I’m introducing my first guest blog post ever. The author is an expert in buying and selling websites and has been doing it successfully for a while over at Digital Exits. I know I’ve always been interested in buying and selling websites so I thought it’d be a valuable topic to write about. I was genuinely excited when Jock, the founder, offered to write and help educate in this arena. It’s definitely something worth exploring so enjoy!
Having some independent sources of income is a great way to earn more freedom. Being able to eliminate the fear of losing your job or of not having a way to make money is incredibly liberating. It’s also empowering, as it teaches you that the only thing standing between you and the income you want to earn is you.
Fortunately, thanks to the beauty of the World Wide Web, there are countless ways to make a little extra cash on the internet. And there also ways to make major cash on the internet, one of which is buying and selling websites, much like you would do with houses.
However, this process is a little more involved than some of the other ways of making money online, and therefore it can seem a bit more daunting. But if you have the right approach and use some good business thinking, you could find yourself turning a nice profit using this method. Here are some things to consider to help you make money buying and selling websites:
Understand where the revenue comes from
One of the first things you need to figure out when you head to buy and then eventually sell a website is where the money is coming from. Revenue doesn’t just come from thin air, and to make sure you actually turn a profit, you need to be certain the website you are buying will grow into something more successful after you take it over.
Probably the smarter move is to go for sites making money selling either their own products or someone else’s through affiliate marketing, not advertising. Making money on ads seems attractive because it’s a lot more passive, but the reality is that it’s hard to scale up. You need to attract lots of traffic and then justify to advertisers why they should pay you to have their content appear in front of your site’s visitors. It’s really just a big headache.
Sites that use affiliate marketing or sell their own products, however, are usually far more established within one particular niche. If they are making money, then there is a good chance they have decent authority within that niche, meaning you can exploit this for further profits.
For example, if you take over a website that is doing well selling electronics gear and equipment, it’s reasonable to think you can expand into, say, internet security or web services. This gives you access to a new market and some great growth opportunities.
Knowing where the site’s revenue is coming from is a great way to know where more of it will come from. Look for sustainable, expandable and scalable opportunities and you’ll be well on your way to some nice profits.
Know where value comes from
A practical thing you should learn as you venture into the buying and selling of websites is where exactly the value comes from. How much should you pay? And how much can you expect to get in return? If you don’t have solid answers to these questions, you’re likely to wind up chasing after a bad deal, leading to losses down the road.
The general rule of thumb is that an online business (website) is worth 2.5 times its yearly revenue, but other things, such as new sales generations, documentation and risk management strategies, all factor in. If you do your research and learn how the valuation process works, then you are putting yourself in a good position to get good deals down the road.
You will know how much to bid on sites you want to buy, and you will know how much to expect when you decide to sell, preventing you from going after the first (which is usually the worst) offer you receive.
The key to making money with a website is search engine optimization. This is the process of setting up your site and its content so that your pages show up as the top results on search engines. Everyone doing business online is working on SEO in some capacity.
When you go to buy a website, you need to ask yourself what the SEO value is. What are the chances this site will rank well for high-value keywords? Is it ranking for any already? If it is, this is a good indicator that Google likes your site and is willing to show your content to viewers.
Another good indicator is links. Google and other search engines use the number of links pointing to your site as an indicator of the quality of your content. If you can find a site that already has a good link profile, then you are already one step ahead of building a well-optimized site that can grow and be sold for a nice profit.
Get some help
On the surface, buying, running and selling a website seems like something you can do all on your own. It is, to an extent, but doing everything by yourself is going to take a lot of time. You may need to redo some of the content on the site, or you may need to create some new stuff so that you can update the site to what you want it to be.
You can certainly do some of this yourself in the beginning, but it’s going to eat up a lot of your time. One thing you can do is to bring in some outside help to do this work for you so that you can stay focused on other things. Yes, this will cost some money, but as long as you stay realistic, you should be able to keep your expenses down, making these small investments well worth it.
Another area where you’ll want to get some help is when you go to actually sell the business. There are sites out there, such as Flippa, where you can post your site and then receive offers for it, but these aren’t the best if you’re trying to maximize profit.
Most of the people on these sites are out hunting for a steal, and they aren’t going to want to give you the best deal. The response is to either be incredibly patient or to hire a broker to sell the website for you, which usually results in a bigger payday.
Hopefully, these tips have made you realize that making money buying and selling websites isn’t that scary after all. It’s something new, sure, but it’s more than doable. Just do your homework and be patient, and before you know it, you’ll be pulling in some nice cash flipping websites.
About the author: Jock is an internet entrepreneur who has been buying and selling websites nearly his entire career. He started doing it to earn some money on the side, but after a while it turned into his full-time job. He does a lot of work with other entrepreneurs and enjoys helping them find success making money online.