Are you one of a growing number of entrepreneurs looking to purchase an existing online business?
An even better question is: Do you know what to look for when buying a website?
Buying an online business is really no different from purchasing a brick and mortar store, so it’s important to choose carefully.
Investing in a website requires the same research and due diligence that you’d perform before buying a physical store in your hometown.
Of course, there are several distinct advantages to buying an established website. These include starting out with existing website traffic and users who provide a steady income.
But, you still need to check all the seller’s claims!
Buying an existing website comes with its own set of unique risks, so we’ve put together a checklist of the fundamental things to know before you take the leap.
We’ll show you:
So, without further ado let’s jump in:
WHERE CAN YOU FIND WEBSITES FOR SALE?
There are several ways to find websites for sale:
A website marketplace
These sites typically offer you a choice to purchase through an online auction or to make an offer on a site listed for private sale.
The auction process works in a similar way to any other auction, except you enter the maximum amount you are willing to pay for the website.
Each time you are outbid by another buyer, the automatic bidding system updates your offer in increments.
The system will only allow bids up to the maximum amount set by you.
Your offer is not shown to anyone – even the seller.
Private sale offers are listed in the same way as classified ads.
A buyer is free to make an offer on any of these sites and the offers are seen only by the seller.
The seller may accept or reject any offer they choose and once they accept a price, they commit to sell to that buyer.
Sellers will sometimes place a “buy it now” option on their listing to facilitate an immediate purchase.
While some marketplaces don’t charge fees to a buyer, some do require a deposit if you wish to get more information on the website.
The deposit is refundable up until the time of purchase.
Your next option is to use a website broker.
Yes, they do exist!
Website brokers work in the same way as a real estate or yacht broker.
In general, website brokers (like FEInternational) sell sites valued from the mid-five to mid-seven-figure range.
They are not the place to find a site selling for $2,000.
Brokers like Empire Flippers also vet sellers and all the data provided, as well as handling the transition to/from you.
I’ve used Empire Flippers for both buying and selling, and I can definitely recommend them to anyone who’s looking to get a solid deal. However, you’re going to pay a premium (this applies to brokers in general).
It’s important to remember that a broker is working for the seller. It’s their job to market the website, find buyers, and to secure the best possible price for the seller.
The seller pays about a 15% commission for this service.
Many sellers choose this option because the broker takes care of the negotiation, necessary contracts, and the transfer of ownership.
Just avoid those brokers with a mailing list of 75,000 people. Do you really think you’ll be the one buyer who gets the deal of a lifetime?
Buy a website directly from the owner
The third option is to directly approach a website owner.
If you’ve identified a niche to invest in, simply make a list of the sites that interest you and reach out to the owners. We use a combination of Hunter.io & Mailshake for our scraping and outreach efforts.
Here’s a sample outreach email you can use to establish initial contact.
My name’s Andrej and I’m a digital marketer.
I have a strong passion for everything outdoors, so I’d really like to buy a site (or two) that’s already generating revenue – preferably from affiliate programs.
After doing some research, I stumbled across your site URL, and I must say that you did a FINE job getting it ranked for different XX-related keywords.
That said, (and to keep this intro email short), I’d like to know if you’d consider selling your site to me?
I can offer you a fair price – up to 3x annual earnings.
Let me know if that interests you and let’s discuss!
You may have discovered these businesses on social media or forums, or you might be their customer.
This method will produce mixed results because you have no way of knowing whether the owner is open to a sale.
But, if a business is struggling and you see a way to improve it, then this technique offers another way to buy a business.
When you buy direct you’ll often secure a sale for much less than you would using a marketplace or broker.
Groups on social networks
This one’s a hit or miss, but you’ll be able to find a lot of solid deals in the $100 – $2,000/month range on different Facebook groups.
These deals will require you to do a lot of due diligence, but, generally, the cost of acquisition will be much lower than anything I mentioned above.
There are a lot of different groups, but the only one I can truly recommend is Richard Patey’s ‘Flipping Websites‘ Facebook group (I’m a member, and I’ve done a couple of solid buy/sell deals over the last 6 months or so).
WHICH ONLINE BUSINESS TO CHOOSE?
The answer to this question depends on what type of business investor you are.
Do you want to buy a site and let it run in exactly the same way; just to have some extra income – or as your main source of income?
Here are some of the common business models you’ll come across when buying an already running website.
E-commerce store (majority of them is using a Fulfillment By Amazon/FBA model)
A site that sells products from its own inventory.
E-commerce dropshipping store
An e-commerce store that sells product but doesn’t own any inventory.
Instead, it only markets products, and supplies those products directly through a vendor when an order is placed.
Most dropshipping sites are built using Shopify integrated with Oberlo – an app for automating order processing and fulfilment (although you can’t tell that just by looking at the site).
A blog that publishes articles for a particular audience and makes money with advertisements, affiliate links and/or products/services
A members-only site that offers premium content for a monthly fee.
Affiliate review site
A site that publishes reviews of different products for a particular niche and makes money through affiliate sales.
Service based site
An agency business offering services to regular clients.
There are other online business models, but these are the ones most frequently bought and sold.
Here are a few things to keep in mind when purchasing an already running online business.
BUY A SITE THAT’S CLOSE/RELATED TO YOUR INTERESTS
Before purchasing a site, study its business model and see if it’s in line with your interests and preferences.
If your aim is to grow and flip a website for a profit in a few months, instead of running it full-time, you still need to select wisely.
You’ll put the same amount of effort into growing a $20,000 website as you will a $200,000 one (if not more).
Here’s an example to give you an idea of the potential that’s on offer.
Last year, we purchased a content-heavy site that was close to our interests and was generating a reasonable monthly income with affiliate marketing.
We worked on improving it for 6 months, generated 400% more monthly revenue (compared to its previous earnings) and finally sold the site for almost twice the purchase price.
Overall, we achieved an ROI of more than 190% on the entire investment.
You can read the complete case study here.
You can apply the same approach to any other business model of your choice, e.g., e-commerce or dropshipping.
Just find a business close to your interests (that’s up for sale), grow it with your knowledge and expertise, and sell it for 200% to 300% profit (depending on how much you grow it).
All profitable websites have one thing in common: that is great content. But, to create useful content that’s better than your competitors, you need to understand how businesses in your niche operate and make money.
Do you have particular talents, interests or skills that you can transfer to your new business?
For example, if you’re a dedicated online gamer you’ll probably have no shortage of ideas for blog topics and information to share with your customers. You’ll know all about the latest headsets and monitors to recommend.
In this case, it would make no sense to buy a site in the gardening niche!
I mean, you could buy it, but you’ll more often than not end up giving up on the project after 5 months of constant grinding doing something that doesn’t interest you.
You’ll be involved with the business for years to come so choose a niche in which you have a keen interest.
CHECK OUT YOUR COMPETITION AND TRENDS (USING GOOGLE TRENDS)
Your niche may look great to you, but is there a demand for it?
How well is the competition doing?
Are they making a killing online or struggling to survive?
You don’t want to be spending money on a site that’s in a dying niche.
You can get a pretty good idea of a niche’s demand using Google Trends.
It shows you the search trends for any topic or niche, along with the top terminologies and topics associated with it.
If a topic has a rising (or steady) graph in Google Trends, it indicates there’s demand for it.
For example, here’s the search trend for the topic, “influencer marketing” over the last 5 years.
There’s a clear upward trend showing that the interest level for this topic is on the rise.
This means it’s the right time to invest in a site that addresses the topic of influencer marketing.
But the search trend only shows demand.
For example, here’s what Ahrefs shows you when you search for a competitor’s website:
It tells you everything from its organic search trends and top ranking keywords, to the number of referring domains and estimated traffic.
If a competitor is getting hundreds of thousands of monthly visitors from Google Search, it’s a pretty good niche to enter.
Do plenty of keyword research
Once you have the traffic estimates for a competitor, you need to find out which keywords drive the most traffic to them.
Because evaluating the search competition for the top keywords will help you determine whether you can rank for them or not.
Ideally, you’d want to look for keywords with high traffic volume but not a lot of competition so you can rank for them easily.
Let’s take the same example I shared in the last point.
Go to Ahrefs, search for a competitor’s site, and click on “Organic Keywords.”
This will give you a list of all the keywords that site is ranking for in the top 100 search results.
The tool gives you the estimated search volumes for every keyword along with the monthly traffic your competitor is getting from it.
It also gives you their position ins SERPs for the keyword.
This helps you determine the amount of traffic you can get to your site if you rank in the top 10 for this keyword.
Plus, it gives you a measure of the difficulty you’ll face in outranking your competitors for this keyword.
Although higher demand for a keyword means a greater chance of revenue, we suggest finding a niche where there are high traffic but low competition keywords so that you still have room to make an impression.
A search result with under 150,000 results is a viable market and gives you a better chance to rank highly.
Identify potential loopholes and profit areas
If a site already has all the bases covered, it’s going to be pretty expensive to buy.
You should be looking for a site that’s performing reasonably well but still has room for improvement.
Such sites are cheaper and give you an opportunity to improve and sell them for a much higher amount. (I’ll explain this in more detail shortly).
Here are some of the potential loopholes you’ll find in a site:
The above are just some of the key points you need to consider while evaluating a site.
If the current owner is lagging behind on most of these points, you have a great opportunity to acquire the site and make it MUCH more profitable by improving these aspects.
WHAT TO CHECK WHEN RESEARCHING A WEBSITE?
Once you’ve found a business and somewhere to buy it, it’s time for some serious due diligence.
We mentioned the need for research before purchasing a website.
And there’s a ton of research to do!
Here are the top items to check before you invest in a website:
A good domain name is something you can build a brand around or that is relevant to your niche market.
That’s because domain names that are easy to remember and relate to the concept of the business will attract more visitors to that website.
No-one searching for pet supplies will visit a site that resides on 12xycc3po.com domain.
Go for an uncomplicated URL.
A review of a website’s history is crucial.
Most websites that have been around for a few years are more likely to stay in business, but you should always check the past activity on the site.
If you’re considering a site that is only a few months old with potential to grow rapidly, then be sure you’re dealing with a reputable seller.
There will be less online history, so investigate the seller too.
To complete your research, dig into whether there have been (or are) any penalties attached to the website.
Not sure what constitutes a penalty?
Let me quickly explain.
When a site violates Google’s Webmaster Guidelines and tries to increase its search rankings using prohibited practices, it is penalized by Google’s algorithms.
As a result, the site loses its search rankings for different keywords and remains under the effect of the penalty until it changes course, takes corrective action, and starts playing within the rules again.
Here are some of the most common violations that result in a Google penalty:
Why do you need to know this?
Because these are the things you need to watch out for when evaluating a site’s history.
Ideally, you want to stay away from a site that has been penalized in the past because it is hard to completely recover from the effects of a penalty.
But it is possible.
So, if you come across a site that has been penalized, but has recovered from it and is performing well, there’s no harm in buying it.
Just make sure it’s no longer associated with anything that can get you penalized.
There are a couple of ways to do that:
The site’s Google Analytics account to see if there are any sudden traffic drops.
The site’s Search Console account to see if there are any penalty notifications.
Secure as much data about the site as possible and make sure it has a clean history before making the final purchase.
The platform on which a website operates can make a huge difference to its ease of use and the time you need to spend on your site.
There are cost factors to be aware of, too.
Is the site you’re looking at run on an open source platform like WordPress or Drupal?
Source refers to the code on your site.
When a site runs on open source, you have the ability to change any part of the website’s design.
If the website is operating on a closed source platform, then the code is locked and you can’t readily change it.
Closed source platforms do have some advantages for beginners because they offer drag and drop builders with numerous style templates and optional plugins.
But you’d generally want to go for sites hosted on WordPress since its the most flexible, feature rich, and secure CMS (Content Management System) out there. Plus, those sites will be a much easier sell later, when you decide to sell the site.
To check whether a site is optimized and well set up you need to find a few details.
These include the site speed and whether it is mobile responsive.
The overall performance of a site can be affected by numerous factors. Among these are large images and too many widgets and plugins.
Thankfully, you can check both these factors using free tools by Google.
To check a site’s mobile responsiveness, use Google’s Mobile Friendly Test by entering the site’s URL.
The tool measures a site’s performance for both mobile and desktop devices.
It not only gives you a speed score but also lists all the possible areas of improvement for the site.
It’s an amazing tool by Google and it’s absolutely free.
So make sure you evaluate a site using these tools before going ahead with the purchase.
Quick note – if you end up buying the site that has poor page speed and/or is not mobile optimized – applying those ‘simple’ fixes will probably result in a nice traffic and revenue spike. Quick win 101.
Content covers many components on a website and these all affect a site’s SEO.
Content is not only the blog posts or product descriptions, but also the images and reviews.
Make sure you confirm how the images were sourced, i.e., do they own them or have the right to use them?
Are the blog articles and other content original?
You can use a free tool like CopyScape to check whether the content of the site is original or copied from somewhere else.
If there are reviews, can these be verified?
Are all the links on the site pointed to businesses that are a good fit with your goals?
One of our tips is to find gaps and ways to add value to a content site.
For example, if you see an affiliate site that doesn’t have product comparison tables, take advantage of the chance to buy it and improve it for a quick win.
In fact, that should be one of your key considerations when buying a site.
If you see a site that has good traffic numbers, despite having average content, it’s an opportunity for you to improve the content and achieve more success from it.
For example, in the case study I shared earlier in this post, one of the main reasons for investing in that website was that, in spite of poor content, it had good traffic numbers.
As the graph below shows, the site was ranking for nearly 30,000 keywords when we bought it.
In just 6 months time, we grew it to almost 80,000 just by improving the content quality and SEO structure of the site.
As a result, the traffic grew from 40,000 visitors per month to almost 130,000 per month.
All of this happened with just 6 months of planned effort.
It wouldn’t have been possible if the site already had all the bases covered when we bought it. And it would’ve been much more expensive.
So, one of the keys to investing in high growth sites is to find decent ranking sites with poor content and SEO which can be improved in a short span of time.
Marketing includes all the activities performed to drive traffic to a site and create awareness about it.
Before buying a site you need to understand what strategies have been used to get visitors to it.
- Have the owners been using Pay Per Click ads on Google, Facebook or any other platform?
- Do they own any social media groups where they promote content?
- Do they have an active email list where they promote their new content?
- Do they have active social media accounts that are helpful in driving traffic?
- What strategies have worked for them, e.g., social media contests, giveaways, opinion polls, etc.?
- How have they secured backlinks to their site? Any particular strategies that worked for them?
Knowing which methods have worked in the past allows you to repeat successful marketing strategies and remain competitive.
Maintenance is a combination of the technical aspects of the website and the daily commitment required to run and grow the business.
Figure out whether any experts are required to maintain the site and how much time you’ll spend updating it.
Most sites require new blog posts or regular adjustments/updates to products etc., to ensure a steady flow of website visitors.
In particular, be sure to ask the site owner about:
Make sure this commitment is in line with your perceptions for your online business.
WEBSITE TRAFFIC DATA
It can sometimes take many months (or even years) to get substantial traffic to a website.
Pay close attention to the data you are provided by the seller and ensure you are given access to their Google Analytics so you can substantiate any claims.
Firstly, is the website targeted at the right demographic?
Getting 10,000 visitors to a site who are not interested in the product or service on offer means the traffic is poor quality.
You can evaluate the quality of the traffic and the engagement level of the visitors by using the following methods.
Analyze the comments on blog posts
Most blogs have a comments section at the end of articles.
If a blog has a lot of comments on its articles, it’s a good indication that the traffic is relevant and engaged with the site.
On the contrary, if an article has spam comments from automated bots (or no comments at all) you can safely assume that there’s very little engagement on the site.
Analyze social shares
The average number of social shares on a site’s articles and content is also a good indicator of whether the traffic is relevant and finds the site useful.
You can find these numbers, either by looking at the share count of the posts individually or by using BuzzSumo which lists the most popular content of a site.
And just to make sure that the social shares are not gathered using spammy techniques or automated methods, search for their content URLs on popular social networks like Twitter and Facebook.
If most of the shares are by real people, that’s another indicator of traffic quality.
Analyze Google Analytics traffic behavior
Perhaps the biggest indicator of the quality of a site’s traffic is how it behaves on the site.
To find that, get access to their Google Analytics account and analyze the “Bounce Rate” and “Session Duration” of the site.
Bounce Rate shows the number of visitors that land on a site and immediately push the back button.
A high bounce rate means that visitors don’t find the content of the site useful and immediately leave it.
However, affiliate sites are an exception to the rule, because we want the users to click on our affiliate links and leave the site ASAP in order for us to make money ;).
Session Duration shows the time a visitor spends on the site. The longer, the better.
The Google Analytics dashboard shows a site’s average Bounce Rate and Session Duration.
To dig deeper and find the engagement on individual pages of the site, click on Behavior–>Site Content–>All Pages in the left-hand menu of Google Analytics.
This gives a list of the site’s most popular pages along with their traffic numbers.
A quick review of these numbers will give you a fair idea of whether the traffic quality of the site is good or poor.
The other thing to look for while evaluating a site’s traffic is the traffic origin.
Where are their customers coming from?
You can find this in Audience–>Geo–>Location in Google Analytics.
There is no doubt that traffic from certain countries is worth more than that from other locations.
Figure out where the money is coming from in order to judge the value of this traffic, i.e., if there is a lot of low quality traffic and no purchases, this can indicate spam.
Thirdly, what are the traffic trends?
With access to analytics you can assess the site traffic over various time periods.
These numbers will show whether the traffic is increasing month on month and whether there are spikes in traffic at certain times.
You can do this by looking at the traffic timeline in Google Analytics or by selecting different time periods.
Looking at these numbers offers a general indication of business performance.
You may find opportunities to scale by attracting new sources of traffic.
Lastly, how is the traffic composed?
By this we mean the sources which generate traffic to the site.
Is there one method that is responsible for most of the traffic, such as paid advertising?
How much of the traffic is organic (SEO)? That is, traffic sourced from quality content and direct searches for the brand or product.
A site with social traffic is a huge plus, as is any referral traffic. The latter has a big impact on the valuation of a website. But, we like to purchase sites that have the majority of the traffic coming from the search engines.
You can view this in Acquisition–>All Traffic–>Source/Medium in Google Analytics.
Ideally, the site should not rely on any single source of traffic and you should have room to scale with methods like additional paid advertising.
Whatever you do, don’t rely exclusively on screenshots from a seller’s Adsense or affiliate site.
These can be faked.
If you have any doubts, then ask the seller to get on video with you to do a live walk through their accounts.
WHERE’S THE MONEY?
When buying a business to provide an income, you want to know that it’s making money.
Establish access to a seller’s verified bank statements, PayPal (if they use it), and any other paperwork that shows revenue and expenses.
This financial data will tell you the amount of revenue generated by the business and whether this is going up or down.
You’ll also notice whether the revenue is affected by the seasons or various holidays.
This allows you to compare revenue trends with traffic trends. If there is abundant traffic and no sales, then this is a red flag.
The opposite is also true.
Limited traffic providing high sales numbers is equally suspect.
The next consideration is whether the revenue is diversified enough. If too many sales are coming from a small number of customers/one affiliate program then it represents a (potential) problem.
The is because you’ll only need to lose a few customers to negatively impact your monthly income.
Other good indicators of revenue are the number of repeat customers, the average order value, and the profit margin per customer.
Likewise, if the website is product based, there are questions to consider.
- what are the top selling products and the trends for these?
- are there low demand products that could be promoted or that have growing demand?
- how are promotions affecting product sales?
Answering the above questions will give you a better picture of the opportunity to improve revenues from the business.
There are numerous ways that a website business can make money.
Some common sources are: sales of product, affiliate income, subscriptions, or display advertising on the site.
Here’s a really useful infographic that shows the different ways blogs or websites can make money:
I recently published a detailed post that describes some of the most popular business models and online money making methods, together with several examples and case studies.
It’ll give you more insight into potential income streams you can add to a site after acquiring it.
The main thing to note here is that any income should be diversified.
If something adverse occurs with one of your income streams, then you need others to provide you with ongoing profit.
HOW MUCH SHOULD YOU PAY FOR A WEBSITE?
This is always the trickiest part of the equation to address and it’s difficult for a first time buyer to know how much to pay.
We suggest starting with a budget you can afford as this will help to narrow your options further.
The price will always be dictated by several factors including:
This is the reason that your research and due diligence is essential.
If you’re just starting out in your online business venture, it’s easy to pay too much.
There are various theories as to the best way to calculate how much a website is worth.
If you browse websites for sale on the large marketplaces, you’ll notice that many sellers want 20 – 30 times their average monthly profit (over the last six to twelve months).
At 20X that means a site earning $1,500 in profit per month is listed for sale at $30,000 (20 x $1,500 = $30,000).
Currently, the asking price for websites is rapidly increasing.
These days, it’s not uncommon to see multiples of 40X in the most sought after industries.
Website buyers often use a P/E (Price to Earnings) ratio to calculate whether a site is good value.
If you find a site through a website broker, then their valuation method is usually calculated on the annual profit of the website.
The range for this is 2.5 times – 4.5 times the annual profit.
A good rule is to use the last 12 months of data to calculate the annual earnings – not just a 3 month window.
N.B. With all of the above, make sure you differentiate between “profit” and “revenue”.
There is not an average price that can be placed on a website, but beware of paying too much or too little.
If a seller is offering a website that’s making $100/month for $500 then it’s probably a scam or a very poor quality site with weird traffic sources that are easily manipulated.
The latter will cost you more to fix than it’s worth.
For those of you interested, WordPress indicate that the average cost for a basic site is $2,500. And that’s just getting the site ready for business!
You can find a solid number of ready-made content sites here. The prices are very affordable in comparison to how much would it cost to build it yourself.
Final points to note for your website purchase
It’s not only about the purchase price.
Factor in the ongoing costs to maintain and/or grow your business and budget for those as well.
IS IT WORTH BUYING AN EXISTING WEBSITE?
Our answer is “Yes” and “No” because this depends on you and your goals.
If you have absolutely no experience or skills with an online business, then we recommend hiring an expert to handle the day to day management of your site. This will eliminate a lot of stress and ensure that the right methods are used to grow your business.
If you’re keen to learn as you go and slowly build your knowledge and online presence, then it may be better to start from scratch and create your own site.
Starting a new business to provide an income is always a challenge. This applies to both offline and online businesses.
The exciting thing is that buying a website gives you a head start towards your goals as an online entrepreneur.
You’re not starting from zero with creating a site, figuring out the technical aspects, creating masses of content, and finding your first customer.
We all understand the value of time, so what is yours worth?
To sum it all up...
There are literally thousands of websites for sale online, but you will need to search hard for quality in the marketplace.
This is where your due diligence and patience are valuable.
It’s likely you’ll need assistance in the areas where you lack expertise or knowledge – and that’s okay.
Just be sure you’re asking the right people for advice!
Investing in a website is definitely not an easy decision and it’s certainly not one to be hurried.
Just remember to set an affordable budget, complete the right research, and invest in a niche you enjoy.
We wish you much success!
Do you have questions about investing in profitable online businesses? We’d love to hear from you.