Buying, Managing & Selling Websites For Profit - Learn the Real Tricks of the Trade

There is a large amount of information about site flipping and similar subjects, freely available or as part of a paid product. The vast majority focus on selling turnkey sites.

Firstly, this is NOT site flipping. This is merely selling turnkey sites. In previous posts I have discussed what flipping really is, so those who continue to disguise turnkey selling as flipping are wrong. I know that myself and many others involved in the REAL site flipping circles are frustrated by the widely circulated misinformation spread on blogs, forums and all sorts of other channels.

This is a widely discussed and interesting topic, and one of the reasons I am bringing it up now is after a few years of constantly keeping up with what is being taught by the ‘gurus’, making wannabe site flippers try and earn money through selling turnkey websites, only to see 95% of them failing miserably. As has also been discussed at length in many of the main IM forums and blogs, the “gurus” are now blaming others for their failures. Instead of arguing why I don’t agree with these people, I shall discuss the economics behind the business model and why it is not advisable when first starting out.

As a side note, there are a number of ways to be profitable selling turnkey sites, but for the purpose of this article I will not go into them. Some of the methods to be profitable require resources and infrastructure that those new to the business simply don’t have, and as such is really not viable. For the critics, I am also aware that the finances have been simplified, and it is possible to benefit from economies of scale. The lesson to take away is that even if you don’t agree with the arguments against turnkey “flipping”, you will see that it isn’t overly profitable for sellers either, and as such, not worth getting into.

If you regularly browse the listings on Flippa.com, you’ll see that at least a strong third of the sites auctioned are brand new, with no revenue or traffic and with a newly registered domain name. About half of this is because of our ‘gurus’ are still very actively promoting turnkeys as a profitable business, the other half is because of the fact that establishing and selling turnkeys simply sounds easy (and is).

To save you buying one of those $37 e-books or courses, that will basically explain how to install Wordpress, a pretty theme and “flip” the site, I will summarise it here:

“All you need to do is find a hot niche (research Flippa.com for previous auctions to see what sells well enough), register a domain name, set up web hosting and Worpress [insert 10 pages of filler on the uses of Fantastico], now decide whether to make a typical blog-type site (in which case, write 4-5 articles on the subject) or an autoblog (install an autoblog software such as wp-robot), find a nice theme for your site (there’s lots of websites offering free wordpress themes, and some of them look very nice), and then go list the website on Flippa with a BIN (Buy it Now) price of $147.”

Now, for most of us $147 isn’t really worth the time and effort, but for a lot of those new to the industry it sounds like a nice bit of extra cash. Besides, all it takes is installing a blog so must be worth the time, right? After all, if they’d build one site a day and do it 20 days every month then they’d make nearly $3k a month – much more than the average salary in almost any country. Or would they?

Let’s go ahead and break it down a bit, firstly by looking at your direct costs to build such site:

·Domain name: $9

·Flippa listing fee: $19

·Front page upgrade: $29 (a must in my book)

·Flippa success fee: $4 (assuming you split it with the buyer)

·PayPal fee: $4

·Hosting: $2 (assuming that you pay $10 per month and host 5 sites at a time)

Based on the above figures, and assuming that 70% of your sites sell (you’ll undoubtedly have ones that don’t get a single bid and ones that you’ll sell for $50 or $60 – and the percentage is likely to be even higher than 70%), your $147 is quickly reduced to just $35 of profit per site!

Fine, $35 per site can still be decent money for some, but let’s look at how much of your time will you spend on preparing each of those sites:

·Initial Maintenance (registering the domain, setting up the hosting etc.):
30 minutes (IF you don't have to do any research i.e. you have a list of domains, themes etc. ready)

·Building the site (installing WordPress, configuring the theme/plugins, creating Adsense units): 1 hour (IF you have everything pre-prepared)

·Preparing the Flippa listing and answering PMs / questions posted in comments: 1 hour (In all seriousness, listing management takes a whole lot of time!)

·Finalizing the sale (preparing the payment, transferring the domain name, the files, the databases and answering any questions the buyer has): 1 hour and 30 minutes

Total time spent on the listing: 30+60+60+90 = 4 hours, making your average hourly rate $8.75 AT BEST.

At best because the figures provided were pretty generous, and there’s a lot of aspects that I didn’t touch at all, such as getting scammed – and believe me when I say that if you sell 100 sites, you WILL get scammed/charged back on a few of these.

Now, does an $8 hourly wage really motivate you? If it does then you’re in the wrong business - seriously. Many want financial freedom and the fact they can work at home might be worth the sacrifice. If you are one of these people, please think again before “flipping” turnkey sites for a living. They don’t add value to marketplaces, they are rarely of use to anyone and as the numbers show, they really aren’t worth the time and effort.