If you’re a creative thinker looking to make money online, you have a lot of options. And if you’ve decided to get into the business of website trading, it means you’ve done your research. Getting started on buying a website is easy and only takes some basic know-how. It’s what comes next that determines whether you get a return on your investment. If you want to make profits, you need to know what to look for in a website.
The biggest mistake you can make is to take a website at face value. Your goal isn’t to own a fun site, with a clean layout, and midrange traffic. What you’re actually buying is a virtual business, with customers, products, a brand image, a social media presence, and an email list. If there are any employees, freelancers, or other resources onboard, then you want those too.
Why? Because your goal isn’t to overhaul their entire business. It’s to tweak it till it reaches maximum productivity. You’re looking for a website that has the potential to be better than it currently is. And with these simple tricks, you can put any site to the test.
1. What platform does the website use?
As a beginner, you should never overlook this critical factor. All platforms are not the same. To start, you need to understand the difference between CMS systems and hosting solutions and how they interact with hosting providers.
Content Management Systems are user-friendly tools that help you make, manage, and modify your website. All without any technical knowledge. Sites like WordPress, Joomla, and Drupal have gained massive popularity in this market. A huge reason why is because of how easy they are to use.
So, if you’re buying a WordPress based site, you don’t need to know how to code. As a result, you save money on tech support staff. CMS systems are also cheap and open source, which means you fully own your site. You can use free plugins, choose themes, add SEO settings, and choose your web host. Most hosting providers have a separate WordPress hosting plan along with their basic plans. Unlike regular shared hosting, this efficient design caters to the CMS user.
If the site you are looking to purchase is CMS based, find out what hosting plan it has, and what services it offers. Look into the monthly expense and potential costs to upgrade your plan or move your site to a different server.
Another term you’ll hear is hosting solutions or website builders. If you use Youtube, you’ve probably come across a WIX ad a few too many times. Other options include Weebly, Shopify, and Squarespace. These web builders are easier to use, often give you constant support, and have built-in eCommerce features.
However, they are not CMS. Overall, they are less flexible and more expensive. But, that’s not the worst part for a website buyer. Not only do you not own your site’s design content, but you also cannot move to a new host without changing your web builder. Similarly, if you’re feeling trapped in the limited options your web builder offers, you’ll also have to change your hosting. Either way, the process is long, painful, and expensive. It involves moving your files, databases, and email addresses.
And all that’s assuming your domain isn’t registered through your web builder. Because if it is, you’ll have to change your URL, in which case none of your old links will work. Any previous customers trying to follow a Facebook link to your website won’t be able to find it. Your website will also drop in search rankings and Search Engine Optimization. Overall, this will create a world of mess for you.
Before you buy a website, look into whether it is on a CMS or web builder. Then find out who the hosting provider is and what package they’re on. Also, take into account whether you’ll need to make any changes and how much that will cost you.
2. How old is the domain?
Few people know that the age of a domain factors into whether it ranks on search engines. Notice that we didn’t say how high. Other factors like SEO, marketing, and content have more to do with how high a page ranks. However, new domains don’t rank on search engines.
Part of the reason Google doesn’t push new domains is to prevent spam. Interviews from experts, like Google’s Matt Cutts, confirm that domain age doesn’t affect SEO rankings. So, the age of a website shouldn’t contribute to its price because it won’t help you. As long as your domain is more than six to eight months old, you’re good to go.
3. Has the website faced any Google penalties?
The number one rule of the internet is that you cannot scam Google. Sites that use black hat SEO tricks, like keyword stuffing and cloaking, find their way onto a list. Once that happens, there’s no going back. In situations like these, a site owner may try to offload their site onto an unsuspecting victim. But do not be fooled. One look at a Google Analytics sheet will show if a site’s ranking tanked because of penalties.
4. What are the sources for traffic and profit?
When it comes to generating leads and making sales, you need multiple sources for traffic. But, those sources cannot be tapped out. All of your profits cannot come from a specific group. The wider the base you can appeal to, the more buyers you can pull. Before you buy a website, you need to find out who their target audience is. And whether there is potential for growth.
To put this into perspective, compare four different business models.
- Website A appeals to two different groups but only succeeds in selling to 40 percent of each group. It is a good investment because you can still attract the other 60 percent and increase revenue.
- Website B appeals to two different groups that are tapped out. Profits are at a maximum, and no new clients can be pulled. There is no growth potential.
- Website C has customers in one group; however, you have identified a second untapped market. If you buy the website, you can market to them and significantly increase sales. It is a good investment.
- Website D also has clients in only one group, but there is no other potential. This severely restricts profits.
The current profits of the business depend on its existing audience. If you want to increase revenue, you need the website to have growth potential. Keep in mind that you cannot change the core audience for a website, no matter what else you do. Tumbler may try to attract businesses, but it will forever remain a space for high school and college students. If you don’t think you can sell products to the audience of a site, don’t buy it.
5. What are the growth trends of a site?
The growth trends for a website can show many things. Ideally, you want a gradual increase in sales and traffic. However, if you see profits stagnating over the past few months or years, the current owners either lost interest or were unable to market successfully. This is an excellent opportunity for you to step in.
Alternatively, a downward slope can spell bad news. A consistent decrease means that customers took their business elsewhere. Research to find out whether a competitor emerged on the market around this time. What did they offer that this website could not? Are you willing to put in the work to compete? Huge rises and falls mean the company took risks that worked, but they could not maintain them. Look into whether they spent a lot of money on marketing and ads during these highs.
6. How much of its success is due to SEO use?
Search Engine Optimization is the use of keywords and high ranking phrases to improve the quality and quantity of web traffic. The chances are that a site with increasing growth trends will already have some SEO use. Applying these strategies can take time, effort, and money. Hence, it’s useful to buy a website that has steadily increased its rankings through SEO use over the years.
However, all SEO is neither good nor useful. While you consider which site to buy, look into the terms they use that keep them relevant. Ask yourself whether they are sustainable. Every niche has certain core phrases that have long-term value. A site based on quality SEO tactics will take less effort to maintain. Meanwhile, if a website’s ratings are because of fad-based phrases, they will lose traction quickly without upkeep.
By looking into the quality of keywords, you can determine how much effort and money SEO maintenance will take. You can also use this research to check how well the target audience responds to the tactics used. Use this to identify room for growth. As with previous factors, you don’t want to buy a site that has maxed out its SEO potential. Try to focus your attention on businesses that gain traction with relatively low SEO use. With the right strategies, these sites can grow many times what they currently are. That is how you identify a quality investment.
7. Have they made an effort to market their website?
While SEO deals with search engine rankings, marketing is directly responsible for selling products to customers. Add both these factors to content and product quality, and you have the trifecta of business success. Before you buy a website look at their social media pages, what do they post on Facebook and Instagram? How often do they share information, and are their customers satisfied? Can you isolate clear steps to improve their strategy?
Alternatively, based on their product type and target market, would they be better suited to a different platform, say Pinterest? You don’t need a degree in marketing. Even a beginner can figure this out if they’re asking the right questions. All you need to do is look at the website’s marketing protocols. If you see a way to improve a successful site’s marketing strategy, you can increase profits three to four times. Sometimes it only takes an outside view and some creative thinking. So, if a website doesn’t have a strong brand identity, find a way to build one before buying it. In business, sales often improve with a change in management because of new ideas.
8. Why are they selling their business?
Asking the owner why they’re selling their website is extremely important. Don’t just take their word for it either; verify and confirm. If it’s because they want to invest their money in a different venture, it’s safe to buy their site. However, owners may also try to offload their website if they’ve been blacklisted or lost business. Ask for both their earnings reports, whether that’s AdSense, PayPal sales or affiliate earnings and their traffic reports.
But, the situation is not always so black and white. If a site is making good profits but has seen dips in recent months, it may have a competitor offering better rates and pulling customers. In this case, the owner will be desperate to offload their business before it tanks. You need to do thorough market research to identify if this is the case. Do not enter a market with stiff competition, especially with an inferior product.
Overall, if you’re looking into a website:
- check what platforms the site is using, CMS, web builder and hosting
- find out what the costs to change services would be
- look at site analytics to see if they’ve faced any penalties
- identify the target audience, sources of traffic and growth potential
- ask for analytical data to prove these claims
- ensure the site has steady growth trends
- inspect whether the SEO use is sustainable or trend-based
- evaluate marketing efforts and areas for growth
- look into the website’s running costs including staff and resources
- figure out why they’re selling their site
- research possible market competitors
When investing in a site, you need to look at its financial history, current profit margins, and future potential. Keep these key factors in mind and you can’t go wrong.