Site Flipping 101

[Thomas]

Hello,

This is my first post on the forum, but I am an active member on a number of IM forums and was referred here by one of the moderators.

Here's one of my Site Flipping 101 posts from another forum. I thought it would be useful here for a number of you.

Firstly, why I think it is a good way to start out for noobs (please note, you need to be able to afford at least a domain and hosting, approx $20) is because it’s a fantastic way to learn a little bit about every area of IM: web design, programming, servers, content creation, marketing, finding the right products, SEO etc. If you can build and sell a site for profit, chances are you can do most methods on the forum.

Depending on your budget there are a few ways you can start.

• Noob/poor man - $20, buy domain and hosting, use free software to build site, use PLR content
• Mid-level - $150, buy domain with some PR and hosting, outsource everything
• High roller - $any, buy an established site, spruce it up and sell it

For a start, with every site you build and expect to sell, install Google Analytics and make sure you can track your specific income for this site – whether it be channels in adsense or whatever.

Now personally, I like to buy established sites cheap from places like DP (Digital Point), but I’ll start with how to do it from scratch. I’m not going to explain the technicalities of building a site, that’s what Google is for :P

There are loads of different types of sites that sell but here are a few ideas for noob/mid-level:

• Do some keyword research, find a good niche, get a domain, throw up some articles (tons of tutorials in the adsense section)
• Buy a tool, learn to use it, offer as a service on your website. When you get bored of service sell the business
• Write an ebook, write a sales page, buy domain, sell some ebooks, flip the site when sales start to drop
• Buy a domain with page rank, add some content and sell (people love PR)

As a rule of thumb, don’t expect much for a new site – DP you won’t get much more than $50 whereas Flippa you might get $200 but have to pay the fees.

I would recommend starting out on somewhere like DP where there is no listing fee and learn how the business works with a few small transactions etc. If you can use escrow for all transactions, it is a lot safer than Paypal and at some stage you will get stung using Paypal (plenty of threads complaining about them)

Now for most of you that will be nothing new or anything earth-shattering so let’s move on to bigger fish.

For bigger sites (anything over $200) I would always recommend selling on Flippa. It has the most traffic of standalone marketplaces and a large number of qualified buyers with cash on hand. There is still a lot of crap listed on there, but that’s not a problem as you are selling a site not buying one.

What I tend to do, is browse DP for sites selling cheap (look for 2-3 months revenue as price), do all my checks against their stats (chances are if their stats don’t add up, they are lying so move on to something else no matter how good the deal sounds)

Once you’ve chosen your site and paid for it, got the domain etc time to get to work. I tend to buy sites that I feel I can add most value to. So if you’re specialisation is monetisation and you feel you can double the revenue, you’ve got a perfect site. If you can make kick ass designs, pick up an ugly site, spruce it up, happy days. If you’re a good writer, buy a site with no content, add content. You get the drift.

It’s not rocket science but I would recommend starting out small as it does take a while to get used to, and ultimately it comes down to judgement and experience not clever tools or checklists.

I would recommend doing some good SEO on the site once you have it. I tend to have a blast with scrapebox although SEO is by no means my speciality. Sites that sell well on Flippa tend to have organic traffic and earnings through adsense.

This is important: if you have bought your site on DP chances are the site/auction has got indexed for the site name. So if anyone looks up your site they will see the auction, and where you bought it. This isn’t good

Make sure BEFORE you list on Flippa you can’t be found in search engines, or you’ll have problems selling.

Now a few tips for Flippa:

• 100s of sites get listed, so you need to stand out. You have to SELL the site to them, so use catchy titles with good selling points such as “meathead1234’s site, 5 years old – NO RESERVE” – you get the picture.
• Buy auction upgrades. Don’t be tight, get a front page listing! You will get 10x more traffic and 10x more likely to sell. Not to say you can’t sell without it, but if you think about it in monetary terms: with 10x more people viewing your listing, will you get $30 (cost of featuring) extra back? The answer 9/10 is yes
• Write a good description. Put as much [good] detail in your listing as possible. Make sure you are transparent with stats – Google Analytics (or at least awstats) and as much historic revenue as you can.
• If you can, avoid telling people you bought the site 3 days ago! People like to see a consistent history with a site so no need to ruin that for them :P
• If you have a unique traffic/revenue source – DO NOT tell people in the auction/by PM how it works. You lose your unique selling point and premium you can charge.
• Flippa buyers like page rank and alexa rank – don’t ask me why, but they do.
• Unique is good – unique content, unique design etc, adds a lot of value to buyers.
• There is lots of traffic in the “most active” section of Flippa – so if you can get the bidding started (hint: low starting price)
• Offer free hosting/free transfer with the site – either let them take over your hosting account or buy a reseller package with Hostgator and charge them 10 bucks a month to host with you (most won’t bother moving to their own server, especially at lower end).
• Incentivise the BIN price – offer some free articles, SEO services, hosting, support, other crappy domains etc if the BIN price is reached.
• Don’t worry if you’re site doesn’t get bids early – the number of watchers is the important part (over 20 is very good). People like to see the auction run, and don’t like to make the first bid, so get a friend to bid early on to get it moving :P. Most sites on Flippa tend to sell for BIN (in my experience anyway) so be patient. If bidding is made towards the end of the auction, it is extended by 4 hours to prevent “sniping”.
• Don’t auto-accept bids. Especially if it is a BIN. If the buyer doesn’t pay then it takes time and effort to relist. Check the buyer out (join date, feedback etc) and if in doubt PM them to confirm their bid is genuine.
• Selling price: general rule of thumb – sites with search engine traffic, age and adsense earnings will go for anything between 10-24 months revenue. Newer sites: 2-3 months revenue. Brand new sites: depends on design, content etc – aim for around $200 on Flippa or $50 on DP.
• Answer questions honestly and promptly. Whether in the listing or by PM answer them today not in 5 days time, you never know who is serious or not.

Most of my flips are relisted in a couple of days, and will be up on Flippa in no time. Work fast, and you should be able to make a good profit and all you need to do is answer questions and see the money come rolling in.

I'd be happy to answer any questions you may have. Flipping makes up the majority of my income so I should be able to help

[3Six]

Welcome, meathead, great post.

Nice to see you here. You mentioned Digital Point. Do you really pick up anything useful in there?

[Thomas]

Thanks - looks like my kind of forum

Yes, contrary to popular belief, you can pick up some real gems on DP. Granted, you have to go through A LOT of listings until you find something good but they are there. If you have a decent budget ($XXXX) you can snipe some nice higher end sites as the number of serious buyers on there is minimal. You will also find a number of sites that are running hugely under-potential, and with a few simple changes you can easily double revenue. These are the ones you want

It also depends on the sort of site you are looking for. My business model relies on buying undervalued sites to resell on Flippa or direct to previous buyers in order to realise a profit.

A lot of people dismiss DP as a place full of scammers (largely true), but some of my best purchases have been from there. Does take some time, but can be well worth it.

[Clinton]

Excellent post, meathead1234, and welcome to the forums. There may be one or two ideas you've expressed that not everybody will agree with - some, like me, are die-hard buyers of established businesses rather than flippable sites - but as a primer for someone new to flipping, you've explained the concept and opportunities well.

Thanks - looks like my kind of forum

And you look like our kind of guy!

[christopheravell]

Thanks for the post meathead1234... I would like to address some of the points I disagree with because otherwise it makes me feel icky.

• Noob/poor man - $20, buy domain and hosting, use free software to build site, use PLR content

I really hate PLR content and you should too. Recycled content is garbage and it litters the internet. Imagine this, you walk into the library and are looking for a book on buying used cars. As you look through the shelf and open up some of the books and take a look you notice they are all the SAME. Is the library you want to use?? This is not the internet you want to use either. Sure, it may make you a few quick bucks to build a site and use PLR content and then flip it. But what good it is doing the BUYER?

I would recommend doing some good SEO on the site once you have it. I tend to have a blast with scrapebox although SEO is by no means my speciality. Sites that sell well on Flippa tend to have organic traffic and earnings through adsense.

I really detest software like "scrapebox" that tries to create FAKE results. Just read this from the scrapebox site:

Ping Mode allows you to send referrer hits through proxies and leave your domain as the referrer. This is extremely useful if you want your domain to show up in the referral logs of other sites, the recent visits widgets on sites, artificially increase your traffic to show affiliate programs and many other uses such as drive up “views” on your articles so they appear on most popular lists and receive more exposure.

That is awful. That is helping to ruin legitimate opportunity on the internet. Programs like that in the long run will get you BLACKLISTED and BANNED from Google -- as they should. I have had to help many clients recover from the long-term disaster of using such programs.

• If you can, avoid telling people you bought the site 3 days ago! People like to see a consistent history with a site so no need to ruin that for them :P

This sounds shady at best. Honesty is the best policy!

• Unique is good – unique content, unique design etc, adds a lot of value to buyers.

Now this we strongly agree on! Again, thanks for the great post. Much of it I agree with (or do not strongly disagree with) but I had to mention the parts that really irked me!

Have a great week and keep up the posting!

[Thomas]

Hey Chris,

Thanks for your feedback

Sure, let me address some of those points:

PLR: I agree wholly, I personally do not use it at all. However, for those starting out with very limited budget it is a valid option to add content to a site. For most of us, we can afford to buy unique articles and not have any problems at all paying for it. With a very low budget you can get hold of PLR and re-write it basically for free and add value. As Clinton mentioned, this business model only works for "flipping" which I should point out, isn't for everyone, but works well for me.

Scrapebox: Scrapebox is merely a tool and its results depend on how you use it. It has a number of functions which could be considered spammy/illegal etc and is entirely down to the end user how it is used. Personally, I use the site scraping feature to find relevant, high PR blogs in my niche to comment and get a good quality backlink, which is totally Whitehat and widely used by SEO's and marketers.

Regarding telling people of previous ownership: this may be considered shady, but when flipping sites have often had a number of previous owners. As long as you are transparant with your stats and honest then there shouldn't be an issue. Obviously if specificially asked, I will state when it was purchased, but I do not state it upfront as often buyers could be put off. This is very much a grey area in flipping and down to the seller what they disclose.

Unique: agreed - best value for buyer and seller, but unfortunately not always achievable for those starting out on low budgets.

My points are very much from a SELLER perspective, and from what I gather, many of the members here are BUYERS, so I would expect some of my points to not go down too well. Many of the factors people use to sell sites should be looked into as a buyer, and I would strongly recommend due diligence before purchasing.

I appreciate your honest feedback, this was posted on another money-making IM forum by myself and many of the points, as pointed out by Clinton, will be debatable - but hey, that's the reason we post on forums.

[Clinton]

My points are very much from a SELLER perspective

I welcome that perspective. I'm trying to encourage more sellers and more people who are into siteflipping rather than just long-term site investors. Not that flipping is a personal interest of mine, but it gives a broader perspective to these boards. So even if there's stuff I don't agree with or don't particularly see myself engaged in, it's great to see them being discussed and debated.

[Thomas]

Flipping is a great way to gain experience and raise funds for bigger, long-term purchases. Even if you have the cash to invest in your first site, I still think it is important to have experience running a smaller site - that way if you make mistakes (and I don't think anyone can deny they make mistakes) it won't end up costing you as much.

I've also built some great relationships with clients who simple don't have the time to browse marketplaces looking for sites, so the fact I can recommend good purchases/do due diligence keeps both of us happy.

I should have added before my post that while I do flip sites, I do also build a portfolio of long-term investments at the same time. If a site isn't living up to the potential I would have hoped, I sell it to someone who hopefully has more enthusiasm, experience or desire to make it succeed. Much like the techniques that built many property investors multi-million pound portfolios with a relatively small initial exposure, you can quickly build a valuable portfolio using my "buy some, sell some" perspective

[Clinton]

I saw a blog post about PLR recently from a member here, Michelle. Thought a link to that blog post of hers would fit perfectly in this thread: link She's even done an interview about it recently.

It's not everybody's cup of tea as is obvious from this thread, but we can't discount that it's very much part of life for many websites/business models.

meathead1234, what areas are your long term investments in?

[christopheravell]

I agree it is very much a part of many websites business models. Yuck!