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Website Flipping 101: The 15 Principles to Buying, Selling, and Flipping Websites
The goal of FlipWebsites.com is to identify and explain the principles or keys to success and the overall mindset which are essential for being successful in the website buying, selling and flipping business.
Why is this important? Let’s say you’ve never learned to write and you decide one day to write a story. Where do you start? Well, first you’d need to learn to write all 26 letters in the alphabet. Then you’d need to spell the words, then create sentences, then paragraphs and so on.
It’s the same with this business. First, you need to learn the fundamentals before you go out on the web and try to buy or sell a site. We hope to teach those principles so you can develop your mindset or way of thinking. That way you are armed with the knowledge to make the five and six figure paydays we all love and learn the truth about how to flip websites for profit.
Why Do We Flip Websites?
Before we get into the “what” and “how” of website flipping, let’s first define “why” you’re in this business to begin with. Why do you want to flip websites?
We’ve boiled this down to the two primary reasons why people should be in the website flipping business:
Principle 1: Cashflow + Equity = Profit
We look at this as very similar to the real estate investing world. You can buy rental property and you get paid from the rental income (cashflow) that comes in every month then you are also building up equity as the value of that property increases or appreciates over time. After months or years of enjoying the cashflow from the property, you decide to sell it. You get a nice lump sum from the equity that you’ve built up.
It’s the same with websites. When we buy a site that is already generating cash flow or has the potential to generate cashflow quickly, we start seeing a return on our investment quickly without a lot of work. It’s passive income. We didn’t have to spend all our time trying to build the site from scratch and drive traffic to it. We get to enjoy that income right after we acquire the site. It’s money we can use now to pay the bills or put into acquiring more sites.
Now here’s the best part. The longer you own a site and the more you can increase its value, the more equity you are building up. When it comes time to sell, you get to cash out your equity.
When you take into account the cashflow you’ve received during the time you’ve held a site and the equity you’ve cashed out, the profits and returns on your original investment can be quite impressive.
Just remember…cash flow pays the bills, equity makes you rich.
What is Website Flipping?
So, now that we know why we are in the business of website flipping, the next step is to answer the question, “What exactly is website flipping?” The easiest way to define it is by looking at the process you go through with website flipping.
Principle 2: Spot ► Acquire ► Add Value ► Sell
Spot Undervalued Online Assets
When we look at the process as a whole, the first step is to spot undervalued online assets. In most cases, this is actually a website, but assets can be more than websites. They can be domains, mailing lists, traffic, You Tube channels, etc. This is the reason we say “assets” instead of “websites” because we need to expand our criteria or what we consider to be a part of this website flipping business. We also say “undervalued” because we do not want to buy overvalued assets. This wouldn’t give us a lot of opportunity to add value. Keep in mind “undervalued” to you, may be different than “undervalued” to a Fortune 500 company. The value of any particular asset will be different for everyone, so you’ll need to decide what you consider undervalued for you.
Acquire Those Assets to Generate Cashflow
Once you have spotted the asset, the next piece is acquiring that asset and that involves negotiating the sale, transferring the website, domain, and other assets over to you. We will talk about some of the principles for that later.
Add Value to Them to Increase Cashflow and Equity
Ultimately the goal of adding value is to increase cash flow or equity in a website. However, this isn’t always the case. It may be something as simple as buying from a seller who does not recognize the actual value of their site and turning around and selling it to somebody else who really needs that website’s assets. You, as the middle person, didn’t do any technical work but are adding value by getting the seller to cash out of his website and getting your buyer exactly what they were looking for.
Sell the Asset at or Above Its Improved Value
After you have spotted an asset which is undervalued, acquired it, increased the cash flow and the overall value of that website, finally, you sell the website. The ultimate goal here is to sell the site at or above the improved value. Another way to say that is that you want to sell that site for what it’s actually worth or you want to try to sell it for a premium. We write extensively about how to answer the question “what is my website worth“.
Website Flipping Business Models
Now let’s define the actual business model behind website flipping. A business model in terms of website flipping boils down to really three main factors. These factors are a result of your personal preferences. It is determined by what you enjoy doing, what your goals are, what your needs are, and other personal factors. There is no right or wrong business model, only one that is effective (makes money) or not.
Those factors are: The effort that you want to put in; What your criteria is for holding a website; and What your timeline is for selling that website.
Principle 3: Business Model = Effort + Holding Criteria + Timeline
The best way to explain how these three factors work together is with a few examples.
The first example is using Arbitrage. Essentially what this is in the website flipping world is going out and finding an undervalued website and turning around within seven days and selling it at or above its actual value.
You might be able to find the site by cold-calling website owners to negotiate a sale and turning around and selling it to a private buyer within seven-days. You have really done nothing to the website aside from buying it in a marketplace that is undervalued and selling it in a different marketplace that is out or near its value. This business model may appeal to you if you like the idea of having minimal effort, you don’t like to hold websites, and you have a very short timeline for selling. This is also the model a website broker may use.
Add Value and Flip Quickly
Another business model is to add value to a website and flip it quickly. Typically you are buying up a website that is under-performing. You are going to add value to that website by improving some aspect of the cash flow or the equity of that website and then turn around and sell it quickly.
Again looking at the three factors, you are putting some effort into the site at least when you first buy it, you hold the site long enough to make improvements and see the result of those improvements, and your timeline to sell is typically around 30 days.
The advantage to understanding your business model is that it makes it really easy to determine if you should buy a site or not. In this case, if you can’t quickly add value to the site, you probably wouldn’t buy it.
Hold Then Sell
One more example is the hold then sell model. Typically you buy a website just solely for the purpose of holding it without putting any effort into it just for the passive income. In this case, holding criteria may change over time on any particular website. If a website that is being held starts to take a lot of effort, you might sell it off. You might say, “This website no longer meets my holding criteria so I’m going to go ahead and sell it at this point.” In this case, the timeline is based solely on holding criteria.
These are just a few examples but there are a lot more business models out there. We recommend everybody to create their own unique business model by determining their best fit for effort, holding criteria and timeline,
Principle 4: Develop Your Skill Set
Now that you have defined what your business model is, you’ll need to understand what skillset you’ll need in order to put your plan into action. We’ve been able to identify four essential skills that you’ll need in order to be successful. You can certainly possess or learn more skills than these such as more technical skills, but at some point, the four skills below are some of the most essential ones for growing a large website flipping business.
The number one skill is the ability to spot potential. Can you look at a potential deal and say, “Wow, I could buy this site for $10,000 dollars, change X,Y, and Z and sell it for $20,000 in a few months”? This is a skill you’ll need.
The second skill is the ability to analyze numbers. One of the great things about flipping websites is that with tools like Google Analytics, you have a lot of numbers you can look at to guage how well a site is doing. Can you look at a trend of 30 days of numbers and say, “Okay. Well, here are the good things about these trends and here are the bad things about these trends”? The ability to understand from the numbers when things are changing for better or worse is essential in this business.
Manage a Team
The third skill is the ability to manage a team. We’re not just talking about employees or contractors here. There will always be some team involved in your business. You might have vendors that you may work with like hosting companies or affiliate networks that will be part of your team. You do not have to be the most amazing CEO-type manager. However, the ability to keep people accountable and productive will be important as you grow your business.
The last essential skill is developing relationships. There are so many areas where relationships are very important in website flipping. If you look at the process from start to finish, beginning with number one, finding good deals. Couldn’t you develop a relationship with people to find deals for you? Once you find a deal that you are interested in, don’t you think it’s important to develop a relationship with the seller? We’ve found that we’ve been able to buy sites for lower than what somebody else was offering them just solely based on the fact that we had a good rapport or a good relationship with that seller.
Hiring employees, managing outsourced staff, recruiting affiliates, and negotiating with buyers interested in your sites are all areas where relationships come into play. There are a number of areas where in the world of buying, selling and flipping websites where relationships come in to play.
The good news is that these four skills are ones we learn in everyday life so it’s pretty likely you already possess the skills you need.
Principle 5: Sharpen Your Tools
Now that you know the skills you need, let’s turn our attention to the tools that are required to run your buying, selling and flipping business. The more tools you have available to you, the more productive and successful you’ll be, assuming the tool you’ve chosen is the right one for the job.
The list below is not meant to be exhaustive, but is simply meant to be the minimum that you need to get started.
In order to have a website, you need to have a domain name for that website. That means you are always going to need a domain registrar. The one we typically recommend to people is called namecheap.com. They are fairly commonly used by people in our business. I believe this is because they make the process of transferring, pushing, and managing multiple domains easy.
Once you have a domain name, you also need a hosting company to maintain the files for your site and keep it online. The company we normally recommend to people is called “HostGator.com”. Ideally you’ll go with one of their reseller plans so you can have individual cpanel accounts for each of your primary websites. If you do not go with HostGator, find a company that utilizes cpanel for their hosting system. It’s what most people in our business are famililar with so it will benefit you down the road.
The third tool you’ll need is some method of tracking and the most obvious one is Google Analytics. It’s important to be able to analyze numbers and in order to be able to analyze numbers, you have to track those numbers. Google Analytics is one thing at a minimum that you should have installed on every one of your websites.
To be able to scale you’re business, you’re going to need to outsource some areas of your business. If you don’t, you’ll have to do everything yourself and that limits your ability to grow. Even if you prefer to do everything yourself, at some point you’ll find a task too tedious or too technical and you’re going to need help. That’s where outsourcing comes in. One outsourcing resource we typically use is called oDesk.com. It allows you to hire, manage, and pay an entire team from across the globe online.
One of your most useful tools, especially when it comes to buying websites, is your gut. No, we’re not talking about a big belly here. We’re talking about your gut instinct. Listening to your gut can be one of your best tools. It will allow you to sniff out people trying to scam you. Always listen to your gut.
To wrap up, let’s look at the analogy between flipping a website and a carpenter building a house. A carpenter has a skill set he needs. He need to know how to measure, read blueprints, etc. He also has tools to work with such as a hammer, nails, saws, etc. Without those skills and tools, he’ll either build a really bad house that will likely fall apart or not be able to build one at all. It’s the same for you when it comes to flipping websites. You might be able to get by, but without the right skills and tools, you’ll likely not be as successful as you have the potential to be.
How Do We Get Great Deals?
Now that your skills and tools are in place, the next step is to go out and get some great deals. So, how do we actually go out and get great deals?
Principle 6: Know the Difference Between Price Tag and Real Value of a Site
The first step to getting great deals is to know the real value of a website. The reason we say the “real value” is because typically a website is going to have a “price tag” slapped on it by the seller. It might have a “Buy It Now” price if you are looking on auctions or the seller will have some dollar amount in mind that he’s interested in selling it for. So, if you know the real value of that website, then it becomes really easy for you to decide if you would accept a Buy It Now price or give the seller what he or she is asking. There are many factors involved in determing what the “real value” of a site and those factors are different for every person and for every deal.
Past Comparable Sales
The easiest way we have found to get a general grasp of roughly the value of a particular website is to look at past comparable sales of that website. You might go to a site like Flippa and look for sold sites that have similar traffic numbers, revenue numbers, etc. That always gives you a sense of what is selling out there in the Flippa market place or other market places like it. Now, that is not always the real value of a website.
Many times site are being sold for less than what they are really valued at on sites like Flippa. Often it’s because the buyers on the marketplaces are people like us who are looking to pay the least amount of money for a site and don’t have as much to gain by acquiring the site as a major company in the same market.
The more you get a good sense of what the real value is for you and other buyers in the market, that is when you start getting great deals. Keep in mind, a great deal to you might be paying way to much for a site for someone else. However, you’ll be laughing all the way to the bank when you turn around and sell it for 10 times what you paid in a matter of days.
Value of Potential Cashflow
To find the real value of a site, you’ll need to be able to determine the potential monthly cash flow of a website. Most buyers value sites at some multiple of monthly cash flow. Typically it’s somewhere between six and 24 times monthly cash flow.
You’re going to come across interesting sites that have no cash flow, so for you to find your true value, you’ll need to determine what the potential cash flow for the site is if you were to put the time in to monetize it after say 2 or 3 months of owning it. If you’re great at monetizing sites, you’ll likely be able to pay a lot more for that site because you know exactly what the potential cash flow is and you can come up with a monthly multiple of say 6 times that amount to base your maximum sales price on. Do you see how the price tag can be so much different than the real value in this example?
Principle 7: Buy Where Sites Are Undervalued
Now that you know how to assign real value to a site, the next step is to always buy where sites are undervalued. Typically, if you are buying on sites like Flippa, you are buying where there are a ton of other people trying to buy and you get in bidding words. The problem is, you end up buying sites at or close to what they’re actually worth. The key here is to buy where sites are undervalued.
Here’s why it’s so important. If you can buy a site that is undervalued, you’ve already made money because you have instant equity. Let’s say you buy a site that had a price tag of $25,000 but a real value of $100,000. The moment you close on the deal, you just put $75,000 in your pocket.
As you can see, a lot of your money can be made when you buy so focus your efforts on buying where the sites are undervalued.
If you don’t have a lot of money to work with in order to buy your first site, read our guide on how to make money fast for your website flip.
Principle 8: Past Performance and Problems Are Negotiating Leverage
Once you found a great undervalued site, the next piece of how to get a great deal is to negotiate a great deal. One of the principles we have found is that in negotiating for websites, your biggest piece of leverage comes from the history of the website.
You do not want to talk about the future or the potential that you or the seller sees in that website (at least until after you’ve closed). You want to talk about what the site has done in the past and base your price on the past performance of that website. Keep quiet about what potential you see in it because that is not to your advantage in terms of negotiation. It is to your advantage to really hammer in on the problems of the website and look at the past performance. Do not let the buyer sell you on the sexy potential of the website.
After all, the future is uncertain and you need to get paid for the work you’ll do to improve the site.
How Do We Buy Safely?
Now that we’ve negotiated to buy a site, how do we actually make sure that we are buying safely? It’s all about doing your due diligence. Here we’ve boiled due diligence down to the principles or keys that you need to look at.
Research the Seller
We feel it’s important to get comfortable with the person you’re buying from. That means you need to research the seller. If he or she is a seller on Flippa, look at their feedback. Do a Google search on their name. Make sure they really own the site. You might even ask for a copy of a driver’s license. There’s a lot more you can do, but the key is to dig up as much as you can to feel comfortable.
Principle 9: Due Diligence = Verifying Seller Claims + Drilling Down
Verify Every Claim the Seller Makes
It’s important to understand that it’s your responsibility to do thorough due diligence. The first place to start is to verify every claim that the seller makes that is important to you in your decision to buy the site.
For example, a claim might be that a website has 10,000 unique visits a month. That is a claim. Just because the seller says it, doesn’t mean it’s true. What you want to do in order to verify that claim is to get access to his or her Google Analytics. If the seller claims that the website has 100% unique content, verify that. Go to a site like Copyscape and verify it is true.
What you’re doing is looking for real proof for the things that are important to you and your purchasing decision for that website. Use that as your overriding principle and then think of all the possible ways that you can verify a claim. That’s when you get good at due diligence.
The next piece is to drill down. Go as deep as you can into the important assets or revenue generators of the website.
For example, let’s say that an important asset to a website was the AdSense revenue that it was generating and it is the biggest reason you are buying it. What we’re going to do is drill down into what causes AdSense revenue to actually happen. The revenue comes from clicks from free traffic, right?
Well, drill down into the free traffic. Find out where his/her free traffic is coming from. Let’s say we found out that 90% of that free traffic is coming from Google organic search. Let’s drill down further.
What causes the Google organic traffic to happen? Well, it comes from the SEO of that website. What are things that affect SEO? Well, it is good quality unique search engine optimized content and the quality of the backlinks of the site. You’ll want to drill down and look at the content of the site and the quality of the backlinks.
I hope you’re getting the concept. Make sure that you drill down as far as you can go so that you are very comfortable with any potential problems you uncover.
Listen to Your Gut
This goes back to that really important tool, your gut. If at any point along the way, something in your gut just does not quite seem right. Maybe something seems “off” about that seller or something about the website just does not quite feel right. That is when you need to listen to your gut. Do as much digging as you can until that feeling goes away or simply walk away and move on to the next deal.
How Do We Do The Deal?
Once we’re comfortable with the website from our due diligence, we have negotiated a final price, and we have everything ready to go, how do we actually go about doing the deal? What are the really important principles that we need to consider about doing a deal?
Principle 10: Plan for the Worst Case Scenario
The best thing you can do when going into a deal is to plan for the worst-case scenario. Run through your mind all the possible really bad things that could happen with this deal and then plan for them. Try to minimize the possiblility of any surprises along the way.
Getting everythign in writing is planning for the worst case scenario. You are clearly outlining the agreement so if there is anything that comes up, you simply go back to the agreement to resolve the issue.
For example, let’s say that the seller owns 50 of the 100 backlinks to the site. The worst case scenario is that the seller will take them all down the moment you close. You want to plan for that. Put in writing that the seller will keep those backlinks as-is as long as those sites exist.
Here’s another example. Let’s say that you decided that you were not going to use an escrow service for the deal. Well, what is the worst-case scenario there? It might be that you pay the seller the money and they do not deliver the website to you. How can you plan for that? It might as simple as using a method of payment that allows you to get your money back in that case. Let’s say you use your credit card to pay. You want to call the credit card company and say, “I’m looking at doing this deal and what happens if that person does not sell or does not actually transfer the deal to me? Can I get my money back?” You have planned for that worst-case scenario.
If the worst-case scenario happens where you will have to go into a lawsuit with the seller, plan for that. Have an attorney review the agreement before you close. Attorney’s are paid to plan for the worst case scenario. If you get into a lawsuit and you skipped that step, it’s your responsibility for not planning for the worst case scenario.
Don’t Be Afraid to Walk Away
Never be afraid to walk away. We know how hard it is to walk away from a deal that just seems so good on the surface. You made the mistake of falling in love with a deal that isn’t meant to happen. You’ll never lose money on a deal you never did and there will always be another opportunity around the corner. That’s planning for the worst case scenario isn’t it?
Principle 11: Get Full Control
Once you actually have done the deal, the money has been transferred, make sure you get full control over that website ASAP. Make sure that you own the domain name. Make sure your contact information is listed on that domain name. Make sure that the hosting is 100% in your control and that the seller no longer has any control. Make sure you have changed the passwords.
There are so many ways that getting full control can be applied. If there are any affiliate links that might exist on the website, you might need to change those to your affiliate account. PayPal accounts that are used to sell products on the website need to be replaced with yours.
If you do not follow this principle of getting full control of your website and all the assets associated with it, it is only asking for trouble down the road.
Choose the Best Monetization
Principle 12: Best monetization = fewest middle men + companies with most to gain
Now that you’ve have taken over the website, the next piece is choosing the best monetization. Monetization is simply the process of turning traffic into money. Monetization is one of those areas that you can focus your efforts and time on to get the biggest leverage or return on your time.
Each method of monetization varies with how many middle men or other people who are taking a piece of the pie and how close you are to the actual company with the most to gain from your traffic. The best monetization comes when there are no middle men and you are the company with the most to gain from the traffic. The worst comes when there are a lot of middle men between you and the company benefiting from the traffic and the actual company benefiting doesn’t have the most to gain.
There are five primary categories of monetization that you have to choose from when it comes to a website.
Number one is advertising. That is basically listing other merchant’s advertisements on your website. That might be AdSense, banner ads, text links, etc. You’re getting paid for the space on your website typically on a per click, flat fee, or per impression basis.
To get the best results from this type of monetization, find the companies who have the most to gain from your traffic and have them pay directly to advertise on your site.
The next is affiliate. That is where you are referring traffic and adding some value like pre-selling or reviewing a product and then referring that traffic over to an actual merchant that you get a commission for it and that is affiliate monetization.
To get the best results from this type of monetization, find the companies with the most to gain from your traffic and negotiate the highest commission you can for working directly with them.
Resold Product or Service
The next one is to re-sell someone else’s product or service. This is typical of e-commerce sites who sell products like consumer electronics.
To get the best results from this type of monetization, buy directly from manufacturers or service providers and negotiate your cost of goods sold as low as you can.
Original Product or Service
The last is an original product or service. That might be a digital product like an ebook or software that you create, a product you manufacture, or a service you provide.
To get the best results from this type of monetization, learn to run a great business.
You might find that certain business models fit certain deals, but you’ll have to balance that with your personal preferences. If you don’t like dealing with customers, an original service might not be a great fit for you even though it might provide the best monetization for the site.
It’s quite possible to quickly double a site’s revenue by simply removing one or two middle men and switching to working with the company who has the most to gain in the industry of the site.
Once you have chosen your monetization model and have it in place, the next step is to grow the website’s cash flow. It may have been as simple as adding the new monetization method to the existing website. However, there are a lot of things you can do once you actually manage a website to grow its cash flow.
Remember, the more you grow cash flow on a website, not only do you make more money every month, you also increase the equity that you have in that website because one of the factors for valuing websites is based on historical cash flow of that website. The more you can grow cash flow, the more equity you have and the more money you are going to make when it comes time to sell.
Principle 13: Cashflow Growth = Increasing traffic + Increasing Revenue Per Unique Visit + Increasing Repeat Visits + Decreasing Expenses
The first thing you can do to increase cashflow on a site is to increase the amount of targeted traffic you are getting. That might be building links to the website to improve the SEO or starting to pay for traffic. There are a lot of ways to increase traffic, but that is outside the scope of this section.
If you increase the amount of traffic that you have, you are going to ultimately increase the cash flow assuming you are monetizing that website. It is very straight forward Math. Let’s say that you average 10 cents per unique visitor, then you are adding 10 cents per month to your monthly income for every new vistor you add each month.
Increase Revenue per Unique Visit
Revenue per unique visit is calculated by choosing a date range such as monthly and running the following equation.
Revenue per unique visit = Dollar Amount of Revenue ÷ Number of Unique Visits
It’s a great metric for determining how well a site is monetized for the amount of traffic it’s getting.
How do we improve our revenue per unique visit? One way is to increase the conversion rate of your site. A conversion is the action that actually generates revenue for you. For instance, if you have an adsense site, your conversion rate is the same as your click through rate because it measures how many clicks you got from a certain number of visits. If you want to double your cashflow on an adsense site, simply double your click through rate.
Another way to increase your revenue per unique visit is to improve your monetization. For instance, you might switch a site from being monetized by Adsense to being monetized by selling your own product. It’s highly likely your revenue per unique visit is going to improve drastically.
How would you like to double the revenue per unique visit for a site that sells a product? How about doing so in 15 minutes? It’s simple. Double the price of the product and maintain the same conversion rate. Can making money really be that easy? We’re here to tell you, yes, it can be.
Increase Repeat Visits
Would you rather own a website that people come to once and never return or one where people come back on a regular basis? That’s what increasing repeat visits is all about. Keep people coming back to your website by using strategies like email marketing, regular blog posts, social media and more. Getting people to convert the first time is the hardest part of online marketing. If you focus on getting repeat conversions, you’re site can skyrocket in cashflow and value.
Let’s take the example of an AdSense websites. The purpose of most AdSense websites is to actually get people to leave your site by clicking on one of the ads. You have very little opportunity to get repeat visits with this model so you’re constantly focused on getting new traffic. Do you see how that is different from a site that focuses on building and marketing to a list?
Here’s another example. Let’s assume we have a site that promotes one affiliate product directly from a page in the site. What if we switched the focus of the site to building a list and then promoting the affiliate product to the list? Suddenly you have the option to promote more than one affiliate product to the same list. Instead of simply sending your business over to one affiliate one time, you’ve built an asset and can send your list to the newest, greatest affiliate product every week!
The final piece to the equation is to decrease expenses. We often spend all of our efforts and focus on increasing revenue and we rarely look at the expense side. Maybe you negotiate with your supplier to reduce your cost of goods sold or find a new hosting company with lower dedicated server expenses.
Remember that your time is also an expense for your website even though most website owners don’t include their time in their net profit equation. You have to assume your time is worth something. That’s why decreasing expenses is also about automation and outsourcing. A 99% automated website is much more valuable than one that is 50% automated.
Often it’s much easier to reduce our expenses by $100/month than it is to increase revenue by $100/month. It’s the same $100 in profit every month isn’t it? Your bank account doesn’t care if you got it by decreasing expenses instead of increasing revenue.
Now, let’s put this all together to see what improving these 4 areas by 25% each can do for your cashflow.
Monthly First Time Visits: 10,000
Revenue Per Unique Visit: $0.10
Percent Repeat Visits: 20%
Monthly Expenses: $200
Monthly Profit: $1,000
Monthly First Time Visits: 12,500
Revenue Per Unique Visit: $0.125
Percent Repeat Visits: 25%
Monthly Expenses: $150
Monthly Profit: $1,803
That’s almost double the cashflow. Not bad for what was likely caused by minor improvements to these four key areas affecting your website’s growth.
Get the Most When You Sell
Finally, you have done this whole process and you are ready to sell your site. How do we get the most money when we sell?
Principle 14: Find the Buyers With the Most to Gain By Acquiring Your Site’s Assets
Let’s take two fictional buyers sitting side by side. Buyer one wants to buy your site just solely for the sake of owning it for passive income and buyer two is a major company who wants to take over on the traffic that you already have in order to sell their product. Which one has the most to gain? Which one would you rather sell your site to? Which one do you think would give you the most money? In some cases, auction sites like Flippa may be the place where there are the most buyers with the most to gain by acquiring your site. In other cases, you may need to cold call all of your competitors to see if they want to buy you out. The key is to find the buyers with the most to gain by acquiring your site and are most likely to give you a premium price.
This is pretty straight forward but it really does help to be honest. We never condone trying to scam people or trying to hide things that are really bad areas of your website. If you have a quality site to sell, it’s highly likely you’ll get a fair price and find plenty of qualified buyers. Just be honest with people and it will ultimately help you have less headaches after the sale and it will likely improve your sales price. Don’t hesitate to provide proof of everything you’ve claimed. After all, you’d ask for nothing less when you are buying a site, right?
Principle 15: Terms are Important
The terms of a sale is very important especially when you’re selling. If it is important to you that you never have to deal with that website after it is sold, then you need to make that part of the terms of the deal.
We have had buyers trying to get us to spend the next six months helping them increase the traffic on their website and make it part of the terms of the deal. We told them that we weren’t going to do that. The reason we were selling was to walk away and no longer spend time on the site. Instead, we negotiated down to something more like 30 days of support.
There is lots of areas where terms can come in. It could be that one seller is about will pay you 100% upfront, with no contingencies. Another seller might be offering you more money but they are going to pay that money to you in 12 monthly payments. So, you have to decide which one is more important to you. Could you put that upfront money into another deal and make more money than you would get from waiting the 12 months to get the entire higher price? What if the seller stopped paying you 6 months down the road?
Terms are an important piece so make sure that you are aware of and very clear about terms when you are selling the site and try to get the best terms as possible for you. In some cases, that might mean giving up a little bit of the sales price to get the terms you want. In most cases, that’s worth it.
Once you develop a firm grasp of these 15 principles of buying, selling, and flipping websites, you’ll see this business with new clarity. You’ll be able to apply the principles in new and exciting ways and have the proper mindset to be successful when it comes time to buy or sell your online assets.