Investing/Buying Established Websites

Spliffic

Spliffic

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Apr 5, 2008
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I'm looking at diversifying my income as I'm looking for more long term assets and earnings as opposed to just straight affiliate stuff.

I'm looking at expanding by purchasing some established websites, however I'm a pretty big newb when it comes to this dept. I know there's many variables to look into before making the big purchase, however I'm a little concerned about the running/maintenance portion post purchase. Many sellers use phrases like "turnkey" etc, but this to me is just a catch phrase and of course you need to put in the effort in to keep things going. I'm totally fine with putting in time, and am devoted to spend a good portion of my time keeping my investment in the black.

Couple issues I have:

  1. I have little to no SEO experience. I realize that the established traffic the site gets would be mainly via SEO, therefore keeping things up and running in that dept is where I'm hurtin. I guess I could outsource this.
  2. Another issue is, I've never run any sort of paid membership site or ecommerce site that deals with payment processing, dropships, or deals with customer service. My coding is sub-par, I can get by but wouldn't be able to do any major modifications to scripts etc. This I guess could be outsourced as well when necessary.

I guess what I'm most afraid of is purchasing a site that's making $x,xxx a month (or getting x number of visitors/month), and then due to my lack of skills seeing these numbers slowly dwindle away. Most people will say you gotta just take the plunge and jump in, however if you're spending minimum $10K plus, it's not that easy to just experiment with. I'm not betting the farm on this either, I have other financial backing however I take investments very seriously and do as much research as possible before throwing money at something.

Just wanted to hit up the WF community who has experience with this sort of stuff and look for any pointers/advice before making a purchase. I'd say my talents lie with optimization, monetization, design/graphics and basically working with numbers.

Some basic questions I would have would be:


  1. What would be a reasonable price to pay based on the site's earnings. 1 year's full income? I know this all depends on how sustainable the niche is etc (i.e. I wouldn't pay 1 year's earnings on a MySpace layout site or even a Farmville forum etc), and how much effort is required to keep those earnings up. Just looking for a ballpark figure and any other factors that might influence this number.
  2. Stupid question, but if a site is getting x number of visitors per day, how much SEO efforts would be needed to keep that up? Like once a month tweaking etc? I know this sounds dumb but this is really important IMO. I'll explore PPC options as well depending on the ROI.
  3. Any other questions you should be asking the seller. Of course there's proof of earnings, expenses & maintenance, licensing for the software that you could be potentially be buying etc. Any other not so obvious questions?

So hook me up fellow WF's, I'm sure alot of you are wondering this stuff as well :)
 


1. Turnkey = always BS, depends on competition
2. Basically you may buy some articles, then buy some links/hire people to develop links to those pages to get more traffic from related rest keywords
3. Membership site almost always automated with paypal payments for example (just join membershipsitecoach.com lmao), customer service - you need to get deeper into business details, and if not just use outsourcers again
4. Dropships, never get this myself, it's like you buy goods, and own sweetshop which Adwords like more than affiliates and then provider simply ships when somebody order from you ? Looks good + you can use Adwords and not worry about slap and BS about "unique user experience"
5. Price... it can be as high as 2 years if site exists for 5+ years and product service.
6. You need to ask him to install Google Analytics for yourself so you can really check his traffic and predict earnings, I learn that on DP, pretty surprised that WF $1k+/day tough guys never cover it.
7. Expenses usually just traffic and hosting and outsourcers.
 
I'm just looking into a pretty big buy (high xx,xxx) and here's my criteria:

- website must have a lot of potential but bad marketing
- I must be instantly able to pin point main issues for current low income
- must be in a niche where I can bring its income from x,xxx per month to xx,xxx per month (I'll never buy a micro niche website)
- relatively simple business model - meaning there's a lot of room to improve without needing to be an expert (example: hosting websites, anime communities, etc these SUCK big time IMO if you don't know exactly what you're doing)
- the website shouldn't rely on SEO traffic, it has to be direct response type where I can send paid traffic and instantly see results
- ideally I'm always looking for something that can be transformed into a membership website
- shouldn't require programming skills to improve (this is because I'm an idiot when it comes to programming and even though I could outsource it, I prefer to steer away from that kind of websites since I have a choice)

So that's that... I'm eager to see other responses too.
 
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You can start buying from DP marketplace, there are not much high cost sites, but so are the risks...and earnings (
 
JoseArmando said:
- must be in a niche where I can bring its income from x,xxx per month to xx,xxx per month (I'll never buy a micro niche website)
QUOTE]

Not always possible, but you can bring xxx per month to xxxx, also good. Have seen that on DP many times.
Click to expand...
 
Flippa has some good sites, but you'll have to wade through the garbage using the advanced search filters. Here are some of the criteria I use:


  • I like to see a site that is at least 3 years old.
  • I don't rely on screenshots. Get a GA log-on so you can verify referral traffic, bounce rates etc. It's more important to know where the traffic comes from then how much traffic it gets.
  • I always ask myself how I can make more money with it, ie. a health blog that relies on Adsense and doesn't have any CPA offers.
  • The link profile is very important to me, because SEO is important to me. How old are the links, where are they coming from, how spammy are they etc. I can generally tell after 3 minutes with Yahoo Site explorer if the site is worth a fuck from an SEO standpoint.
  • Who is the competition and how hard will it be to beat them.
If you're looking for decent sites ($xx,xxx +) then it should have good consistent traffic, with multiple streams of income. If it's a high quality site you'll know because you'll have multiple people bidding against you and it will almost always sell for at least 2-5 years revenue. Anyone that says 10 months revenue is used to buying proxies, recipe sites and MFA sites. A real quality site will be a lot more, and I challenge anyone to provide a link to an auction that disproves this. If a site is really good and has real potential for growth and increased revenue (which is what you're looking for), then the market will reflect that - I promise you.

Also, never buy a site that is "turnkey", and always use Escrow.com. Make sure that the seller is willing to work with you during the transition and is willing to sign an NDA for 2 years.
 
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Unarmed Gunman said:
is willing to sign an NDA for 2 years.
Click to expand...

What's the point of an NDA when buying a website and what does it protect you from? Is it similar to a non-compete agreement?

I don't know much about it, but I thought an NDA was so people couldn't steal your ideas and methods or some shit like that.
 
RockDiesel said:
What's the point of an NDA when buying a website and what does it protect you from? Is it similar to a non-compete agreement?

I don't know much about it, but I thought an NDA was so people couldn't steal your ideas and methods or some shit like that.
Click to expand...

I tried to edit that out but it was too late - yes a non-compete is what we're looking for.
 
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