|
Flipping
a website for a profit
|
|
|
FLIPPING A
WEBSITE
FLIPPING A
WEBSITE TO EARN AN INCOME
Website
Flipping refers to creating or buying a website and then
fixing it up and selling it for profit. This is an easy way
to make extra money online one you have mastered the art of
creating an income generating website
|
|
|
|
|
The stock
market and real estate industry have long been populated by
day traders and “flippers”, those that buy and sell in a
short period of time in order to make a quick profit. In the
real estate industry the life of a house flipper can be very
appealing. Buy a renovator’s dream property at a discounted
price, renovate and modernize it and then sell it at a few
months later at a profit. This process can then be repeated
over and over for a reasonably stable income. You might even
get rich.
|
 |
FLIPPING FUN
The life of a
house flipper is often romanticized, with images of married
couples buying old houses, spending a fun-filled six months
working renovating and then making a profit on the sale and
moving on to the next property. Do this three times a year
and you have a recipe for a fairly nice lifestyle.
If you plan to renovate yourself then you better have the
skills to do it or have the friends or family willing to
help out. Alternatively you can hire professionals to
perform the labour but you must factor in the cost into your
expenses. There are also many other variables that need to
be carefully controlled such as financing fees, real estate
agent costs, legal fees, government charges and all the
other issues that come with buying and selling property.
Those with a keen eye for a bargain can do exceptionally
well but it’s just as easy to lose money if you don’t do
your research and plan. Watching the real estate market,
tracking house prices and monitoring economic conditions are
all important activities for a successful house flipper.
Provided you do your homework and control your variables you
stand a fair chance of succeeding.
Trading on the stock market is another area where the
educated and diligent researchers can succeed. Knowing
market trends, tracking company performance and economic
indicators can all provide an extra edge and if you work on
it full time you just may come out on top more often than
not. Both the stock market and real estate industry have
long been considered staple investment opportunities and
even full time careers for those that choose to take on the
challenge.
There is unique breed of entrepreneur that has taken the
concept of flipping to another area; buying and selling
businesses. A shrewd entrepreneur will locate an
underperforming business, buy it, work their magic to
improve performance and then sell it for a nice margin. It
is by no means easy and certainly requires a lot of research
and due diligence, but the rewards are there and no doubt
it’s a heap of fun too (entrepreneur’s wet dream ).
|
|
|
Buying and
selling businesses is appealing but given the high costs of
making the purchase it is quite difficult to start,
especially as a young entrepreneur. If you go wrong you may
end up loosing a lot of money (just as you can with the
stock market and real estate), so you really want to be sure
of your skills and ability before investing.
The Internet is very new and the whole online commerce
industry is just establishing marketing practices that work.
Quite frankly, and this may sound harsh, but most of the
people running businesses online have very poor websites. A
lot of people running popular sites are not taking advantage
of their traffic by monetizing it (this could be by choice
or ignorance). Making a profit may be as simple as
implementing a smart AdSense campaign on a popular site
after buying it from an owner wishing to move on to other
things. Perhaps an e-commerce site could use some search
engine marketing or some tweaking to an AdWords campaign
might do the trick, or better still, monetize, optimize,
affiliate and up sell for maximum gain – make use of all the
marketing tricks at your disposal.
I’m sure if we did some statistical sampling of the web
industry search engine optimization techniques would be
understood by a minority of webmasters and implemented well
by even fewer. Search engine optimization is becoming
mainstream and no doubt as the web continues to mature more
and more people will study, test and build better websites,
but it’s definitely still early days.
What this says to me is “business opportunity“. For those
with the know-how, the energy to implement and a little bit
of funds to buy the sites there are big gains to be made.
What makes it even more appealing, especially for young or
new entrepreneurs, is the price – we are talking about a lot
less funds then it would take to invest in shares, buy
property or purchase a bricks and mortar “real world”
business. Websites with potential go for as low as a few
hundred dollars.
|
|
|
The big
advantage of buying a site is you don’t have to establish an
audience and wait for the site to be indexed within search
engines. Most webmasters, even those that don’t know their
SEO from their XML, will understand the benefit of link
exchanges. Even the most poorly managed sites should have
some form of backlink network developed and return a result
in the major search engines. It may not be a top ten search
result but it will be a result ready for you to optimize and
improve.
Taking over a mature site (at least 12 months old) will mean
you avoid the Google sandbox, a significant perk of buying
established web property. Of course it really depends at
what stage you take over a website as to how much of a
step-up you gain and will no doubt reflect how much the
owner will expect to receive for it (traffic for cash in
simpler terms, but there are other variables to consider
when selling a website).
|
|
|
Before
undertaking a search for a website acquisition a smart web
entrepreneur will stop and have a good think about what she
wants the site to do and how it will fit within her overall
web business strategy. Here is a list of the top 7
strategies to consider when buying a new website: |
|
|
|
Buy a site
that has targeted traffic for a product or service you
already produce or sell. You can direct traffic from the new
site to your products/services through advertising, email
lists or sales pages. This is a great way to establish a
customer base very quickly but you have to be confident that
the traffic is quality, targeted traffic. Don’t fall into
the trap of buying a high traffic site that consumes lots of
bandwidth but doesn’t have the type of user you can leverage
for revenue, otherwise you might be buying a liability, not
an asset. |
|
|
|
Buy a site to
generate advertising revenue. In this instance you might not
change the site other than by working to increase the amount
of traffic and improve the performance of advertisements on
the site. Sites with lots of good content but are poorly
optimized are perfect for this strategy. Once you own the
rights to the content you can then further leverage it by
repacking and republishing the content in other ways
– perhaps information products, article marketing or
as free give away enticements to join an email list |
|
|
|
Buy a site
specifically to flip it quickly. This is perhaps the most
risky venture (day-trading!) because you need to find sites
that are clearly underperforming with the potential for a
big upside result after you complete your renovation.
Ideally you should locate e-commerce sites selling a product
that has an established market that is only just starting to
take off online AND the current owners are not good at
search engine optimization or online marketing and are
willing to sell.
The theory is that you can quickly implement your changes,
tweaking a few percentage point increases in multiple areas,
resulting in a good double figure increase in sales in a
short period of time. If you can complete your work just
before the general marketplace catches up you can make a
mint by selling the site at a premium before the Internet
becomes saturated and your early mover advantage is eroded
or the market slows.
The web is one
of the fastest industries in terms of competitive action due
to the very low barriers to entry. To execute day-trading
style website buying and selling requires an entrepreneur
with their finger on the pulse of the web. They must be in
tune with what’s new and willing to gamble on what’s going
to be new tomorrow in order to have success. |
|
|
|
Purchase a
community driven site. A site with a massive forum filled
with a nice target niche audience can be a gold mine to a
entrepreneur. Often these sites were built by hobbyist fans,
not aimed to profit in any way. Their website might have
ballooned in growth to the point where the bandwidth is
costing them a lot each month and since they are not skilled
in website monetization they will be willing to sell the
site at a bargain price. This can be a great strategy to
make advertising revenue but be very careful with audience
selection. Some forum communities are very difficult to make
money from and may end up costing you more in ongoing
hosting fees. Ideally choose a community demographic that
has established high keyword prices in AdSense/high value to
advertisers (electronic gadgets for example), has a good
selection of affiliate products you could market or suits
some products or services you already sell yourself. |
|
|
|
Look for a
site operating in a highly popular keyword niche or one you
expect will become popular in the near future. Keywords
drive search engine traffic and if you can pick the trends
before they become trends you may own some valuable
property. Consider if you could guess what tomorrow’s best
money websites will be and buy the sites with established
keyword rich content before they become mainstream topics
and overpriced. |
|
|
|
Remove the
competition or merge with the competition. In this case you
buy competing websites or negotiate a merger to combine with
them to create one large enterprise. Depending on the
industry you operate in this can be a very smart strategy to
create market dominance. One of the best examples is website
hosting. Often smaller hosts are bought up by larger hosting
businesses with the result increased stability and
professionalism. |
|
|
|
Purchase a
site strictly for the domain name. Obviously in this case
you don’t care too much about what is already developed in
terms of website content, you just want the street address
(URL). Imagine a few years ago if you purchased mp3.com or
blog.com. In this case the address itself is of significant
value regardless of the website, or if you are good at
picking trends, you might see the future value in a domain
name before the market realizes it.
There are many other options available for how to use a new
website acquisition and of course what you do with a new
website and what type of website you search for will depend
on your skills, the industry you operate in and your cash to
spend. Remember to take some time listing a few goals you
want your new website to achieve and strategize exactly what
you will do with the new website before you buy it. |
|
|
INVESTING TIME
INTO YOUR NEW WEBSITE
Make sure you
have the time to manage your new investment in web property.
Remember just the transfer process and daily maintenance of
your site will take time and energy and if you don’t have it
available now then maybe you should hold off making the
purchase. It would be a shame if your good intentions to
improve a website result in you instead killing it because
you don’t have the time to maintain the status quo. Remember
a new website comes with new responsibilities, for example
support emails and phone, server maintenance, SPAM control
and the usual day-to-day activities of a webmaster. Don’t
get caught up in the excitement of the purchase making you
blind to the reality of how much additional work will be
added to your daily activities.
|
|
|
I could point
you in the direction of a few good website trading sites
(this article has some links – How To Sell A Website) but
you will be very lucky if you find a bargain there. To find
good sites you have to search deep into the web. Use the
main search engines to find websites operating in an
industry you feel confident buying into. Don’t look for the
big sites, the sites on the first few pages of search
results unless they show clear potential – perhaps in
industries with low competition so “bad” sites show up in
the first page of search results. Professional or popular
keyword sites are usually too expensive, well managed (they
wouldn’t appear in the first few pages of the search results
if they weren’t) and the owner likely won’t be interested in
making the sale or will be looking for six figures if they
are.
You must look deep in the search results. Find the
solo-webmasters that perhaps don’t take their site too
seriously but have been diligent over the years adding
content consistently, if not in large quantities. You need
to find the good sites with potential, not great sites
already optimized or poor sites going nowhere. The more
research you do during the search phase the smarter buy you
will make. No matter how much time you put into the search
it’s going to be gamble when you do decide to buy. There are
just too many variables to consider and control, but by
being smart and patient you reduce the risk.
|
|
|
BUYING A
WEBSITE
Once you find
a good site that meets your criteria start monitoring and
researching it. Check backlinks, investigate it’s history
(try the Wayback Machine) and if the site has a community
(forums, chatrooms, comment system, helpdesk, etc) see what
goes on there. Check the site design, the structure of the
links, headings, titles and keyword density. Check the site
statistics if they are available (look for those little
webstat icons or try Alexa rankings).
Once you get a good feel for the site and you are interested
in buying it’s time to contact the owner. You should be able
to find an email address for the website owner somewhere on
the site, if you can’t do a domain name lookup in the WhoIs
database where you will find the email address for the
person that registered the domain. Remember some websites
will simply be hobbies for the owner which will make the
purchasing process that much easier, while others will be
fully fledged businesses making the transfer process just
that little bit longer (think about business registration
and incorporation detail transfers – now consider you
may not even be located in the same country!).
Start casually by introducing yourself to the owner, state
you like the site and then slowly gauge how much interest
the owner has in their web property. Eventually you are
going to have to express your interest in making a purchase
and you can spend as much time as you like communicating
with the owner to negotiate a deal. Like with buying
anything, the negotiation process can be laborious as you
gather the information you need to calculate a price. This
process can be swift and easy or slow and painful depending
on your attitudes and the willingness of the owner to make
the sale and release private information about their
website. You will need to know details like website
statistics, revenues, and costs, all information that the
current owner may be hesitant to give out (see How Much Is
Your Website Worth? for a discussion of important website
metrics when determining the value of a site). Demonstrating
your sincerity at this point will go a long way in helping
you to divulge as much information as you can order to
properly evaluate the website.
If you are lucky the owner of the site may simply be so
excited that their website will make them some money that a
few hundred dollars will seal the deal, others, the more
savvy owners will realise the value of their asset and you
might have more difficulty negotiating and will pay a higher
price. Remember you are never under any obligation to buy so
don’t force yourself to offer too much because there are
plenty, literally millions, of other sites out there.
|
|
|
WEBSITE
DETAILS
When you
finally agree on a price don’t forget to look after the
little technical details as you manage the transfer of
ownership. Here is a list of some important factors:
•Transfer of the domain name registration details, the
business name, incorporation information, hosting ownership
and any third party software or subscriptions to your name.
Check that everything, absolutely everything, has your name
on it by the time the deal is done.
•Get a contract made up outlining the deal and have all
parties sign and date it. Also consider creating a clause
stopping the previous owner starting up a competing site
immediately after the sale.
•Download the email lists. Download the email lists.
Download the email lists. There is nothing more important in
a web business then the mailing lists so make sure you have
these safely in hand with backups.
•Outline how much support, if any, will be provided by the
ex-owner for a transition period. Having the owner available
for questions for a few months after the sale can make the
transfer less stressful.
|
|
|
Given the time
it takes to get a new website off the ground because of
issues like the Google Sandbox and the amount of work and
effort it takes to create a site, produce content and build
backlinks, the prospect of buying a ready established domain
and website is very appealing. If you have a sound
understanding of search engine optimization and the industry
you work in online, you should have no problem finding under
optimized websites, or perhaps fully fledged web e-commerce
businesses to buy. By adding content, fixing title tags,
linking structure and all the other good search engine
marketing practices you can very quickly start reaping
rewards. Sites with quality traffic but no monetization
strategy are huge opportunities ready for you to step in,
stick some advertisements up, use your AdSense optimization
skills and boom, start profiting immediately. Alternatively
you might look for sites that augment your existing web
enterprises and purchase the targeted traffic to effectively
“buy customers”.
|
|
|
|
