We are in the golden age of buying and selling websites.
Remember when you could buy Bitcoin for $10?
In 5- 10 years there’s going to be too many barriers to entry into the ‘investing in websites’ industry it’s no longer going to be an option.
I’m going to share with you my own actionable tips and strategies for investing in websites in 2020.
In short: If you want to make money from buying and selling websites, you’ll love this guide.
Let’s get started.
Website Investment Fundamentals
In this chapter, we’ll cover the basics.
First, you’ll learn exactly the criteria that you need when searching for a website.
I’ll also explain why it’s important to consider return-on-investment (ROI) from the very beginning.
How to buy a website?
Let’s slow down. We’ll get to the best marketplaces for buying and selling websites.
Before we jump to that, let’s outline the various types of websites you can buy.
Different Types of Website Monetization
Ad Sales When visitors click on your ads, you get paid.
AdSense When visitors click on your ads, you get paid by Google.
Amazon Affiliates When visitors click on your ads or product links and buy, you get a commission from Amazon.
Clickbank When visitors click on your ads or product links and buy, you get a commission from Clickbank.
Dropship When visitors buy from your website you purchase the item from a third party and ship directly to the customer. No need for holding inventory.
eCommerce When visitors buy from your website you ship directly to the customer.
Subscription When visitors really like your content, they pay a monthly/annual fee to access more content.
In the beginning, I was all about AdSense It felt good to have tech giant Google paying my wages. But this gets risky.
It’s all about the sheer quantity of visitors. If you take a significant traffic hit, so will your revenue.
Nowadays, I’m more fond of the Amazon Affiliates monetization. It’s the opposite and is about quality, targeted traffic with commercial intent.
This is where strategic SEO comes in handy.
Buying and Selling Different Asset Types
There’s also a lot of different asset types.It’s not always a domain, content and a WordPress theme.
Let’s outline the various asset types.
Domain Just the .com, .co.uk, .whatever. It will usually be parked with no content.
Website The domain, theme, and content (typically everything associated with the brand)
Amazon FBA The storefront on Amazon aka the Amazon eCommerce store.
App An app on the Google Play or App store.
Forum A fully fledged online community.
Website Investment ROI
Now for the juicy part.The return on investment that you get with buying and selling websites is great – if it’s done right.
Not only is the ROI attractive, the investment is low risk if you’re familiar with web development and digital marketing. To show the ROI of a website, check out our example below:-
EXAMPLE OF WEBSITE ROI
Let’s say you want to buy a website. That website is making $1,500 per month.
In buying and selling websites, the average multiplier is 25x the revenue. On a marketplace, this website would be listed for $37,500.
So you buy the website for $37,500 that’s making $1,500 per month….You’re now making 4% return on your investment monthly. Or 48% return on your investment yearly.
The question is: How do you sustain this revenue?
And what investment strategies are there to guarantee your return on investment? Well, that’s what chapter 2 is all about…
My Favourite Investment Strategies
There are websites that only have a short-term potential.
There are websites that have a GREAT long-term potential. And there are even websites that will be bad investments and lose you money.
In this chapter, I’ll show you the two main ways you can invest in websites and avoid losing your money.
Website Investment Strategies
Not all websites are created equal.
In other words, if you want to make decent ROI, you need to focus on your investment strategy. Depending on the time-frame you are working with.
And needless to say, these are the types of strategies you want to focus on.
The Flipping Model
Buying an asset and selling it in a couple of months is known as flipping. For the less patient investors, this strategy is for you. You may audit a website and identify a few quick changes you could make to increase earnings overnight.
Increased Clicks by 87% Month-on-Month
Back in 2008, I invested in my first ever Amazon Affiliate site.
It was in the technology niche (men’s gadgets). The website wasn’t making much, it was more of a personal experiment. Anyway, the main source of revenue was links to products throughout the articles (in the text only). I thought, why not the headings and images?
I added more affiliate links in headings, images, tables wherever I could legitimately place them. Clicks increased month-on-month by 87%. This had a direct impact on revenue as visitors were guided to Amazon more efficiently.
This is a very basic example, but it worked. You would be surprised at how many top earning websites miss out on fundamental steps like this.
Let’s say you add more affiliate links to your website and it generates an additional $500 per month. When you go to sell it, it’s going to be worth ($500 x 25) an extra $12,500 more than you bought it for. So you bought a website for $37,500 and all of a sudden, 3 months later you’re selling it for $50,000. Congrats, you’re a Flipper now.
Flipping works effectively for investors that have an area of high expertise, using this to increase earnings substantially & rapidly.
The HODL Model
No, that’s not a misspelling.
Buying an asset and holding on to it for the long-term is called the HODL. For the patient, strategical investor – this is for you. HODL – Hold On for Dear Life.
Let’s break it down.
If you are looking to expand your portfolio, you will need to consider the HODL model. There are a lot of benefits to this long-term strategy. It can also be a lot of fun because there are no limits.
Investing in a Brand
For the past couple of years I’ve been developing my portfolio. Because of this, I’ve been way more selective in buying and selling websites.
One of my biggest investment criteria is the brand potential.
Let your imagination run wild for a second. Picture your website appearing on Forbes, your business cards, your corporate HQ.
Now you have seen the big picture. Start building that brand from the ground up.
If you’re interesting in learning more about this. Here’s a guide on Why Good Branding Is Important.
Marketplaces for Buying and Selling Websites
In this chapter I’ll reveal some of the best marketplaces to buy and sell websites.
Sure, you can exchange assets privately but I do not recommend this.
Also, marketplaces tend to carry out due diligence for you – legitimising the asset you’re about to spend $50k on.
Let’s dive right in…
This is a good place to sell your business if it's a high value listing. They have been in the game since 2010 and have an extremely high sale success rate.
FE International is on my list on 2020 to sell and buy with, so watch this space for a case study.
In a nutshell, this is an outfit that has been going for more than 10 years. They have brought the M&A game to the online space and look extremely professional.
As a result, I feel very confident on the buying and selling front.
If you have a high value property, I would advise contacting FE International first to get a valuation. It may be the best ROI out of all of your marketplace options.
Now onto the next marketplace which is Empire Flippers, the one I've had the most experience with. Feel free to ask any questions in the comments below.
These guys mean business. Literally, they broker empires of web assets.
Empire Flippers tend to be more selective than other online marketplaces and have a high quality of assets available (new listings every Monday).
Let’s take a closer look at the benefits and drawbacks.
Empire Flippers is my go-to for buying websites. Sure they have a smaller selection of assets but they make up for this in quality.
There’s a reason why the new listings are eagerly anticipated on Mondays. I even have alerts set up in my calendar.
My most recent purchase has been on EF and although there were some hiccups during my migration period – I generally had a pleasant experience.
Now onto the next marketplace, one I call the eBay for websites.
Think eBay but for websites. I’ve been using Flippa since 2006 and still check it on a weekly basis. Careful though, like eBay, there are a lot of dodgy sellers on there.
Flippa is great, easy to use and there is a great selection of assets. I focus on the Editor’s Choice listings as these have been vetted by their team.
However, don’t rely on this. I recommend asking for Google Analytics access, verified earnings reports and video chatting with any seller before you invest.
Protect your investment.