Thursday, October 14, 2021

How to Start a Website Flipping Business

Flipping a website is not unlike flipping real estate.

You buy a piece of underperforming piece of digital property, improve its value, and resell it at a profit. 

The business has low barriers to entry and requires minimal investment.

And the rewards of a job well done and a lucrative payday can make its challenges worthwhile. 

This guide covers everything you need to know to successfully flip websites. 

The Easy Parts of Starting a Website Flipping Business 

One of the most attractive things about website flipping is the simple business model. Theoretically, you buy a website, improve it, and then sell it for a profit. The business model is so simple that you have a decent shot at creating a successful business with little or no entrepreneurship experience. 

Also, the website flipping business has a low capital investment. You only need a couple of dollars to get started if you’re building websites from scratch. You can also snatch existing websites with good profit potential for a few hundred dollars. Considering that there are virtually no overheads, this business has some of the lowest barriers to entry from a capital investment perspective. 

Selling your newly improved website is equally easy. There are marketplaces specifically for flipping websites. Platforms such as Flippa allow you to easily list your website for sale and find potential buyers in just a few clicks. You can even hire a broker here to help you navigate the more tricky parts of selling your website.

Finally, there’s good demand for good websites that generate income. Unfortunately, these kinds of websites are getting harder and harder to find. Therefore, individuals and companies are willing to pay top dollar for a performing website. You can do very well if you have a knack for building high-performing websites. 

The Difficult Parts of Starting a Website Flipping Business 

Patience is a virtue in the website building business. If you are in it to turn a quick profit, there are better business opportunities out there. Successfully flipping a website takes at least two months if you’re lucky and up to two years in some instances. Likewise, your SEO efforts take some time to pay off. So, you’re looking at a long-term game in this business. 

The website building business is also primarily knowledge-based, which can be a problem for some people. You’ll need at least basic content development, web design, user experience SEO, lead generation, and data skills. Of course, you can always get around this problem by outsourcing the tasks where you aren’t competent. But, this move will cut into your profits. 

Finally, there are no guarantees in the business. You are at the mercy of the market and what people are willing to pay for your website. There’s also the chance that you’ll make a bad acquisition, especially in the beginning. You can expect to make costly mistakes, but you also have an opportunity to learn valuable lessons that you can use in the future. 

If you’re ready to get into the website flipping business, here’s how to go about it step-by-step. 

Step 1 – Find a Website To Flip 

Finding your first website is both challenging and fun. However, this is arguably the most crucial step and requires serious consideration. Making a mistake at this stage can mean losing valuable time and money even before you get started. But, there are a few things to keep in mind when looking for your first website to flip. 

Buying vs. Building 

The first major decision is whether to buy or build a website. Each option has its advantages and drawbacks. For example, building a website from scratch is cost-efficient. You only need to pay a couple of dollars for a web host. And, you can create the entire site yourself if you have the skills and know-how. 

Another advantage of building a website is freedom. You have total control of content, domain name, and monetization. If done correctly, you can create and grow a high-value website though it will take some time.  

But, I highly suggest buying a website instead. If nothing else, it is faster. It can take up to two years to flip a brand new website that you’re building from scratch. Additionally, an existing website, regardless of how terrible, is already indexed on search engines. So, it can take a while before a new website even shows up on Google search results. 

Choose a Profitable Niche 

There are infinite options when it comes to buying a website. So, establishing a niche helps to narrow down the possibilities. Having a niche in mind also makes the acquisition process less confusing. You’ll have a good idea of what to look for when purchasing a website. 

Some of the most profitable niches to consider include:

  • Food and cooking 
  • Travel
  • Personal development
  • Business 
  • Technology
  • Health and wellness 
  • Technology

It helps if you already have a niche that you are passionate about or are interested in. Having experience or knowledge in a niche will make it much easier to create content and design a marketing strategy. 

You can also opt for a mico-niche. This strategy has great potential for profit if don’t correctly. For example, you can choose a website that focuses on the keto diet or vegan recipes under the more general food and cooking niche. 

Create a Website Buying Checklist 

Just like flipping houses, you need to check the website thoroughly before you buy. A checklist will help you determine if you are getting a good deal. I do not recommend using price as the main deciding factor. As the adage goes, you get what you pay for. 

Here are some of the criteria to include in your website-buying checklist:

Domain history – This is one of the most important considerations when shopping for websites. You want to be sure that the site hasn’t been involved in any suspicious activities like spamming or other shady dealings. Also, check that the website hasn’t been penalized by Google and other search engines. 

Content quality – Good quality content is one of SEO’s best practices. However, creating content is time-consuming and costly. So, many website owners cut corners here. The result is possibly being penalized by search engines. Ideally, you don’t want to overhaul the entire site’s content. You merely want to improve it and add more content. Also, find out if any of the content is subject to copyright issues. 

Website traffic – You want a website that brings in decent traffic. Here, you want to look at more than just the numbers. For example, you want traffic coming from high-quality locations like the USA, Canada, and the UK. Additionally, you want largely organic traffic from reliable sources like social media. 

Platform – Check with the platform powers the website. WordPress is by far the preferred platform for website flippers. WordPress websites are easy to maintain and sell well in the marketplace. It is also easier to find experts to help you with your WordPress website. 

Revenue – This is a crucial consideration when buying a website. Find out how much revenue the website generates. Also, think about the revenue potential of the website. 

Step 2 – Buy Your First Website To Flip 

Buying your first website may seem straightforward. But, it’s one of the trickiest parts of the business. Your first instinct may be to search Google for high-ranking websites. But, these high-performing websites may be too expensive. Oftentimes, the website owners are already putting a lot of effort and not looking to sell. 

Fortunately, you have some options. 

Choose A Website Marketplace 

A website marketplace is one of the easiest places to purchase a website. You don’t have to waste time finding out if the webmaster is open to selling their site. 

Also, website marketplaces allow you to customize your search, making the process easier. For example, you can search websites on the marketplace based on your preferred niche. While there are many options you could choose from, I highly recommend Flippa

This platform has a massive market share, increasing your chances of finding the perfect website to makeover. Plus, you can later flip the website on the same platform. Flippa is also incredibly easy to use and navigate. 

Flippa doesn’t charge you to buy a website except for the payment processing fee. Flippa also holds your money in Escrow, just to make sure you get everything you need before the seller receives your payment. 

Opt for Solopreneurs 

Websites owned by a team of professionals are often too expensive to make business sense to flip. These professionals have put in a lot of work and rightly want to be compensated accordingly. Also, these experts often exhaust the website’s potential, so there is nothing much you can do to improve it. 

Most marketplaces list the owner’s details. So, search for individual-owned websites. Also, look for hobbyist website owners. Usually, these owners haven’t invested much in their site, so there’s a lot of potential here. Additionally, hobbyist owners may be willing to sell for a low price. Don’t forget to use your checklist from the previous step to identify the perfect website to purchase. 

Negotiate With the Owner 

There’s always room for bargaining in this business. And, a better deal is always around the corner. So, don’t feel compelled to pay the list price. You are sure to find a website that ticks all the boxes and is within your budget if you are patient. 

Contact the owner directly and begin negotiations. Flippa has an excellent website valuation tool that you can use for reference. However, calculating the actual value of a website can be difficult. But, Flippa’s value calculator can give you a ballpark figure of how much the website might be worth. 

Step 3 – Transfer Ownership of the Website

Purchasing a website is a little more complicated than your typical cash sale. So, don’t forget to transfer ownership of the website to yourself. Otherwise, you don’t legally own the website. As a side note, make sure that the seller is the actual website owner. 

Ensure You Are Purchasing the Entire Site

It may sound like a no-brainer. But, you should be crystal clear about what you are purchasing. First, make sure that you buy the entire site, including the domain name, content, images, databases, servers, and mailing lists. Then, be sure to get a complete list of what’s included in your package.

Draw Up a Contract

It is worth spending the time and effort to create a contract for you and the seller to sign. The agreement will help clear up the transfer process and resolve any issues that might come up. The contract doesn’t need to be complicated. But, it should cover critical matters like the parties involved, a detailed description of the website, price, payment plan, and details about the transfer.

Where possible, consider including a non-compete clause. This is especially important if you are purchasing the website from an expert. They could just go off and create an identical website to complete with yours.

Transfer the Website Ownership to Yourself

Transferring website ownership is a pretty straightforward process. But, things can get complicated. You don’t want to draw out the process any more than it needs to. Ideally,  the transition to owning the site should be smooth. 

The typical website transfer process includes:

  • Getting access to the hosting account
  • Transferring the ownership of the website domain
  • Getting access to all connected third-party accounts such as Google Analytics
  • Receiving all files relating to your website, including custom icons and image assets relating to the website’s design.

Flippa already has a standard website transfer procedure laid out for you. This is another reason to opt for the platform. You don’t have to worry about missing anything during the transfer process. 

Step 4 – Improve the Website

Now comes the ‘meat’ of the process. This step can make or break your business. So, you want to pay special attention to this step. Improving a website can be a gratifying process. Plus, it is guaranteed money in the end if you do it right.

Perform a Thorough Audit

A website audit will help you identify the weaknesses you need to fix to make the site more attractive. Heatmaps are a great way to get a first-hand look at how visitors navigate through the site. You’ll be able to figure out where you’re losing visitors and improve your sales and marketing strategy.

Equally, a website audit will help highlight missed SEO opportunities and identify common SEO mistakes. Other SEO deficiencies that a website audit can help you identify include broken links, inappropriate tags, and poor link building.

Start Creating Content

The first obvious step for improving your newly acquired website is to publish content. This step includes improving and updating old content. Also, you’ll need to post tons of new content to enhance your website’s appeal on Google rankings.

Specifically, focus on a search engine optimized (SEO) content. SEO will help to drive traffic to your site and help you rank in Google.

You don’t necessarily have to be an expert. There are plenty of free and paid resources you can find online to help you learn SEO.

Improve Monetization

You’ll need more than Amazon and Google AdSense affiliate marketing to boost the website’s monetization. While common, these methods are some of the lowest-paying monetization methods.

For this reason, consider expanding to other monetization methods such as displaying ads, selling ads spaces sponsored posts, selling digital products, monetization widgets, and RSS feed ads.

Improve the Website Traffic

Improving your website’s traffic works hand in hand with improving monetization. Getting more traffic to the website will increase your sources of generating revenue. More traffic also makes your website more attractive when it’s time to sell.

Again, explore various options for boosting website traffic. Standard methods include using targeted keywords, writing guest posts, growing your social media presence, sending email newsletters, and exchanging backlinks.

Step 5 – Sell the Website

It will take some time for SEO to yield results. So, I recommend waiting a while before selling your site. Most people stay at least eight months before selling. But, how long you wait is entirely up to you. Meanwhile, you can enjoy the passive income that the site generates.

Sell Your Site on Flippa

Again, I recommend selling your site on Flippa. It is a peer-to-peer marketplace, meaning you can communicate with potential buyers directly. This format helps eliminate many of the problems of working with brokers. Alternatively, you can work with a Flipper-recommended broker if you don’t want to take a hands-off approach.

Price Your Website

Multiple factors go into pricing a website accurately. But, most people agree that a website is worth between 24 and 36 times its monthly revenue. Again, you can use Flipper’s valuation tool to get a ballpark figure of how much your website is worth.

The valuation tool will also give you a sense of what to consider when valuing and pricing your website. In this case, you’ll need to look at factors like the age of your website, the web traffic, revenue streams, your expenses, and the amount of time you spent improving the site.

List Your Website on Flippa

You’ll be asked to include basic details about your site like the domain name, the business name, and your country.

Flippa also offers details to help you decide the kind of website you are selling. For example, your website may fall in a category such as advertising, SaaS, ecommerce, advertising, or services. Be sure you check out these details carefully so you can list your website appropriately.

Flippa also easily links with QuickBooks to help you quickly provide your website’s financial history. Alternatively, you can upload this information manually. You’ll mainly need to give details like your expenses and revenue. Details of your financial history will go a long way in making your website more attractive to buyers.

Lastly, upload a high-quality image of your website. Now you only wait for quotes and inquiries to start coming in. Alternatively, you can list your website of Flippa’s auction and sell to the highest bidder.

from Quick Sprout