Top 5 Mistakes Made Buying a Website
The cost of building an ecommerce sites in 2018 ranges between $5,000 and $10,000, according to Georgia Web Development. That’s a hefty sum of cash for someone starting out with a dollar and a dream. Buying an existing website bypasses some of the traditional time and technology hurdles of getting an online business up and running.
As a marketplace offering websites for sale since 2012, we’ve seen it all – successful first-time buyers bringing in their first revenue from the Internet, experienced website flippers adding to their empires, and (unfortunately) newcomers who make huge mistakes that cost them dearly. The team at WFSBO wants to see YOU succeed, so we’ve rounded up five classic pitfalls for you to avoid in your adventurous foray into buying websites.
Mistake #1: Buying websites outside your budget
Desire is a powerful thing. But if you’re thinking about moving money out of your retirement account or emergency funds, DO NOT DO IT. Acquiring any business - whether it’s online or brick-and-mortar - is not without its fair share of risk. Even the most thriving enterprises fall flat if they lack critical capital when it’s needed.
Consider what happened to businesses who couldn’t afford the first Google Panda updates in 2013. One analysis found that just seven websites out of 98 experienced 100% recovery from the hit two years later. The average website saw visibility drop by 69%. That means there were a LOT of entrepreneurs out there running on a shoestring budget and unable to hire a good web developer who could turn their SEO problems around.
There are many sources for necessary funding - friends, family, business loans, payment plans with the seller, angel investors, or venture capital. Cashing in on the money you reserved to survive off is a risk not worth taking, no matter how juicy the URL is or how promising the profit appears.
Mistake #2: Buying websites outside your area of expertise
How hard can buying websites and running them really be? Many of us have this very thought as we start poking around at all the lucrative opportunities online. You may stumble across amazing URLs and sense opportunity like a shark picking up a drop of blood in the water. You may see the historically impressive rankings and think “I can do e-commerce!”
The truth is: a lot of people sell websites at a loss a year later because they were too ambitious or naive. One successful venture doesn’t mean you can replicate the same success in a different niche or industry. Lead generation businesses are not the same as e-commerce businesses. Software as a Service subscriptions are not the same as online magazine subscriptions. Online businesses are not the same as offline businesses.
Mistake #3: Agreeing to buy websites you haven’t researched
Before you buy websites, you’ll want to feel confident that the site has been managed thus so far. Just about any website listed can be improved with due diligence, but do you really want to start off deep down a hole? Here are a few important facts to clarify before you acquire a new site:
Exactly how old is the domain?
Older domains around for more than a year tend to perform better in search engine listings.Has the site suffered a Google penalty?
Blacklisting can be difficult (and costly) to rebound from. You’re better off starting fresh.What is the development history?
It’s good to know how long ago the site was created, how much it cost, and what investments were made over the years to maintain it.Is the traffic good quality?
Look beyond the 50,000 visitors a day, into measures like sales conversions, time spent on site, bounce rate, and make sure the traffic is high quality.Has growth been steady?
Check how long the site has been generating income. Ideally, rankings and conversions will be steady, without huge peaks and valleys.
Mistake #4: Snapping up websites for sale without seller input
Even when a seller hires a broker for representation, there is a treasure trove of knowledge to mine. Once purchasing websites for sale, the successful buyer will work closely with the seller to make a smooth transition. You won’t necessarily learn everything by looking at financial statements and analytical data. Sellers may be psychologically ready to move on quickly from their past ventures, but don’t let them rush out the door without the training you need to feel secure in your purchase.
A few good questions to ask include:
How is the site being monetized?
Are your links natural or paid?
Is all content on the site 100% custom and unique?
Who writes your content and how much do they charge?
Are the tools, themes, and plug-ins on the site included?
What other channels, besides search engines, do you use to generate income?
How much time do you spend maintaining the site?
Have your maintenance costs increased over time? If so, why?
Why did you decide to sell your website?
Mistake #5: Buying a website you can’t maintain
Buying a website is a bit like buying a dog - the amount you pay for the initial acquisition is little compared to the ongoing maintenance. With a dog, you’ll need to buy food, toys, bedding, vaccinations, and medical care. With a website, you’ll need to buy annual hosting and domain registration, SSL licensing, security and backup protection, blog content, social media managers, web developers, plugin upgrades, analytics data, and payment processing vendor services. A small business can expect to spend $600 - $2,800 on annual maintenance. If you haven’t budgeted for those expenditures, then you may be in for a rude awakening as these costs inevitably arise.
Buying websites can be a whirlwind source of income - if you choose the right website, at the right time, with the right expectations! If you have any questions on the process, contact us for assistance. We are always happy to speak with first-timers interested in becoming a website flipper or owner.
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