FP - Things to Look for When Buying Sites

[Ryan Sorensen]

Hi everyone,

I just wanted to give more to the forum so here are my tips on what to look for when purchasing a website as a long term investment, or as a flip.

Consistent and scalable traffic that has been monetized - This should be the number one thing you look out for. The traffic, whether it be pure SEO or Paid, needs to be consistent.

If you have a good feeling that the traffic came from a temporary interest in the marketplace - and I'm not talking about holidays because those come every year - I'm talking about traffic from product launches, fads (like ringtones), and dying markets (like Get Paid To) then you should probably stay away...

...because the traffic isn't scalable. Yes, a website will sell very well if you have awesome keyword rankings and getting most of your traffic from SEO, but a website that has a great sales funnel that you can put $1 into and get $2 out of - that's straight money for you and/or the future buyer! When a website's SEO and paid traffic strategies are monetized and obviously scalable, you have a winner.

Maintenance - People very often forget to consider the cost of time and money required to either learn or hire out expertise. Some sites require hours of content production, others require specific knowledge in scripts. Make sure you understand your responsibilities of owning the site if your keeping it, if you're flipping it you need to know what to do to fix and shine it up for the next buyer.

Verified Owner - This is the most obvious one but it's amazing how many people forget to do their due diligence. Contact the owner, preferably on the phone! Speak to them like you would if you were buying a car. Has the car been in an accident? How has it been driven? Is there a lien? Being a smart buyer means asking the right questions and knowing that your purchase is backed by you and the seller's confidence.

Snatch it up! If you see a bag of gold in the corner of the room and all you had to do was walk over and pick it up, why would you even have to think about it? Quality buying opportunities only come around oh so often - jump on the obvious money makers that are undervalued. (Become a master gold prospector as you practice!)

Help someone - Keep close to your friends in the industry and if you come across a great find that would be better suited to someone else you know - send it their way. You'll be amazed at the power of karma as you go along your business journey.

If you have any other things to look for when buying sites, please leave them below!

Ryan

[zneve08]

Usually the buyer will need to put in an offer for a website, how do you determine how much to offer? I find this extremely difficult if there is no revenue already, how do you determine the value and how much to offer? Also, you noted to ask questions about the website, which ones fundamentally should be answered in every sale?

Thanks for the help!
Z

[Ryan Sorensen]

Z, determining a good price all boils down to traffic and revenue. If it has no traffic, offer minimum price on it (we're talking $25-$50 based on strength of domain name), if it has plenty of decent traffic that you'll obviously be able to monetize better than what the seller was able to do - still make a minimal offer making sure to note the site's weaknesses.

Make sure you verify domain ownership, traffic sources, and why they are selling. By personally talking to someone - they're willingness (or lack thereof) will give you the confirmation you need about purchasing their site. It will also give you a great opportunity to work out a lower price with some old fashioned negotiating.