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

I spend a lot of time browsing various marketplaces looking for ideas for my current businesses and also potential new businesses. The nature of operating on the web is that the majority of markets have low barriers to entry and are easy to enter and replicate and existing successful business. A process often used by engineers to work out how unfamiliar technology works is often known as “reverse engineering”. The same thought process can be applied to web businesses and can be used by savvy marketers to copy ideas.

I recently brokered a site for a client and one of the main “assets” was a relationship with a supplier. I advised him not to disclose any information about the supplier publicly, as by doing so he could easily bring loads of other people into the market who could compete directly and undercut the business. I often see listings on Flippa where people will disclose their supplier publicly, and it massively reduces the value of the site in my opinion. The majority of experienced webmasters can easily replicate a business cheaper than purchasing a site for a premium.

One of the main problems with Flippa’s interface is the fact they put a massive emphasis on statistics, keywords and everything about a site that makes it unique. As soon as keywords are revealed, a savvy SEO expert can easily build a better site, steal all the backlinks and rank as well or better for the same keywords. If you’re good at SEO, this is definitely something you should look into. It takes the guess work out of working out what niches are profitable or not, and you can immediately see what works (and what doesn’t). More often than not, you can also improve what a competitor’s site already has and therefore make your site better and more profitable. You could do this by searching in Google for relevant sites to your niche and seeing what they do, but the issue with this is you usually have no idea how much that specific site makes. Flippa takes the guess work out and lays out the majority of figures and statistics on the table for all to see.

This is one of the main reasons I don’t advise people to expose all details about their business in a public auction. The more that is kept secret, the more value your site has. Get them to contact you and sign a NDA before giving away more information about the specifics that makes your site unique. Be as transparent as possible (give away information they could find with basic due diligence), but be aware that there are many clever marketers browsing Flippa everyday who would have absolutely no regrets copying your business model and diluting your profits. This may sound slightly hypocritical after my previous post about “saturation” but there’s no denying that another direct competitor is not good for your site(s). Be careful when you get private messages asking you to “tell me more before I bid”. People will often fish for information. I’ve made that mistake in the past, and once you’ve done it and seen a number of competitors pop up, you will never do it again.

Work smart and be aware that there are a lot of people out there looking to copy your business given the chance. Don’t throw away all your hard work. Alternatively, if you’re clever, browse through Flippa and find profitable businesses to copy without actually having to buy the site!