As I often talk about on this site, I am a huge fan of outsourcing. I use services like Constant-Content.com and Upwork.com to hire writers, web developers, and I even use sites like Fiverr.com to buy logos. One of the ultimate ways to outsource work is by purchasing an already existing website, especially one that is already making money.
In this post, I’d like to talk in further detail about how to buy a website and not get ripped off. Unfortunately, a lot of people and even experts in this field get ripped off when they buy a website from someone else. There are a lot of things that can go wrong, so you need to approach all website purchases with skepticism.
Do NOT Buy A Website If You Are A Beginner
Someone who is new to building websites or creating an online business should never purchase a website. Everyone is looking for the easy way to strike it rich, so many beginners feel if they purchase a website that is already successful, they can skip past the 1 – 2 years it takes most people and start making money immediately. This is wrong and it has gotten a lot of newbies in financial trouble.
When you are a beginner to building money-making websites, you don’t know what to look for yet. Website traffic numbers and revenue figures can be easily manipulated. Sometimes, websites are receiving a lot of traffic due to black hat SEO methods. The site might be doing fine at the time of purchase, but eventually, the site will be penalized and you’ll lose all traffic and revenue.
This is just one example of many. The point is, if you are brand new, start your own site from scratch. After 1 to 2 years of doing that, you will have learned a great deal and you’ll be much better prepared to perform adequate research on sites that are for sale to determine if it would be a good buy or not.
Never Purchase A Site Because Of The “Potential” It Has
I have one pet peeve when browsing websites for sale and that is people who talk about the “potential” for revenue on a site they are selling. A lot of people feel like since their sites have potential, they can charge more for them. Never, ever purchase a site based on potential. If you are thinking about purchasing a site that does not earn any revenue, you need to determine why you want to buy it in the first place and also find out what it’s worth in terms of quality content, etc. Most sites that are for sale will have positive aspects as well as time-sucking problems that you’ll need to deal with. Factor both into the price.
How Much Are Money Making Websites Worth?
If a site is actually earning some revenue, the general cost (as of this post in January 2016) is about 24 to 36 times the monthly net profit. So, if a site is earning $20,000 per month but has $10,000 per month in expenses, then the site is profiting 10,000 per month. That site would be worth anywhere from about $240,000 to $360,000. Note that lower revenue sites may be priced at only 12 to 18 times their monthly profit while larger sites in the millions may demand significantly more.
There’s More To It Than Profit
Aside from looking at the total net profit of a site, you also need to look at the age of the site as well as the trends it has had. A site that is 2 years old will likely sell for less than a site earning an equal amount of revenue that is 15 years old.
Likewise, a site that is 15 years old with consistent growth and steady revenue will sell for more than a site that is of equal age, but has had decreasing revenue numbers or a history of volatility.
There are other aspects to look at such as where the website traffic is coming from. Paid advertising campaigns can be a solid source of traffic and sales, but it is also very expensive. Search engine traffic is great because it converts very well, but it generally requires a lot of maintenance and upkeep on the site to maintain those rankings. Social media traffic can be good as well, but gaining a lot of traffic through social media channels has proven to be very difficult and time consuming at best.
With this in mind, a site that is diversified with lots of different traffic and revenue streams will be considered higher quality than a site with one main traffic source and only one product being sold.
Always take into account the entire package when you are purchasing a site. When you buy a website, you are acquiring both the good and the bad. In order to minimize your risk, you need to first determine that all of the stats are legit, then figure out the strengths and weaknesses.
If It’s Too Good To Be True, It Is!
I would venture to guess that over 95% of websites being sold right now are either scams are not worth a purchase. A quick look at the sites for sale on Flippa.com will reveal all the scams your little heart can handle.
By browsing the sites for sale on Flippa, you’ll see sites selling for just 3 or 6 times their monthly profit figures. They also boast how the site is “passive income” and takes no time to run. They might even offer to manage the site for you after the purchase. Stay far, far away! Put yourself into the sellers shoes. Would you sell a site right now if it would make you twice as much as long as you held onto it for a year?
This leads me to another point…
Scams Are ABUNDANT With Website Sales
I can’t stress this enough. The first thing you need to know about how to buy a website is how to detect the scams and bad sites. You can’t know this without experience. As someone with experience, let me tell you that there are hardly any legit sites out there for sale. If you are expecting to buy a legit site that is actually making money, you better be ready to spend 10’s of thousands if not 100’s of thousands of dollars on that site. The sites selling for $500 or even $5,000 are almost always scams or rip-offs.
It’s a sad reality, but you always must treat each website purchase as if you’re dealing with a very smart scammer. You can’t ever trust anyone. Just look at how Mark Cuban got rich by selling Broadcast.com to Yahoo for billions of dollars. Just a couple short years after the purchase and Broadcast.com didn’t even exist anymore. Let that be a lesson to even you “experts” out there. Purchasing a website is risky business. Yes, it can have great returns, but most people lose money, including big companies like Yahoo.
The Real Truth: Nobody Wants To Sell The Good Sites!
One reason it’s so hard to find great websites for sale is because nobody likes to sell the winners. Even at 36x profit, it usually isn’t worth it. Just about all of my money making sites earn more and more for each year I have them. The time it takes to work on them gets to be less and less as I’m able to outsource most of the work. While it isn’t 100% passive income, it’s pretty darn close. So why would I ever want to sell my most valuable passive income streams? The same holds true for most other successful website owners. They aren’t ready to sell until their sites are worth millions.
The ONLY Place I Will Buy Websites From
There are plenty of places you can buy websites. Heck, you can even find websites for sale on Ebay. There is only ONE place I will purchase a site from these days and that is EmpireFlippers.com. I have absolutely no affiliation with that company nor do I have any relationship with the owners, but I do think it is a great service. Most of the sites for sale will be out of your price range, but there are many gems in the $5,000 to $15,000 range as well. The sites for sale at Empire Flippers have been checked and verified to be legit. There are still some pretty shady sites that make it into their list, but it is the only place I would purchase a site outside of a private deal.
The Better Way To Spend Your Money
Before you go rushing off to buy a website for thousands of dollars, stop and consider that there may be a better way. Why not take that money and invest it into building your own site from scratch. You can invest in content writers, a programmer to make your website top notch, and excellent full-service web hosting. You could even experiment with paid advertising and social media campaigns. Sure, it might take a little while to get it profitable, but at least you avoid all the risk of a site tanking after you purchase or realizing you’ve been ripped off. While I do purchase sites from time to time, there’s nothing like building my own site from scratch, even if it is built through the work of outsourced help. Not only is it more fulfilling, but I’ve found it to be more profitable.
Have you ever purchased a site before? Was it a good or a bad experience? Please share in the comment section below!