Key Insights to Buying and Selling Web Sites
As a long time developer of Internet businesses, I’ve always built things myself. Now with the growth of the Internet, the days of do it yourself are opening up to a real business of buying and selling web sites businesses.
This video and blog post come from my coaching of Zac Johnson while he was developing his new book, Flip This Web Site. What I share below are 3 case studies from Flippa, done live (and I’ve never worked with Flippa or know any of the people involved in these web sites, so this is my opinion only), showing you how to evaluate a web site business purchase by looking at 3 sites that were bought recently on Flippa.
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Key Insights to Buying and Selling Web Sites
Buying and selling web sites demands that you know the business you are getting into and have some sense of how to evaluate it.
After all, if you buy a site that needs tons of tech development, and you have no tech skills or don’t know anyone, or can outsource this well, that’s not a smart buy.
But if you know your skills and can leverage the foundation someone else has built, this is a powerful tool. And it’s smarter than building from scratch, or if you want to develop a portfolio of businesses.
What inspired me about reading this book is that there is real value in a web site purchase. This is not just about buying a domain, which is an excellent investment but often requires business development.
Here I’m talking about buying a web site that exists, with assets like steady traffic, email lists, and sometimes revenue. The way Flippa lays it out for you is powerful, easy, and safer than anything I’ve seen before, including eBay.
Here’s the 3 skills I see as important to buying and selling a web site:
Smart Buyer 1. Tech Savvy
Many sites for sale have been developed to a certain stage technically and either need more time, money, or resources to grow.
Those with technical skills may find these kinds of sites lucrative. Of course the nature of coding means you need to look at their code to make sure it makes sense, and you can adapt it your own way.
In a world powered by AJAX, PHP, and MYSQL, it’s a no brainer to buy many of these businesses. Think of it like buying a fixer upper house, can you add the right tech tools to improve performance, and of course drive traffic and revenue?
I’ve seen several examples of purchases, especially on the lower end, based on technical teams who can simply fix and either flip or grow a web site.
If you don’t have technical skills, be sure to research whether you need them for the site you are buying. Bad code is after all, bad, and if you can’t adapt it or improve it, you’ll have to start from scratch…which defeats the purpose of buying a web site if you can do it yourself.
In the video I share an example of a site that has traffic and an iPhone app sold for around $3500; if the iPhone app alone is good, this is a pretty low price to get going, but as with all things Internet, buyer beware…check under the hood before you buy.
Smart Buyer 2. Search Savvy
Flippa has many, many sites with high PageRank, keywords, traffic, and built are search. Search experts have long known the power of acquiring sites and creating a portfolio of high traffic, usually leveraging what they already have and integrating the new site into what they are already doing.
Search sites based on strong keywords may also be smart for a newcomer who simply needs some traffic and an existing site, while they learn the craft. Be careful if you are too much a newbie, but the allure of a search site in this market is easy to figure out.
Just be sure you check all their claims, check their PageRank out using tools like SEOFirefox (among MANY others), and search for the keywords related to the site to see the positioning.
Just like buying a house, do your research and look for what’s lacking; that’s where you can add value, and leverage the existing site to either grow your business or integrate it into what you are doing via search.
Smart Buyer 3. Internet Marketing Savvy
Internet marketing should be a required skill for anyone buying a web site, because if it doesn’t make money, and you can’t help it make more money, what are you doing?
Sure you can buy a site that is generating revenue, but anyone in the business knows you’ll have to keep up and adapt. Knowing how to convert traffic, write copy, and continually test and update the site is crucial to success.
My favorite inspiration from this review was a site called RecruitingBlogs.com, a Ning site with a huge community, traffic, and targeted to a human resources audience. Career sites with traffic and a loyal audience are incredibly valuable, and this one listed as selling for $95,000 on Flippa.
In about 4 years the loyalty this site built enabled the builder to flip it for a nice profit, and give more than just a web site…he sold a loyal audience and traffic that monetizes.
That’s the key to building a business online; loyalty and monetization. Be sure to check out Flippa and see what’s up, this is not only smart, it’s a new trend in this growing business called the Internet!
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