Should You Buy Websites For Profit, or Just Continue to Grow Your Current One?
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In his best-selling book The Richest Man in Babylon, George S. Clason explained money and financial success like this: “Wealth, like a tree, grows from a tiny seed,” he wrote. “The first copper you save is the seed from which your tree of wealth shall grow.”
If you can take and plant the right seed at the right time, it will grow into a powerful, sustainable tree. This is true for websites and investments alike.
In countless ways, buying websites is like buying investments; if you purchase the right one at the right time, maintain it, and let it grow, a small website can turn into a gigantic powerhouse of traffic, activity, and revenue. And while this article isn’t investment advice, it is a deep-dive into exactly how some incredibly smart investors were able to purchase hundreds of websites and earn far more than they invested through website profits.
If you ever wondered what it’s like to buy websites for profit, then look no further than Ezoic’s own DNA; this company was built on buying hundreds of websites, learning how to turn a profit from them, and apply those lessons to other sites. Our founders invested over $5 million dollars in web properties, buying and investing and building hundreds of websites while earning significant revenue.
But before we go into the specifics of how to find, appraise, and successfully buy sites, let’s go over the pros and cons of this process.
The Pros and Cons of Buying Websites
Anyone who invested in Apple or Microsoft back in the 90s is probably sitting pretty right now, where a $1,000 investment would be worth over $4 million dollars today; that was a good investment, to say the least!
Of course, there are millions of other investments investors made in the 90s that went nowhere. Deciding whether an investment is good or bad takes no small amount of wisdom, foresight, courage, and shrewd calculating.
Buying websites can be compared to many other common investments; it costs a lot up front, but good websites can make you far more money than your initial payment for years to come. If you can own and operate a successful website, you can earn enormous income (mostly passive if you have a team to manage the site for you) and make a difference in that audience’s lives.
Owning popular websites affords owners unique prestige, power, and of course, revenue. John Cole, co-founder and CCO of Ezoic, invested $360,000 dollars for a website in January 2013; the first year of owning that site, Cole saw an ad earning of $280,000 dollars, and it earned around $20,000 dollars a month for several years after owning it; definitely a good investment!
On the other hand, buying websites can be a risky business. Savvy website buyers must check each website for countless factors and traits to ensure it’s a good investment: how the traffic is, if the traffic is legitimate, if the site was banned by Google for some reason, etc. No stranger to the ups and downs of buying websites, Cole bought another website in June 2011 for $8,500; unfortunately, he failed to realize that the majority of that site’s traffic was coming from adult websites, meaning most of the site’s traffic (and revenue) went away once he had to redirect it to stay aligned with Google’s policies.
The choice to buy websites is yours; you can earn enormous revenue and create a massive impact in your new site’s niche; or you could accidentally buy a worthless site that never recoups your initial investment!
Still, savvy website owners can buy websites for profit and truly earn significant revenue, if they know how to find, appraise, and successfully purchase the right site.
How to Buy Websites For Profit in Three Steps
John Cole, Ezoic’c co-founder and CCO, explained that buying websites can be summed up into three basic steps:
1. Find Good Prospective Sites
2. Appraise Them Correctly
3. Contact the Owner to Do a Deal
First, you have to find good prospective sites. This can be tricky; massively popular sites might not be nearly as successful once you take a closer look, while plenty of modest-looking sites can reveal an enormous traffic source. You have to know where and how to look in order to find a great potential site to buy.
A great filter for your initial searches is to look for evergreen sites, in niches and topics that have proven to be popular for years or decades. Think politics, personal growth, relationships, finance, history, food, marketing, etc. The content and knowledge of these topics from twenty years ago would probably still be applicable today.
Choosing evergreen sites ensures that despite any ups and downs in the market, these websites can still depend on consistent organic traffic not dependent on recency or trendy interests.
Here, you can see John Cole’s reasoning of evergreen vs non-evergreen sites, focused on keywords that will not change much — or at all — over time. While keywords like “sausage casserole recipe” will probably little to no traffic “spikes” throughout the year, there’s a good chance they’ll be getting consistent traffic. On the other hand, there may be massive spikes for seasonal trends and gossip like the Amber Heard trial, but traffic will probably die down completely after just a few months.
There are plenty of tools, plugins, and browser extensions that can help with this assessment and search process. First, SimilarWeb is a free, public tool that helps you get a good idea of average monthly traffic, traffic sources, and visitor trends over time. It’s a great “general” assessment of a site.
Next, you can use SEMrush to see a more complete identity of a site’s organic traffic and SEO potential, like seeing more information on keywords, keyword rankings, and how well these SEO keywords perform in organic search queries.
You should simply make a personal judgment call on these sites; does it pass the “smell test”? Does it appear like a good or bad site? At first glance, would you trust it’s a good site, or not? This means looking at traits like:
- Does the site have ads? (Is it monetized?)
- Are these high-quality or poor quality ads?
- Does the site have active and recent posts and content engagement like comments and likes?
- Does the site load quickly or slowly?
All these are just some examples of what savvy website buyers check when assessing a new site. With all skills, you’ll get better at this over time.
After you’ve done extensive research, it’s time to appraise the sites and make an informed estimate on how much you think the site may be worth (more on that later). For now, there are a few more key checks you should make when appraising a site.
The above screenshot is an evergreen site Cole was appraising. It was an evergreen site (it was focused on historical data and figures), it appeared to have an active traffic model, and looked like a clean, well-maintained site.
The only problem? It didn’t have any ads on it. This could mean many things, but upon closer inspection, Cole realized the site had been banned by Google and was not eligible to integrate with AdSense. There are other ways to monetize sites that have been banned by Google, but if you’re looking to purchase a website with the intention of monetizing it through traditional advertising revenue, this is a must-check category.
You should also check and see who owns the site; specifically, if it’s individually owned or owned by a corporation/enterprise. Traditionally, sites owned by major media enterprises are less inclined to sell their websites (they are buyers themselves), whereas independently-owned sites are far more likely to be open to selling. You can use a tool like Website Informer to see more information on the site owner and their contact information. You should only reach out to a site owner about conducting a deal after you’ve done all this due diligence.
Finally, it’s time to contact the site owner and ask about possibly purchasing the site. Cole shared a simple email he’s used in the past to ask whether a site owner is willing to sell:
Here’s the email text:
I’m interested in buying your website, www.website.com.
If you’re interested in selling, please let me know and I’ll give you an estimate of how much I think it could be worth.
Hope to hear from you soon.
All the best,
Cole revealed that many site owners aren’t that willing to sell their site. This is true for many reasons; if their site is successful and profitable, they’re just less likely to want to sell in the first place. The site might also be a long-time project for them that has sentimental value.
Still, this is why sending out a simple message asking if the site owner is interested in selling is a great way to start this process.
Once a site owner says they’re interested, it’s time to do some more appraising. The first step to take now is to ask for a read-only look at the site’s Google Analytics. This lets you see a deeper look into the site’s traffic, traffic sources, and overall site health (if they don’t use Google Analytics, it’s a bad sign!).
This part isn’t just about seeing how much traffic a site is getting, but a deeper look at where the traffic is coming from.
The traffic breakdown from the image above on the left is a sign of a healthy site, where the majority of traffic is organic with a few more sources peppered in. This shows strong SEO metrics and keyword viability.
On the other hand, the picture on the right shows some suspicious site traffic: a majority of traffic coming from “Other” or unknown sources. There are countless ways sites can manipulate, pay for, and cheat their way to get more traffic; make sure the site you’re buying has legitimate traffic sources! Be sure to check for plagiarism and originality in the site too.
How to Make an Offer
Once you’ve deemed a site has an active, healthy traffic profile and is legitimate in every important metric, and the owner has expressed willingness to sell, it’s time to make an offer.
One important rule of thumb here: you should make a shorter-term deal if possible. As John Cole explained, “Because of the volatility in this space, it doesn’t make much sense to pay more than a 3 year multiple for a website business unless there is something significant about the opportunity that makes you absolutely sure the ROI will be coming back in less than 18 months.”
It may be possible to earn significant revenue after many years after buying a site, but it’s best to try and recoup your initial investment and begin earning revenue sooner rather than later. The digital landscape is always changing, and you never know when a Google update, market change, or new trend could dramatically change the status of your new site.
Essentially, your offer for the site should be between 12–36x the site’s average monthly revenue (remember to measure revenue year to year, to avoid using inflated or deflated data based on seasonality or temporary trends). This is both fair as an initial investment to the site owner, and provides the buyer with flexibility to start earning income to recoup their investment.
Ideally, you want the site to have been around longer (this helps with Google indexing and providing stronger viability for SEO success and keyword ranking), as well as a site with longer articles. Cole has his own personal calculation that can provide a rough estimate for pricing for US and UK based sites he’s dubbed “Cole’s Constant:”
Monthly sessions x $.017c = Annual Earnings
This means if a site was getting 350,000 monthly sessions x $0.17 cents = about $59,500 in annual earnings. You can then use this shorthand rough estimate to make a more reliable offer. (Of course, this pricing model changes with other factors, like if a site is banned the estimate will be a lot less).
Once you and the site owner agree on a price, it’s time to safely and successfully transfer your money. As these deals could be large investments — tens of hundreds of thousands of dollars — you need to make sure these are safe transfers that don’t leave you at risk of getting scammed, duped, or tricked in any way.
For this reason, you should use a site like Escrow.com where both you and the seller can insert your part of the deal — the payment and the site login credentials — without either of you being at risk of not getting the promised return:
To summarize the process of completing a deal with a site owner:
- Agree to a price
- Sign an agreement
- Use Escrow.com or similar site to safely set up transaction for both parties
- Send your payment
- Seller sends over login credentials
- Verify everything is transferred and correct
This process can happen quickly, or it might take weeks or months. Odds are, this is a large transaction for both parties and it’s wiser to take your time to make sure everything is legitimate.
After that, the site is yours and you can begin recouping your investment through the monthly revenue!
Countless publishers have had the idea to buy websites for profit, but haven’t because they didn’t fully understand how this process worked.
This article should give you the basics to begin assessing what sites might be worth purchasing, how to appraise a site, initiate contact with the owner, and safely conduct a business deal. It’s not the most simple process, but countless publishers have braved these waters and purchased sites that have continued to earn them significant monthly revenue years and years after they’ve earned back their initial investment.
Like any investment, it can pay enormous dividends if you make savvy choices on where and how to invest your income.
Anthony Moore is a writer, speaker, and coach. He's helped hundreds of entrepreneurs create successful businesses, and has gained over 7 million views for his work on entrepreneurship, personal growth, and productivity.
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