The web site development business is similar in many ways to real estate in that there’s an abundance of land for development, but the greatest demand and highest prices go to the areas with the highest profit potential.
As in the real estate business, many investors have realized that developed web site properties can be purchased for relatively small amounts of money, improved over a short period of time, and either resold for a profit or held to provide a passive income stream.
If you’re interested in flipping a web site for profit, keep the following in mind:
The Value of Experience
The saying in the real estate business when it comes to flipping houses is that you make your money when you purchase the property – not when you sell it. The same is true with websites. When flipping web sites, always look for those that can be purchased with minimal investment and turned for maximum profit. Investors with experience in online marketing and web site ownership will have the greatest advantage because they’ll have a better idea of a site’s profit potential based on their own experience.
Start Small
If you’re looking for your first web site to flip, start small. Investing a small amount your first time out is a great way to minimize your risk. Use the profits from your first small flip to finance your next larger one.
Go With What You Know
Look for web sites that appeal to you. The key element in a web site flip is the investor, and if you have no interest in the product it will be difficult to improve or even maintain the site. Start out by looking at sites themed toward your profession, your hobbies, your pets, or your social life. Having experience in the same genre as your website automatically gives you an advantage in making it more profitable.
Ask Questions
When purchasing a web site, it is important to learn as much about the site as possible before investing. Ask the seller how much money the site is making currently, the number of unique visitors to the site for the last three to six months, the number of page views per day, the hosting arrangements and the bandwidth requirements of the site. Consider using our web site buyer’s checklist to make sure you’re asking the right questions
Watch Out For Inflated Traffic
When it comes to traffic, more is better. Watch carefully for web site owners that inflate traffic statistics artificially by manipulating log files, counting web spider and bot visits, high traffic incoming links that will expire after the site is purchased, and large amounts of paid traffic over short periods of time
Get the Business Plan
If you’re purchasing a web site that already turns a profit, make sure to get all of the information you’ll need from the buyer to duplicate their results. Are they using banner ads or text links from another source? Are they contributing regular articles? Do they purchase paid traffic from a search engine? What keywords do they target? Any reputable seller will be happy to share this information with you when they pass on the site. Often, it’s best to have them lay out a business plan on paper. Don’t be afraid to question them about any part of the process and follow up with them later on if you have a question.
Move the Domain Name
Ownership is nine tenths of the law. Always transfer the domain name to a registrar account under your own control. Never leave it in the original owner’s name.
Previous Engagements
Be sure to ask the original site owner if there are any previous engagements you’ll be expected to honor once you purchase the site. Think about things like ongoing contests with promised prizes, memberships that have already been paid, text links that have already been purchased, etc. Be sure to ask all the questions outlined in our buyer’s checklist.
Use Your Network to Promote the Site
If you’re flipping multiple websites or if you own a network of web sites already, you have a distinct advantage over your competitors! Use sites in the same theme to boost traffic, search results, and reputation while waiting for your sites to sell. Avoid artificially inflating traffic statistics, but use multiple sites to promote those in your own network. Purchasing and flipping multiple websites in the same theme can add instant value to each of the sites involved. You may even consider consolidating content and membership to a single site.
Improve the Web Site
Lastly, before purchasing any website you should have a clear idea of how you are going to improve it. Do you have a plan to increase advertising revenue or bring in new members? Do you have an affiliate program membership that would work well with your potential purchase? Do you have an existing website you can use to boost traffic to the new purchase or vice versa? Whatever your plan, make sure it is outlined carefully and within your means. Avoid purchasing a website simply because it looks cool and figuring out how to flip it later on.