My Experiences With Buying And Selling Websites
Last Update: Dec 27, 2018
It's been a while since my last post, so I thought I'd share some experiences that a lot of people might be interested in, but not have much experience with themselves.
I'm going to cover buying and selling "established" websites in this post. My definition of an established website is something that is already getting traffic, and already making some consistent money.
It doesn't really matter if that site is making $50, $100, $1,000 or even $10,000 per month, my definition is quite broad!
Anyway, I've been on both sides of the fence on multiple occasions, and when I first joined WA, the concept of buying/selling or "flipping" websites was quite alien to me. Since then, I've sold quite a few established sites, and bought some for myself too.
As a side note, what I'm going to cover is separate from my main turnkey website business, because I want to cover soemthing everything here can get involved in, and cover different sizes of businesses. So this is all based on the sites in my personal portfolio.
I'm basically planning this post to just be an explanation of why people might buy an established site, why they might sell one, and some other lessons I've learned along the way.
I've bought sites as expensive as $120,000 (twice, though once I partnered with someone else) and I've bought sites as low as $500. I even picked up sites off WA members in the past after they decided to move on.
On the selling side, I've sold sites in the five figure range, but not yet sold one for six figures, though that will probably change in the next 6-12 months when I sell one of the $120,000 ones I bought.
I know these numbers might seem very high and like soemthing a long way above anything you can afford, or would even want to afford, but it was only a few years ago that I could barely afford a WA subscription. Things can accelerate quickly once you have some traction and you have the inspiration to see what is possible.
Why Do People Buy Already Earning Websites?
It really depends.
Generally, the reason people would buy a site vs building one, is because:
a.) It takes the doubt of whether or not a site will succeed away. If it's already established, then it is proven.
b.) It's usually faster to take a site from $1,000 to $2,000, than it is to take a site from $0 to $1,000. Even $0 to $100 can take exponentially longer.
There are other reasons why people buy though. People who have capital and are looking for a good ROI may want to invest in websites, because the returns are so much higher than real estate.
Sometimes I buy sites because I can see a good room for growth, othertimes I'm just looking to buy and hold. I bought a site once that was making $500 per month, and I had seen a few opportunities to grow it. In both situations the ROI is great.
I did so by improving some of the monetization, and by adding more articles. Within a year, the site was making around $1,200.
You might think "Ok so you spent a year and only grew the site by $700 per month." or you might think "$500 per month isn't life changing, and $1,200 per month also isn't life changing", and perhaps you'd be right!
But for me, I looked at it like this:
"I bought a site for a certain amount, and in one year it was worth almost triple that amount".
I basically earned 150-200% ROI on that investment, which is great considering most investors think 10% is a good ROI.
So in conclusion, people typically buy sites because they either don't want to wait for a brand new site to succeed (if it ever does), or because it's a great return on investment. Even if you don't grow a site, you can still generate good returns just by maintaining its income levels.
So Why Do People Sell Sites?
For there to be buyers, there must also be sellers, so why do people sell sites if they are doing well and generating nice returns?
Every one has their own reasons, but for me, I think there are a few key reasons people sell.
On the one hand, there is a big opportunity cost in working on a site. It takes up your focus, and your time, and some of your financial resources too. Sometimes I sell a site simply because I think "I could spend six months growing this site, and maybe it will only grow a small amount. Alternatively, I could sell it, and use that money to buy a site with more/faster potential, or I could sit on that money and just focus on another site instead".
As well as opportunity cost, some people sell sites because they have reached the top of their capabilities. Maybe you're great at getting a site from $0 to $1,000 but for some reason, you haven't yet mastered getting the site to go higher...or you're in a niche where you need to be a really big player to get the site higher.
So hand it over to someone who has more resources/skills, and go back to starting a new site, or focusing on one of your others.
I used to think I would only sell a site if it was going to make me hundreds of thousands of dollars, even millions, but the reality is that we're just trained to expect these huge pay days by the news and media talking about big acquisitions that companies like Google or Facebook make.
You don't need to have seven zeroes for a sale to make sense.
There are other reasons too. Maybe you think your niche isn't all that evergreen, so getting a big payday now instead of having it dripped out over two years is less risky, or maybe you have just lost interest in a particular topic.
When I sold my first site, I did it because I just had no idea how to grow it, so I figured somebody else with more skills might see value in it, and they did.
I sold another site because I was offered $27,000 for it, and I wanted to buy a different business for $25,000 which I felt had more potential, so it was kind of like a straight swap in that sense.
I ended up holding that $25k business for about 2 years, and then selling it for $36,000. Not only did I make around $11k profit on that business, but it also paid me $24,000 in monthly earnings while I held it, so really I doubled my money in around two years, or a 50% ROI.
I feel like if I go on, I'm really going to get into the weeds and go off tangent, so maybe I'll bring this post to a close.
I'm sure you have a bunch of questions, so feel free to ask them below. Maybe you'd also like me to share some more posts in future, or some training, which teaches more about the actual "how to" of buying and selling websites, rather than just the conceptual stuff?