How To Make A Profit Buying & Selling Websites | HostGator Blog

HostGator Blog

Web Hosting Made Easy!

Blog / Web Hosting Tips

How To Make A Profit Buying & Selling Websites

Monday, June 18, 2018 by

how to make a profit buying and selling websites

How To Make A Profit Buying & Selling Websites

Creating a profitable website from scratch can be difficult. But, there is a way to shortcut the process.

It involves buying existing websites and flipping those for a profit.

The process of buying and selling websites is similar to the process of buying and flipping homes. Just like there’s a major upside, there will be some inherent risk involved.

The smart website flipper will look for undervalued websites that can be improved with minimal time and money invested, then sell those 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.

register domain name

1. Know Your Time and Money Limits

Before you even think about buying a website you’ll want to take inventory of how much you can afford to invest, and how much time you can spend improving your new site.

Buying a website is an investment, 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 your number, think about how much time you have to actually work on your new site.

Chances are you’ll be buying a relatively passive website, but you’ll still want to improve certain things if you’re looking to sell.

 

2. Look In The Right Niches

When looking for sites to buy, the niche you choose is important. Don’t choose a site that’s based on a timely topic or a passing fad.

You might have heard of the term evergreen before, but essentially it’s a type of niche that’s consistently popular and will be over the long-term.

This includes niches within the following spaces:

  • Health and wellness
  • Money and finances
  • Sports and hobbies
  • Relationships and personal growth

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 weight loss for moms who just had a baby or fitness for men over 40.

 

3. Finding Websites to Buy

When you’re buying a site there are certain performance indicators you’ll want to look for. Here are a few criteria you can use for evaluation:

  • The website has been generating consistent revenue
  • The income is generally passive (meaning it’s not entirely ad-based)
  • It has upside potential. You can maximize the traffic, types of revenue, existing content and design, and more.

When looking for sites to buy, expect to pay a multiple of the monthly (or yearly) income. On average, you can expect to pay a 12-18x multiple of the monthly income, although this figure does vary.

You can usually get a newer and unproven site with a higher monthly revenue for less than a site that’s been a long-term consistent earner.

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:

  1. 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?
  2. Look for proof of revenue and traffic. Usually, you can verify traffic levels with Google Analytics and other tools.
  3. Do you trust the seller? Some sites have user profiles with feedback, ratings, and more.
  4. 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?

Ideally, you’ll speak to the seller and ask them these questions in person, along with evaluating things like traffic and income reports.

Some of the platforms highlighted above offer broker services that can help you evaluate the site. Other platforms 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 done the proper background check, then it’s time to make an offer.

Some website listing sites will have a price listed, but for others, you’ll simply make an offer.

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.

 

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.

Your goal should be 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
  • Explore more affiliate opportunities, or negotiate better deals
  • Growing 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 takes 40 hours a week to run.

 

7. Sell The Site

With your site fully optimized, it’s time to sell your site. The easiest way is to head back to the same platforms where you originally purchased your site. You can also sell your site directly or through industry forums.

When selling your site you’ll want to be as honest as possible. Keep detailed records of your revenue, and traffic numbers to show to potential buyers.

Finally, it’s always a good idea to use an escrow service when receiving payment for your site. 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.

Hopefully, you have a better idea of what it takes to buy and sell websites for a profit. It’s time-consuming and the money isn’t guaranteed, but if you get good it can be a lucrative way to make a living online.

Kevin Wood writes about technology and human potential. You can find him at his virtual homes Wooden Writing and Counter Culturist.