Time and time again you’ve heard me rattle on about the need to build long term assets to survive. Traffic brokering is a volatile gap-market to be working in, and if you’re not setting some time aside to expand in to other ventures, you’re going to run in to a brick wall at some point.
Site flipping is something I’ve never posted about before, and yet it’s probably one of the most interesting areas for an affiliate marketer to work in. It’s a chance to leapfrog your way to those long term business assets without needing the creativity, time or technical know-how to build them yourself. It’s the art of investing in a good concept. Something any self respecting entrepreneur should be able to appreciate.
And it’s a very simple concept to get your head around. There are many websites for sale on the net. Some of them are untapped goldmines of potential revenue that a lesser webmaster simply hasn’t thought to monetize properly. As affiliates, we’re typically a long way ahead of the average website owner when it comes to finding ways to drive profit from a site.
By scouring various online marketplaces, it’s possible to buy websites that have already been developed with outstanding content. We can then choose to apply an affiliate’s touch. Hopefully to raise the revenue being generated by the site with a view to selling it on at a greater price – “site flipping”, if you will. Of course, you can also choose to bag the redeveloped website for yourself and keep it as one of your long term business assets.
Nothing says “well diversified” like an affiliate with a few dozen automated and high-quality websites earning him a few hundred dollars each every month.
Unfortunately site flipping is one of those areas where if you go in unprepared, you’ll end up getting mislead in a market where there are 1001 tricks that a seller can use to artificially inflate the true value of a website. This post should hopefully warn you against a few tricks of the trade.
Ten Commandments For Successful Site Flipping
1. Become a dirty great cynic. – Whenever I visit a website marketplace, I’ll make sure I’m already feeling cynical. Maybe I’ll play Radiohead in the background and pound myself in to a state of doom and gloom. The reason being because there’s simply so much bullshit that a site seller can attempt to get more money for his creation. If you go looking to buy a website with the attitude that you’ll snap up the first bargain you find, prepare to be burnt. Be super cynical and don’t be afraid to ask for whatever necessary data you need before agreeing to a sale.
2. Don’t trust the seller’s traffic stats on face value. – So you’ve stumbled across an excellent looking website and you’re salivating at the thought of 65,000 unique hits/month in a high profile niche. With a 1% conversion rate, that’s 650 sales, right? Don’t be such a retard. You need to know exactly where that traffic is coming from, the countries of it’s origin and whether the traffic will be sticking around after your purchase.
I’ve seen websites for sale boasting 20,000 unique visitors/month, but what the seller isn’t keen to disclose is the fact that nearly all of them are triggered by a pop-up on his own high traffic site somewhere in Ethiopia. Oh, and that he’ll be removing the pop-up after the sale. Get smart about it. If the seller is currently driving a shitload of low quality traffic through PPV, for example, you can pretty much disregard any value he attributes to the current traffic levels.
Assess the website as it’s own little standalone business. Is it well diversified with organic traffic being driven from a number of different sources? That’s what you should be looking for.
3. Adsense is for amateurs. – If a website is boasting Adsense as it’s main source of income, your little affiliate ears should be standing on end. Adsense, with a few exceptions, usually means that the webmaster is pretty clueless when it comes to monetizing his site. Why would you plaster ads over your website for OTHER affiliates to use your own high quality content for their own gain? Remove the Adsense, replace with your own banners, and you could flip a profit in the space of a lunch break.
4. Look out for licensed software platforms. – I got duped by this trick last year. I purchased a website built on the CubeCart platform, but I failed to check how the long the license would last. Contrary to our agreement, the motherfucker deactivated the license after a month and I ended up having to pay more than I set out for the actual site just to renew the license.
If you’re buying a website built on licensed software, make sure you nail down the terms of the transaction so both parties are clear who owns the license, how long it has left to run, and any other bullshit escape clause a slimy dealer might use to shaft you over. This includes the site domain.
5. Ask what has been spent on the site so far. – Of course, you want to know what percentage of the site’s traffic is being delivered from paid traffic sources. Otherwise you could just build the same damn site for yourself. But it’s also important to find out if the seller has paid for any banner placements, directory submissions, classified listings…anything that you might potentially have to replicate to maintain the current levels of traffic. If it’s not free, and it’s not automated, you need to know about it.
6. Is there any work required to maintain the website? – If the site involves distribution of any kind of physical goods, you need to be considering the implications of what an actual “brick and mortar” business involves. Basically, asking yourself “Am I too much of a lazy motherfucker?” If the website is selling something, make sure that the sales funnel requires absolutely minimal processing at your own end, or ideally none at all.
I only bother investing in websites selling virtual goods. You should be careful not to end up site flipping your way in to a position where you’re responsible for a dozen small businesses that each require your time and care. Automation is key, and it will dramatically increase the number of potential buyers if you choose to sell the project on.
7. What are the hosting requirements? – If you’re purchasing a very bespoke website, it may come with specific server requirements. These can be a Grade A pain in the jacksy. Nothing will frustrate you like having to purchase a brand new server to recreate a specific hosting environment for a site that currently only makes $47/month. Make sure you can handle your new baby, or that it shows enough potential to merit such an investment.
8. What are the reasons for the sale? – This sounds petty. Well, I’m a petty man. I like to know exactly why a website is being sold. My logic being that if there’s a reason for selling, there’s probably a reason for not buying. In cases of turnkey sales, my mind rests a little easier. But if a seller is boasting an automated website providing $500 of profit per month. Why would he sell it for $800? He only has to wait 6 weeks to match that ROI by keeping it. Explore the reasons for selling and compare them to your own reasons for buying. Don’t get stuck looking after somebody else’s wobbly dying donkey.
9. What do I know that the seller doesn’t? – I specifically like to find websites that are developed by passionate fans of their chosen niche. Firstly, it guarantees a level of excellence in the content. I like value that a marketer wouldn’t be able to replicate without outsourcing. But secondly, by targeting these kind of websites, you often have a raft of knowledge for monetizing the project that would dramatically increase the website value. I like to use forums as an example. Most forum owners create and develop their communities because they like to play God. Their ROI comes in the form of members and posts.
If an affiliate marketer can get his dirty hands on hours of work where the content really is king, his task of monetizing it becomes a whole lot easier. Look to buy what you cannot build overnight.
10. Sleep on it. – Hey, listen. It’s better to miss out on a promising looking website than it is to jump the gun, buy it now, and end up waking in the morning with that bitter taste in your mouth. You know, the “why the hell did I just buy a website about the culling of trees in the Amazon rainforest? Oh yeah, just because it mentioned acai in the footer” kinda taste. Yes, site flipping is a competitive business. But there’s plenty more competition for being a retard with a bunch of failed investments in your portfolio. Think before you buy, eh?
Finally, here are some marketplaces to check out for site flipping galore: