4 Important Considerations When Buying a Website
Buying websites can be a quick way to start making residual income through pay-per-click advertising and/or affiliate partnerships. Unless you know what you are doing, it can conversely be a quick way to burn through a lot of cash or miss golden opportunities. Buying a website should be approached the same way as buying an established business. These 4 considerations can be as much applied to buying a business as to buying a website.
1. Calculate how much time and money you will need to invest at the start…
Many website owners decide to sell their sites because they have lost interest or other matters have made them neglect the website for a while. In fact, the site may have a lot of potential and even be making some money but you should have a clear idea as to how much money you will need to invest at the start in order to get the site to a level that is making significant revenue. The investment may likely be in the form of more content, SEO, or even a re-design.
2. Define the break-even point…
The next step is figuring out when you can stop investing new money and the site starts to generate enough revenue that you can stop putting in additional new funds. At this break-even point the site will stop being a liability and will now pay for itself. Knowing this information will help you understand how much time will be required for you to keep pumping your own money into the site.
3. Understand the true value of the reputation of the site…
Many online investors feel that they can study an existing site and build a ‘replica’ of the same under a brand new domain name and get the same results. This is simply not true, unless you are willing to spend the money in building the reputation of a new website and wait sufficient amount of time. A site’s reputation is measured in a) age and quality of the domain name, b) total time the site is online, c) amount of indexed pages, and d) the number and quality of incoming links. It can take a lot of time and money to build a reputation of a website. An established website can already have significant reputation value built over the years. On the other hand, you may discover that the owner wants to sell the website because it was dropped from Google’s index. Understanding the site’s reputation can help you know whether you are getting a good deal or a lemon.
4. Discuss with the current owner what exactly is included in the price…
Frankly talk to the current owner (seller) about the condition of the website you are thinking of purchasing and what is included in the price. Is hosting included or will you be required to move the site to a new host? Will the owner move the site for you as part of the deal? What third-party services are being utilized? Can the licenses to any services used be transferred to you or will you be required to purchase new licenses? What are the monthly expenses, revenue, and profit (get numbers for past 6 to 12 months)? Can the owner grant you access to stats (we recommend Google Analytics)? Are there any staff or freelancers contracted to maintain the site or create content? Is the content unique? These are some of the things you would want to get clarification on in order to get a better understanding as to what is included in the purchase of an established website.
Conclusion:
Depending on your reason for buying a website will put more weight on one of the points than the others. For example, if you want to buy a website because the traffic it gets is targeted to your current business and you want to redirect that traffic to an existing site, then the overriding point will be #3, the reputation of the site. If your sole reason is to make residual income then the overriding points will be #1 and #2. But you should not ignore the other considerations mentioned.
Buying established websites can be a great experience and lead to quick profits. Some sites will make you money right from the gate. But this will be reflected in the asking price and it will not be cheap. Some sites have strong potential for profit and established reputations but will need some amount of love first. Still, many other sites are just a waste of money and should be avoided. Seriously considering all of these 4 key points will help you make a smart business decision when buying a website.
