Guide to Website Flipping - Part 1
As promised a couple of weeks ago, this post begins a series of articles on the subject of Website Flipping. At it’s simplest level, flipping a website involves the following steps:
- Find a site to purchase
- Evaluate, negotiate and complete the sale
- Add value to the project
- Find a buyer and make a sale
Finding a Site to Purchase
In order to narrow your focus a little, it’s a good idea to decide on some sort of specialisation. Perhaps there’s a particular type of site that you already have experience with - forums, blogs or e-book sites for example. Buying in an area that you’re already familiar with will give you a much needed step up the virtual ladder, at least over somebody who’s a stranger to them. If you don’t have existing experience then sites that provide a service like image hosting, file storage, content resources, tutorials etc may be a wiser investment. E-commerce sites that sell an actual product are also good to work with.
You may also find it helpful to narrow down your search by a particular vertical market, looking at all sites covering a particular interest or hobby for example.
For me to become interested in a site it must have two things - compelling factors and issues that need solving. A site may be getting plenty of traffic but lacking decent content, or perhaps it has traffic and content but poor monetisation. Maybe the site offers a good product or service, but hasn’t gained traction in the marketplace.
When looking at a site, you should keep one question in mind: where’s the hidden value? Every site has compelling factors and every site has issues; find what’s compelling about any website you’re considering, and think about how you can take advantage of it.
Things to Remember
- Buying a “fixer-upper” isn’t a wise move if you don’t have the skills or financial resources required to solve any technical issues a site may have.
- Buying a web site with huge level of traffic only makes sense if you can move it onto a new server that can handle the traffic, and then properly monetise it.
- Buying a site that sells a script or a digital service means you’re going to have to provide support - including fixing any bugs or errors in the product itself.
Where to Look
There are many ways to find good websites to flip, and it’s quite easy to spend much more time on the selection process than is really necessary. For every good deal there are hundreds of dud ones, and out of ten bargains you may only end up finding a single project that appeals to you.
Because it charges for listing sites for sale, the SitePoint Marketplace should be the first place you look - the cost of listing a site there means that many of the duff deals have already been eliminated. You still need to tread carefully, it’s definitely worth monitoring if you’re a novice getting into flipping for the first time.
There’s a number of other forums and sites that include sales - Digitalpoint and Namepros to name a couple. Listing a site for sale on these boards is free, so you do tend to end up seeing a load of rubbish on there - but every now and then a little gem pops up for the taking! One site I avoid for flipping purposes is eBay. It has hundreds of listings at any given time, but is generally a complete waste of time.
There are some other marketplace sites that might be worth checking out: BizBuySell, WebsiteBroker and WebHostingTalk all have some interesting listings, but also generally require a bigger budget. You could also use Google - searching for terms like ‘this site is for sale’, but be prepared for anally retentive Webmasters who think their 2 hour project is worth several million!
Conclusion
So, that covers finding a site to flip. Future posts will include information on negotiating and completing a sale, adding value to a project and the process of actually finding a buyer to flip to.
I really hope you’ve found this both interesting and useful. Feel free to ask questions if you have any - and I’ll be happy to answer them!
Thanks to these people for their comments on my previous couple of posts: Vivien, Damien, Toni, Sunny, Paul B, Vagner, Lisa, Roger, Laurence, Jacob, Steph, Ludovic, xBrain, Stuart, CCNA Exploration and Zer0_II.
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Good point about hidden value Paul. Identifying site with unused potential can be very time consuming tho and might require bit of luck, but if you manage to find and have enough time/resources to exploit it’s value I guess it can be well worth of trouble. By the way have you decided on what to do with Feedbytes? Anyway glad to see your post again and I hope to see part 2 soon.
I did find this article both interesting and useful, Paul. Thanks a lot. As I mentioned before, it’s all pretty new to me - I’ve read about other deals but never tried it myself.
I just checked out SitePoint MarketPlace - gosh, did I get dizzy after looking at all those hundreds, no - thousands, of listings.
How do you determine if the site does get the traffic, or does make money? Most of them are listed with a limited time offer, so I don’t think there’s much time left to talk back and forth with the site’s owner. How does that work?
Also, I guess, if the listing gets many bids, than it is worth buying, though of course it shouldn’t be the determining factor, of course.
Anyhow, I really look forward to your future articles.
Vagner,
It’s definitely worth the trouble most of the time! I’ve spent quite a bit of time on these forums recently, and it still amazes me at how often people are turning a $xxxx profit in less than a week!
Still undecided on FeedBytes. I really want to make it into something original, useful and a bit special - but I haven’t had the time to play with ideas yet!
——
Vivien,
Glad you found it a good read! I was a little worried that nobody would be interested…
If a site is getting a decent level of traffic (or generating significant income) then the seller will often attach a stats or adsense screen grab. If they don’t then you should ask for them - the seller’s are generally only too pleased to answer questions, and respond quickly most of the time.
A large number of bids doesn’t necessarily mean that the site’s worth buying… Buyers often flock like sheep, bidding on what their peers bid on simply because they’re worried about missing out on a deal. I’m also pretty sure that on occasion sellers use multiple accounts to hike the price up.
A buyer should ultimately use their intuition and intelligence (both of which you have in plentiful supply) before taking the plunge!
oh, thanks for the compliments, Paul
That’s a good point - about sellers using multiple accounts, didn’t think about that one.
I can see that it’ll take quite some time to study various offers on SitePoint’s site, before making that first bid.
So that’s what I’ll do first, as well as becoming a diligent student and reading all your articles on this topic
I hope you’re planning on giving an example with a Case Study - one of the sites that you’ve purchased before and made a profit on?
Did you also sell your sites/projects?
It’s definitely a good idea to watch from the sidelines for a while before making your first purchase. Of course, if an offer you can’t pass up arises then you always have the option of biting the bullet!
A case study’s a nice idea - I’ll do that to finish up the series.
I’ve sold a few sites and domains so far, and I’m about 300% up on my initial investment at this stage. 
The part I most keen to learn is to figure out how to price a site! Since price is usually fixed by the seller and its value subjective, there is no easy way to tell if a site is a bargain unless you find it to be of value to you. Most sellers think their site is of value (at least until the point of sale), but for a buyer to be able to put a price on it is tricky to say the least.
Hey great post if you want I have a 30 minute
long video I did for my list that answers the
top 20 questions most flippers have.
You can embed it on your blog and be a hero
to your subscribers…
http://www.veoh.com/videos/v1496653Cc7rsNyN
Hope it helps…
Justin Brooke
SiteFlipAcademy.com
Agreed. I think it’s something that comes naturally with practice - I’m sure I’ve both underpaid and overpaid for sites in the past!
Wow, I never knew people did that.
Hey Jacob! Never knew people did what?!?
Really good post Paul
For me, Sitepoint is certainly the best. As you said, people have to pay so you won’t have all the rubbish you can find on DP or NP !
Also, use your intuition and don’t jump on the first deal you’ll see thinking it is the deal of the year… especially if you are buying your first website … spend some time on forums to see how the sales are done, questions asked … learn basis first !
Good luck to anyone starting with “website flipping” !
Hi Ludovic,
I’m glad you liked the post!
DP and NP are definitely filled with alot of rubbish, but I’ve certainly come up trumps on a couple of sites from them!
Have a great Christmas and New Year mate!
Great post - look forward to the rest of the series!
Flipping happens a lot with undeveloped domains too.
Wow, you can really do that? Anxious to see the rest of the series…
Great article; I didn’t know about Websitebroker and Webhostingtalk .. so thanks for mentioning these resources! Looking forward to part 2!
Maybe you could share some information on how to buy websites that are not for sale on SP or DP; I strongly believe that there are a lot of webmasters who don’t have a clue that they are sitting on a goldmine … any ideas on how to approach them and make them an offer they can’t refuse?
Hi Paul,
I do admire your blogging ability, and if there was a professionalism about it, you do have it down.
Could you provide details of one of your flipping experiences? I spent some time on sitepoint a few days ago, and it was pretty inspiring to see the marketplace in action. I have yet to buy or sell a website, but I’m moving in that direction.
I own 107 domains, designed about 15 websites and operate 2 monetized websites. I’m self-taught, and have immersed myself in website study for the last 2.5 years.
Any details would be greatly appreciated.
Thank you,
Luciano
I look forward to the post regarding the price negotiation. I am curious how the value of a site is determined when it is not a site in which sells a product to have a revenue record.
[…] part-time career as a Website Flipper was going well, until the powers that be on Digital Point decided to give me a lifetime ban for […]
I can’t believe you got banned for that, it’s pretty ridiculous especially if you almost never used the other account (and they would be able to check that).
I am tempted to buy some site at sitepoint as well. I have been checking regularly and think have found enough tool to help me make sure the site is genuine and all that. Things that people might want to check for is:
1- Make sure the PageRank is valid and not fake. (A few website can do that for you). The Google toolbar isn’t an accurate way to measure (as it’s updated only each 3-4 months). Where do the backlink come from and will they remain after the sale?
2- Be careful of revenue and traffic stats. First of all, it’s easy to modify the screenshot (using photoshop). You also don’t know if the person has paid to receive traffic in order to make the declared revenue. Traffic could come from various source, other website they own, partnership and other sources which could be stopped after the sale.
They are definitely some genuine offer with growth potential, but be careful and treat this as a business decision by doing all the proper assesment first.
Paul, I am building a small portfolio of websites, all with U.S. national interest (good for 300,000,000 people). My plan is to significantly monetize them and sell them within 3-5 years. I think whatever website is hot today could quickly get outdated tomorrow. So if there’s an opportunity to flip, I’m all for it.
Hi CarFan,
Thanks for the support - it sucks, but it’s meant that I’ve had more free time to pursue some personal projects!
There’s always a risk with buying from DP, SP or wherever - but it’s no more risky than buying a car. It’s just a case of being careful.
The best site I’ve found for checking PR and backlinks is iWebTool (http://www.iwebtool.com). It’s free too!
——
Luciano,
Your project sounds fascinating! You’re bang on with sites becoming quickly outdated, but perhaps that’s why flipping is such great fun - taking an old shabby site and glossing it up before reselling it for an easy profit!
Great post
website flipping can make alot of money
buy a site with some traffic at the right price
add unique content and then its already worth more
There’s good money to be made here with patience, personally I like doing up sites where the content is sound, but improvements can be made design-wise and with SEO. Ultimately, however, your site is only worth what someone else is willing to pay for it
Hi Paul, this has always interested me, selling a “property” on the web and turning it into a profit. I believe that this is a profession in itself as “value” is something that I struggle to understand. Enjoyed what you had to say.
Really intersting articel, I hit upon coincidentally while I was googeling.
I’m asking myself how much basic capital you need to flip websites successfully?
But in the end I sadly think that is not possible with german webprojects. At least it will be not so easy to find good sites.
That was a really great read, thanks.
I’ve spent about the last year or so teaching myself to design websites and dealin with shopping carts coded in php and I’ve been looking for a way to make some more money our of the skills I’ve taught myself. This is perfect and a very well written explanation.
Many thanks. I’ll be looking around your blog for more interesting info
Hmm great post. You got the wheels turning in my head now. I have always wondered about doing this as I do enjoy SEO and website projects. Thanks.