The Lazy Man’s Guide to Owning a Website

Purchasing a website is a wonderfully fast way to eliminate 90% of the headaches of putting together a new website … you get the domain name already chosen, it usually comes with a web hosting package, and if you’re smart and careful, you have a built-in product and traffic. Unfortunately, the overwhelming majority of websites for sale aren’t worth the change in your pocket – so let’s examine the facts.

First, let’s define your goal – to find a website, spending less than $500 for it – and being able to recoup your investment in under 3 months. Why is that the goal?  Because it’s the rule that I use.  I rarely spend more than a few hundred dollars, and I want to see that website earn it’s purchase price in just a few short months.

There are just a few places where I’d recommend purchasing a website – Ebay will be the best, as you’ll occasionally run into real gems. While there are websites that specialize as brokers for buying & selling websites, you’ll rarely find any real bargains.  At least, this has been my experience.  So off to Ebay we go:

Remembering that we’re looking for websites, I immediately drill down into ‘Business & Industrial’ > ‘Businesses for Sale’ > ‘Internet Businesses & Websites’.  If I’m looking for it, chances are quite good that this is where I’ll find it.  Next, I sort the listings by ‘Time: Ending Today”, and I start scanning down the “Bids” column.  I know that I’m more likely to hit the lottery than to find a good website for sale that doesn’t have 25 or more other people bidding on it, so what I’m looking for are websites with double digits in the bid column.

Next, as a personal thing – I eliminate all pornography sites… I realize that you can make plenty of money with ‘em – but I have to sleep at night too – and I’m just not interested in earning money that way. I’ve long believed that if I can’t discuss how I earn a living with my friends & family, then I need to change jobs.

The next category to be eliminated is all websites that are ‘drop-shipping’ sites… How wonderful this relationship is for the dropship company!!  You handle all their advertising, all their complaints, even take the losses on credit card chargeback’s – and they just sit there and collect your money…  No thank you! If you can’t control your own product, it’s not worth it.  If you want to sell products, stock them yourself, and ship yourself.  That way, you control quality, you control shipping, and if there are problems, you can handle it yourself.

I don’t want any website that I have to check every day, I want websites that I can ignore for any length of time – go on vacation if I want to.  While I’m sure that there is plenty of money to be made in these sorts of sites – they have the same basic problem that any site has – how to develop traffic – and if I have to develop traffic anyway – why not stick with websites that don’t require an excess of my time? This limits the types of sites that I can buy, but this is what I’m interested in.

Next, I take a hard look at the website, how is it set to earn money?  Does it sound reasonable to me?  I once found a website for sale that I knew beyond any shadow of doubt had a good product – because just 6 months previously, I had been a customer!!  On the other hand, I’ve seen sites for sale on Ebay that sell either downloadable software, or an informational product, that simply doesn’t resonate with me.  For example, you can find websites that sell databases filled with company listings … but how would I market it?  Where would I go to upgrade my database product?  It just doesn’t hit the right note, so I pass it by.

Is the product owned by the website, or is is an affiliate marketing site?  I much prefer a product that will be owned by the website owner, but affiliate products can be very profitable as well – but you need to check into the competitiveness of others selling the same affiliate product.  Google is your friend here – check out the product name, and see how many other websites are promoting it, and how effective their site appears to be in relationship to the one you’re looking at.

Forget the pre-built “Adsense” sites… they’ll tout how many thousands of pages they have – but they are sharing their content… the content is from article directories, and isn’t unique.  You’ll do far better with your own blog site, or a member site such as this one.  The problem for any website is how to drive traffic, and you simply aren’t going to rank well enough with the Adsense sites you purchase on Ebay to make any money.

Keep an eye out for the ‘popular’ sites… right now, it seems to be Internet TV websites that are popular.  They’ll make money, indeed, they may have made quite a bit of money – but you want a website that will earn you money far into the future – not just the current ‘fad’ websites.  Unfortunately, there’s no way to explain which ones are the current fads – you have to study what’s for sale frequently, so that you can get an idea of what is hot or not…

Another type of site to watch out for is “Dating” or “Travel” sites… you can’t compete.  Don’t even try.  If you want to have your eyes opened, go to SpyFu and search out what Match.com or Travelocity is spending on advertising.  If your budget doesn’t come close to what they are spending on PPC campaigns, then don’t bother trying.  Ditto with auction sites, search engines, or news portals.

Next, is it really an “Established” website? 90% of auction listings touting an “Established” website are actually referring to a turnkey site that might not even be set up on a hosting package yet.  I’m just like a real estate investor looking for ‘distressed’ properties – I want a house that someone’s been living in, but that can be fixed up.  Likewise, I want a website that is actually set up, and drawing at least some traffic, yet has possibilities that the current owner either doesn’t have time to exploit, or doesn’t know how.

I realize that I’m not going to find a website with a Google pagerank higher than around 2-3 for less than $500 – but I am interested when I see some valid pagerank.  I’ll then make the following checks on the website:

• Alexa – Does the site have an Alexa rating?  Few websites at my price range will – but if it does, it’s a big plus.
• Back Links – Does the site already have backlinks pointing to it?  I’m leery if I don’t see anything at all – but I don’t expect to see thousands of links for a website costing under $500.  Still, I do want to see some – because I’m looking for established websites.
• Website Traffic – Unfortunately, short of having direct access to the server logs, you have to rely on the seller for traffic data – but this tool will be a valuable ‘cross-check’ on what the seller is telling you.  It’s not 100% reliable, but it does put you in the ballpark for what traffic a site is getting.  I’d absolutely love to see high double digits or better.  I certainly don’t expect hundreds of visitors per day on a site costing under $500.
• Analyze the Website – How much work am I going to have to do to the basic construction of this website?  Is it basically good – and all I need to do is drive traffic?  Or am I going to be spending a great deal of time fixing up the website first?  This check is particularly needed on unique websites, the ‘one-of-a-kind’ that have been put together by someone that may or may not know what he’s doing.
• Domain Name – if it’s not a ‘dot.com’, I’m not interested.  Half of the value of a website is in the domain name – it must be easy to remember, difficult to misspell, and be brandable or relate to the website product.  If the website looks tremendously good, I’d grudgingly accept a .org or .net, and it would have to be a fantastic site for me to accept a .info – all others are of zero interest to me.
• Is it Unique? – I recently saw a website sell for close to $2,000 on Ebay – yet the identical site was available as a template for $15. (It only took me 5 minutes of Googling to locate the template!)  If the site was really drawing the traffic claimed for it – it might have been worth the price… but why take a chance?  To find out if a site is unique or not will take some time on Google – take the time!
• Website Focus – Does the website sell a product that I’m familiar with?  For example, I have zero interest and no knowledge of “Horoscopes”, so I’ll never buy a site related to Horoscopes, since it would be difficult for me to expand the website.
• Develop Traffic – Does the seller describe how he gets traffic, or offer to help develop traffic?  If it’s all PPC, I’m leery – I want traffic developed other than by strictly PPC advertising. Organic Search Engine traffic is by far the best – PPC or other forms of bought traffic mean little.

Okay – I’ve found a website – and it passes all the tests given above… the normal ‘rule of thumb’ in the business world is that a business is worth 12 months of earnings.  Forget it.  On the Internet – you don’t have a clue what the real numbers are – I’ve almost never paid more than 1-2 months revenue.  If someone claims that a website has earned him $100 a month – I’ll be willing to take it off his hands for $200-300, but not much more.  I’m also referring to ACTUAL EARNINGS, not the future “if you make 5 sales a day” sort of forecasts that you frequently see.  The website traffic must be able to support the claimed earnings.  If my searches show that a site is drawing less than 100 people a day, and the owner is claiming that he’s earning $1,000 a month from the site – things aren’t adding up.  The common consensus is that you’ll sell your product to roughly 3% of your visitors.  Do the math, does everything add up?

Now – the actual purchase – I decide how much I’m willing to pay for the site, then I go to Bidnip – and place my bid.  Bidnip offers a free trial, and what they do is ‘snipe’ your auctions. Sniping is the process where you place a bid just before the close of the auction – Bidnip will place your bid just 10 seconds before the auction ends – and this prevents ‘bidder wars’.  I then simply forget about the website.  I’ll either get it at my price, or I’ll wait for the next one to come along.  I never try chasing the price – if you do, you’ll end up overpaying for a website, and it may take many more months, or even years for it to pay for itself.

Purchasing a completely set up website – with a product, traffic, and sales – is a gratifying way to bypass the time and effort it takes to develop one on your own – but there are many pitfalls – hopefully, this article will keep you away from the more serious ones…

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