I will be honest with you: most blogs that are put on sale on big sites like Flippa are crap! Fortunately, most of them are easy to label as crap, but there are still quite a few that might seem at first incredible deals.
How to really tell if a blog is worth spending your hard earned money on? I will tackle that in this article and share with you my own guide on how to buy a blog without overpaying and without getting scammed into buying a crappy blog posing as a great one.
Since I started blogging, I sold my fair share of blogs and brought quite a few. From my personal approach, I can guarantee that all the blogs that I sold were sold when I considered them maxed out or about to go on a downward path: and I think I was right. Also, all the blogs I purchased were the purest form of crap and I got fooled into thinking otherwise.
The biggest mistake in both cases: paying based on POTENTIAL.
Potential, when it comes to blogging, has ZERO value. I never tried to scam people when selling my blogs, but I made sure to get as much as possible based on potential. Mark my words: all blogs have potential.
Few actually make it count. If you know nothing about that niche or how things should work, completely ignore the potential value. Yes, space tourism has the potential to make you a millionaire. But can you build a spaceship?
Watch out for: declining traffic
Most blogs that I saw on sale, as well as all the blogs that I sold were starting to lose traffic. Sure, traffic may go up again but in most cases, the downwards trend continues.
The biggest blog that I sold was generating, on average in the past three months before selling, about $6,000 per month. But I just felt that keeping the revenue to those standards would’ve been difficult: traffic was already declining, the articles that were bringing in the most traffic were soon to be forgotten and I had no guarantee that I could make it work again.
In my case, I was convinced that the great levels of income can be kept high by the right buyer, but unfortunately those who purchased the website didn’t listen to my guidelines and didn’t do what I advised them to do – what I would’ve done – and the website went down crashing.
Even though I don’t have the numbers, I estimate that it’s making no more than a couple of hundred dollars per month today – two years after the purchase and I think that there are high chances that the buyers didn’t get their money back.
I might have been able to keep the traffic levels to similar values, and the revenue up – but maybe I wouldn’t have been able to fight the declining traffic either. So always – ALWAYS – be very careful when dealing with websites that show a declining trend in traffic!
Stay away from social traffic!
Unless you really know what you’re doing, going into the business of easy money making and buying websites that get hundreds of thousands of visitors per month from Facebook is extremely risky.
Usually, the webmasters promote their content to more than the Facebook Page they’re selling together with the website and many of them won’t admit it. Plus, social traffic, for a person that didn’t write any content for it, is a huge risk.
I did a “viral” website for a while and I grew relatively fast to almost 100k visitors per month, most of them from Facebook. A couple of weeks after I decided that it’s not something I want to keep doing – and without any new content added – my traffic dropped to ~5,000 per month.
So unless you really know your social traffic marketing, stay away from these sites as you can lose all traffic as soon as you get the website!
Double check the income reports
If you’ve been in the blogging business for a while, you can already anticipate the revenue generated by some advertising networks (affiliate sales are difficult to anticipate, though).
If a website with 10,000 monthly visitors is claiming $1,000 in revenue per month in AdSense revenue, they are surely lying. If you have any kind of doubts – and even if you don’t – ask for more proof. Screenshots could be OK in most cases – as long as it’s obvious that the reports are only for the website you’re buying – but most of the time, the safest bet is to Skype call them and do see a video report.
Check out the traffic sources
Unless you’re bidding on “viral” types of websites, you should look for Organic traffic. The bigger the percentage of all the traffic is organic, the better. Referral traffic and direct traffic usually mean paid traffic. You don’t pay for Organic – and that’s the holy grail!
Check out the website’s “behind the scenes”
Try to get Analytics access to see what articles are getting traffic and how they’re getting it: if there’s 1,000 articles published and just 1 or 2 are bringing 90% of the traffic, that’s not a good sign. You want many articles contributing their own piece to the pie.
However, most sellers won’t give you Analytics access, so do your own research. Use free tools like Open Site Explorer or Sem Rush for checking out the domain power, spam score and backlinks profile: you want a website that has natural looking backlinks which are not over-optimized.
Targeted keywords and exact matches are no longer good for SEO purposes, so make sure that you find everything you can about the website you’re about to buy. Don’t take traffic estimations as real – from my own experience, by checking out the stats of my own websites, they are way off.
Know if you can keep it up
Most websites you will purchase will require a constant flow of content being added and this is extremely important. Who will take care of the adding new content after you get the domain? If there’s already somebody writing, it might be a good idea to keep them on, because they know what they’re doing.
But if there’s not, can you handle the new task and content creation? Are you sure you’ll be able to grow the website or at least keep it at its current numbers? On many occasions, jumping it to do something that you’re not familiar with will result in a failure, even if the website itself is as solid as it can be.
Find out hidden costs
You might love it that the website’s earning $1,000 per month, but what are the costs? Usually, there’s more than just the domain’s name and cheap hosting: author fees might be involved, e-mail marketing solution costs might be involved, ad costs, costs for purchasing images or even Private server costs. Make sure to know the PROFIT a website is making and know all the costs!
Check out the seller’s profile
If you are buying from a major source like Flippa, you have the advantage of being able to check out other listings by the seller. Although most won’t have more than the current one, you should always check the past sales of those who have them: see how the websites were doing when they sold them and how they look like now. If they are mostly dead websites, this might prove that there’s something wrong with them.
Always go for Escrow and do your own due diligence
Maybe you won’t get that option for websites worth anything between $100 – $500, but if you’re paying more money, you must do your own due diligence and use an Escrow service. Try to get a due diligence period of 7-10 days but don’t settle for anything under three days.
Check out the stats closely during this period of time, looking at income and traffic. If anything seems fishy or doesn’t match the advertised numbers, cancel the deal! It’s better to be safe than sorry.
Look for underoptimized websites
Even though I told you that bidding on potential is the biggest mistake, there are certain nuances that should be considered here. If you have enough experience, you can easily tell if there might be a chance for you to better optimize the existing content.
That’s the secret: when taking this in account, always consider existing content and how can you improve the revenue generated by it, and not any future content you’ll be adding.
Although it’s rarely the case, some websites will have poor Ad Placement (so simply changing that would give you more money), poor design or lack of vital functions (like mobile friendly design or other features). But if you can find this kind of a website, jump on it because it will normally make you more money than it’s already making!
So… how to really value a website when bidding?
If you take all the things mentioned about in consideration, there’s still one big question left: How much should you actually pay?
Most people go for x number of profit, usually calculating the final price on at least 12 months of revenue and going as high as 24 months. The Empire Flippers website brokers, for example, who are considered to be selling only high quality websites go for nothing less than 24 months of profits – but in their case it’s almost guaranteed that you’re going to make those money back in at least that time frame.
In other words, here’s how the 24 months of profit value is calculated, if a website is making $100 profit per month:
100 (the profit) * 24 (months) = $2,400
However, I consider this approach risky. Judging from a buyer’s point of view, I think that you can consider a purchase a good deal if you get it for the price of 8-10 months of profit (or lower).
The risks of the website losing profits is really big: none of the websites that I have bought for a price set on 24 months of revenue managed to make me a profit. These were indeed smaller websites that I bought without really following my own rules, but you should always make the purchase trying to minimize potential losses by as much as possible.
So, in the end, I would say that I would pay for a good website generating $100 per month, anything between $1,000 and $2,000. If I am 100% confident that I can improve it a lot and increase the revenue, I might go as high as $3,000 – but I’ve never done this so far, and I don’t recommend going that high with your spending.
Have you bought any websites recently? Is there anything you’d like to add to the list or you consider it complete, just as I do?