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Business of Buying Website

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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Jim Karter on April 17th 2008 in Business, Earning Money

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40 Responses to “Business of Buying Website”

  1. kluka responded on 17 Apr 2008 at 2:18 am #

    Nice tips thanks!

    I’ve got just one question. Where do you find sites that pass all the tips above?

    I to have some money lying around :)

  2. Pushkar responded on 17 Apr 2008 at 3:18 am #

    Thanks alot, very nice compilation indeed. Can be easily treated as checklist

  3. Pushkar responded on 17 Apr 2008 at 4:00 am #

    Hey Jim Karter, one question - What kind of sites will you recommend to buy, I mean I know you said the one with zero maintenance but what kind of sites are zero maintenance sites ? turnkey ? lyrics ?

  4. chenzen responded on 17 Apr 2008 at 4:48 am #

    Good post. Nice points.
    Sometimes people take the last three or one month of revenue and post it as an average monthly earning.

    Would you mind posting about some good
    marketplaces for buying and selling websites?

    Thanks for sharing.

  5. Redfin responded on 17 Apr 2008 at 6:30 am #

    going beyond using the traffic tools you mentioned - I find that using gostats is the best way to get a handle on what their traffic is really like. (because of split between unique visitors and unique “hosts”/”ips”)

  6. suresh responded on 17 Apr 2008 at 6:31 am #

    A well planned post and step by step to follow as it is to buy a website domain.Checking the details with third party resources is always safe and we shall feel happy about after deal after the deal.
    Nice post.

  7. Adam Dempsey responded on 17 Apr 2008 at 6:31 am #

    Nice useful list, have bookmarked for future reference :)

  8. Zeaun responded on 17 Apr 2008 at 6:58 am #

    Having gone through the process outlined a couple of times, I find that it’s a good idea to ask the owner to install the Google Analytics script at the beginning of the deal, if they have not already. In just a week you will be able to see what the traffic is like and from where it is coming from. Extrapolate those numbers and you’ll quickly see if the owner has been honest.

  9. harshads responded on 17 Apr 2008 at 7:05 am #

    Great post Jim.

    I use histats.com for the stats because it gives good statistics and I will recommend it.

  10. Dickson responded on 17 Apr 2008 at 7:12 am #

    Best advice on site buying I’ve ever seen.

  11. Bujes responded on 17 Apr 2008 at 9:32 am #

    Great tips Jim. Which marketplace would you recommand?

  12. Ankit responded on 17 Apr 2008 at 12:03 pm #

    Hey man..

    very nice tips… thinking of buying some…
    If we extend the logic of finance and real business landscape, then we can also go for hostile bidding… ;)

  13. Kunle Campbell responded on 17 Apr 2008 at 12:38 pm #

    very very helpful tips indeed.

    My question is where are the best marketplaces for trading websites?

  14. James responded on 17 Apr 2008 at 2:55 pm #

    I would say if they have GA installed ask them to add your email address to thier account so you can see the live traffic and everything.

  15. Carol responded on 17 Apr 2008 at 8:36 pm #

    I don’t know what to say…I do really admire your talent to make money online. I am sure your tips take a big role in your friend success.

  16. Gopal responded on 18 Apr 2008 at 3:00 am #

    Great post Jim, thanks.

    A question on the 5′th point… “If a site publishes Adsense, how much CTR will you consider as ‘VERY HIGH’.
    …thanks

  17. GettyCash.com responded on 18 Apr 2008 at 3:45 am #

    Thanks for the tips :-) You are my inspiration.

  18. egk responded on 18 Apr 2008 at 4:02 am #

    So if I have $44,000 laying around can you help me turn it into 5k a month?!

    Good post, nice tips.

  19. Debt Cures responded on 18 Apr 2008 at 12:35 pm #

    Jim-

    Thanks for the excellent post. I’ve bought a few books on buying websites and your free tips are worth more than some of the books that I had to pay for.

    Thanks,

    Adam

  20. Asia'h Epperson responded on 19 Apr 2008 at 1:24 am #

    5K revenue monthly is very good. The investment amount will be recovered in less than a years.

    Good advice.

  21. Armaan Bhati responded on 20 Apr 2008 at 2:06 am #

    Thanks for this tips..
    I will buy some sites soon

  22. Degree Dropout responded on 20 Apr 2008 at 5:41 am #

    Nice tips Jim

    It acts as a quick reference while buying a new site

  23. tansks responded on 20 Apr 2008 at 7:04 am #

    Thanks for the tips. I will use as my checklist.

  24. Tech blog responded on 20 Apr 2008 at 11:45 am #

    Those are great tips.
    Thanks man. :)

  25. JewelrySoup: Diamond Ring Jewelry responded on 21 Apr 2008 at 11:56 am #

    Great article for online investment.

  26. Website for Sale responded on 21 Apr 2008 at 3:47 pm #

    That is indeed a good article.

  27. Carol responded on 21 Apr 2008 at 9:04 pm #

    My brother told me that he is interested to start a new blog few days ago. I think your tips are proper for him right now. I’ll pass it to him soon.

  28.   Daily Blog Summary - April 22 by Full Tilt Blogging.com responded on 22 Apr 2008 at 2:00 pm #

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  29. David responded on 23 Apr 2008 at 1:05 am #

    This post has been featured in FullTiltBlogging.com’s Daily Blog Summary today. Great post!

  30. Paid Surveys Reviewed responded on 23 Apr 2008 at 1:29 pm #

    It just shows you that you need to speculate to accumulate! Looks like your friend made some good choices.

    Thanks for the tips too, there are some good points I had not thought about.

  31. Bujes responded on 28 Apr 2008 at 1:32 am #

    Great brilliant, i want thats too

  32. Mat responded on 29 Apr 2008 at 9:48 am #

    wow..great tips and advice..i will refer you post later i want to buy a new domain/sites

  33. webguy responded on 29 Apr 2008 at 2:16 pm #

    This is a fake story. all the marketplace is full of scam sellers. I don’t trust this story at all.

  34. rik responded on 10 May 2008 at 9:11 pm #

    New to your blog, and love it.

    Question: for the benefit of those who don’t have $44,000 to spend buying sites, how do you build an ‘online real estate’ portfolio if all you can afford to lay out is the cost of domain registration and hosting?

    Is it really worth $44,000 to buy existing sites instead of building new ones from scratch?

  35. Jim Karter responded on 11 May 2008 at 11:57 am #

    You can do it without that much money, but it will surely take time. A long time, for which not everybody is ready.

  36. Gino J responded on 11 May 2008 at 12:09 pm #

    Great article. I’m planning on buying some websites and your tips is a great help for me.

  37. Apoorv responded on 24 May 2008 at 11:48 am #

    Cool Tips,

    For buying/Selling websites I always recommend Sitepoint !

  38. DDesigns responded on 25 May 2008 at 4:19 am #

    Excellent information, very helpful…

  39. articlesubmission responded on 30 Sep 2008 at 8:43 am #

    Hi Jim really great information this post have, it really makes worth

  40. ady responded on 03 Oct 2008 at 10:12 pm #

    Very good tips. Need only money to invest

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