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5 Tips for Buying a Website

Jun 23, 2008
Purchasing websites is like purchasing any asset that generates income. The buyer must carefully assess the website, and determine whether or not the website is a good deal. While there are many different valuation factors associated with buying websites, I will give you 5 big tips for buying websites over the internet.

1. Research the Website's History

This includes checking the content quality, the number of backlinks, domain length, domain age, Google pagerank, Yahoo! And Dmoz listings, number of delicious backlinks, any authority links if present, etc. The most important factor is backlinks, and the more, the better. Also, links from authority domains (CNN, Google, etc) can sometimes be worth 100 links. The key is to acquire authority sites because it is very easy to rank for high traffic keywords in the search engines.

2. Verify all Earnings and Traffic Numbers

The previous owner should provide complete proof of earnings to verify website revenue and earnings. If the owner cannot provide image proof of earnings, then proceed with caution. Verifying analytics is a lot easier because the owner only has to unlock Google analytics to your e-mail address. Give the previous owner your e-mail address so they can grant you analytics access. You are looking for consistent traffic, coming from direct, referral, and organic traffic sources. The more traffic, the more potential the website has.

3. Pay Below Market Value

It can be difficult to determine a fair market value, but the general consensus is 10x monthly earnings. A site that makes $1,000 per month would sell for $10,000. You must also factor in domain age, backlinks, etc. An aged authority site is worth more than 10x monthly earnings because it takes lots of time to develop backlinks and build trust. Carefully access all history, earnings, and traffic factors to determine a fair market price. You can also search Google for website valuation calculators for some generic website valuation tools.

4. Use Escrow Services

Escrow handles online transactions well because you don't release a single penny until the domain and all the website files are owned by you. This protects both you and the buyer because a third party oversees the website transaction. Alternatives to Escrow include Paypal and Money Order/Check, but these methods are less secure and more susceptible to internet fraud.

5. Optimize Your New Website

After buying a new website, you have a unique opportunity to get positive results quickly. One of the best ways to see quick results is to optimize the higher traffic pages for testing purposes. Go to your website analytics, and note the top 5 landing pages on your newly purchased website. Try implementing changes on these pages whether its page titles, ads, call to actions, etc to quickly gain feedback about your new site. Sometimes just 20 minutes of work can double a site's income!
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