Learning how to buy and sell websites can be intimidating, almost as intimidating as the actual practice of buying and selling websites. There's a lot to worry about, such as what to look for in a site, where to buy and sell sites, what to do after you buy a site, how to sell it, and more.
If you're not familiar with website flipping, the term used to describe the practice of buying and selling websites online, think of it in terms of flipping houses or cars. You buy a rundown house or car, fix it up, and sell it for a profit. Buying and selling websites works in the same way. The only difference is you'll earn monthly recurring revenue (MRR) along the way.
- Why do entrepreneurs buy and sell websites?
- What to look for in a site
- Where do you buy and sell websites?
- Tips for buying websites
- What happens after a website has been sold?
Why do entrepreneurs buy and sell websites?
Entrepreneurs buy and sell websites for a few different reasons, but we'll focus on the top two reasons. The first is obvious. Buying a website, growing it and eventually selling it is a wonderful way to increase the amount of money you make online while also earning a steady stream of MRR. While you spend time and money fixing the site up to grow it, you'll earn money through ads, affiliate marketing, sponsorships or even product sales.
The second main reason entrepreneurs buy and sell websites is to expand their current businesses by adding more sites to their portfolios. If you're wondering why bloggers and entrepreneurs sell their own websites and businesses, here are a few reasons:
- They're ready to move on.
- They need to fund a new project.
- They're not skilled enough to take the business further.
- The website was a hobby or side project.
- The website or business is sold to pay off debt.
What to look for in a site
We're going to go over a few specific features to look for in a site. Specifically, we'll be talking about the following ways of buying a website:
- Plan ahead while buying a website that has an “evergreen” niche.
- Buying a website that's already acquiring traffic and generating revenue.
- Buying a website that has a niche that interests you.
It's highly recommended to choose a website that has what's known as an “evergreen niche”. This means the niche and all of the topics in and around that niche stay relevant no matter what. The rules here are simple. Steer clear of a niche that's merely a trend (think Google Glass, fidget spinners or smartwatches) or is about something that may be illegal or highly regulated soon (think vaping / electronic cigarettes). An “evergreen niche” will give your business a solid foundation from the start.
Most niches only require common sense to determine whether or not they're relevant on the long run. But if you aren't sure, pop them into Google Trends, and use the 2004-Present setting. You can see how stable the weight loss niche is in the screenshot below.
The wearable technology niche, on the other hand, is merely a trend that was dormant for years, peaked for a few more and is now on the verge of dying. Though, this may change in the future.
You can even break things down by country.
The key to spending as little on your initial investment as possible and maximizing your profit is to buy a website that has pre-existing success but plenty of room for growth. Many experts recommend choosing a website that has at least 100,000 monthly visitors and only a couple of methods for generating revenue. This will give you enough room for improvements to move things forward.
For example, pick a website that makes money from ads but has yet to explore affiliate marketing and sponsorships over a website that makes money from all three. Furthermore, sites with pre-existing success also have keywords they already rank for and strong followings on social media.
A niche that suits the buyer
Your success is going to be dependent on your ability to produce and your passion. If you can't invest enough energy or interest to produce content, grow your social media presence or do all of the other things it takes to grow a website, you aren't going to find as much as success as you were hoping for. This is why it's highly recommended you choose a website that has a niche that interests you.
Where do you buy and sell websites?
Alright, now that you know what features to look for in a site, let's talk about where you can go to buy and sell websites. If you're a serious buyer looking to spend six or seven figures on a website, consider joining WeBuyWebsites.org's mailing list. They pump out a list featuring hand-picked, high-quality sites they've sifted through and selected themselves. With that out of the way, let's get to the list. This list of places to buy and sell websites is broken into three sections:
A website broker is similar to a real estate broker. Real estate brokers help you buy and sell houses and other forms of real estate. Similarly, website brokers help you buy and sell websites. They sift through lists of available websites for you and only feature high-quality sites in their marketplaces. There are a number of different brokers to choose from, but for now we're going to focus on two.
FE International – This is a website broker for serious investors. Most of the asking prices featured in their listings have seven digits with the lowest price featuring five digits. As you can see, each listing contains the site's yearly revenue, yearly net profit and asking price. You'll also get a breakdown of the main benefits the site has as well as a general description of what its purpose is.
Certain investors can even take advantage of the broker's management service, which takes care of content marketing, advertising, social media, technical maintenance, link building and more. If you're a seller, you'll have an extensive network of pre-qualified online investors to look forward to as well as peace of mind knowing you're working with a broker that has sold over 425 businesses.
WeSellYourSite.com – This is another website broker for serious investors. Most of their asking prices are six or seven digits with some featuring five. Each listing contains the site's gross revenue, annual profit and annual visits. Each individual sales page for each listing contains the date the website was established as well as an overview of the business. Sellers have “thousands of potential buyers” to look forward to.
Marketplaces are the “free markets” of the website flipping industry. They allow nearly any listing and aren't nearly as exclusive as website brokers. Naturally, this practice has negative connotations that can outweigh the positives at times. This includes having too many low-quality sites to sift through as well as being taken advantage of by scammers. We're going to look at three marketplaces.
Flippa – This is one of the most popular marketplaces you can use to buy and sell websites, domains and apps. It's great for beginners as some websites are only available for a few hundred dollars. Each listing is different as they're dependent on the information the site owner provides. High-quality listings contain detailed breakdowns of financial information, traffic and other details. This information is accompanied by graphs.
Empire Flippers – This is a marketplace for serious buyers. Most listings have asking prices that feature six digits. Each listing contains a breakdown of how the site generates revenue, the year it was established and its net profit by the month. Individual listings contain what Empire Flippers calls “seller interviews” that contain more information about how the site operates.
Freemarket – This marketplace is great for novices but not really suitable for “expert investors” as many listings are available for under $100. Listings contain an overview of the site's revenue, number of unique visitors, expenses, Google PageRank, Alexa rating, backlinks and SEMrush keywords.
You don't necessarily need to sign a contract with a website broker or browse marketplaces to buy a website. The next approach is the “going out on a limb” method. It's simple:
- Pick a preferred niche with potential.
- Use that niche as a keyword in Google.
- Use the results to find abandoned sites in that niche.
- These sites will likely have abandoned blogs and social media profiles.
- Use services like SEMrush and SimilarWeb to check out the site's stats.
- Contact the owner, tell them you're interested in buying the website if everything checks out.
This approach has one huge advantage. You'll have the chance to buy websites that other people don't have on their radar because they aren't publicly listed for sale. You may even pay less in comparison to the bidding process on marketplaces or the listed price at website brokerage firms.
Tips for buying websites
So, you know what to look for, and you know where to look. Now, let's switch gears and talk about the buying process involved when you buy and sell websites. The buying and selling market, no matter the niche, has a term called “due diligence” that involves taking the time to research the website and seller carefully. Here are a few things to look for:
- Why is the website being sold?
- Does the sales page contain proof of traffic and revenue?
- What reputation does the seller have?
Website brokers are useful for this process as they take care of everything for you. Here are a few tips once you have a list of pre-qualified sites to choose from:
- Start with your lowest price, but make sure it's high enough to make the seller interested in entering negotiations with you.
- Experts recommend paying between 12 and 18 times the site's monthly net profit.
- Many experts specifically recommend starting with 70% of the asking price when you enter negotiations.
- Use weaknesses to justify paying a lower price.
- Having to spend time/money redesigning the site, bringing its search engine rankings up, necessary investments in marketing, development costs to update products, etc.
- Use a service like Escrow.com to handle payments when you buy and sell websites online.
- Buyers may open disputes or use fraudulent credit cards with PayPal.
- Some services, such as Flippa, use Escrow.com.
- Use a contract if you're buying/selling independently without the help of a broker.
- Escrow.com can help with this.
- Use model contracts if you need help writing a contract and don't have a lawyer.
What happens after a website has been sold?
After the successful sale of a website things usually will be pretty hectic. You'll need to transfer servers, domain names, login credentials, social media accounts and more before you can begin working on optimizing the site. Do an audit by finding out how these items are doing:
As the buyer of your new website, take note of any weaknesses, and begin optimizing each area. You should also do an audit of the site's revenue and see what needs to be improved, what needs to be added and what should be dropped. Hire independent contractors to help you with all of this if you need to and have the budget to do so.
What you're trying to do is get the site to a point where it requires as little maintenance as possible. This will help you sell the site in the future for as much as possible. Speaking of which, make sure you're keeping records of everything to show as proof when it comes time for you to sell. Remember, weaknesses can be used as a justification for buyers to offer lower prices.
Final thoughts on buying and selling of websites
The process of selling a website is quite similar to the process of buying one. You can use the same brokers and marketplaces and use the same services to handle payments. If appropriate, you can also use the same guidelines for the asking price (12 to 18 times the site's monthly net profit).
Buying a website can be a huge investment, one that shouldn't be taken lightly or rushed into. You can lose a lot of time and money with this venture, so be certain you're not spending money you don't have and you're taking careful strides with every step of the process. There are opportunities to run great online businesses waiting for you. Good luck, and if you have experience buying and selling websites, be sure to share your wisdom and pieces of advice in the comments below!