Archive | Website Flipping

Doing Due Diligence Before Buying a Site

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This is a guest post that I did for Flippa. There are plenty of bargains on Flippa, but when you are considering buying a site (from anywhere), you must be careful that you perform due diligence and research and verify everything that is being claimed in the listing.  It goes further than just verifying all the claims in the listing. You have delve even further if you want to avoid some unpleasant surprises after you purchase the site.

If there is a large amount of money involved, you may want to hire a business broker to handle the due diligence for you.  A business broker could be expected to look into the business in detail, checking all of the company records including financial statements, budgets, contracts with staff and suppliers and customers if applicable, insurance policies, etc.

If the site being sold is less complex, it is not uncommon for the buyer to perform due diligence themselves. You’re going to have to play detective a bit and there are some useful tools to help you do this. Here are some questions to consider when thinking about buying a site:

  • Does the listing have a detailed, clear description of the site and it’s assets, traffic and revenue?
  • What stage in the Life Cycle of a site is this site in? Is traffic and revenue rising or declining and is there room for expansion?
  • How much competition is there and how do they compare in regards to position in the serps, price, product quality, etc.
  • Are there any obvious violations of FTC regulations, trademark or copyright violations, etc. You can do a trademark search online at TESS (for US trademarks) and use Copyscape to check the uniqueness of the content.
  • Check the site’s reputation in places like Rip Off Report and Better Business Bureau.
  • If products or services sold on the site are outsourced, will you continue to have access to those vendors or suppliers?

1. Checking Out The Domain

Domain Tools is a great tool to help you find information about the domain, how long the domain has been registered, who the domain is registered to (if whois information is not protected), Whois history, Reverse Whois, and has DNS & IP Tools.

You also need to look into whether the domain has suffered from reputation problems. You’ll want to know if the domain has been blacklisted by anti-SPAM or anti-virus sites or if the domain has been banned in Google. A simple search in Google using the operative site:domainname.com, replacing domainname with the site’s domain can tell you whether or not the site is listed in Google and how many pages are indexed. You can enter the IP of the site here to check to see if the domain is currently listed in the live Spamhaus IP blocklists.

The Wayback Archive is a pretty useful tool for checking out the history of a site. It has snapshots of the site, often going back years. Flippa also has Due Diligence information on the listings, giving you a detailed snapshot of many important website stats. To access that information, under the bar with the stats for Domain Visibility, Domain and SEMRush Stats, is a link that says, “View extended due diligence data for this listing.” Click on that to get detailed stats on the site that is listed.

2. Checking Out the Owner

Flippa and webmaster forums will give you some information about the seller, but it is usually only what they want you to know and very limited information. However, both Flippa and webmaster forums will normally give you a link to the feedback that a seller has received from previous transactions. This is very important information and you must take the time to check out their feedback. While it is not a guarantee that the seller is honest, it’s a good source of information on how the seller conducts business and if his customers are happy.

If the seller is new, you won’t have customer feedback to rely on. You will need to do some research yourself and Google can help you do that. Get the seller’s real name and type that in Google to see what kind of information you can dig up. You may find he/she has profiles in forums or social networks, such as LinkedIn, Twitter, Google Plus or Facebook.  You can often find some very revealing information on these sites about the seller’s character and reputation.

In addition to how happy their previous customers are, you can tell a lot about a seller by checking out their other listings, including the ones that have already sold.  You may be surprised to find that the seller sells this identical type of site many times over, and that would be something that you would probably want to avoid buying.

3. Confirming Traffic and Revenue Stats

From the Flippa listing, you have access to the stats for hits, page views, and unique visitors, but those stats don’t tell the whole story.  You need to verify where that traffic is coming from (referring urls) and whether or not the seller has purchased cheap, untargeted traffic to inflate the traffic stats. Insist on either Google Analytics or access to Statcounter or AW Stats to confirm where the traffic is coming from.  If some of the referring urls are unfamiliar to you, check them out to see where that traffic is coming from. Be aware that a portion of those hits can be from the seller himself or from the search engine bots crawling the site.

If the seller provides traffic stats from one or more sources, cross-check the numbers with other sources, such as Compete, Alexa or Quantcast. The numbers will never be exactly the same, but if there’s a huge discrepancy, it’s worth investigating.

4. Due Diligence on Site Revenue

One of the most unreliable pieces of information about a site is often the sites’ revenue. It is very easy to fake screenshots of revenue, so you cannot rely on them to verify how much money a site is making. If revenue is a selling point of the site, it is very important to be able to verify the accuracy of the information given in the listing without relying on screenshots.

One way to verify the revenue of a site that is more reliable than a screenshot is by using screen sharing software.  This is very helpful to get a more accurate picture of the revenue without the seller having to give you login details to his accounts.

Learn to distinguish between actual, verifiable facts about a site and just unsubstantiated claims, such as “potential $15,000 month income,” or “the main keyword has 50 million searches per month,” etc. Statements that are not verifiable are not relevant and are only a distraction.

A site’s revenue should be based on a solid earning history. If the site was established two months ago and is claiming revenue of $1,000 per month, take that information with a grain of salt. Quite often, a seller will launch a site with a WSO (sales page in a popular marketing forum), make some quick revenue and then list the site with revenue claims from the proceeds of the WSO.  Very often, the WSO has run it’s course and the income level being claimed is not sustainable.  Look for a consistent history of earning for at least six months.

5. Conclusion

Nearly all website sales listing lies or exaggerates about something or conceals important information about the site. It’s up to you to distinguish between real, verifiable information and information that is incomplete or misleading. Bear in mind that due diligence will vary based from site to site based on the type of site it is, traffic sources and revenue streams of the site.

Finally, when buying a website for any significant amount of money, always use an escrow service. Escrow services protect both the buyer and the seller.

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Where to Buy and Sell Websites

buywebsites
I’m sure most people who are thinking about flipping/selling or buying websites know about Flippa, but when the question is asked, where can I sell my site, that seems to be the only answer people give. Flippa may be the largest at this time, but it’s not the only game in town. Due to the many changes Flippa has gone through with pricing structure and other changes that don’t necessarily benefits sellers, it’s worth a good hard look at the other places for buying and selling websites. Flippa does have an advantage over others with probably more buyers who search the site, so it’s still a viable website marketplace, but it’s always good to know all the options available.

There are also a fair amount of brokers who can help you to sell your websites, particularly if they are well established businesses that have established revenue and traffic and are valued at $10,000 or above. Brokers will often help with creating the listing or sales copy for your site and listing it at various resources both offline and online. They may also help with screening buyers, legal paperwork, and helping with negotiations and prospect questions when a buyer is interested. They often have developed a large list of buyers that they will contact about your sale.

Here’s a list of some website brokers:

Latona’s Website Brokerage
Quiet Light Brokerage
Acquisitions Direct
Acquisitions Agency
Maine Business Brokers
We Sell Your Site
W3 Business Advisors
We Broker Websites
Flipping Enterprises
Website Properties, LLC
Trusted Site Seller

Here’s a list of places to list your websites or look to buy websites.

Flippa

Currently the largest. Here’s the new pricing.

Listing fee for established websites & domains $29
Success fee for established websites & domains 5.0%
The success fee is paid by the seller when they make a successful sale.

Listing fee for new websites $9
Success fee for new websites 15.0%
The success fee is paid by the seller when they make a successful sale.

If your sites sells, there’s no real advantage in price between listing it as an established or a new site. In fact, if your site sells at a certain price point, using the new site listing could cost you more than the established site listing, so be aware of that when you choose which pricing to choose:

Your site has to sell for $200 or less, or your overall costs are higher due to that 15% success fee.

On a $100 sale:
$29 listing, $5 success fee = $34
$9 listing, $15 success fee = $24

On a $200 sale:
$29 listing, $10 success fee = $39
$9 listing, $30 success fee = $39

On a $400 sale:
$29 listing, $20 success fee = $49
$9 listing, $60 success fee = $69

On a $600 sale:
$29 listing, $30 success fee = $59
$9 listing, $90 success fee = $99

Traffic on Flippa can be pretty low in the beginning of an auction. Buying the enhanced featured listing can increase those views. If you do go that route, don’t buy it until the last day or two as that’s when people actually start bidding on most auctions on Flippa. You’ll notice a pickup in traffic also when it’s listing on Ending Soon tab.

The kinds of sites that sell well on Flippa are sites with established revenue. I was somewhat surprised at some recent sales below that appeared to sell for too cheap if the revenue is accurate. I didn’t investigate these listings very much. Just noted that they seemed to go too cheaply for sites with that kind of revenue.

REVENUE SOLD FOR
$599/mnth $2,249
$5,926/mnth $17,000
&20,000/year $8,000

As you can see from the above if the revenue numbers are legitimate, those sites should have sold for more money. So if you have a site that is making a solid income every month and has a history of doing so, you might want to consider a website broker. The commission will be higher, but the selling price will also be higher, in many cases, a lot higher. A broker could be well worth your time if you have a website valued at $10,000 or above.

Website Broker.com

This site gets a lot of traffic due to it’s high position in the serps for the terms buy sell websites. It ranks just below Flippa in the serps. Standard listings are available for 90 days for $9.95 and premiere listings cost $29.95 and give you more exposure than the standard listing. For listing just domains, the price is 90 days for $9.95, and premiere listings are $14.95. There are no other fees … no “success” fees, no commissions. The Premiere listings are listed in the Premiere Listing section of the site and will also appear at the top of their respective categories. They are bolder so they stand out more than standard listings and have a higher click through rate.

Buy Sell Website

The cost to list your website for sale here is $39 for a 2-week listing and $59 for a 3-month listing. It’s a well established site with plenty of listings and traffic. Don’t be put off by the ugly design (they should probably have hired a real designer to design the site).

Daltons Business

The UK’s largest business for sale marketplace. While they have a large amount of offline businesses for sale, they also have an Internet business for sale section.

Businesses for Sale.com

Pretty interesting looking site with website for sale listings in all countries. Has over 61,000 listings at this time.

Experienced People Forums

Forum for both website listings and information on buying and selling websites. Moderated to keep the spammers and scammers out. Doesn’t look like a lot of traffic but the site comes recommended by other website flippers. There’s a private VIP section which they say has all the good information but you don’t have access until you reach a certain (unknown) amount of non-fluff posts (which I haven’t yet).

BizSale.co.uk

Another UK based site that you can buy or sell offline small businesses. There’s also an online or web based business section.

Webmaster Talk Forum

Popular webmaster forum with a section for listing sites for sale.

The Warrior Forum

A lot of turnkey sites being sold in the Complete Sites for Sale section of the Warrior Forum. Can occasionally find some established sites listed here also.

Digital Point Forums and Ebay

I’ll group these two together. I don’t recommend either one. Too much spam, too many scams. ‘Nough said.

Posted in Featured, Website Flipping2 Comments

How to Increase Your Sales and Your Site’s Value

website value
Whether you’re going to keep or flip a site, one of the most important things you should be doing is making the site profitable. A site with revenue will sell for a great deal more money on Flippa than a site with no revenue, so it’s well worth your time to attempt to make that site profitable. Here are some ideas on how to increase the revenue of a site.

Create your own product. Creating a well written, informative ebook on the topic of your website and selling it for 100% of the profits can produce a great deal more profit than just offering affiliate products for a percentage of the sale price. You can also sell a service from the website rather than an info product. Test the best pricing strategy. Increase your price, even if you have to repackage or edit the product to increase it’s value. You’d be surprised how many times I’ve heard people say that sales increased when they increased the price of their product. Don’t be afraid to charge more.

If you do offer a higher priced product or service, also offer a “light version” of your product. Sometimes people aren’t buying simply because they can’t afford it or they think the price is too high. You can overcome this with a light version.

Add great bonuses to your product. Don’t add a low value bonus that no one really wants. Make it a dynamite bonus so that people will buy your product for the bonus if they aren’t interested in the actual product. A valuable bonus can make your product irresistible.

Increase the traffic to your site. Don’t be dependent on just one source of traffic. If it dries up, all of your traffic is gone. If you’re trying to rank in Google for your keywords, make the same effort in Yahoo and Bing. Don’t forget social bookmarks such as Digg, Reddit, Stumbleupon and many others. They are not only a good source of traffic, but provide backlinks as well. A viral post in Stumbleupon, Reddit and Digg can get thousands of visitors in a short period of time. If you use paid traffic, buy more paid traffic. The point is to increase your efforts to increase the traffic.

Another good way to increase traffic is to become an authority on the topic of your site. Provide really useful information and you’ll find that not only do people visit, but they come back time and again for updates.

Launching giveaways and contests are also a good way to get repeat visitors and increase traffic. Make your prize or giveaway something really spectacular that most people would want. Giving away junk won’t get the traffic that a dynamite offer will. Visitors will tell other people if the giveaway is really great. Nothing better than word of mouth for increasing traffic. Launching contests and giveaways not only increase your traffic and encourage visitors to come back, but it can also increase your product sales.

Adding a Twitter account and Facebook page and getting people to like your page are excellent ways to get additional traffic. Tweeting your posts to your Twitter account and posting your posts on your Facebook page are good ways to increase interest in your site and to increase the value of your site should you list it for sale.

Make sure you’re building a list. If you’re giving something away, make them opt in to download it. Not only is a list invaluable for marketing to your list, but the list itself is a great asset to list on a sales listing for the site and increases the site’s value.

If you’re selling affiliate products, experiment. Don’t just sell one product. Add others to the mix and test, test, test. If you can sell one product, you can sell more than one.

JV with others. Do ad swaps with others in like markets, make friends and get noticed by super-affiliates. Getting links on authority sites or getting affiliates to promote your products can greatly increase both your traffic and sales. Attracting the right affiliates can make a huge impact on your business. Making friends and giving or helping others in your business is one way to do that. Build up a reputation for helping others, expecting nothing in return, and you’ll be much more likely to get people who want to promote your products.

One way to meet and make friends with potential JVs is on social networking sites. They aren’t called social networking sites for nothing. Contrary to popular belief, they are actually for networking with like-minded people and are a great way to make friends in your market.

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Beware of the Google Panda When Buying Websites

Google Panda update
Most of us have heard and may have even been affected by Google’s changes in it’s algorithm. The latest update, called Panda, has been out for awhile. We’ve seen the demist of blog networks like Build My Rank and others that just post links to the network for themselves and their customer’s backlinking efforts. Well, those links could now hurt your site instead of help it rise in the serps.

This means, that in order to do due diligence when buying a website, you now have to take into consideration what kind of SEO has been done to the site. Things like checking backlinks, site load time, unique and fresh content, anchor text links, and much more. You’d be well advised to read this (a href=”http://www.pcworld.com/businesscenter/article/253550/keep_your_website_off_of_googles_naughty_list.html” target=”blank”>PC World article to get up to speed on the latest Google algorithm changes.

This will give you a good list of things to watch out for when buying sites. It’s no secret that when a site is on the decline in traffic or revenue, that many sellers will opt to dump the sites in Flippa or elsewhere as quickly as they can unload it for as much as they can get for it. A site that was once successful may now be a site that is doomed. It’s traffic and revenue could already be in decline and it may also be running the risk of getting deindexed by Google. How sorry would that be to buy a site only to have it deindexed in a short period of time or to buy a site that was making good revenue and will soon be making nothing?

Due diligence
has to go beyond just checking the stats that are listed on a website auction. You now have to check historical data such as backlinks … how many there are and where are they? Are they just blasted onto blog networks with spun content or thousands of social bookmarking sites with the same anchor text? Other things you have to check for that Google will now penalize sites for are:

  • Keyword stuffing
  • Anchor text heavy links
  • Slow load times
  • Building links on link farms
  • Too many ads and too many ads above the fold
  • Autoblogging: Lack of unique content
  • Stale content: site not updated frequently

There are of course many more Google changes and only Google knows most of them, but the above are some to be aware of and watch for when buying a website. Not checking could be a costly mistake.

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Best Selling Types of Websites on Flippa

cookie cutter sites
Two types of websites that seem to always have a lot of bids and activity are Adsense sites and autoblogs. I can understand the popularity of Adsense sites but not autoblogs, other than people generally being lazy and not wanting to bother to add unique content to their blogs. Personally, I look for unique content when thinking about buying a blog from somewhere else. That’s a minimum requirement for me.

In addition to having no unique content, autoblogs can come with some built in problems. They are obviously scraping other people’s articles and possibly other people’s copyrighted photos, so the potential for a lawsuit or at least a cease and desist are high.

Then there’s the Google Panda thing … Autoblogs aren’t high on Google’s list of what it considers to be relevant and many are getting deindexed from Google or are disappearing so far down in the serps that they might as well be deindexed. All in all, if you’re browsing Flippa for sites to buy, I’d avoid autoblogs.

Beware the Cookie Cutter Business in a Box Sites

There’s also a very disturbing trend of cookie cutter sites (business in a box) being sold with a lot of success. The listings are all hype and have dubious income claims, especially since they are all start-ups. The income claims are in the copy since Flippa doesn’t even allow income claims on start-ups. These sellers sell the same cookie cutter sites over and over again … only difference is the domain name. Just copy the site to a new domain and they’ve got another listing. These low quality cookie cutter sites range from autoblog selling businesses to traffic selling businesses to social media selling businesses (buy Facebook likes and Twitter followers, etc.). People, there are a lot of these sites listed on Flippa. Please do some due diligence before spending your hard-earned money.

These types of sites often appeal to newbies who have little experience in buying websites or even in operating an online business. They think it’s going to be instant cash as soon as they buy it. Most are sadly disappointed to say the least, when they discover they’ve forked out a bunch of cash for a site that is not making an income as was claimed. Making money online simply isn’t as easy as all that. Spend $1,200 for a site without doing any work yourself and sit back and watch the Paypal receipts pour in.

Be certain to do due diligence when thinking about buying Adsense sites already making a passive income on Flippa or anywhere. They are hot sellers. Browsing the Just Sold section on Flippa, there’s listings like this, $630 per Month Adsense, High CTR, 2 yr. Old, PR2, Grants & Scholarships Niche, that just sold for over $9K. Listing looks good and has plenty of Adsense screenshots for income proof and Google Analytics.

So some research before investing in an Adsense site and make sure that the sites primary keywords are actually high paying keywords for Adsense. There are many Adsense keywords that are very low paying, making only a few cents per click. Also be certain that if the site advertises a certain placement in the Google serps, that you actually do a search for those keywords and the site does show up in that spot in the serps.

For more information on how to do due diligence, see my guest post on Flippa.

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Creating a Dynamite Sales Page for Your Website Listing

buy sell websitesIt takes a lot of hard work to get your website to the point where it is profitable and has a lot of traffic. You might want to cash in on all that time and money you’ve spent, but you want to get the most out of your investment. Before you list, make sure you do any housecleaning that needs to be done. Any broken links or glitches that you’ve been putting off… now is the time to fix those. Make sure you do all the SEO and everything is in good shape.

The Auction Listing

Why can some sellers get big money for their sites and some get barely noticed at all? It’s important that you create a site that offers value, but it’s not always the quality of the website to blame. Your listing headline and copy can make the difference between getting the price you want for your site or having it sink into Flippa oblivion.

With too many listings, the biggest mistake I see, other than a boring headline is not enough information about the website. Potential buyers want data. They want to know everything about the website and they want screenshots to prove it. They also want access to Google Analytics.

When writing up your listing, include everything including traffic, revenue, costs to maintain the site, outsourcing costs if any, how much content it has and whether or not it is unique content, whether or not it has a list, the number of back links, social media accounts, special programming or design, etc. Don’t leave anything out. Highlight the most important information in the headline. Grab their attention with revenue or high traffic figures if you have it, PageRank, etc.

You want to build trust with potential buyers and providing accurate data on your website will help to do that. Make sure that you break down all of your revenue streams by the source of the revenue and the revenue history. Go back as far as you can. The longer the site has been earning, the more you will get for your site.

Promote Your Auction

If you have a blog or website that is related, mention your auction. Some of your readers may be interested in the auction. Same with a list. Put your auction in your signature file if it’s allowed on forums that you participate in. I do this on the Warrior Forum. You can also get additional exposure with the Featured listing on Flippa. I don’t recommend doing this until the last couple of days of the auction, since most people hold off on bidding until then. You will get a lot more views doing this. If you have a Twitter account, tweet about your auction or mention it on your Facebook or Google Plus page. If the site you’re selling gets good traffic, put the link on that site too to let your visitors know the site is for sale.

You’ll get a lot more attention by getting your auction on the “Most Active” page on Flippa. You can do this by accepting all the very low bids. The more bids you get, the higher up on the Most Active site you’ll be.

Pay attention to your auction while it is listed. Answer any questions potential buyers might have and don’t take a lot of time doing it. An interested buyer may lose interest if his questions go unanswered for too long. Give accurate, detailed answers. Don’t be evasive. Good communication with potential buyers will help to build trust and help you get the most for your website.

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