hill of cash

next up the hill: promote the web site

Buy a Website

If your experience is in sales and marketing rather than web design then it may be simpler for you to buy a website that is already trading in your area of expertise and modify it to suit your requirements. It may even be an opportunity to buy out your opposition.

There are many websites in the buy and sell market but few are really active.

Flippa is my choice. Their recently published statistics indicate:-

• 1,267 Listings Open Now;
  788 Bids in the Last 7 Days;
  $321,077 Sales in the Last 7 Days;
  35% of Listings Sold Overall; and
  $28,188,948 Sales since the site started.

In other words, the site is really active!

Flippa charge $19 for an advertisement listing plus 5% when sold.

The problem with buying or selling anything on the Internet is 'How much can you TRUST the other party?' - there are so many crooks out there.

Flippa overcomes this problem to a large extent by examining each item put up for sale and checking as best they can for ownership, quoted statistics, quoted current earnings, etc. and then acting as an arbitrator in any disputes.

Buyers can see that each seller has a points score indicating honest dealings in the past - similar to Ebay ranking.

Escrow.com is often used as a trusted third party to protect both buyer and seller. For a fee, Escrow gets both parties to agree to the terms of the deal then holds the purchase money.

Once the money is cleared the 'goods' are shipped. In the case of a website the agreed documents are sent with links and passwords to all areas of the site, domain name, hosting, statistics, database, etc.

The buyer then has an agreed number of days to inspect the documents and satisfy themselves that they are getting what they expected to get in the terms of the deal.

On acceptance, Escrow pays the seller the agreed price less any fees.

As of November 2009 Escrow charges 3.25% or $25 minimum on deals up to $5,000 then $162.50 plus 0.26% of the deal from $5k to $25k and 0.89% of the agreed selling price over $25,000. There are other charges for International deals and for a Premier service.

Well the smart answer is 'What it Sold For!'

So go to the 'Just Sold' page on Flippa and see for yourself.

Now the value will vary for many considerations; popularity, traffic, page rank, earnings, membership list, your competition and after sales support.

Some (buyers?) give a rule of thumb that the selling price should be between 6 to 12 months of proved earnings over that period.

Others (sellers?) say that 1 to 3 years of earnings, as with conventional businesses like high street shops, is fairer.

Personally, I can't see the sense in selling a site for only $6,000 that is bringing in $1,000 a month. Realistically, a website has very low overheads compared to a 'bricks and mortar' business and an income of a thousand a month may only have costs of $20 to set against it. Put $6k in a bank and it will only earn about $200 a year!

The Risks?

Well if the income is just from Google Adsense then the site could be removed from the Google Index for some infringement in the recent past, like paid clicks to boost recent income.

If selling a product, does the new owner have the rights to resell the product?; is the product due to be withdrawn?

If the site sells marketing methods for Twitter, FaceParty and similar sites, does the method meet the Terms and Conditions policies of Twitter, etc. or is it about to be banned?

Is the domain name owned outright by the seller or is it actually owned by the hosting company and impossible or costly to move. See my page on Domain Names.

These and similar hurdles can and should be part of the buyers 'due diligence' investigation before purchase.

next up the hill: promote the web site