Opening your computer screen and seeing revenue numbers like this doesn’t happen by accident. Read this article to learn how you can avoid my mistakes and how to purchase sites that will be profitable, returning your investment in a one to two years and then offering purely profitable positive cash flow into your bank account.
Part of the reason I’m writing this article is to give back to the Niche Pursuits community, as I would not be in the position I am today or a successful website owner if it were not for some of the articles I’ve read on the website.
I’ve been a Niche Pursuits email subscriber for a few years, and I’ve found the information in their emails to be incredibly valuable. When I see a Niche Pursuit email in my inbox I either read it right away or star it so I can read it in the near future.
I first heard about the idea of buying and selling websites in a Niche Pursuits email article, and a few months later that article is the reason I decided to purchase my first Flippa website.
I’ve made a lot of mistakes buying websites, which I want to share with you here so you can avoid making similar, quite expensive, errors like I did. I have also learned a lot from these mistakes and have a few successful site purchases that I will continue to grow and build on. I plan to invest my successful site proceeds into more website purchases as they continue to bring in revenue.
What I’ve Learned From Investing in 4 Flippa Sites Overview
Site #1 lesson – Don’t believe everything they tell you, always verify revenue claims
Site #2 lesson – Look at the long term, don’t invest in something that is a fad or trend
Site #3 success – It’s possible to make all your money back + pure profit in 10 months if you learn from past mistakes
Site #4 success – Always buy sites under 20X monthly valuation, when you pay attention to detail you may be able to get them for only 10X
How To Get Started Purchasing Your Own Site
Don’t believe everything they tell you, always verify revenue claims
My first visit to Flippa, I was very curious, open and completely naïve. I saw all these revenue numbers for sites and my mind was blown that they could all be making that much money!
I found a site that claimed to be making $350/month from Amazon affiliate revenue. I asked what they would be willing to sell for, and we negotiated $1,300 for the site, less than a 4X monthly valuation.
I was so excited to purchase my first site and thought it was such a good deal that I completely trusted the seller and did not second guess, look into, or even use my common sense to check the revenue numbers.
The owner posted a few sales screenshots and sent me some revenue number screenshots, but looking back they were likely revenue screenshots of his entire account lumped together, not just the site he was selling me.
Turns out the site was only making $20-50/month on a good month. It really hurt to be tricked like that, but, it was an incredibly valuable lesson to learn as I never made the mistake of overvaluing a site again.
Lessons learned – what you need to know
Looking back, being able to purchase a site for under 4X monthly valuation is in itself a huge warning sign. If you see a site selling for anything less than a 5 or 7X monthly valuation it stands out to me in big red as a scam or lie. Most site owners have worked hard to build a site, and if it is valuable and making them an income every month, they will work to explicitly verify their revenue and get a decent 15X+ monthly valuation price.
One great feature on the Flippa site is “verified revenue” numbers for all sites that make revenue via Adsense. Flippa also verifies page views and visitors via Google Analytics. When I look at sites now, I only consider sites with both verified Adsense revenue and Google Analytics.
This site also did not have verified revenue numbers, as it made money as an Amazon Affiliate site. It did have verified Google Analytics numbers, however.
I could have easily used my common sense and looked at the Google Analytics data to realize the site owner was lying about the $350/monthly revenue. The Google Analytics traffic averaged 1,000 visits a month, so even at an astronomical 5% conversion rate, that would be 50 conversions a month, making around $1 or less/conversion. I would have easily been able to tell the site was making well under $50/month if I had applied some common sense and basic math skills before pressing the buy button.
There is no reason not to buy an FBA or affiliate site as long as you thoroughly look into the numbers and use the common sense to double check the numbers using Google Analytics data and industry average conversion rates, which I did not do.
The main takeaway from my lesson learned on this site is don’t be too eager, and look at the site objectively and carefully before you make an offer.
Look at the long term, don’t invest in something that is a fad or trend
My second site purchase was also made in a poor state of mind, desperation to find anything I could buy that would make me over $1,000/month so I could quit my job.
Being in a positive, neutral state of mind while purchasing a site is something that will help you avoid making huge mistakes.
This time, with my newfound appreciation for double-checking and verifying site revenue, I found a site making $500 “verified Adsense” revenue a month. Looking at the Google Analytics and doing a basic RPM calculation, I realized the site could easily make double or triple that with an ad provider switch provided the traffic stay stable.
I made an offer and purchased the site at a 20X monthly valuation.
At first the traffic stayed stable and I was able to double the monthly revenue to over $1,000/month by switching ad providers.
Lessons learned – what you need to know
Turns out my assumption that “traffic would stay stable” was completely false in this case.
In a better state of mind, one other than pure desperation to have a profitable asset, I probably could have seen this coming, but as it was, I was desperate.
The site was an iPhone game app answer site. Game applications have a half life of 6 months, and a few months in traffic started to sharply decline.
As of today, 1 year later, I’ve made back 75% of the website cost and it continues to return minimal revenue, however I still look at is a failed investment and lesson learned.
Your takeaway from this is to only invest in long term ideas and sites, not ones that are passing trends, games or fads.
Don’t make my mistake again, and I know I never will!
It’s possible to make all your money back + pure profit in 10 months if you learn from past mistakes (see lesson #1 & 2)
My third website was a two-site combo, which I of course carefully verified the revenue on and picked a stable niche.
A bonus of my third site is that it has a committed community that continually generates content for the site, making it completely hands-off for me.
I bought this site at a fair 20X monthly valuation, and knew I would be able to at least double the ad revenue, making it back much sooner.
I was able to increase the monthly ad revenue from $370 to $1,200/month by partnering with several different ad providers.
It’s been 10 months since I purchased the site and I’ve made back my entire initial investment + an additional $1,600 in pure profit. I continue to make $1,200/month in pure profit from the site.
Lessons learned – what you need to know
A key and often underlooked component of buying a website is being in a good state of mind. When you are not desperate and are able to be objective, you’ll be able to evaluate a site’s revenue accurately, pick a stable niche, and make an offer that is fair for you and the seller, creating a win-win situation for everyone involved.
Always buy sites under 20X monthly valuation, when you pay attention to detail you may be able to get them for only 10X
My first site I purchased with a very small investment, which is what I recommend to anyone purchasing a site for the first time, since it is a risk, and starting small allows you to minimize the risk while still learning and possibly making a good deal.
My fourth site is the biggest investment I’ve ever made, aside from stocks.
I purchased it a month ago at an incredible deal, a 10X monthly valuation, which I was able to do with a special technique I’ll outline below.
I call this the “expired site” technique. I filter on Flippa to see sites that meet my minimum monthly revenue goal that are also no longer active auctions. This means they have previously been put up for auction but no one bought them.
This means you have no competition when negotiating an offer and are speaking with someone who wanted to sell their site but was previously unable to. I’ve found the best deals are often found this way because they are often very profitable sites other people have overlooked.
This site has huge organic search potential and my goal is to double the organic traffic by next month, meaning I could see a full investment return in 5 months or less if I’m successful increasing the traffic.
Even if traffic stays the same, a 10 month return is a very good deal and not something I would be disappointed with. Remember, after the 10 months when your investment is returned, all revenue becomes pure profit.
Lessons learned – what you need to know
To find good deals on sites, focus on sites others have overlooked and search using the “expired site” method. Also focus on keeping your offers at a 20X valuation or under to get the best deal. 20X valuation is the accepted standard on the Flippa marketplace.
Have you learned a lot, and are now ready to make your own first purchase?
Where To Buy Your Website
I bought all 4 of my websites on Flippa.com because it is a site where if you look closely you’ll be able to find great deals.
However, Flippa sites are often lower ticket sites and if you’re looking to spend upwards of $40K, you’ll likely have to look elsewhere. Empire Flippers is a great site with much higher ticket and value sites. They pre-vet and verify sites beforehand so that you don’t have to be as careful vetting in advance because the sites are generally legitimate.
The only downside to Empire Flippers is you pay a premium monthly valuation, generally 30X, as opposed to the 20X or under deals you can find when you look closely at Flippa. Empire Flippers also takes care of the entire transaction for you, including transferring the site, which takes away the hassle for those with no website transfer experience.
Other Ways To Find Profitable Websites To Purchase
There are other ways to find and purchase great sites including simply sending an email out to your email list if you have one, or posting in website or investment Facebook or Linkedin groups, which is exactly what the owner of Niche Pursuits did when purchasing his brand new site, a mom blog , for a price in the six-figure range.
Think creatively, such as the type of person or group who may already own your ideal website, then think of ways to contact them. There are many people who own profitable websites, now it is your job to think of who and where they might be, and how you can get in touch with them. The more creatively you think, the more opportunities you will have to find amazing sites.
I also offer a website buying service where I take care of finding a profitable site, negotiating and purchasing the site, transferring the site to your host, and offering advice how to increase the traffic and profit. Feel free to contact me if you are interested in learning more about how to hand the difficult parts off to me to buy a profitable website asset.
How To Negotiate A Great Price
To negotiate a great website price, you’ll have to get and verify all the stats, privately message the seller to get more information and build some trust and rapport, then formulate the price you are willing to pay in your mind which ideally should be 20X monthly valuation or under, then ask the price they are looking for. If the price is under your maximum monthly valuation, then make an offer and you will have a new site at a great price with lots of potential to make the investment back plus much more as time goes on.
Author: Stacy Caprio
Founder, Growth Marketing
The post Buying Websites For Sale: What You Need To Know & How I Make $3K/Mo appeared first on Niche Pursuits.
This is a news feed, by author Stacy Caprio, the original post can be found here Buying Websites For Sale: What You Need To Know & How I Make $3K/Mo.