Usually bloggers around the world generate revenue from advertising and affiliate marketing. These two are the well known streams from which a blogger makes money. However there is another revenue stream from which a blogger can generate revenue. And that is buying and selling websites.
In fact, you can make a lot of money buying and selling a website. Buying and selling websites is also known as website flipping. This article is just a primer so a blogger should take this as an introduction and not a final guide to website flipping.
What is Website Flipping?
The first one is you create a website from scratch and then sell it. Here you have to create a website and bring all the traffic before selling it. Second type is where you buy a website, curate it or increase its value and then sell it for huge profit.
Second type is more common than the first one. Let us see this in more details.
Analogy Between A Flipping Website and A House
To make it more clear I am comparing website flipping with flipping a house. A house flipper will buy an undervalued house and sell it for a higher price. A smart house flipper always knows how to increase his profits. So he will look for a property which is cheaper now but he knows in coming years the value is going to increase 3 to 4 times.
The house flipper will choose a location smartly before buying the house for a very low price. He will withhold the property for few years so that price can go up and finally at a right time he will sell the house with a profit margin of 200% to 300%. Same thing you do with the website. You buy an undervalued site, curate it and sell it 8 to 10 times higher than the costing price.
Flipping Website: Who is it For?
This is very important so I do not want to mislead you.
It is quite true that like domain flipping you can make millions of dollars with website flipping. However at the same time this is also true that website flipping is for a pro. You can’t start flipping a website without any prior experience with blogging, affiliate marketing and creating websites.
A newbie does not know anything about website flipping. You can’t start flipping a website just after reading this article. You must have an experience of years and years before your start flipping. Hence website flipping is for professionals and not for novice who are new to blogging or making money online.
STEP BY STEP GUIDE FOR BUYING AND SELLING A WEBSITE
Now let us see how you can buy and start selling a website step by step. There are just 6 simple steps involved.
3 Stages of Website Flipping
There are three stages involved in website flipping.
Stage 1 is where you plan to buy a website. This is very important stage before buying because you have to do a lot of research.
Step 1: How Much Can You Afford?
How much money and time are you willing to spend on buying a website?
Let us be honest here, no investment is full proof. There is a chance that you might end up losing money.
What is your limit? $1000, $2000 or $5000? How much can you waste?
You also need time to develop or curate the website you have just bought. The website you just bought might be a passive in nature and you have to do a lot of work to increase the traffic and overall value.
So how much time are you willing to spend daily?
Time and money are important factors.
Step 2: Research Required for Choosing a Website?
The next two steps are the most important steps in website flipping.
What site you should buy? The niche of the site is very important. The niche must be evergreen and not seasonal.
For example niches like eCommerce or health or insurance are going to stay forever.
However niches which are subjected to legislations or laws are going to vanish. One example is pirate websites where people download movies and music for free, even porn websites.
Moreover, you must buy a site that is easy to work on. It means you must be able to bring a lot of traffic in a short period of time. You must have an expertise on the niche you are deciding to buy the site.
Choose a site which ranks high for popular keywords. You must also give importance to the domain name.
Step 3: Research Required Before Buying a Website?
Once you are through with choosing a site you have to do even more research before you make a final call.
Find out why the owner of the site wants of sell it. Is it because of Google updates and the site lost all its traffic? or the niche is outdated.
The owner must be willing to show you the real traffic and revenue. Do not buy a sight that has only one source of traffic.
You can do research on Google Analytics to know what is the exact traffic and its source.
You must ask the seller to make a video about logging them and showing their account details like revenue, traffic source etc.
Videos are genuine because screenshots can be forged.
Finally before signing the deal you can talk to the seller on phone or via Skype.
You can always bargain to reduce the asking price.
In second stage you add value to the site you have just bought.
Step 4: What To Do With the Website You Just Bought?
Here you have to work on the site and increase its value. If you bought a site for $2000 then you must be able to recover the money by making profits every month.
You must bring in enough traffic so that the site gives you $100-$150 every month for next one year.
The selling price will totally depend upon the current value of your site.
You can work on SEO to increase the site’s value. By the time you sell your website it must be generating at least $500-$1000 a month.
Hence work hard to increase its value.
The final stage is selling your website for maximum profit.
Step 5: Right Time to Sell the Website
How long you are going to curate the site before you finally sell it.
If you feel that you have exhausted all options for optimizing and increasing traffic then it is time to sell the website.
You must also know the exact percentage of returns on the investment you made on buying the site.
If you bought the site for $2000 then the return amount of $1500 or more would be good. It is not necessary that you have to recover all the money now.
Finally ascertain the exact value of your site. Before you sell the website you must know how much does it worth.
Step 6: Finally Closing the Deal
Last step is selling your website.
While selling the website you must expect the same thing from the buyer what you expected from the seller when you were buying the same site.
Earlier you were a buyer now you are the seller.
So be prepared with all the proofs like traffic records, monthly revenue and other proofs that a buyer might ask you.
If you got the right buyer then don’t be greedy and sell the site if you are getting returns at least 5 to 6 times. For example, if you bought the site for $2000 then you can close the deal for $10,000-$12,000.
So you make profit of $10,000 + the money recovered while you were adding value to the site (Stage II).
For selling you can go to the same website from where you bought the site.
So this is how you make money buying and selling websites. With experience you can increase the profit margins up to 15 times.