Fat Stacks quote from Breaking Bad by Jesse Pinkman

17 Criteria I Used to Buy a Killer Website (and Avoided a Dud)

What if we dont change and something magical happens

I used to think buying websites was a waste of money because I figured I could start it for almost no investment and build it up.

After all, when you buy a site, you’re in the red from the get-go, which means it will take many months to recoup the investment.

Moreover, buying a website can be risky. Many people have purchased duds for top dollar.  I nearly did.

However, in recent months my views toward buying an established site have changed. In fact, I really like the idea if the right site is available. I like it so much, I recently invested $10,000 in my first website purchase. I’m very excited about this because I think it will be a great addition to my overall online business.

I spent a lot of hours analyzing websites for sale on several broker websites.  I ultimately purchased a site listed on Flippa.  It was a good buying experience… but this post focuses on the research I did to to buy a website with great potential (and how I nearly avoided purchasing a dud)… it’s not a Flippa review.

I really enjoyed the process of researching websites.  While it is like looking for a needle in a haystack, every promising site is exciting.

My Primary Reason for Buying a Site

It’s true, I can start a new site from scratch fairly quickly and for very little money.

However, what I can’t have quickly is website authority with the search engines.  Also, I can’t have large social media followings in a short amount of time.

My goal with buying an established site was to find one with decent organic and social traffic but low revenue.   In other words, I was looking for an undervalued site that I could quickly increase its revenue and in the long run increase traffic as well.  By increase revenue on an RPM basis plus increasing traffic results in a substantial increase in site value (not to mention generating a decent revenue stream in the meantime).

I guess you could say I was looking for a good deal with which I could apply what I’ve learned about making money with niche sites to increase its value quickly.

17 Criteria I Used to Buy a Great Website

1. Established site

Established Website

For me, it was important that the site I purchased was established.  By established I mean it’s been a going concern as a website for 2 years or more.  I don’t necessarily require that there be constant growth, but I do prefer it to be established.  After all, sites that are only 1 month old don’t offer much advantage because I could set up something similar within a month.  Of course there are exceptions such as sites that sell software or ecommerce websites with established wholesale relationships.

2. Decent DA and trust

During my research, I purchased a pro membership to Moz so that I could analyze websites for sale.  Until a few weeks ago, I didn’t know much about Moz DA, PA, trust and other Moz metrics.  Now I have a pretty good handle on it.

In addition to being an established site, I wanted to buy a site with a decent Moz Domain Authority score.  By decent, I mean anything above 30.  I know that’s not amazing, but it is indicative of a site that’s established and has some authority.  After all, I didn’t want to shell out more than $50,000 for my first site purchase.  If you want to buy a DA 50 or more, it’s going to cost some serious money (unless you get very lucky).

My Moz analysis included the new Moz Spam Analysis.  This nifty tool assesses sites’ level of spamminess based on 17 factors, including spam analysis of backlinks.  The lower the score, the better.

Please keep in mind that Moz tools are just that, tools.  They can’t replace additional due diligence including asking the seller important questions.

3. Unique and quality content

Quality website

Because I’m buying this site for the long run, I don’t want to have to improve hundreds or thousands of articles.  I wanted a quality site with quality content.

I would say the biggest failing of most sites I analyzed was the poor quality of the content.  Unfortunately many sites are created to be sold and so the content used on those sites is terrible.  Fortunately it doesn’t take long to spot poor quality content.

4. Consistent traffic (especially organic search)

This is important to me.  I want a site with a consistent pattern of organic search traffic because that traffic establishes a baseline for revenue.  If I can increase RPM, as long as traffic remains steady (on autopilot), I can increase revenue.

Moreover, a healthy site has steady organic traffic.

That said, I wouldn’t rule out sites with recent traffic dips if there’s a reasonable explanation such as the seller hasn’t added content in a while.  This is common and as long as there is no search penalty and the organic traffic levels were steady and growing before publishing volume slowed, I would consider it.

After all, it’s hard to be motivated as a seller to keep publishing content if the site is going to be sold.

5. Ability to increase net profit quickly

Every site I look at I do so with an eye toward being able to increase RPM quickly.

Having extensive experience monetizing with ads, I can fairly quickly tell if a site is under-monetized with display ads.

In my experience, one ad placement change can increase the RPM by $5 to $10 or even more.  That alone makes any site purchase a great deal.

Imagine that – the site has a $3 RPM and with one ad placement change you can increase the RPM to $8.  That’s more than a 100% increase in value for about 5 minutes of work.

If you’re savvy with display ads, there are such opportunities.  Of course the site needs to have decent traffic volume for an RPM bump to result in any meaningful revenue.

6. Covers topics I enjoy

This isn’t an ironclad rule, but I definitely kept it in mind for my first site purchase.  Fortunately the site I ended up buying covers topics I enjoy.  More importantly, the site can easily include more topics without appearing odd.  This way I have flexibility with respect to topics I publish on… which is what I really like.  I love having topic freedom for niche sites… yet still within a particular vertical.

7. Potential to grow significantly (I tend to look at organic search growth mostly)

Not only is the ability to quickly increase RPM important, you want to ensure there’s growth potential.  There are a million ways to grow a site.  Consider the following:

  • Increase present keyword search engine rankings
  • Publish more content targeting more keywords
  • Improve on-site SEO (a good example is if a prospect site isn’t mobile responsive, you may be able to get an organic search bump simply by making it mobile responsive).
  • Improve social media engagement
  • Buy traffic
  • If you’re skilled at getting Google search penalties removed, you could do really well buying penalized websites and then removing those penalties.  BUT – be sure you know what you’re doing and have successfully had penalties removed in the past.  A purchased website should not be your first kick at the can for attempting to remove a Google search penalty.
  • All of the above

I plan to do all of the above except try to recover a penalized site.  While the site I purchased is a great site and it’s been run very well, I’m optimistic I’ll be able to grow it substantially.

8. Able to cross promote existing website(s) (including cross promote social media channels)

It’s great to buy web assets that can be used to funnel traffic to existing sites.  This isn’t a requirement for me, but it’s a plus.

I know some publishers focus on buying sites in related niches to gain the leverage of building a network of related sites.

I’m not quite that strategic, but I’ll definitely do some testing of cross-promotion.  I’m not sure it will work well or not.

9. Ability to include high-engagement topics and articles that will fit with the site’s topics

I like B2C niches that are ripe for being able to publish high-engagement articles within the site’s topics.

I like high-engagement because when done right, it does well attracting organic search traffic and can often pay for itself or more from the initial burst of social media traffic.

10. No copyright infringement issues

This is a biggie for me.  It can also be a dealbreaker.  I can’t tell you how many sites I checked out and asked about whether a license and/or permission was obtained for the images used.

Most sellers responded with “yes, I have permission… I got the image from Google Image search”.  As far as I’m concerned, I don’t consider images from Google search as being freely available to publish elsewhere.

Copyright infringement is simply not a risk I’m willing to take.

TIP:  I strongly suggest that any website you’re looking to buy you ask the seller if they have a license and/or written permission to use every image on the site.  Quality sites will have such permissions because they’re owned by people who take being a website publisher seriously.  This is particularly true if the site is image-focused with galleries etc.

11.  Built with WordPress

This isn’t a dealbreaker for me, but it definitely helps because I know WordPress well which makes for a smoother transition.

I prefer not having to migrate from another platform to WordPress.  I also don’t relish having to learn another website platform (especially ad management which can get complicated enough on WordPress which I know fairly well).

12. Avoid following the heard with respect to multiples

Many people say an established website is worth 20 to 30 times net monthly income.  While it’s good to have guidelines, I think if you’re not willing to pay a higher multiple you may miss out on good deals.

For my first website purchase I paid a 50 multiple of monthly net income.

Of course you don’t want to pay too much, but suppose you see a site that has great traffic, but is not well monetized.  That’s a great opportunity.  In fact, if revenue is absurdly low given the traffic, paying a high multiple can still be a great deal.

13.  Large social media following

Crowd of people running

I’d rather have awesome organic search traffic, but large and engaged social media followings is the next best thing.

In fact if you’re buying a website in a related niche to current niche sites, you can easily leverage the new social media accounts by sending traffic to existing and new sites.

The site I purchased had decent social media channels; the Tumblr account was fantastic with more than 100,000 Tumblr followers.  I think that will be interesting.

14.  Can You Publish Similar Content?

In my case, I wanted to buy a site for which I could outsource 99% of the content creation and still be a great site.  In most cases, if you have a good budget, content can be outsourced.  However, in some cases, if you don’t plan on outsourcing the content, you must ask yourself whether you’re able to generate the content that’s at least as good as the existing content or hopefully better.

15.  Niche/Informational Website

My aim with buying a site is to leverage my knowledge and success as a niche publisher with a new site to improve its value and revenue quickly.

Therefore, I restricted my search to websites with which I have extensive experience, namely informational niche sites that are monetized with display ads and/or affiliate promotions.

Since I have no real e-commerce experience, I avoided e-commerce websites.  Also, since I’m not a coder and have not had experience selling software, I avoided websites devoted to selling software-oriented products.

The take-away here is, in my view, it’s a good idea to buy sites you’re familiar with so that you can leverage your experience and knowledge to make it a success.

16. Is the site on the Verge of Exploding to 500,000 monthly pageviews?

Why 500,000 monthly pageviews?  Because many top-tier ad networks have a 500,000 monthly pageviews threshold.  If you can get a site quickly to 500,000 plus monthly pageviews, you may qualify for admission to some great ad networks.

That said, if you already have a high-traffic site and are admitted to top-tier ad networks, adding ads to a subsequent, lower-traffic site is usually a done-deal (see my next point).

17.  Leverage my existing ad network relationships

This isn’t really a criteria, but it’s a point worth mentioning.  Because I have some successful niche sites, I have plenty of solid relationships with ad networks developed over time.  These relationships mean I have some additional monetization options in my hip pocket to add to a website to improve revenue quickly.

Many ad networks require a minimum number of monthly pageviews (often 500,000 or more).  However, once you’re an accepted publisher with these ad networks, adding more sites, even if they don’t have 500,000 monthly pageviews is usually a done deal.  In other words, ad networks with a pageview threshold are willing to let publishers place ads on smaller, lower-traffic site when already accepted into the network.

IMPORTANT:

The above 17 criteria are guidelines only.  If a site you’re looking at doesn’t meet all 17, that doesn’t mean it’s a bad purchase.  If it meets 10 of the criteria, it could be an excellent purchase.  The 17 criteria above are what I look at when analyzing a site.

Why pay more if you don’t have to?

In my case, I paid the Flippa the Buy It Now price.  That price was 50 times monthly net income.

The last auction bid was 15 times monthly net income.  Yes, I could have entered the bidding game, but that meant I may not get the site.  I knew I wanted the site.  I also believed the buy it now price was still a good deal.  I decided to pay top dollar based on current revenue levels.

Pitfalls to Watch Out For

Caution Sign

During my site research, I was interested in several sites.  I managed to avoid buying a dud.  The following helped me avoid buying that dud.

Please note that the pitfalls I list is not an exhaustive list.  There may be other pitfalls to look out for.  I’m only sharing what I’ve learned.  When buying a site, do your due diligence exhaustively.

1. Comb through Analytics Carefully

One website sale listing I really liked was an 8 year old site that stated a pretty solid “organic traffic” number that appeared consistent. It had a really good DA and PA score. SEO Moz spam score was only 1/17. On the surface, it looked like a great buy with huge potential.   Moreover, the owner told me in writing he was the copyright holder for every image.

Always dig into the “organic” traffic numbers!!!

However, in Analytics I assessed the organic traffic sources and learned that most organic traffic was from Yahoo and Bing. After further analysis it appeared the site suffered a Google Penguin penalty in April 2012.

TIP:  Many website listings use the term “organic search traffic”.  That’s totally fine, but keep in mind that includes Google, Yahoo and Bing.  If the organic traffic is only from Yahoo and Bing, there’s clearly a problem because Google search traffic should be the highest source of organic search traffic.  The point is analyze all organic search traffic sources

While the site was being sold on present traffic volume, the problem is that since the site suffered a Google Penguin penalty and never recovered, the potential organic search growth is very low. I’m not a Penguin recovery expert and don’t care to learn how to become one. Going through a link disavow process, which probably has pretty low success rates, is not a task I wish to undertake.

Moreover, SEO Moz spam score for this site was 1/17, which is very low. Therefore, you can’t rely solely on SEO Moz or any software. You must analyze the numbers in Analytics very carefully looking for any anomalies.

2. Are you positive you can increase revenue?

Of course nothing is certain when investing in a website, but the main consideration for me is whether I can increase the revenue quickly. Methods to increase revenue include:

  • Adjust ad placement for a higher ad RPM
  • Increase traffic
  • Increase revenue with other or additional revenue stream(s).

I’ll give you an example:

Suppose you find a site earning revenue primarily with AdSense and the RPM is $3.

If you have experience earning decent revenue with AdSense are confident with some display ad changes you can increase RPM to $6 overnight, that’s a great investment. After all, you purchased the site based on a monthly net income multiple. When you increase the revenue, you increase the value of the site.

Another example includes being able to increase traffic quickly. Perhaps you have related social media channels that you can leverage to drive traffic because the topic is related to your existing social media channels. Once the site is in your hands, you turn on the traffic spigot and voila, you’ve increased the value of the site very, very quickly.

And then there’s the growth potential consideration. I don’t just look at the potential to increase net income quickly, I also look at growth potential. I want to be able to apply knowledge, assets and team in a way to leverage the existing site so that it can grow quickly with minimal investment.

3. Rely on logic, not emotion

It’s easy to really, really, really want a site, even if it makes no logical sense.  I nearly fell into that trap.  Buying a website is a business decision.  You must be almost certain that you can get a positive return on your investment.  Emotion can cloud analysis and result in making a bad investment.

4.  AdSense Not Banned

I can’t imagine I’d consider buying a site for which AdSense is banned.  While this is easy to verify such as noting verified AdSense earnings with the site listing or asking the seller, it’s something you want to check.  It could be easily forgotten and it would be a shame to pay for a site only to discover you can’t place the most lucrative ads on it.

Even if you have no plans to use AdSense, you don’t want to cut that avenue off.  You never know if AdSense will be the best way to monetize a site.

Tools I used to assess my first website purchase

I’m sure experienced website buyers will be able to point out a lot of things I failed to do.  In fact, I welcome such tips in the comments.

At the end of the day I went with my gut once the numbers checked out.  That said, I didn’t buy it blindly.  I used some basic analysis software to assess the site.  I used the following:

Analytics

For every website I was interested in buying I asked the seller for “read and review” access to Analytics.  If a seller does not give you this, move on.  That means they’re hiding something.

Just because a website listing has some verified Analytics data, it doesn’t tell the entire story.  For example, Flippa listings include Yahoo and Bing traffic in the organic search traffic figures.  Without digging into Analyitcs you don’t know whether the site has been penalized by Google search.  If most of the organic search traffic is from Yahoo and Bing, there’s a problem.  Unless you’re a penalty recovery expert, it’s probably best to avoid such sites.

There is a lot of information in Analytics.  I didn’t check out every number, but I did review the following:

Organic search traffic (in detail):  I spent quite a bit of time reviewing the entire history of organic search traffic of every website I considered buying.  I wanted to be sure there weren’t any problems.  Moreover, the longer the consistent organic traffic trend, the better.

Traffic by Device:  I also like to know on what type of device the traffic is from.  Is it mostly mobile?  Mostly desktop?  This is important because it impacts monetization. Typically mobile traffic will earn less than desktop.

Traffic from social media channels:  In my view, social media channels are only as good as the traffic they can generate.  Just because a site has tens or hundreds of thousands of followers doesn’t mean that’s good.  What matters is whether those social media channels actually generate engagement.

That said, if you’re savvy with social media, you can find great deals if you’re able to improve social media engagement.  This alone could dramatically increase website traffic quickly.  Therefore, it’s a good idea to check out the engagement on all associated social media channels of any website you’re considering buying.

Organic traffic volume by landing page:  What I’m looking for here is to see if most of the traffic is going to a few posts or whether it’s spread out across many posts.  While it may seem attractive to buy a site that has a few posts pulling in huge organic traffic numbers, that traffic pattern is riskier than a more spread out traffic pattern to the site.

Why riskier?  Because if you lose rankings for the high search volume keyword(s), your site will lose a lot of traffic.

This wouldn’t be a dealbreaker for me, but I am more comfortable with a site that isn’t getting the lion’s share of its organic traffic from one or a few keywords.

With the site I purchased, it wasn’t ranking in the top 3 for any massive keyword.  In other words, organic traffic is nicely spread out across hundreds of posts.

I also analyzed traffic volume to the top 100 pages to get an idea of what kind of content on the site performs best.  This way I can assess whether I can leverage prior success by publishing more (a lot more) of similar types of content to quickly grow organic traffic.

With the site I purchased, I definitely noticed a trend of article types that performed best.  They were listicle/best-of types of posts which was a great discovery because I love publishing those types of posts.  They’re easily outsourced, relatively inexpensive to produce and there’s no limit to the volume of posts to publish.

Traffic by Country:  This is a biggie.  I prefer sites that get most traffic from the USA, Canada, the UK and Australia.  If you buy a site where most traffic is from India, monetization will be more difficult.  Of course if you’re from India and that’s your intended market, that’s fine.  The point is to know before buying where the site’s visitors are from.

SEO Moz

Once I was serious about buying the site, I purchased my pro Moz subscription for the first time.  I must say I really enjoy the software.  I particularly like the Chrome extension which displays DA/PA and other key Moz metrics for every site I visit.  This will be useful far beyond analyzing potential sites to purchase.

Moz definitely helped with my buying decision.  I relied upon the spam analysis, DA/PA and trust factor metrics.  I did a cursory backlink analysis as well, but relied more on the Spam Analysis more than combing through the massive lists of backlinks.

If buying a site, I recommend a pro subscription to Moz.  I believe they offer a 30 day free trial during which time you can check out a lot of sites.  I think I’ll keep my Moz subscription because I’ve found it useful beyond the website purchasing process.  In fact, it’s very useful for assessing the competition and keywords so I’ll probably hang on to it.

Spend Time on the Site

You don’t want buy the site unseen.  I spent hours on the site I purchased with an eye toward the following:

  • I read the content to ensure it was unique and high quality.
  • I analyzed the monetization.
  • I analyzed navigation (considering how it could be improved).
  • I analyzed site design (and how I could improve it).
  • I analyzed user experience and how I could improve time on site.
  • I analyzed post formats.

I wanted to ensure the site was reasonably well set up yet with some tweaks could be considerably improved.  Of course I will have to test changes such as site design, navigation, etc., however, upon purchase I had a clear plan of attack.

My Brain

I say this tongue-and-cheek, but there’s quite a bit of truth to it.  A site can have great numbers, but if you’re paying a decent amount of money, you have to consider it carefully?  Can you leverage existing sites/social media channels?  Can you leverage the site’s existing authority?  Is it a site you’ll enjoy working on?  Is it a site you have the the skills and knowledge to make it a success?

Of course crunch the numbers and analyze trends and do your due diligence, but also think about it from a bird’s eye view.

How to Spot a Search Penalty?

Penalty Kick

I think the best way to spot a search penalty is to look at the organic Google search traffic chart from site inception to present.

Specifically, check out whether there was a significant traffic drop in April to May 2012 when Penguin first rolled out.  When I did this checking out one site, I noticed a massive drop.  This signaled to me a Penguin penalty.  I asked the seller about this and he admitted it was a Penguin penalty.

IMPORTANT:  Flippa listings only provide traffic history for 12 months or so.  You must examine traffic from the beginning of the site to present to see if there were any significant traffic problems.

If there’s a nice trajectory with no permanent traffic drops, chances are the site is in good shape Google-search wise.

I realize this isn’t a foolproof filter, but it’s pretty good.

While I like the Moz Spam Filter tool, it’s not foolproof.  In fact, the one penalized site I nearly purchased scored a 1/17 spam score (which is really good).  I spotted the search penalty when looking at the 8 year Google organic search traffic chart.  Sure enough, in April 2012, organic Google search traffic plummeted and never recovered.

If you know of other ways to look for penalized sites, please share them in the comments below.

Should you buy a website suffering a Google search penalty?

I never would.  It limits growth potential.  Even though I also generate traffic from social media and paid traffic, I still love organic search traffic.

However, if you’re expert at getting penalties removed, you could probably make a lot of money buying penalized sites and then recovering them.  Some sites pre-penalty had a lot of traffic; if you can recover even 50% of that traffic and then continue growing organic traffic, you can buy sites for peanuts and turn them into a golden goose.

Of course it’s still risky because there’s never a guarantee you’ll remove a penalty.

I’m not interested in recovering sites or learning the process so I stay away from penalized sites.

What Were the Metrics of the Site I Purchased?

Sorry, but I’ll be vague here.  I haven’t decided whether I’ll reveal the domain of this site.

  • Type of site:  Niche site (i.e. informational website)
  • Monetization:  Display ads and Advertorials
  • Site age:  >5 years.
  • DA:  30 to 40 range
  • Organic search traffic:  80,000 to 90,000 per month
  • Total monthly page views:  110,000 to 180,000
  • Website platform:  WordPress
  • Social followers:  130,000 (mostly Tumblr)
  • Price Paid:  $10,000 USD
  • Net income before purchase:  $200/month (yes, that’s a 50 multiple I paid).

I paid a 50 multiple of monthly net income because the site is very high quality with consistent organic search traffic and I was positive I could increase RPM very quickly as well as harness its authority and social media accounts to increase organic traffic quickly.

4 Weeks Post-Website Purchase

Man paying cash

I drafted much of this post as I went through the buying process.

I’ve now had the site for 4 weeks.  So, how is it going for me?

It’s good and bad.

The Bad

No immediate profit bump:  It turns out the niche is one where RPM from display ads is lower than I anticipated, regardless where I place ads.  This was a miscalculation.  Let’s just say I’m not going to triple or quadruple the revenue anytime soon.  It’s definitely back to the drawing board for me.  However, I have some ideas… which is the main reason I bought the site in the first place.

Many moving parts:  As a first-time website buyer, I didn’t really think about the implications of becoming the sudden owner of a huge site with editors, hundreds of writers and large social media channels.  This was another oversight.  I should have known better and been prepared.  After all, my other sites have many moving parts; this new site has many, many moving parts that I’ve been thrown into.

Despite there being a huge learning curve (new niche, huge site, loyal audience, many contributors, etc.), I’m really happy with the purchase.  It’s challenging, but it’s a site anyone would be proud to own.  The thing is I don’t want to ruin what it has going for it and so I must proceed carefully.

Totally unrelated to my other B2C sites:  One really good reason for buying a website is to integrate it with existing sites by leveraging the social media channels, email list, traffic etc.  However, the site I purchased is totally unrelated to my other sites so I can’t really leverage anything.  I knew this before buying it and went ahead anyway because of all the other attributes it had.

The Good

All the metrics are very, very good.  Organic search traffic remains stable even though content production dropped during transition.  Social media channels are relatively engaged.  Frequency of content being published by contributors is astonishing.

Content is contributed for free.  This is something I didn’t really anticipate. It’s a site with a huge community.   The community, many of whom are aspiring journalists (many of whom are extremely talented) contribute top-notch content for free.  I’m not talking about pictures of their cats and dogs.  I’m talking about really well written articles.

I’ve never enjoyed this with a site before.  In fact, this site is run more like a real publication than anything I’ve ever owned.  There are editors for each category and a huge group of writer contributors.  There’s a chain-of-command and content is published daily.  It’s really cool, but it’s a lot of work to ensure standards are met.

While content is free and always has been for the site, I’m going to start paying for even more content in an effort to attract writers in the space who are established and have large followings.

The content is incredible.  It’s written by professionals in the niche as well as knowledgeable aspiring professionals.  It’s not content by your run-of-the-mill writing agencies.  It’s content by people passionate about the topics.

Excellent site design:  I like the site design.  No work needed.  I did test some other designs briefly, but it didn’t work out.

Stable:  This is huge.  The traffic is stable and has been for years.  It’s not a one-keyword-wonder.  No proactive SEO has been done whatsoever.  It has over 20,000 posts.  Let’s just say as long as I don’t do something monumentally stupid, traffic levels should remain stable (and hopefully grow).

Niche-specific ad networks available:  It turns out there are ad networks that cater to this niche specifically so that RPM will be higher than what AdSense and my usual spate of ad networks generate.  The problem is these niche-specific ad networks want 500,000 monthly pageviews before accepting the site.  This means goal numero uno is to get to 500,000 monthly pageviews.  Trust me when I say I’m doing everything I can to make that happen as fast as possible.

Overall:  I’d say the good far outweighs the bad.  I’ve not regretted the purchase for one second.  I love having this site and hope to fulfill its vision in the long run.

My long term plan with the site

Goal and plan

GOAL: Increase value, net income and while making it one of the top websites in its vertical.

How?

Invest Resources:  I’ve hired an editor-in-chief and established a $1,200 monthly budget for additional top-notch content.  In the past the site operated on a shoestring budget.  I’m fortunate to be able to invest in an effort to ramp up the site quickly.

This will keep the site in the red longer than expected.  However, it’s an investment with the hopes of pushing the site into the very top echelon of sites in this vertical.  The potential organic and social traffic is enormous (tens of millions per month), so while ad RPM is not as high as I enjoy on other sites, the potential traffic, if I play my cards right, is enormous.

This site is in a niche where networking and outreach are important.  The editor-in-chief on board has extensive contacts in the industry to get listed with other sites and to attract writers with their own massive reach.

Expand the topics:  We’ve decided to add another category to the site which makes sense with the existing categories and is a topic that is very lucrative online.  We have some serious stiff competition, but I consider that good because it’s indicative of the potential monetization.  It’s also a topic I know reasonably well and enjoy.  In fact, most of the site covers topics I (and millions of other people) enjoy a great deal because it’s fun.  That said, the site is fairly serious in that the writers take the topics serious and really know what they’re talking about.  In other words, it’s far from being a clickbait site (which isn’t necessarily bad … just a different model).

Leverage the site’s authority:  I do plan on publishing article series with huge revenue potential that will either pull in a lot of social traffic and/or organic search traffic.  These articles may be on topics not directly related to the current categories – so I’ll publish them as stand-alone series on static pages so they’re out of the blog loop.

White hat outreach link building:  I started white hat outreach link building as taught in RankXL this past week.  Link building of any sort has never been done (although it has plenty of decent links).  I think this can increase traffic over time.

Improve On-Site SEO:  I think there is opportunity to pay a little more attention to keywords and on-site SEO to improve organic search traffic.  However, I must be careful here because writers don’t want their copy dictated by SEO.  I agree with them so this will be a bit of a learning curve.

Test paid traffic:  I think I can come up with some articles that will work with paid traffic.  This can immediately increase the site’s traffic.  As usual with paid traffic, it’s not a sure thing but definitely worth trying.

FAQ

Should you buy a site if you’ve never published a site before?

Should purchasing a site be your first kick at the can as a blogger or website publisher?

Clearly there are benefits to buying a site; however, looking back at my online career, I think it helps to have built a few successful sites from scratch first before plunking down thousands of dollars on a website.

That said, if you have hundreds of thousands of dollars in the bank and losing ten, twenty or fifty thousand dollars won’t affect your livelihood, who am I to suggest it’s better to start from scratch than buy an established site?

How much should you spend on a website… what’s a good price range?

I set out with wanting to spend no more than $30,000.  $50,000 if if was an awesome deal.  I ended up spending $10,000 which is a comfortable amount for me to part with for a first site purchase.

I wouldn’t be comfortable mortgaging anything to buy a website.

I also didn’t want to get a new website for $500 because there’s not too much value there that I can’t establish quickly on my own.

At the end of the day, your budget is personal and it depends on your reason(s) for buying.  For me, I wanted an established, high quality site that I could grow and would be profitable in the long run.  I also wanted a website I would enjoy publishing.

What net income multiple should you pay?

I paid a 50 multiple of monthly net income.  This is fairly high.

Most information out there about buying websites suggest a site’s value is based on 10 to 30 times monthly net income.  The newer the site, the lower the mutliple (generally).  Also traffic sources come in to play.  Stable organic search traffic is more valuable than paid traffic, for instance.

In my view, while the multiple suggestions are helpful, you must assess the site individually and the potential it has under your ownership.  This could very well mean it’s worth paying an above-average monthly net income multiple.

Other pricing factors to consider

Outsourcing Expenses:  If a website has high outsourcing costs attached to it and you plan to not pay for outsourcing, buying a site could result in a higher monthly profit to you immediately.

Hosting Costs:  If a website has high hosting costs attached to it and you have a hosting account that won’t increase in cost to you by adding another site, this effectively lowers the monthly cost to you (this was the case with the site I purchased).

There’s a lot to consider

As you can see, there’s a lot involved when buying a website, just as there is when buying any type of business.  Invest time in your research and due diligence.  The fact is you can lose your shirt or make a terrific deal.  Often the outcome is based in part on the site your choose to buy.

Disclaimer:  The above is information I used and steps I took to purchase a website.  I cannot and do not guarantee or represent that following the above will result in a successful website purchase.  As always, do your own due diligence and realize that buying any business, especially websites, is a risky endeavor.

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