Business of Buying Website

Discussion in 'Growing and Managing a Business' started by rose, Aug 15, 2008.

  1. rose

    rose
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    One of my friend had some money lying in his savings account, which he wanted to invest in building an online business. We discussed is some time back in some detail. My suggestion to him was to just go out to the marketplace and buy some good websites. I even gave him some tips on what to look for while buying websites.

    Around 2 months back, he went out and bought 6 websites for a total sum of around $44,000. We did some optimizations and link building work for the websites. Now these sites are making around $5,000 in monthly revenues with a monthly expense of around $200. That is a very good ROI I would say. He would get his money back in less than 10 months. Wow! Which other business would provide that sort of ROI.

    So what are the tips I gave to my friend for buying websites?
    Here are those tips. just remember them while going into the marketplace and buying a website:

    * The first thing you need to remember is that you should try to buy website with minimum amount of work required. That is the key to building your “online real-estate empire”.
    * Always use escrow service. Even if it is at the cost of your own money. This will give you time to verify ALL the claims by the seller about the monthly traffic and revenue. If those claims are not met, feel free to reject the deal.
    * When viewing the traffic stats, make sure you view the referrals stats as well. These days many people create quick traffic with sites like digg and stumbleupon and then sell the website. Such websites may not have a good business model to work on in the long run. So make sure that you view the referral stats to see how much traffic is coming from search engines. If around 70%+ traffic is coming from various search engines, you are good to go.
    * If the seller is not using adsense on his website, make sure he is not banned from using it.
    * When person is showing the revenue stats (lets say from adsense), make sure that CTR is not very high. If it is too high, make sure that the person is not in any sort of violation of policy on the page, for example, images above the ads, extra attention to the ads, etc.
    * When you see the page rank of the website, don’t just believe it. Check the back-links of the website and verify that these back-links actually make sense with respect to the page rank of the site.
    * When verifying the back-links, check if there are many site-wide back-links. If yes, ask the person whether these are his own sites. If yes, ask him how long the the links will stay. If not, ask him what sort of understanding with the other site is, so that those links can stay there.
    * Make sure that internal pages of the site also have some page rank.
    * Ask the seller if he has ever sold any site before (on the same forum/marketplace or other). If yes, check his history and transaction with previous buyers.
    * Make sure that the site is listed in Google and pages are cached.
    * Make sure you ask the seller whether the content on the site is unique. If yes, ask him who has written the content. Use the copyscape to verify what the person says. Also inquire about the images used on the website. Make sure they are not in any copyright violation with some other site. If they are, you should know about it.
    * Check the age of the site. The older the better. Check the archive of the website at archive.org to see what has been the past of the site. Make sure it is not a site which was created on a old domain grabbed which had some other site in past.
    * Ask the person whether he bought the site from somebody else. If yes, when.
    * Find out what softwares/scripts he is using on the site. Make sure you are comfortable with those. Else it can create problem later on.
    * Don’t ever belive the “webalizer” stats. They are much inflated. Ask the person to provide stats from any third party like google analytics or scripts like awstats.
    * Last and finally, ask the person if he/she would help you moving the site to your server. Most people will agree to it, but its always good to ask first.

    So now you know what are the things you need to know while going for the business of buying website and creating your own online real estate empire.

    Are there any tips you would like to add here?
     
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  2. Fergal

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    Thanks for sharing such excellent tips with us Rose. I particularly recommend your suggestions of checking referrer stats & verifying the back links. If these two things are not as they should it is very easy to buy a site and then find that the revenue plummets once you have taken ownership of it, because the backlinks and source of traffic can suddenly disappear.

    Your friend has had an excellent return on his investment and has built up a great income stream.

    Other suggestions that I would ad to your list are;

    1. Ask yourself if the site is right for you. Don't buy a site that provides the latest news on poodle breeding if you know nothing about poodles and have no interest in them.
    2. Make sure that you have the technical skills, or can hire someone with the required technical skills to manage and maintain the site.
    3. Don't buy a new site if you are in the position where you haven't got the time to manage and support the sites you already own.

      I have to admit that I've been very guilty of this one. When you see a site you like for sale it is tempting to think that you will manage your time and make time to manage it. But if you haven't got the time to manage what you already have it's probably not wise to add to your workload.
     
  3. laurenSwaha11

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    Thank you for the tips...I personally agree with all, especially when you see the page rank of the website, don’t just believe it. Check the back-links of the website and verify that these back-links actually make sense with respect to the page rank of the site. Thanks again!
     
  4. pendelton

    pendelton
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    Either using, or not using, Adsense, or any of the other networks, doesn't really mean much.

    The listing itself means little. Check the types of back links to the page, are they 90% forum profile home pages and what time span was used to make them? A site can be indexed, using various means, and be highly rated for a few months, before the methods used to index it are noted and the site is de-indexed. This can happen well after a person buys the site.

    Do not believe ANY stats from the site. Scripts can be fooled, Google can be fooled, Alexa can be fooled.
     
  5. realitybites.in

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    this post is quite interesting

    i am writing one e book on this topic

    buying and selling website is really big market

    we can call it to be online real estate ...... this is just starting with in a decade (10 years )
    this business will be really big ..... and this business will be of multy billion $
     
  6. BenjaminCip

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    Sometimes you don't need to buy already registered domain name. A friend of mine bought a lot of unregistered domain name before, one of these domain was "makemoneyonline.com" and someone was offering him about $35,000 to grab this domain name. I believe that if you buy several domain name you think new compagnies can be interested in, you'll get great chances to sell these domain at great price.

    The only problem is that some people are already making a living from selling domain name, and have more experience than people like us. I already registered several domain names about topic I am interested in, so that I can use them in case I didn't find any buyer for them...
     
  7. realitybites.in

    realitybites.in
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    this is very intelligent move .....one of my friend registered many domain names ....
    he failed to sell any one and all his domain got expired
     
  8. Sahil

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    That is very good business but it is risky also, the risk is you need to choose a good domain. If you register any type of domain name then they will be useless and they won't be sold.

    As I told already you need to choose good domain name which are important, like related to money making or affiliate marketing or any thing which is popular.

    I also tried that thing I bough www.gfdivine.com but that is useless for me now and no one needs that ;)

    The main thing is choosing domains.
     
  9. JBMedia

    JBMedia
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    Particularly buying and selling websites can be very profitable. Especially if you can prove traffic statistics and that there are revenue sources on the site that have a decent amount of UV (Unique Visitors) and income coming in.

    There's also something that is very profitable called "Domain Flipping". This is pretty much where you buy a really good domain name and then sell it to someone else for an obscene amount. It works out pretty well as long as you are alright at searching for these types of domains. Keep in mind, if you're planning on trying this out, that some brand names are copyrighted themselves, and it would be infringement to take their name and exploit it an unprofessional manner. I know Apple didn't like the fact that someone else took the domain 3GS.com I believe, seeing how it was part of their brand. Just keep those things in the back of your head while doing this so you don't run into any legal troubles.
     

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