Article
Flip a Web Site Fixer-upper
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Add Value to the Property
You've acquired a new web site, now what? Occasionally you can flip it immediately -- as I mentioned above, sometimes, I've resold a web site after just a few hours or days. Perhaps you already had a buyer in mind, or you sell to someone who happened upon a site-for-sale listing after you had already purchased. But more often, you probably now own a site that's broken or imperfect in some way. It's up to you to fix it.
If you've been paying attention, you already have your improvement strategy in place. You're going to increase the site's revenue or traffic, or rebuild the site in some other way. I can't cover every possible situation, but there are a couple of typical examples I can briefly detail to give you an idea of what you can expect.
I purchased a forum that had been around for a couple of years. I liked the topic, and the forum seemed to have been active at one time, but the owner seemed to have given up on it. I contacted the owner directly; he had started it as a high-school student, and had lost interest in the site, and was too busy now that he was in college. The forum used phpBB and the default forum skin. The owner was happy to sell it, as he had been planning to let the domain expire. I gave him $100 for it. The site received decent traffic -- about 500 visits a day -- but the forum was overwhelmed by spam. I upgraded it to vBulletin, made a nice skin for it, installed vbAdvanced (a CMS add-on on for vBulletin), removed all the spam, and sent out a note to all the former members. Once people saw that some care was being put into the site, it didn't take long for the forums to become active again. I kept it for a while, placing some discreet AdSense and text ads through the pages to build up a revenue stream. I sold it last year for around $5,000.
The improvements you make to the site you purchase could be easier than these, or harder. Sometimes it's simply enough to redesign the site. You can take advantage of existing traffic, for example, with a clever redesign that makes more efficient use of ad space. You can get a fully coded template for your site for as little as $200 by running a contest in the SitePoint Contests forum. I've seen AdSense earnings increase by as much as 500% when I simply moved ads around and used different ad sizes. If you have time, you can experiment with ad locations and sizes, and try blending them with the content and design of the site.
Other common ways to improve site revenues include the use of text link ads, affiliate programs, and advertising networks. Having the site sponsored directly is a great way to boost revenues too, and it opens up the possibility of selling the site directly to the sponsor when it comes time to sell. There are so many other ways to increase the value of the site -- you'll see many of the methods I mention used over and over again. They're time tested, and they work well, but it's often the unconventional that produce the most explosive results.
Whatever your path to improved revenues, make sure you:
- Have a plan in place.
- Look for an immediate flip.
- Redesign and rebuild.
- Test ad placements.
- Try different revenue formats.
Find a Buyer and Sell the Property
Sometimes, it's almost no effort at all to sell a site. You'll do fine, for instance, selling your finished web sites in the SitePoint Marketplace. There is now enough of an established buyer base to drive each sale to an honest purchase price. Be sure to use the auction setting, and don't set your Buy It Now price too low. Before you list your site on the SitePoint Marketplace, take a moment to review the two following documents:
Being active in this marketplace has opened a lot of doors for me. Last summer I picked up a forum that was listed at a popular domain marketplace for $1,200. Before I had a chance to do much of anything to improve its value, I had a serious inquiry. The prospective buyer contacted me through a private message on SitePoint, knowing that I had purchased the forum, and that I'm in the business of buying and selling web sites. Within a couple of weeks of buying it, I'd sold the web site for $3,000.
Just in case I'm painting a too rosy picture here, I must add that flipping sites isn't necessarily a breeze. Three years back, I purchased a forum for $2,000. It seemed to be thriving, the topic was right up my alley, and everything seemed on the up and up. Within a week of taking over the forum, the former owner disappeared, and the administrator started up a competing forum and got most of the moderators and top members to defect to his new forum. The community never really recovered, and while I make $50 to $100 a month off the site, I doubt I'd be able to make the $2,000 back if I put this forum up for sale. I'd say that one in every ten sites I buy turns out to be a dud. And some of those that do make me a profit create huge headaches along the way.
Among the documents that you should be prepared to share with a potential buyer are screen shots of the site statistics (I generally use either AW Stats or Google Analytics) and proof of revenue (which might include screen shots of the Adsense, Text Link Ads, PayPal, and others). You'll want to show that you own the domain outright and that it's qualified for transfer. You'll need to disclose any liabilities that will be transferred with the web site. Also, if you've hired anyone to help with the site, the new owner may need that information as well.
Generally, I'd recommend that you are as detailed as possible when you list your site. However, there are certainly instances when it may not be prudent to disclose all information in public. For example, if you're concerned that certain details may make it too easy for other parties to copy the success of your site, those details are best left in private and only disclosed to the most serious of buyers.
Don't forget:
- Sell at SitePoint.
- Price it right.
- Prepare your documentation.
- Be careful about what you disclose.
Getting Started in Site Trading
This is an exciting and growing market with tons of room for new people to jump in and make a success. Start small. Don't put more money into a site than you can afford to lose, and build upon your successes. Network with others in the industry, and pass along information on deals that you're not taking -- it's as much of a community as a marketplace. Enjoy it, and let me know how you do.