Should You Buy an Established Website?
Over the years I’ve had my fair share of web site purchases. Some were good, and some were bad. Search any website forum or auction site and you are sure to find a handful of web sites that wet your appetite. Buying an established web site is a great way to expand your business outside of continually adding more ad campaigns, and can continue to generate revenue over a long period of time. Before you place that bid and jump into buying an established website, you should ask yourself a few questions. Just because it looks like a good deal, it might not be right for you.
Do You Know Anything about this Niche?
As much as we like to think we are gods of marketing and can make money with anything, it’s always best to stick with what you are good at. Just because you see a web site for sale that is making money and they are doing a crappy job, you may not want to pick something up that you have no experience with. On the flip side, focus your efforts on finding what you do know well and expand upon any sites you might find for sale.
Other important questions to ask yourself before buying:
– What type of competition, keyword traffic and costs are associated in this niche?
– How long will it take to make this new purchase profitable?
– Is this business scalable and how much time and effort will it require?
– Do I really want to take on a new project?
This site makes $500 a month and the “Buy It Now” is $2,000!
I see this all the time. Unfortunately it’s almost never true. The average price for a web business is in the 12-24 months revenue area. Why in the world would someone sell a web site that’s making X dollars a month for only 4 times that amount. You will also usually find a short blurb in the listing stating, “I’m selling this site because I need money to go back to school, or pay bills“. If it looks too good to be true, it usually is. There is a lot of junky web sites that are thrown together just to make a quick sale. Don’t be fooled.
The Numbers Don’t Lie
As much as we’d like to believe everyone is honest, some people are out there to get you. The numbers may not lie, but the person putting that nice sales chart together might be. A lot of auction sites are upping their standards and making “verified” stats a requirement. If Google Analytics and other high value stats aren’t available, always make sure to request screenshots of stats/ad campaigns and even what the site backend might look like. Also don’t be afraid to search resources like Copyscape, Alexa and Way Back Machine to see what the history of your possible purchase is.
Why Would they Sell such a Great Site?
If you search the forums and auction sites enough, you will probably come across a gem every once in a while. The site has a ton of backlinks, all of the revenue / profit numbers work out, and it’s a perfect fit for your business. Everything checks out and you are so confident about the site, you contact the seller to make a possible buy out. I did this a couple months ago and offered up a high 5 figures for a site. The buyer said he wanted to wait til the end of the auction, which wasn’t part of my deal. The auction ended, never hit what I offered and the site was still never sold. It seems a lot of sites want to see what they are worth and just want to throw themselves out there to see what happens. It’s unfortunate for the buyers, but it happens. So next time you see a site for sale that seems perfect, it might also be too good to be true… or may cost you a bit more than expected!
Paypal, Check or Cash
This is a two way street. If you are the seller of a web site, you would much prefer to have cash, check or a money order. If you are the buyer, you DEFINITELY want to pay through PAYPAL or using a credit card like American Express. The seller wants cash/check to save on fees, while the buyer wants paypal/credit card to offer security. It’s in the best interest of both parties to agree on a solid payment method. If you are determined to pay with a credit card or through paypal, offer to split the difference in fees, while keeping your sense of security.
There are a lot of web sites out there that offer established web sites for sale. The important thing is focus on due diligence and finding what’s right for you.
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