Flip or Develop?
Both the stock market and real estate industry have long been populated by day traders and “flippers”, those that buy and sell in a short period of time in order to make a quick profit. With luck, this process can then be repeated over and over for a reasonably stable income - and you might even get rich!
Flipping Fun
A unique breed of entrepreneur is starting to emerge - one that takes the concept of flipping to the area of buying and selling online businesses. The shrewd investor will locate an underperforming business, buy it, work their magic to improve performance and then sell it for a good margin. It is by no means easy and certainly requires a lot of research and due diligence, but the rewards are there and it’s a lot of fun too!
The big advantage of buying a site is you don’t have to establish an audience and wait for the site to be indexed within search engines. Most webmasters, even those that don’t know their SEO from their XML, will understand the benefit of link exchanges. Even the most poorly managed sites should have some form of backlink network developed and return a result in the major search engines. It may not be a top ten search result but it will be a result ready for you to optimize and improve.
I intend to write a series of articles on website flipping, covering top acquisition strategies, places to shop for sites and details on how to avoid the common pitfalls. If there’s a topic you’d like to see covered then let me know!
Your Advice?
I’ve been on a bit of a buying spree recently, and have bought a great selection of domain names, full sites and content too - all for an amazingly small amount of money! 
One of the sites I now own is Feedbytes.com. - a great little blog focused on articles relating to the Search Engine industry. But I have a decision to make, and I’m hoping that you might provide some input!
I think Feedbytes.com is a great domain - short and memorable, the way that a good name should be! But should I continue to run it as a blog, or dump the blog and develop something new? If you favour the latter option, then what should I create? My primary idea at this time is a sort of fusion between Technorati and Netvibes - but I’d really like to hear what you think! 
Digg/astetix
Flickr/astetix
Facebook/Paul Enderson
Linkedin/paulenderson
Del.icio.us/jazzpak
Technorati/astetix
MyBlogLog/astetix
[…] Check it out! While looking through the blogosphere we stumbled on an interesting post today.Here’s a quick excerpt [IMG Flipping Pancakes] Both the stock market and real estate industry have long been populated by day traders and “flippers”, those that buy and sell in a short period of time in order to make a quick profit. With luck, this process can then be repeated over and over for a reasonably stable income - and you might even get rich! Flipping Fun A unique breed of entrepreneur is starting to emerge - one that takes the concept of flipping to the area of buying and selling online businesses. The sh […]
[…] Kafila wrote an interesting post today!.Here’s a quick excerpt [IMG Flipping Pancakes] Both the stock market and real estate industry have long been populated by day traders and “flippers”, those that buy and sell in a short period of time in order to make a quick profit. With luck, this process can then be repeated over and over for a reasonably stable income - and you might even get rich! Flipping Fun A unique breed of entrepreneur is starting to emerge - one that takes the concept of flipping to the area of buying and selling online businesses. The sh […]
I agree, it’s not hard to find a good domain name/idea on the cheap, my advice is to plan ahead and look at your websites as a portfolio, they should work well together and all be about subjects you enjoy and will keep up to date!
Happy turkey day!
Thanks Steph! I think I’ve tried to separate my sales portfolio from my personal one.
The former contains a real mix - everything from blogs to proxies, and from directories to keyword sites. These all require work before I can flip them, which I’ll do simply because it needs to be done. But I don’t get passionate about any of them - their purpose is to make a quick buck.
The latter features sites which I’ve poured my heart and soul into, agonising over layout, design and content for hundreds of hours each. These are the sites which I’m proud to own!
“The latter features sites which I’ve poured my heart and soul into…”
And most of your waking hours
I may have a few “ideas” for you, just give me time to think :-p
I’ve been selling and buying websites for few monthts now. I’ll definitely enjoy reading your “Flip” articles.
Just my thought !
For the Feedbytes, it is a nice domain name. For the blog, if you want it to be successful, you should make daily update … which is time consuming ! Try and find another idea … there is plenty of ideas to create
Hi, this is my first time here.
Got your blog from DP..
Nice blog..
Strongly agree with you with the flipping.
It is better than stocks somehow.
By the way, as for me buy a domain, develop for a less than a year and can get me return like more than 100%..(assuming that you calculated the percentage of return)
The traditional approach is to identify a gap in the market where there is demand first, rather than starting with a neat name/product/technology and then trying to construct a business around it..
..interesting idea though! feedbytes? suggests some kind of RSS application??
Looking forward to the ‘flip’ articles.
Thanks for your comment Stuart!
You’re totally right - the usual way of doing things is market need first, solution delivery second. But I think that it’s happening the other way round more and more often recently; come up with a good brand (including the domain), and then build the need around that.
Perhaps it’s this way because brand dominance and memorability has never been so important before as it is online currently?
I agree on the RSS element - that had occured to me also. I was thinking about some sort of feed aggregator perhaps?
I think the key thing is the ’so what’ factor.. the thing that makes it different from the rest.
I just googled “rss aggregator” and got 1.3 million results, now, sure they are not all possible competitors for feedbytes, but I think it shows one of the problems with starting with the name and trying to find the gap.. its all too easy to end up with a ‘me too’ product that just struggles along.
I suppose the question is, if you are going to flip a website, then what adds the most value to the site?..
Sorry for answering these comments out of sync - my comment spam killer decided to nuke a few legit comments!
Mr Barnes,
Your ideas are always welcomed mate - you even have the occasional good one!
LOL…
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Ludovic,
Thanks for your input mate! You’ll have to keep me updated on what you’re flipping, and let me know which forums you’re active on (if any).
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xBrain,
Welcome to my blog!
There is definitely a certain buzz with site and domain flipping… Maybe it comes from being able to make a huge profit selling something completely virtual? 
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Stuart,
That’s an excellent question, and the answer depends on who my potential buyers are! If I intend to flip it back to the forums I grabbed it from (DigitalPoint, Namepros, Sitepoint etc) then the most important thing to buyers there is that the site’s making money, preferably from advertising revenue.
I’ve heard and read about many site flipping deals, but it’s all pretty foreign to me. I’d be interested in learning from you on how to spot a lucrative deal for a little money
As for Feedbytes.com - if you keep it as a blog, you’ll need to hire someone to post regularly, unless you’re planning on doing that yourself. Perhaps you can get contributions from readers, kind of like “feed me with your bytes of info”
oh, and btw, don’t forget to update the About and Contact pages on Feedbytes.com
It also has a pretty good RSS feed count #. Good luck with it and keep us posted on how are you doing with that site/domain, pls.
I’ll share some tips with you in the next couple of weeks!
Making FB into a multi-user blog is a nice idea. I’ll add that to the list of possible solutions.
The ‘feed count’ of 2499 is a red herring. It’s powered by something called Zookoda, which I’ve never heard of - and I’m pretty sure it’s not the actual number of people I have subscribed by email! I haven’t had a chance to figure out how it works yet though!
Don’t really have experience with flipping, so I might be wrong, but waiting for a year or so seems like a long time to me. With in a year it’s possible, starting from scratch, if niche is properly identified, with quality content/service to make it work. Flipping, at least to me, is more about short term effort but I guess it has to do with how much time one can invest in such endavour. But as I said I never really tried it, tho it tempted me from time to time, so I don’t mind being corrected by more experienced. By the way looking forward to reading some of the tips you’re willing to share Paul.
I would develop.
This might sound like a weird idea, but if you ever feel overwhelmed with running multiple sites, you could convert the site into a mashup with feeds for a certain popular topic, so the name will fit the bill, at least the “feed” part! Or, how about a WPMU site?
Vagner,
Thanks for your comment!
I think the pre-flip development period tends to vary from trader to trader, and also with what needs doing to the project in question. I personally think 3 months of work is necessary before returning a site to the marketplace, although there are some sites that I think could be flipped much more quickly! 
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CCNA Exploration,
Thanks for your input! Do you have any ideas on what I could build?
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Sunny,
I thought about WPMU, but I have another domain that I’m planning that for - BloggerBit.com.
The feed mashup’s a nice idea, but as Stuart said - it’s been done to death!
I thought you might be interested in a graphic design contest I’m having for my blog. If so please check out the following post:
http://digitalmeltd0wn.blogspot.com/2007/11/graphic-design-contest-sponsored-by-sir.html
Thanks for dropping in Zer0_II! Current time constraints mean that I’ll be unable to enter your contest - but I wish you the best of luck with it, and for your blog too.
[…] promised a couple of weeks ago, this post begins a series of articles on the subject of Website Flipping. At it’s simplest […]
I once asked a financial planner about investor flipping and he claimed it doesn’t work, and this is why.
1) If you buy a share a value “X”, the value of that link will (hopefully) increase over time, let’s say by 0.001 per day
2) Lets say you bought a million shares where X = $1. Let’s say after 3 days your original value of “X” is now “1.003*X = Y (the new value of the shares)”. If you now sell all your shares, the profit is $3000 - not bad for 3 days work.
3) Wrong! Because you won’t be selling your shares at Y (the new price of the shares) due to brokering fees. While you may sell all of your shares, after just 3 days the new value won’t be large enough to make a considerable profit over the brokerage fees. In other words you’d want to make alot of money on those shares if you wanted to quickly sell them again. The value on investing is that you want to make a big increase over a big amount of time and live off the interest (which is better than bank interest).
Now, where websites differ is you have some sort of control over how well a site performs. A potentially better strategy (this is just my opinion) would be to buy a couple of networks and link them all together, potentially making them stronger both from an SEO and user perspective. Once you have strengthened the network, you could then either expand it or sell it off. It would probably make more sense to monetize a site through PPC and then sell it off once it is performing less then your news sites.
Thanks for your comment SWD!
Your idea for a network is a sound one - it should indeed build things like PageRank. The only problem is having enough money to invest in making the network in the first place… 
I have been flipping domains, but this year I started flipping sites. It really does help to know the niche, but to date my biggest payday was an inquiry that came out of left field. I doubt I’ll ever understand why the buyer bought what he did. Perhaps he saw an nupside I underestimated.
Great topic for a series.
Thanks SDI - I’m glad you enjoyed the post!
I’ve got to admit, website flipping sounds like a good idea. If I had the money, I’d do it, but for now, I’ll stick to flipping dollars and pancakes!
How do you go about securing the validity of a domain or online business? Just like buying a used car you don’t know how it is has been treated, what kind of liabilities has been created and the true underlying valuation that is in place. While I have personally found great deals I have also seen more than enough turkey’s that make this a risky business still.
The real advantage comes when buying domains at reasonable prices that do not come with a bunch of baggage, but have a lot of back links directed at it providing a foundation to build from. I know that others have benefited from domains that I have let expire due to my lack of attention and issues with renewal settings on the registers site.
This is a great topic and I would like to learn more about how others are finding good domains while eliminating the issues that could occur.
Paul,
I’ve began to dabble in buying developed websites, not necessarily for flipping, but for monetizing.
I think I got pretty lucky on Ebay, as I was the only bidder and purchased a pretty intense website for only $10.99. The owner didn’t seem to upset and transferred everything over to me, including setting up the database on my own hosting very quickly!
Heck, that’s a pretty low entry fee, wouldn’t you say?
Hi
I like reading your insights into flipping websites. The thing is that it takes a good eye to recognize whether a site has any potential.
To verify the traffic, income, tenure or ownership, whether you can spare the time for it, whether it’s what you’re interested in owning for a while; what needs to be done in terms of monetisation, whether you want to outsource it; the content - is it good enough ? The list goes on and on.
At first I thought it’d be so easy. But you have to be dedicated, and Im hoping for a quicker way to make a $ I guess.
Perhaps on the internet there’s no such thing. The secondary sites offer cheaper pickings than the prime sites, so there must be a way of flipping one to the other.
Any comments on my last sentence?
I have never thought of flipping outside of real estate. It’s a very interesting idea though. If you can purchase serped sites on the cheap, then buying groups of sites in a particular niche would be a great idea. You then could use the link juice among the many sites to create a powerful flagship site in any niche.
the flipping business is on a rise esp with a lot of money involved with link sales and other stuff. ucan find some sites with pr easily and then recover them with in few weeks.
Hi
Its something I’ve looked into pretty closely, but I can’t find the figures that they say are involved eg $450 for a site with a little functionality and say 10 article content.
It seems to offer some potential between sites. There are popular sites that evidentally have websites on them for sale that might sell elsewhere for a bit more.
I’ve spent a few $’s on a couple of websites but don’t really think Ill make anything, its a confidence thing, I guess esp in terms of technical knowledge.
This is my second post here, learning about flipping. Currently we just develop as we get to use the tools that we have been developing for the past 11 years, but if a website has authority then it might be worth its while to do a combination of the 2.
Paul - I’ve done the buying/selling website flip several times and have had it done to myself as well. I had developed several sites that were performing well and had members (over 100,000 when I sold one). I had invested some of my time into the site and not very much money (maybe $500) and sold the site 3 months later for $14,000. It can be done and is a very smart practice. Great post!
We would be interested in buying websites that are mature and that focus on real estate, and hopefully that have a large number of do follow high rank in bound links.
Such sites could be valuable to use to augment our business and drive potential clients to our own site. Additionally, they may be good candidates to flip.
You have given us some food for thought and we intend to pursue this.
Thanks for providing us with some good ideas.