually.

    In terms of buying, I would prefer to go for an up and running site rather than starting from scratch – It just saves so much time.

    Thanks for recommending Flippa too, I've just checked it out.

  17. Zac please answer me, when build your website (myspacenow.com) do you outsource the contents ? do you create the content of myspacenow graphic your self ?

  18. Building from scratch does have a certain allure, but why re-invent the wheel, especially seeing how much worth the search engines place on aged domains. There are good arguments to be had for both, but personally I feel that every case will have a unique set of circumstances that can swing your decision either way.

  19. Some people will tell you they are’ getting 600 visitors a day and theur Alexa ranking is 9,000,000

    It is jungle filled with wild animals who will eat you in every chance you get.

    There may be a few flowers, so it is not easy to find and the bidding can go up very quickly.

    You’re warned about flipa.

    There was a blog post published somewhere that talks about all sorts of scamming going on in flipa. Do a Google search.

  20. I would prefer to go for an up and running site rather than starting from scratch – It just saves so much time.

  21. There are good arguments to be had for both, but personally I feel that every case will have a unique set of circumstances that can swing your decision either way.

  22. If I can get the seller to sell at 12 to 24 (max) month multiple, then I buy it – the math is simple, I'm buying at 50% to 100% ROI. I personally don't know of any other type of "investment" out there giving you this kind of ROI – unless of course you consider gambling as investment.

  23. Zac,

    Great post. I am in the same camp, investing in an established site is a far more profitable venture. Time is worth too much to be messing around with the building block steps of putting together a site. Great post, I'll pass it along.

  25. A real marketer will know that buying a site is much more profitable, but a blogger will probably want "the experience".

  27. I have often viewed websites for sale on Ebay as scams, so it is nice to know that you have experience with Flippa and recommend it. Thanks for sharing your story. 🙂

  28. I would look into opening a Roth IRA. The tax advantages at your age are numerous. If your looking solely as an investment account, maybe also look into Etrade. Good Luck.

  29. Zac,

    I think this is really sound advice. I am a internet business broker and my company, websiteproperties.com specializes in selling established website businesses. While sites like flippa offer many interesting opportunities – typically under $50K, our niche caters to the $50K – $10M range. We consult with a lot of buyers the same advice – buying an established website with solid fundamentals and lots of upside opportunity is often a safer bet than starting from scratch and trying to figure it out yourself.

    While our sites are on the higher end, they tend to go through a vetting process and they have to meet a level of criteria that raises the bar and culls away the riskier deals. You typically get what you pay for.

    David Fairley

    President

    WebsiteProperties.com

  30. I really wish I had the budget to buy existing websites. I have built all of my websites up from scratch. Once I get my websites going I will definitely have to look into buying some other sites to expand my network.

  31. I guess I would buy the website for $10K instead of starting from scratch, it is all ready earning money and the ground work is done.It is a pain to start from scratch and it takes a lot of time to build a website that makes say $1,000 per month constantly.

  32. I think the value of an established site with PR and Link juice will get you up and running much faster.

  33. Well IMHO, I will choose to start from scratch rather than buying an already establish website because I can see the changes in traffic, rankings, and sales if I'm an e-commerce website. That's my SEO point of view, but If I'm just a guy that wants to earn then I will go to that establish one.

  34. For me it really depends on your business needs. If you are given limited time and want your business to stand up at the middle right away then better to buy a well established site than starting it from scratch. If you are willing to take a challenge then start it from scratch.

    Phil

  35. I agree with you…buying a established website is better than starting from the scratch…but you have to be careful.

  36. It is better to buy a website…but it should be done through a attorney and close the deal only after the domain is in your name

  37. Buying is great, but nothing can beat the skill set you'll acquire from building a site yourself

  38. If I can get the seller to sell at 12 to 24 (max) month multiple, then I buy it – the math is simple, I'm buying at 50% to 100% ROI. I personally don't know of any other type of "investment" out there giving you this kind of ROI – unless of course you consider gambling as investment.
    My recent post Preetika Chawla

  40. Well, buying one is obviously easier, but they usually cost A LOT more. Scratch is about the only way most people can go, because they simply just don't have the money to buy pre-established ones.

  41. Some great tips here Zac on whether to buy or start from scratch. Personally my own website design have been designed and built from the beginning. I actually enjoy the branding and building up the reputation of the sites.

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