How to Buy and Sell Websites Safely and Profitably
Forget flipping houses.
Let’s talk about flipping websites.
If you’re looking to buy or sell a website, read on if you want to make some serious coin.
Why do people buy and sell websites?
There are many valid reasons why someone may want to sell a great a website.
- They enjoy creating, but not maintaining websites.
- They have too many sites and can’t maintain all of them.
- They don’t have the skills or funds to grow the site.
- They are looking to do something new.
- They need cash to invest in another venture, or major life event.
For buyers, the same types of scenarios are common.
- They enjoy creating new content.
- They enjoy growing traffic and marketing.
- They have the skills to grow and improve the site. (Neil Patel and Backlinko.com Readers, for example)
- Looking to buy something new.
- They have cash they’d like to invest in a new venture.
You get the idea.
And this market is huge, and growing at a rapid clip.
Where can I buy or sell websites?
The most popular website marketplace is Flippa.
Flippa is a marketplace for websites, domains and mobile apps.
If you are a total beginner at flipping websites, you should start on Flippa.
The other major website marketplace is Empire Flippers.
Empire Flippers is a premium only marketplace. They’ll have less than 100 listings and prices starting at $15,000.00.
All listings details are verified by the Empire Flippers integrity team.
The Complete Buyer’s Guide to Buying and Selling Websites
If you are only interested in the Seller’s Guide to Selling websites, click here to scroll down.
I’ll forgive you if you plan to read it later, but you’ll need to know this basic ratio:
Price-to-Earnings Ratio (P/E): The total price you pay relative to the annual income (earnings) of the website.
Example: Suppose you buy a website for $1,000 that makes $100 per year. The P/E ratio would be 10 ($1,000 / $100).
In other words, it would take 10 years to break even, assuming earnings stay the same.
Always calculate the P/E when considering buying a website.
Later in this guide, we’ll talk about price ranges and fair P/E ratios.
Stick with what you know
Warren Buffett often talks about “The Circle of Competence“.
As he so eloquently puts it, “I’m smart in spots, and I stay around those spots”.
This timeless advice from a man who doesn’t have a computer at work applies when buying websites online.
If you hate sports, you shouldn’t buy a sports website.
If you don’t know French, don’t buy a French site.
And so on. Even if you think it’s a great deal.
No Called Strikes
In baseball, you have to swing when the pitcher throws in the strike-zone.
When buying websites, you can browse the marketplace every day and never place a bid.
In fact, not bidding is usually the best decision you can make.
It’s not easy to be patient. I know, I still struggle with impatience to this day.
You may have to wait a month, a year, maybe even longer.
But when that perfect website comes along, you’ll be so happy you waited.
Analyzing a site before bidding
So, you found a site that might be in your sweet spot, now what?
Before you start bidding, you’ll want to do a few routine checks.
Most established websites on Flippa and Empire Flippers will have Verified Traffic Analytics.
In other words, stats that came directly from Google Analytics.
Many sellers will also gladly provide you with direct access to Google Analytics, if requested.
But, be careful with so-called “verified traffic”.
Traffic can be “spoofed”. There are bots that can trick Google Analytics into thinking the traffic is coming from Organic Search, Social, anywhere they want, really.
Direct traffic is usually bad. Direct traffic in most instances is indication of fake or very low quality traffic.
Referral traffic needs a closer look. Not all referral traffic is equal. We need to dive into which exact domains are sending traffic.
The good news is, there are free tools to help you verify the “verified” analytics.
SimilarWeb is an awesome tool. I use it everyday. Download their chrome extension for free.
SEMRush is a great tool for analyzing organic search traffic. It shows you all the keywords a domain ranks for and estimates the traffic.
If after using all these tools, the traffic appears to be valid, you can move onto the next step of analysis.
Backlinks are a huge driver of organic search engine rankings.
If you have strong backlinks, you can quickly rise in Google search.
If you have spammy backlinks, you can quickly be removed from Google.
The best tool you can use to find information about a backlink profile of a website is Majestic.com.
There are four common types of backlinks a website will have:
High Value Links are do-follow links from sites with high Trust Flow (25 or more)
Low Value Links are do-follow links from sites with average Trust Flow (10-24)
PBN Links are do-follow links from sites that were created for the sole purpose of linking out. PBNs are discussed later in this article.
Spam Links are links on sites with Trust Flow of 10 or less. They provide very little value, and in some instances can hurt your search engine rankings.
If you ever wondered what kind of links you get on Fiverr or other cheap services, now you know.
Ideally, you want a mix of high and low value links.
PBN links work for many people and hurts many others, use them at your own risk. There is an art to running a PBN.
Synergies with your existing website portfolio
There’s a reason why companies love mergers and acquisitions.
It’s called economies of scale.
In simple terms, the bigger you are, the easier it is to make profit.
If you are just starting out, this is an important concept in building a website portfolio.
Here are some obvious examples of economies of scale:
- Social Profiles: If both sites have social profiles that should attract similar types of audiences, you can instantly increase your total reach of both sites by acquiring social profiles. This can help you increase both traffic and the fan base of both sites.
- Hosting: If you already have a VPS or Dedicated Server, it’s likely you can absorb another site without increasing your cost of hosting.
- Backlinks: If two or more sites are related and all have strong domain authority, they can link to each other to improve the SEO rankings of all sites. If you do plan to leverage backlinks on both sites, do ensure they are all hosted by different companies and are on different IP subnets. It is worth the cost.
- Direct Advertising: If between all your sites have you significant reach, you will have more leverage with direct advertisers to secure pre-paid sales of your impression inventory. Reputable advertisers like to purchase impressions in large quantities, so having a large quantity of impressions will help you attract buyers.
- Increased CPA Payouts: Many CPA / affiliate deals will pay an increasing revenue share based on volume. Having two or more related sites that are selling the same product can help you increase your overall sales and reach the higher revenue share tiers.
Whenever you are purchasing a website, it’s important to frame the purchase in the context of your overall portfolio.
Opportunities to improve the site
Remember our little talk about sticking with what you know? This is where the value really shows itself.
If you are able to personally direct the continued creation of high-quality content through your own expert knowledge, or improve the SEO, Design or user experience, you can invest your time to increase the intrinsic value of the website you’ve purchased.
This is a highly attractive aspect of analyzing a site, especially for those who are limited budgets or are making their very first website purchase.
Seller feedback is somewhat important, but the types of transactions are the main thing you want to be on the look for. A seller may have bought 3-4 websites for very low prices, and then attempt to sell a large site for which all their feedback has no bearing.
In general, if you see somebody claiming they have been scammed, you’ll want to avoid that seller at all costs. This should be obvious.
In general though, you shouldn’t place too much emphasis on the seller and their profile, the majority of your analysis should be the website and related assets.
Buy the site or build from scratch?
There are some ethical considerations to this question.
If a seller has listed sensitive information about the operation of their business, is it ethical to leverage it to try to compete with them?
I will not get into the ethics of this question, but I will say with certainty that people are doing this.
And I think it is a fair question whether you use their “sensitive” information or not to form your decision.
If you are an experienced webmaster, often times it will be less expensive for you to build a new site and try to compete than it will be to purchase the site outright, especially for smaller sites with low traffic.
Even if you are a complete beginner, using my guide to building a profitable business from scratch, you can start a website for virtually no cost and start getting traffic within 30 days.
Forming Your Price Range / Budget
After all of these considerations, you’ll want to have a price in your mind on what the site is worth to you. This will be different and there is no correct answer, either way.
However, there are some rules of thumb that you want to follow when it comes to thinking about a fair price:
- Traffic Sources: a highly diversified traffic source profile from organic sources (search, social profiles, email list) you should expect to pay a higher P/E since there is less risk of traffic suddenly falling
- Monetization: sites that generate income from Ad Networks like AdSense, Adbuff and Taboola will cost more than sites who are making affiliate deals or direct sales, as this income is considered more stable.
- Expenses: sites that require more on-going expenses (high hosting costs or advertising costs) will cost less than those with virtually no expenses, even if the profits are the same.
Here is the multiple spectrum I kind of use in my head to determine what P/E multiple I’m willing to pay.
Assuming all these things check-out and you’re able to bid and win the listing, now comes the due diligence and contract, an equally important part of the transaction.
Once you’ve won an auction or bought a website outright, the first thing you must do as a buyer is deposit the purchase amount in escrow. Don’t worry, your money is totally safe if something doesn’t check out in your due diligence. But no seller will give away their passwords without indication that you’re a serious buyer.
Under no circumstances whatsoever should you pay the seller directly before getting control of all the assets. Escrow fees are worth the protection.
Due Diligence and Contract for a website purchase
Every time you purchase a website, you should insist upon a contract being signed by the seller. I have a sample one you can use, but it’s important to customize it based on the particulars of the website.
The main points you want to cover in a basic contract are:
- List all the assets that are included in the sale: domain, social, email, databases, intellectual property etc
- List the criteria that would need to be met for you to release the funds to the seller, for example a functional site with daily income between x & y of what was expected
- Any non-compete terms, if any
- Who will handle the migration and what is the timeframe
- How much post-sale support will be available
- What warranties are available against defects in the code found after the fact
- Any licenceing considerations if there are third party scripts or libraries
The reality is, for smaller transactions, enforcing a contract would often cost more than the site itself was worth. The point is the contract is not necessarily to use in court, it’s more to ensure both the buyer and the seller are on the same page about how the transaction will work. This is simply good business to not have any assumptions and get it all clearly written.
While you are going back and forth on the contract, you can also begin your due diligence as it relates to the operations of the website and the verification of all claims.
Verifying revenue claims
The first and most important thing to verify is the revenue claim.
You will want all of this to happen via a live screenshare. Skype is perfectly acceptable, and you should be able to watch the seller login and navigate around on the pages, perhaps on PayPal, AdSense or Amazon associates. Screenshots are never acceptable as a form of verification.
There are a few areas you’ll want to see during a live verification of AdSense earnings.
- Payments: All AdSense reports are just estimated earnings. AdSense nearly always makes deductions at the end of the month to the payments that aren’t reflected in all the other reports. Ensure you verify the payments closely match the estimated earnings. If you see large deductions for invalid traffic, you should back out of the deal.
- URL Channel: You want to clearly see that all the income that was claimed is for the specific domain. AdSense allows you to monetize unlimited sites, so you want to ensure the claims are at a domain level, not an account level.
- Pageviews match Analytics: You should still have access to Google Analytics from your analysis. You want to compare the pageviews in Google Analytics to the pageviews in AdSense. They don’t need to be 100% perfect, but at least 80% in-line, ideally 90%+.
Often times as well, the seller will allow you to put your AdSense codes on the site for 24-48 hours so you can verify the daily income is in-line with expectations.
The three most common eCommerce platforms you will encounter are Shopify, WooCommerce and Amazon FBA.
Common payment processors you’ll run into are PayPal, Stipe, Payoneer, Skrill and a few others.
Here are some of the most common things you need to look for on all platforms
- All orders have a corresponding transaction in the payment processor.
- All orders have a customer name and contact details.
- Any refund reports or reversals
- For physical goods, records of the shipments / tracking numbers.
- For drop shippers, records of orders and invoices for physical goods
Amazon Associates Verification
Amazon Associates is very straight forward to verify. So long as the traffic sources check-out, you’ll just want to verify two things:
- The products ordered on Amazon match the products being promoted on the site, and;
- Amazon successfully issued the payments to the seller
If all the revenue claims seem to check out, there are still a few quick checks you’ll want to make.
Search Console Verification
Especially if the site derives a significant amount of traffic from organic search, you’ll want to check a few things on Google Search Console:
- Manual Actions – this tab in Google Search console will alert you if any penalties have been applied to the domain
- Search Analytics – the daily traffic here should match what is in Google Analytics. If there is a major discrepancy, it could indicate spoofed traffic.
Backlinks and PBNs
There’s generally nothing wrong with purchasing a site that has established links. It’s important to get full transparency about whether or not these are paid, are part of a PBN, and if the PBN is included in the sale.
The most important thing, especially if the site has strong rankings, is to ensure you are able to maintain the backlinks. If they are paid lin
ks, establish contact with the vendor / site owners and ensure the links will stay up.
Whenever possible, you should attempt to purchase the PBN from the seller.
The responsibility of who will handle the migration is usually displayed in a website listing. You should do your best to find listings where migration is included in the sale, but it’s not always possible.
The most common and simple ways to migrate a site are:
- Ask your hosting provider – many hosting providers will provide free migrations if you are purchasing a new account, even the cheap shared accounts.
- cPanel restorations – if the site runs on Apache/PHP/MySQL (WordPress, Joomla, Drupal etc), you can do a complete backup of the cpanel account and restore on your own hosting.
- FTP & MySQL Import – with access to FTP, you can download all the files on to your local PC and re-upload them to your hosting provider. You’ll also need to download a MySQL export with phpmyadmin and import it into your database.
The Complete Seller’s Guide to Selling Websites
If you made it this far, congratulations! You are now ready to learn how to sell your website and get the best possible price.
Before we dive into mechanics, there are some guiding principles I’d like you to consider.
Don’t trade reputation for money
You have your whole life to make money, but a major blow to your reputation can follow you far into the future. Always be honest and fully transparent with everyone you deal with.
If there are problems with your sites and you just want to unload it, just disclose all the problems with the site. There are plenty of buyers who will be interested in trying to fix all the problems, as long as they pay a fair price.
Picking a marketplace
Just to get it out of the way, don’t even consider FreeMarket or Digitalpoint. More times than not, you will just be wasting time with scammers. If this changes in the future, I will update this article.
When to sell your site on Empire Flippers
You should list your site on Empire Flippers if your site meets the following criteria:
- Generate over $1,500 USD in profit per month
- You monetize with AdSense, Amazon Associates or eCommerce.
- You are not in a rush to sell
In general, Empire Flippers will get you a better price for your site than Flippa.
Selling your website on Flippa
There are many aspects to finding the perfect buyer and getting a great price when selling your website on Flippa.
Building your profile
Flippa has many features to help build trust with your profile. You should work towards all the verifications possible, such as sending in your identification to Flippa’s marketplace integrity team.
It’s also ideal to have feedback on your profile before your first listing goes up. Purchase a few cheap sites for under $20 just to get the 100% badge on your profile.
Writing a comprehensive description
A detailed and fully transparent description of your listing will help attract and convert visitors to watchers and bidders. I’ve provided a template I’ve used to sell over $67,000 on Flippa alone, or you can use our handy questionnaire to generate one tailored to your specific site.
Verifying all your data
Flippa has a Google AdSense and Google Analytics verification system built into their listings. Take advantage of this feature as it adds a strong layer of credibility to your listing.
Managing & Responding to Comments
It’s important to respond to all legimitate questions in a timely fashion. If one potential buyer is thinking it, it’s likely many are. Be as honest and detailed as possible.
You will however, get a lot of inappropriate comments as well. Some buyers may draw incorrect conclusions and smear them all over your listing. It’s ok to delete a comment as long as you respond and provide a reason.
Responding to all intelligent questions
As with the comments, some of the questions you get aren’t worth a response. Don’t feel the need to respond to silly questions.
Any legitamite question should be responded to promptly and thoroughly.
Communicating with bidders
Whenever someone bids on your listing, you should send the a message as soon as possible letting them know you are available to answer any questions they may have. You can be proactive and grant them access to Google Analytics while the auction is active.
When the auction is coming to a close (perhaps with 24 hours left), you should message anyone who has bid and anyone who has asked you a question, in both comments and private message.
Remind them why this site is great and if they had any final questions or concerns.
The final hour of a website auction
Anytime a bid is made in the final hour of an auction, the auction is extended to 60 minutes.
The final hour is also when the true bidding war, if any, will take place.
Ensure you are near your phone to respond to any final questions that come to you in the final hour.
If a bidding war is taking place, you may want to consider setting a Buy it Now price.
Setting a Buy It Now Price
What price you choose should be a multiple of the current bid. I have seen success in doubling the current bid in the final hour and having one of the bidders end the auction with Buy it Now.
As long as you are happy with the current bid of the auction, go for it and set a high Buy it Now price.
Wait for escrow, no exceptions
When the listing closes, you should immediately message the winning bidder and congratulate them on their purchase.
Let them know if they have any questions about the escrow process and if they’d like to prepare a sale agreement.
It’s always a good idea to have a sale agreement, however, the ball is in the buyer’s court.
Under no circumstances should you transfer any assets or grant any passwords to the buyer until you can confirm the escrow account is funded.
When escrow is fully funded
Once the escrow account is funded, you are safe to start transferring assets over the the buyer, which could include granting usernames and passwords for the site and the back-end and starting the domain transfer.
If you have agreed to handle the migration, you should complete it as soon as possible.
You should also be proactive and offer a screen share of all the revenue claims you made in the listing.
What to document during the transfer and migration process
It’s important to record everything you transfer during this process, ideally by recording your screen with Camtasia, at minimum taking screenshots of every asset transfer.
If the buyer attempts to back-out after you have transferred the assets, this documentation will be critical for the escrow company to side in your favour.
Post Sale Support
Whether you agreed to it in writing or not, you should assist the buyer to a reasonable degree after the sale has taken place. It should be your goal to ensure that all buyers are successful with their purchase.
If the buyer has released the payment, you should be inclined to leave positive feedback for them. Be sure to include information like how quickly they funded escrow, how long the sale agreement process took and how responsive they were when they needed to take an action.
If you follow this guide to buy and sell websites, you will be sure to find success and avoid scams on Flippa and Empire Flippers.