What To Know When Buying Or Selling A Content Website
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What To Know When Buying Or Selling A Content Website
If you want to buy or sell a website, you probably have a lot of questions and concerns, especially if you’re considering it for the first time. When buying or selling a website, you’re doing what real estate investors often do. You’re assessing a property to understand it’s true potential value to you.
“What do I need to do to sell my website?”
“What are the biggest risks of buying an existing website?”
“How can I boost a site’s income to make a profit?”
“How do I get people to want to buy my site?”
“When is the best time to sell a site?”
I recently sat down to interview with Greg Elfrink of Empire Flippers. Empire Flippers is an online brokerage and marketplace for buying and selling online businesses (everything from content publishing sites to e-commerce sites).
Greg helped us dig into all the questions and more. See what he had to share on top of some of the wisdom we’ve previously gathered from John Cole — who had previously bought and sold hundreds of digital publishing sites.
Background on Greg & Empire Flippers
Before working for Empire Flippers, Greg worked in SEO, email marketing, and worked with a lot of online businesses to better understand how they generated revenue. Now, as the Director of Marketing for Empire Flippers, he works to expand knowledge on buying and selling websites externally to customers. However, if a buyer gets serious about purchasing a property, they should ask for Google Analytics read-only access from the seller, or make sure the seller has been vetted by a trustworthy 3rd party, like Empire Flippers.
SimilairWeb’s chrome extension is free and can be a helpful device when browsing multiple sites to buy.
Overnight organic traffic growth or growth that features a lot of unknown or direct traffic can be sketchy.
Here are some good SEO skills and practices you can use or learn to grow a site and understand ethical organic traffic growth:
- Tips for ranking quickly in Google Search
- How to learn SEO yourself and avoid “consultants”
- How to use old content to drive new organic traffic
- Why small websites can outrank larger ones and how they do it
What should you know when selling a website?
- GREG: Keep good records of the website’s performance. You should be tracking all of your traffic through analytics. You should have something that shows not only how much money you have earned but also how much money you spent to earn that money (Profit & Loss: P&L). A lot of publishers don’t necessarily need a P&L and so they won’t have it. However, if you’re running a big media or content site and have a big in-house team that will follow the business once it sells, you need to have some kind of P&L for the buyer to go over.
- GREG: You should have at least 12 months worth of historical data, traffic, and revenue for your website. It’s not necessary, but you’re typically going to get a worse sale price without it. A longer history equals a better multiple at the end of the day because your site has proven itself.
- GREG: Use a broker if you’re unsure.
Revenue is a lot harder to get tricked on than net profit. A buyer doesn’t like setting milestones on revenue because there may be a situation where they have to spend a lot of money to fix something, such as when a Google algorithm update rolls through. Now, the risk on them.
So, both sides would get burned either way, but it’s not necessarily a scam. They both came to terms on it. One of the terms might benefit the other party slightly better, but it just depends on who is willing to take the bigger risk. – Greg from Empire Flippers
How do you increase the value of a site quickly?
The cool thing about buying a content site is it’s usually a lot easier to go from $5k a month to $10k a month than it is from $0 to $1k, according to both John and Greg.
If you’re starting a content-based website from scratch, your primary traffic channel is traditionally going to be from SEO if you’re in it for the long-haul. According to Greg, What’s nice about buying a website is you already know it’s a profitable niche because the revenue is there as proof. Also, if it’s a good site, then it probably already has some meaningful backlinks.
Greg thinks that using a good broker helps mitigate the risk of buying a site with black hat SEO used to grow it; as many publishers lack the skills to look into this properly he says.
Greg’s tips for increasing the site’s value:
- Immediately do in-depth keyword research or ask the seller for a list of keywords they haven’t yet acted upon.
- Get as much content based around those keywords in production right away, within the first month.
- Put in display advertising and use a platform like Ezoic to streamline testing placements, networks, etc. Most content sites are affiliate-based and do not have display ads. Now you’re making money from the affiliate deals, which are more optimized, and you’re gaining additional revenue from display ads. And if you’re using Ezoic, those display ads are continually more profitable because their locations are always being optimized.
How do you minimize risks when flipping websites?
If you want to flip websites, I would say you should first be somewhat skilled in starting them and running them. Once you’re good at that, I would make sure you stick to a system that you know works. – Greg from Empire Flippers
A simple system Greg likes as a checklist for flipping sites:
- Create more content (it’s the product you sell)
- Optimize existing keywords
- Add another form of monetization
- Create an email list
Greg says that usually, the sites that you buy are going to only have a single source of monetization, but that doesn’t mean that there isn’t an opportunity for a second or third form of monetization. You could add display ads, an info product, work with an affiliate program, or explore other forms of monetization that fit that site’s theme.
According to Greg, Flippers are usually thinking more short-term, so he recommended looking for a monetization method that you specifically have experience in. Display ads and affiliate deals tend to go hand in hand.
Greg claims that most publishers he’s seen don’t have an e-mail list. He thinks it is critical to start building or growing a list of newsletter or email subscribers as soon as possible.
What advice would you give to a first-time buyer or seller?
GREG: The biggest advice I could give is to look at your bank account before you buy that business. Often, the issue with first-time buyers is that they buy a website and they aren’t prepared.
I’m working a 9 to 5 job as a mid-level manager in this cubicle and I don’t like it. I have $120k saved up and I can buy a $100k site and make $5k a month, so I quit my job. That all sounds great on paper, but you really have to ask yourself ‘do I have the skill set yet?’ I’m not saying it’s rocket science, but there are definitely some complex elements, especially if you have no experience.
Join Facebook groups, and learn the ropes a little bit.
You could even start a little starter site. I’m not saying you have to take that starter site to fruition, and it doesn’t even need to make a profit, but it’s a great way to test out owning a website before putting a bunch of money on the table.
Basically, get some basic knowledge. Don’t spend your emergency fund thinking that this is your ticket out. There’s still real work involved.
If we compare it to investing in real estate or stocks, the ROI for investing in a website is insane. I was talking to a guy that bought five very small sites like for maybe $10k. 80 percent of them failed, some of them pretty badly. I thought he must be pretty angry with those results, but he just said, ‘Well I wish I was making more money, of course, but it’s still outpacing everything that’s in my stock. So, it’s money well spent.’
What are examples of successful website flips or sales you’ve seen?
From Greg: The guy bought it for about $52k and then after about six or seven months, he sold it for $210k. That guy, in particular, is extremely good at what he does.
That’s not everyone of course, but that doesn’t mean you can’t buy a $54k website and sell it for $80k. That’s still a huge win.
Anything else for interested buyers or sellers to know?
More from Greg: Just to harp on my earlier point, content sites should be looked at as little media companies. Then, you’re no longer just chasing the SEO keywords —you do social, you do email, you broaden your horizons a little bit. Once you get an actual visitor to your site, there’s the other 90 percent of marketing left to do. That’s a very powerful thing to remember when building sites because having multiple channels of traffic makes your site more stable, which also makes your business a lot more valuable.
The other thing I would say is if you’re a content publisher looking to begin buying and selling, one of the best ways to start is by selling your current content site. We had a guy who built up multiple different content sites and was selling them with us over a period of a year and a half; he had acquired around $700k at the end. He took that $700k and was able to buy a SaaS buisness and then created a service where he acquires all these other tech companies for a hosting company.
Maybe you don’t go into a more competitive niche and you use that money from your first sale to start ten other content sites. Now, you have the money for the services, the in-house writers, and all that goes along with it. There are a lot of things you could do with the money you earn from selling your current content site.
All of this to say, buying and selling websites can seem complicated, and it is in some ways, but it also doesn’t have to be as hard as people think it is. It’s a great industry to invest in and services like Empire Flippers can make it a lot easier, pretty risk-free, and get you a really good deal.
Questions or comments? Feel free to leave a comment and I can try to answer or put you in contact with someone at Empire Flippers.
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