Websites are the real estate of the virtual world. In the same way that some people choose to invest in houses, others treat buying and selling websites as a business investment.
If you’re looking for a new career or side project that can be done entirely from home, buying and selling websites is worth considering.
That said, you should know it’s not easy money. As with real estate investment, there’s inherent risk involved and doing it effectively requires work and skill.
A successful website flipper needs to know how to spot undervalued websites that can be improved with a minimal investment in time and money, then sold for a larger fee.
Below you’ll learn the ins and outs of buying and selling websites, so you can start a new side hustle, or give yourself a leg up earning an income online.
1. Know Your Time and Money Limits
Before you think about buying a website, take inventory of how much time and money you can afford to invest. Buying a website brings risks, so you should only spend what you can afford to lose. There are no guaranteed investments, no matter how attractive the website may seem.
Once you have a budget in mind, think about how much time you have to work on your new site. If you find a website that’s already passively making money, you may not need to make that many changes. But you’ll still want to identify areas for improvement and implement the changes to increase the return on investment you get from a sale.
2. Look In The Right Niches
When looking for sites to buy, the niche you choose is important. Don’t choose a site based on a passing fad. Look for sites that feature evergreen content. If you’re not familiar with the term, it means content that will remain useful and popular over the long-term.
Some examples of evergreen niches include:
- Health and wellness
- Money and finances
- Sports and hobbies
- Relationships and personal growth
- Food and recipes
- Small business
- Current events and political commentary
- Entertainment coverage and analysis
The above niches can expand out into multiple sub-niches as well. Don’t just think about the big overarching topics like health. Consider sub-topics like fitness for people over 40. Specialized niches are more useful and relevant to a subset of consumers and have less competition than websites covering broad topics, which can lead to a more loyal readership.
3. Find Websites to Buy
When identifying sites worth buying, consider a few key performance indicators.
- How much revenue the website generates
- How consistent the earnings are (e.g. Are they seasonal? Are there spikes and dips?)
- Whether the income is generally passive (meaning it’s not entirely ad-based)
- Does it have upside potential? Consider if you can identify ways to maximize the traffic, expand the revenue sources, and improve the existing content and design.
Expect to pay a multiple of the monthly (or yearly) income the site brings in now. The current owner is giving up future earnings, so the price has to be worth it. On average, you can expect to pay a 12-18x multiple of the monthly income, although the figure varies.
That said, if you’re willing to take on more risk and do more work, there are sites that won’t charge as much. If a website is newer, and thus doesn’t have the proven staying power of a site that’s been a long-term consistent earner, you can likely pay less.
Here are some of the most common places to find websites you can buy:
4. Do Your Due Diligence
Once you’ve found a website you like it’s time to do your due diligence. This includes things like:
- Determining why they’re selling the site. Has it been flagged by Google? Has the interest in the niche been slowly declining? Or, are they simply tired of the site and want to move onto something new?
- Look for proof of revenue and traffic. Usually, you can verify traffic levels with Google Analytics and other tools.
- Do you trust the seller? Some sites have user profiles with feedback, ratings, and more.
- Examine their link profile. Are the links purchased, or are they white-hat links? If the site relies on SEO, can you keep both the link quantity and quality up?
Speak to the seller and ask them these questions, along with evaluating things like traffic and income reports. Many of the platforms highlighted above offer broker services that can help you evaluate the site. Some also thoroughly vet every site before they even list it, so you can be sure it’s high quality.
5. Make an Offer
If you’ve found a site you like and have done the proper background check, then it’s time to make an offer.
Some website listing sites will have a price listed. If this is the case, then you’ll want to start with a lower offer, but don’t low ball. Starting at 70% of the asking price gives you some wiggle room, especially if there are some negative things you were able to uncover about the site.
If no price is listed, use what you learned in the last stage to come up with an amount to offer.
6. Improve the Website
Once you’ve purchased the site and it’s been transferred to your name it’s time to get to work making it more valuable.
You want to grow your monthly profit as high as possible. This may involve doing things like:
- Improving the content strategy and SEO to rank for more keywords and improve the traffic
- Exploring affiliate opportunities, or negotiating better deals
- Increasing your investment in things like social media and paid advertising to further grow revenue
- Creating and nurturing an active email list
Overall, you should try to optimize the traffic and income as much as possible, while removing yourself from the equation. A site that takes less time to run and maintain will go for more than a site that requires a lot of work to keep profitable.
7. Evaluate What Your Website is Worth
Once you’ve spent some time building up the website’s value, do the math to figure out what the website is now worth. This step won’t be that different from what you did back when you were deciding how much to pay for it, you’ll just be on the other side of it now.
Take into account:
- Your current traffic and any increases since you’ve been in charge
- How much revenue the site makes now, and how consistent it is
- How many revenue streams there are and how likely they are to continue
- How big your email list and social followings are—loyal followers are more valuable than one-time visitors
- How much work the website will require to stay at the current level of profitability
- The value of the domain name—if it incorporates a popular keyword, that makes it more valuable to relevant buyers
If you’re happy with the number you come up with, and confident you can make a solid case to a buyer, then you’re ready to sell.
8. Find Your Buyer
You have two main methods to use for these last few steps:
- Use a website marketplace
- Hire a broker
The website marketplaces we mentioned earlier (back in step 3) are all options for listing your website. The benefit of this method is that you let interested sellers come to you, rather than having to do the work of finding them. And with a website marketplace, you pay less in fees than with a broker.
But for anyone who’s relatively new to selling websites, or that has a website they think could potentially be worth a lot, hiring a broker has its benefits as well. A broker has access to a broad network of contacts. They can discern the kind of buyers who are most likely to want your website and be able to afford it, and find them for you.
If you like the idea of hiring a broker, some of the website marketplaces also offer website brokering as a service, including Flippa and FE International. Some other businesses known for providing website brokerage services include:
9. Negotiate the Sale
Once you’ve found someone who wants the site (or they find you), it’s time to get down to the business details. Figure out a price you both agree on, and work out the terms of the sale. If you hired a broker they’ll help with the negotiations and all the proper paperwork. If not, consider getting a lawyer to help make sure you do everything right in this stage.
When accepting payment, use an escrow service. This is a smart way to avoid scammers and provide confidence in the seller that you’re not a scammer yourself. Most of the marketplaces have built-in escrow services, but if you’re selling the site on your own it can be helpful to use a third-party service.
10. Make The Transfer
This is another part of the process a broker will help with. But if you’re doing it on your own, reach out to your web hosting provider to make sure you take the proper technical steps to transfer your website to the new owner.
They’ll need access to the web hosting account, the domain name, and any CMS or website builder you use. And all the assets that make up the website will need to be moved to their name.
Can You Make a Profit Buying and Selling Websites?
If you’re considering online entrepreneurship, you have a lot of options. Buying and selling websites for profit isn’t for everyone. It requires a lot of work and skill to identify the right websites and increase their value.
But if you know how to spot a good opportunity and have some expertise in increasing website traffic and online revenue, buying and selling websites can make for a valuable business model.
Kristen Hicks is an Austin-based freelance content writer and lifelong learner with an ongoing curiosity to learn new things. She uses that curiosity, combined with her experience as a freelance business owner, to write about subjects valuable to small business owners on the HostGator blog. You can find her on Twitter at @atxcopywriter.