Every day I visit forums and other websites looking to buy websites. I come across so much garbage out there but sometimes I find a few gems that are worth buying. In this short guide I’m going to quickly explain what to watch out for and what to look for when buying a website that will earn passive income for many years with little upkeep. Currently I have purchased 100’s of websites that generate 1000’s a year with very little maintenance.
a) Estimated – I personally never buy a website that is not currently making money. If the seller is talking about ‘potential’ or ‘will be great’ or ‘estimated revenue’ then that is a very fast way for me to ignore the listing. The only reason these types of sites should be considered is if you are in the market for something completely specific such as a design or a domain name etc. If you are looking to make money, you want the site to be making money already.
b) Earnings Proof – You want the site to have at least a solid 3 months of producing revenue. Anything less than that and you run a very high risk of the site not producing in the desired time frame (2+ years) after purchase. You need to adjust your calculations for this and pay less than 10 months revenue upfront. You need to request screenshots of all earnings proof if they are not already available before purchasing a website.
c) What to pay – Generally speaking you will pay 10-15 months revenue up front for a decent earning website. Most people who know websites and how to buy them will be competing for the same ones and the price may even go higher.
d) Automation – Stay away from automation. This includes autoblogs, content spinners, and anything else that has its primary content delivery in an automated fashion. Sure, these websites are earning money but it will not last long or will likely decrease over time. You will constantly have to buy more sites like this to replace the income that drops off every month from the sites you purchased. So if the website claims to be 100% automated, you should stay away 100% of the time.
e) Exact monthly searches – Many times the seller will describe his listing in this fashion: “10 GILLION searches per month – keyworddomain.info, become a billionaire!” Be wary of these websites/listings unless the extension of the domain is a .com AND is an exact match with the number of exact searches reported.
f) Domain – This factor is significant. If everything about deal looks good but the domain is flavaflav.in you can pretty much disregard the listing. At the time of this writing non U.S. country extension domains do not do well for search listings. (You want organic search listings for high paying websites with low maintenance.) This most likely means the owner is receiving traffic from other sources. What are these sources? The answer to this question will lead you to find out an answer that may not be in alignment with your goals. I personally stick to .com/.net/.org and sometimes .us and .info if they have really good traffic sources.
g) Zero / No Work Required – Listings that claim no work is required is lying. However most of the websites I purchase have this title. They are typically small content sites that have some really nice articles surrounding a niche market, have been promoted correctly and are receiving a small but steady stream of traffic every month from search engines. They usually also come with a template with a high click through rate for ads. Try to stay away from xfactor styled websites in this area if possible.
h) Time Sensitive Websites – as a general rule you should stay away from time sensitive websites. What I mean by this are fan sites of a celebrity or are focused sole on a TV series, or an upcoming movie. These sites will do great for a little while but once the hype is over with you can expect earnings to drop.
i) Traffic Monetization Methods –
>> Many times a seller of a website will claim he has spent X and earned Y and made a profit of Z. He claims to do this by purchasing advertisements on the internet and selling something from his website for a profit. He claims he will teach the owner how this works once the site is purchased. When you read this statement you have to ask yourself why he is selling the website. Spending money to generate a profit requires very little time so there are really two scenarios if the money earning is true. One is that he wants 10+ months revenue up front and his business model is to produce sites in this manner or he is in a desperate life situation. The second, and most likely, is that he wishes to get rid of the site because of some complication (probably the time involved to make a profit is very high). You will only figure out which one for sure once you have purchased the website.
>> Watch out for a typical bait-and-switch method which involves reporting the site earnings as X which has been averaged over five months. The first two months have the highest payouts while the last three have very little. Something went wrong and the break down is not always very clear. Look for this and make sure you have a good understanding of what happened in the last three months before buying.
>> Websites earning revenue from posting links is not something I like to get involved with. The advertisers sending monthly payments for these links will drop off at some point and the time it takes to replace them could be significant. More and more link purchasing is headed for a one time payment.
>> Websites that have an earning history from Google Adsense are usually pretty good. You do not have the hassle of dealing with advertisers, and Google will kick out fraudulent websites. It is not easy to earn a significant income from adsense, so the web sites that are will most likely have something decent to offer.
>> Affiliate programs and CPA systems can be highly profitable and relied upon to make residual income. Websites earning monthly revenue using these systems can be of very high value.
>> Websites that are selling an information product or other digital good / service can be quite profitable. You need to beware of a few things. Be careful when buying a site that has outdated information and revenue is trailing off. Also you want to make sure there is a sales and transaction history for at least 3 months.
>> Websites selling only one form of advertising but are generating a significant profit should be considered more valuable. You can take that site’s traffic and implement more advertising systems to increase revenue.
>> Other ways websites can make money are numerous. The most important thing to consider is how much time it takes to keep the money flowing in every month. You will also have to keep your traffic steady so investing time into keeping advertisers or some other income system up and running should be minimal.
j) Types of Traffic – There are incredible number of different methods to generate traffic on the internet these days. Here are just some samples: organic search, paid search advertisements, social media, banners, traffic exchanges, direct links, pop ups, 404, PPV, PPI, and more. My advice in this area is to make sure of two things: You understand the method of traffic being generated, are comfortable working with it, and the traffic can be relied upon to a certain degree for future months.
k) Revenue Trailing off – You will notice sometimes the amount of revenue reported is dropping each month. It’s important to find out why. The most obvious reason is usually the correct one: the seller is attempting to offload a website with declining revenues to an unsuspecting buyer.
l) Unreported Revenue – Take notice of when a seller is not offering revenue stats for the latest month or months. This is usually an indication something has gone wrong with the site, they have lost revenues and they are trying get rid of it quickly.
m) Statistics – This is probably the most important factor when buying a website. What does the traffic look like? You must understand without traffic there are no sales, leads, or advertising revenue. So the question really becomes where is the traffic coming from, how much is the website getting currently, what is the potential for growth, and how consistent is it? Most of the time a site will be weak in one or more of those areas. Figuring out what is most important to you should be a major concern when looking at a website to buy. As noted earlier, you should stay away from websites that are weak in all areas except for the ‘potential’. You should always seek to find proof of this information from screenshots and other forms of verification.
n) Check Feedback – I cannot stress how important this is. If a seller has no feedback for his past sales (or has no post history), and you are not dead certain the deal is solid, do not buy. If there is any shady feedback, just keep that in mind when looking over what the entire listing has to offer.
o) Ask Questions – It is extremely important to ask questions. What is being represented will never be perfect, so you need to figure out what the pitfalls are according to your needs. Ask the seller questions and note the response time and if the answers make sense. Never purchase a website without asking at least one question. This will also give you an idea of how easy the seller will be to deal with once the site is purchased.
p) Website Buying Due Diligence - You need to figure how the traffic is being generated and do the research to know if what is being stated is in fact true. Almost all factors for website popularity and traffic can be validated on your own. Backlinks, Rankings, Alexa traffic, are all recorded and available on the internet for free. So do your research before buying any website.
q) The Transaction – I personally have a threshold (under $1500) for which I will send payment straight to the seller before receiving anything. I do this because all the other factors mentioned above check out and I feel the website and the owner are solid. When you get ready to purchase a website you should feel very confident in what you are buying. If you are worried about the seller not following through with the transaction there is something wrong. There will be however an amount of money that is outside of your comfort level with just sending to a seller, so you will want to involve some type of escrow service.