Buy A Website Business With These Guidelines For Buying Websites
What would be the right price to buy a website business?
Currently, website businesses are changing hands ten to twelve multiples the revenue a particular website earns a month. However, if you are impressed with a particular website’s performance, you may make an instant purchase may be slightly even more at it’s “buy it now” (BIN) price than to bid in an auction. Given the fact that internet based businesses are so far recession proof, if you’re going for an amount of 12x the current revenue, you’re doubling your investment in a year, which is not a bad proposal considering the lower returns in traditional businesses, stock markets, bonds, or real estate with the current global economic scenario though the risk factor varies with each type of investment.
Where are the marketplaces for websites?
Major marketplaces:
- Flippa: This is the major active marketplace where you can buy website businesses of any value no matter what your budget is. Due to increased activity of trade at Sitepoint, they spun off the website trading board on the forum as a separate entity into Flippa. Members are telephone verified.
- Digital Point: Another active meeting place of buyers and sellers of all budgets but it is just a forum. They are just testing waters to bring in a bidding system rather than being just a forum. Members are not telephone verified.
Less attractive/active marketplaces:
As security deposit is not involved in any of the marketplaces listed above, on various occasions I have noticed noncompliance by bidding members in paying the bid amount and taking over the sites that they have bid due to various obvious reasons.
Most of the sites that arrive for sale on the aforesaid marketplaces are either new or refurbished ones. Hence take due care and do a thorough research before finalizing to buy a website.
Now that you’re convinced, what all research has to be done and factors to be taken into consideration before buying websites? Continue reading for more details.
Are there any resources that estimate valuation of a website?
Yes, there are quite a few. A few of them are dnScoop, $timator, Biz Information, Site Value Check, My Website Worth, Ninja Website Appraiser, Value My Web, and Ebiz Valuations. However, none of these are accurate or rather all of them would give you an exaggerated value which you would be doubtful to pay. I would say a website is worth how much you are willing to give.
Age of the domain and site:
One of the factors that Google considers before throwing up search engine results page (SERP) is the age of the domain and site. Google considers websites that are online for a longtime with considerable inbound links to be authority sites. Hence the more the age of a site, the better. Furthermore, huge databases of websites are available online for sale. So a geek could tinker one such database into a new domain in a matter of minutes and flip it for profit saying he has an established website. So before zeroing in on a website, do some research to know the history of a website by looking at the date of creation of domain and owner’s name at Who Is and how the website looked since its creation at WayBack Machine.
Revenue Proof:
Check the proof of all revenue channels that the current owner is claiming to receive. Raise doubts on areas of suspicion or less clarity. Compare the traffic to the earnings. Ask for screenshots of whatever you’re doubtful. Certain accounts like an account with eBay build-a-niche store are not transferable. Ask the owner if all the income sources can be transferred to your name once the sale is over. Be 100% satisfied about the performance and income sources before unzipping the wallet.
PageRank:
Though Google has diluted PageRank to 1 in 200 among other factors before showing up a site on SERP, people still give ample importance to Google PageRank in assessing the value of a site. Hence the more the PageRank of the homepage of a site, the better.
Alexa and Compete Ranks:
Though Alexa Rank is less reliable as it can be manipulated, it still gives a rough idea of traffic pattern and intensity. A site claiming to have huge traffic will definitely have a less Alexa Rank, probably in three, four, or five digits depending up on the traffic volume. Similarly Compete also gives you a rough idea of the traffic pattern. Though none of these two methods are accurate, they are still considered to be fair indicators to give you a rough idea of the traffic pattern.
Incoming Links:
The more a website has relevant incoming links with good keywords as link text from other websites in the same niche, Google sees that website to be more authoritative and hence drives more traffic for related searches. That’s the power of links. So more the links pointing to the proposed site, the better the bargain. Hence do a small research about the link count and the websites linking to the proposed site with Yahoo! Site Explorer to get an idea of link strength.
Traffic Stats:
US traffic is considered gold while you present your site for advertisers. So consider buying a site with comparatively more traffic from the US. Google Analytics is considered to be more reliable when you look into traffic analysis of a site than Awstats, Webalizer, or any other traffic statistics software that come bundled with the hosting package. Hence look into the screenshots of Google Analytics of the proposed site for “unique visitors” count and “page views” to have a rough idea on traffic pattern.
Please note that huge traffic is one of the basic requirements a website needs to fulfill in order to make money online with CPM (cost per million impressions), CPA (cost per action), and CPC (cost per click) advertisements. So this aspect has to be looked into with due importance.
What are the payment methods that are usually accepted and adopted?
The payment methods in practice for buying a website online are PayPal, Check, Escrow, wire transfer, credit card, Western Union etc., while Escrow will be safe for high-end websites than to completely believe the seller with other payment modes.
While you cannot upload cash into your PayPal account directly from your bank account from a country like India if you choose to pay by PayPal, the other option would be to attach your credit card having good credit limits to your PayPal account before going for a website purchase of high end. In this case, once you make the payment through PayPal for the website you bought, PayPal will automatically deduct the amount from your credit card.
Miscellaneous other factors to ponder:
As most of the advertisers reject sites of dubious backgrounds, it would be safe to choose a site complying with Google AdSense program policies. Hence apart from the ever popular porn, gambling, drugs etc., the site should not have warez downloads. For eg., just give a site command in Google like site:mtherald.com Viagra. This will definitely bring up all those pages containing this term from the site we intend to buy. That should give you a fair idea about dubious contents on a website as you cannot go and read every page on a website.
Google penalizes those sites selling links and accepting paid reviews. So it would be safe to keep away from such sites. Keep an eye on the revenue split up of site, so that no revenue is claimed from selling links and paid reviews. Similarly watch the bottom of the homepage of a website that you are intending to buy for outbound links to websites that are in no way related to the one you’re focusing.
Google likes websites with dynamic contents like blogs and forums more than sites with static contents. Dynamic sites keep on adding contents where as static sites are almost dead. This is a valid point to take into consideration before zeroing in on those sites made especially for ClickBank products, made-for-AdSense sites, or scraper sites. It would also be advisable to not go for startups, single paged websites, or sites with a very few pages unless there is a proven track record or you could foresee huge growth potential like that of Twitter.
Forums are hard to monetize but still if you are going to buy a forum, check how many users are online throughout the day on the forum by looking at statistics usually found at the bottom of the forum. Check how many threads are created on average a day and whether bots are employed to create posts/threads.
Similarly if you are going for a blog, check out the comments received for each post, which is a clear indicator of user engagement, the subscriber stats and growth with a tool like Feed Analysis to get an idea about what was happening on the blog for the past few months.
I hope these tips and guidelines for buying websites have thrown some light on what’s going on in the marketplace of websites. With these insights on buying websites, my efforts and journey to make money online, a decent online income rather, continues. So stay tuned to hear the future updates.
