Posts tagged "buy a website"

There is a lot of websites popping up recently promoting the fabulous virtues of flipping websites for a living and making BIG money. Many offer extensive courses and consulting on the do's and don'ts of this business model. There are certainly plenty of self proclaimed experts and gurus who are now exploiting this niche by selling off their e-products and personal coaching on how to capitalize on unwitting, naive, or unmotivated sellers. The premise is to find websites that have certain fundamentals like age, search engine positioning, and original content that have been under optimized and under monetized and convince the owner to sell at a lower multiple - say 10 - 15 months net profits. Once accomplished, the new owner, flipper, redeploys the site with better on page optimization(keyword enrichment in tags and copy as well as good internal linking/navigation) which can be accomplished pretty quickly and getting more back links using keyword anchor text in the links to make them more effective. Concurrently, new monetization elements such as pay per click(PPC) code like adsense, banner ad networks, paid links, affiliate program links, etc are placed on the site or reformatted to more strategic positions on the pages for better conversion. The end game is to improve monthly profitability and traffic so the site can be sold for more money - and typically at a higher multiple!

The strategy can work very well for entrepreneurs who take the right approach and do their homework. I have personally bought and sold over a dozen websites in the past, selling them for 10 -20 times what I purchased them for because I had developed the websites into thriving profitable businesses with solid fundamentals and cash flow. That is the point - to create better website opportunities for a future owner that is more solid fundamentally and more viable long term with lots of upside in profits. Buying an existing business that has a good foundation saves a lot of time over creating a site from scratch - so it can speed up the process of becoming very profitable and has more history of stability and growth which buyers will appreciate and value.

Most of the website flipper gurus seem to focus on the lower end market for websites for sale making a few hundred or few thousand dollars. Personally, for a more seasoned investor/ buyer, I think it is a much more interesting and potentially lucrative focusing on existing website businesses that are already producing healthy monthly profits and are worth more than $50K. The reasoning is that the right kind of business that is throwing off this level of revenue can literally explode to 4-5 times that amount with some basic strategies implemented once purchased. You generally get what you pay for and so buying an internet business with better current revenues can be much more of a lucrative venture with less risk than buying less robust cheaper sites and trying to manage many small sites to flip for modest profits

The biggest areas of improvement to a website are optimization of the meta tags, and page copy to improve SEO rapidly. Many times a site can leap in position overnight just by improving the Title and description tags to target better or more keywords and phrases. Improving and honing the body content so every page of the site is unique will go a long way to improving SEO. Internal linking with keywords - using the main keyword phrases in the sites navigation - will make a big difference as well - providing more link relevancy as long as every page of the site has unique content. After the websites "on page" optimization has been implemented, the back links the site has pointing to it from other sites will radically bump the site's natural positioning over time - sooner than later with established older sites. The key here to is to get links from sites/pages that have good PR, are relevant in nature to your site and use keyword anchors in the link. Some experts argue that it makes no difference if the site is not relevant - this can be argued currently - however it is in Google's and other search engine engineers best interest to continue to refine their algorithms to achieve better results for users - results that are relevant and not manipultaed by massive inbound linking strategies.  I think it is better to to concentrate on quality more than quantity personally and expect this to pay off in the future.

Getting more traffic inevitably equates to more revenues for a site, however it does not guarantee it. Herein lies the next opportunity for a website flipper. Once the sites optimization is underway, the other areas to consider renovating are the sites layout and graphics.. Many of the best opportunities can be improved simply by giving a site an updated web 2.0 makeover. Visitors to your site will leave in a nanosecond if the site doesn't appeal to them quickly - ugly colors and graphics, busy wordy layout , poor quality digital images, etc. By giving the website a facelift - which doesn't necessitate spending a great deal of money - can improve the stickiness and appeal of the site and lead to much higher page impressions and conversion of the monetizing elements embedded throughout the website.

If the site is a content based model offering information, the areas to grow revenues will likely be with PPC links, testing different layouts and positions on the page, affiliate programs related to the subject matter - check out www.clickbank.com for thousands of e products to offer , paid one way links , banner ads , and even webpage advertorials.

For e-commerce websites, spiking sales revenue and profits can be ramped up by adding new products and product categories that get further optimized, implementing a targetet extensive PPC campaign with good copy and hundreds of tertiary keyword phrases for the individual products and categories, integrating an affiliate program and recruiting strong affiliates, promoting to existing customers who have purchased in the past - offering loyalty programs and incentives to return and buy more, and adding a toll free number for ease of contact (make it easier for customers to order and be comfortable they are dealing with a legitimate retailer).

Some websites and business models will be easier than others to optimize and monetize so be sure to measure all the attributes of the website itself, the niche, the model - ie e-commerce, social networking, forum, blog, PPC, etc - and see how much work will be involved post closing. This will determine the viability of the purchase - buying an e-commerce site may not be appealing to some buyers unless it is a drop ship model because of the need to inventory product, process and ship orders and answer the phones - all of which may necessitate hiring employees. This  may be ideal for a website owner that is expanding and has some infrastructure in place to manage the new acquisition until it is ready to sell again.

It is important to be clear as well on the timeframe of the investment. The longer you are willing to hold and build the sites revenues, the better the new history and the larger the multiple you can expect on the net profits. If you want to maximize your profit on the flip, it will be better to hold for at least 6 months before listing again to establish the trend. Remember, buying cheap sites is not guaranteeing a larger profit on the other side - look for solid sites as mentioned above that you can sink your teeth into for a longer period of time and you will enjoy much higher returns and profits when you sell your website business.

 David Fairley

Preident,

www.websiteproperties.com

With the summer rapidly coming to a close, people will start getting back into their business groove again as we head into fall and towards the 4th quarter bonanza.

For buyers, acquiring a new website business for sale at this time of year, particularly e-commerce internet businesses, can be highly advantageous. Christmas sales and the 4th quarter can amount to 40% of the years total gross revenues. Therefore the ROI(return on investment) for the business really explodes because the cash flow is really ramped up during the holidays. This can really be a big boost for new owners and allow for earlier debt retirement, greater cashflow to expand into new product categories or marketing avenues, etc.

On the reverse side, sellers listing their business opportunities at this time of year will typically get more interest because of the same compelling reasons. Transfering a website business prior to the 4th quarter means there is enough time to train and support the buyer so they can manage the surge at Christmas. In addition, it removes the stress of the seller having to redeploy their resources - money, time and energy - for the heavy and sometimes stressful holiday season. This period will be exciting for a new owner because of the sales volume and cash flow, but often can be dreaded by a seller who is burnt out or wanting to relax for a change during this period!

Another timing issue on the seller's side deals with sales and traffic trends. The best time to sell an internet business is when it is stable and growing at a reasonable rate year over year. This makes for an attractive opportunity for buyers because it will mean a quicker ROI as well. In addition, it shows strength in the long term for the business opportunity. For some sellers with sites having explosive growth it can mean asking a much higher multiple on the net cash flow/profits of the business to incorporate the upside increases. In some cases it may make sense to hold on tight during this surge until the trend is less dramatic - say going from 100% growth to 30% year over year as an example.

For a buyer, a website business with respectable or exciting growth of revenues, profit and traffic is going to be much more compelling than a business with flat or slow growth of course. Again, it comes down to expected ROI on their investment. In addition, most buyers want to buy a business they can grow and sell later for much more money while reaping the rewards of the growth.

The concern is to not hold too long and risk having the trend reverse - so that revenues and profits start going down from the previous period year over year. This creates doubt and fear in buyers and they will be less inclined to make an offer or one that is at a lower multiple to factor in the perceived risk.

Finally, mental and emotional timing is critical for a seller. As soon as the passion of running your business starts to wane, you either change your perspective and get re-fired up or you need to make a move to list sooner than later because most of the time the business begins to suffer and atrophy as a direct result of your lack of interest.

 Timing will make all the difference in accomplishing your goals and realizing your best deal - both for website buyers and sellers.

 David Fairley

President,

Websiteproperties.com

I was recently lassood by a family member to assist in their quest for an online business for sale they could buy and operate to create a steady stream of income. The process of working with my sister has been pretty insightful to say the least! What was quite revealing is how daunting the internet and doing business online appears to be to the uninitiated. There is a lot of fear and apprehension and sense of overwhelm that new buyers with no experience have when starting the process.

The single biggest step for new and future internet entrepreneurs is to get clear on what areas of interest they have, like gardening, organic food, healthy lifestyle, etc and then hone in on a specific segment within the category. It is critical to your future success to target a clearly defined niche. When you are looking to buy a website business, you should be searching for internet business opportunities that are more narrowly focused and specialized. Websites that try to be too broad - something for everybody - often fail to maximize the true potential of a specific niche. Trying to sell tools verses selling only garden hand tools is an example or focusing on educational toys rather than just toys.

Staying narrowly focused doesn't mean you can't sell a broad range of products or services within the specific niche. For example, a specialized kitchen gadget niche selling only salt and pepper shakers could offer these items in multiple categories and price ranges and potentially offer thousands of different salt and pepper shakers.

Another benefit of niche sites is they tend to dominate the natural search engine results because they are extremely relevant to the search queries from surfers. This means more targeted traffic, higher conversion rates and greater sales and profits overall.

Often when you have identified specific areas of interest, it becomes easier to see specific opportunities within these categories. You will be able to refine your search for a website purchase much easier and recognize a good opportunity that is interesting to you after engaging in this process. Even if websites on the market currently don't fit the criteria of the niche segments you are interested in, you can always contact websites within the niche directly and ask them if they have interest in selling.

The third option of course is, build it yourself if you can't find a good existing internet business opportunity to buy.

Either way, finding an interesting focused product category, subject matter or service area will provide a higher probability of success than a website hocking thousands of products in hundreds of different niches.

 Good hunting!

David Fairley

President, www.websiteproperties.com

Who says you can't thrive in a recession? Not every business has to suffer from a downturn in the economy. Website Properties.com is a prime example of this. We are coming off our most fruitful month in the history of our company. We closed 6 website business for sale transactions in January which included a total of 26 websites!

Despite the gloomy news we are inundated with nightly, there are a lot of people who want to buy a website business and are searching actively. The main theme seems to be the perception that the markets, real estate and brick and mortar businesses are still too risky, whereas internet business opportunities with proven cash flow are a better bet in these times of uncertainty.

The quality of internet businesses for sale also seems to be improving as well. More aged sites with 4-8 years of history, great fundamentals, sales resilience, and stable and growing trends. The most popular sites we are selling currently tend to be ecommerce websites - primarily with drop ship models.

Looking forward, we anticpate a similarly great February, with lots of activity and new listings from new clients wanting to sell a website business. We are preparing to list these new quality online opportunities which should garner plenty of interest from buyers.

Keep in mind that some of the greatest opportunities exist in recessions and some of the biggest fortunes have been amassed during the worst economic downturns in history. Choose the thrive rather than survive in these times and you shall.

David Fairley

President, Websiteproperties.com

When determining the actual value of a website business beyond the financial profit and loss statements using method such as EBITA , Cash Basis , etc , the main supporting fundamentals, other than the financial condition of the business, are unique to internet opportunities. These fundamentals typically underscore the reason for a buyer to pay a fair market price or above average multiple of net profit. The following list encompasses what are considered relevant and important attributes of an internet business opportunity:

Domain Name - specific to the product niche, generic, dotcom or other suffix, memorable, etc

Organic Search Engine Positioning - Natural rankings on major and tiertiary keywords in Google as well as yahoo and MSN

Unique Monthly Visitor Traffic and Page Views - natural traffic vs PPC, country of origin, top 20 referrers

Age and History of Website Business - Usually -the older the site, the more stable and potentially authoritative, as well as easier to spot trends and solidity

Unique and/or proprietary content and products - content is king - unique content along with proprietary products or product or information dominence providing competitive edge

Customer Database - Large loyal customer base, % of repeat sales, recurring billing - autoship, etc

Niche / Market Size And Potential And Competition - Is the product or service easy to obtain offline, popularity, price points, who else is selling, growth sector or dying...?

Growth Trends - Sales, Profits and margins, and Traffic - Trending up consistently year over year, flat yet stable, dropping like a sack of hammers?

Vendors - Quantity and Quality - barriers to entry, proprietary relationships, etc

Drop-Ship or Inventory Model - can it be home based or is a warehouse needed - other considerations - margins, speed to ship, customer service experience, extra fees

strategic partnerships - ie Amazon.com , shop.com , Bizrate, BBB, etc - other developed sales channels make for more stable revenues and growth.

Having checked through these line items and finding most if not all of these to be robust , for example, would likely lend to a website business being substantiated at a higher valuation - say 3.5 - 5 times net annual cashflow or profit verses an average 2.5 -3 times multiple of earnings.

Solid Fundamentals beyond the actual sales revenues and net profit will compel a buyer to make his best offer potentially well above the average market multiple because the business has greater probability of creating a stronger and quicker ROI(return on investment) than online businesses without them. Sellers with websites that have these elements typically receive at or close to asking price for their businesses for sale and sometimes even more when there are multiple suitors.

So if you are a buyer seeking a website for sale be sure to review these elements closely as long as the financial statements meet your interest.

Sellers need to present as much detail on these as possible to the buyer so they can make a sound and solid offer that is acceptable.

David Fairley

President, websiteproperties.com