In recent years, websites have become valuable assets, whether they offer a product or service specifically or generate money via advertising revenue. As such, the buying and selling of sites is a frequent occurrence, and price tags vary wildly from $20 up to and in excess of $200,000 depending on revenue, content and potential.

Buying vs. Building

The reasons behind buying a site as opposed to developing from the ground up are numerous. Often, you can purchase a website to your requirements that is already built, has adequate content and a user base. This saves valuable time planning, developing and marketing, hence is an attractive proposition for web entrepreneurs looking to get projects in motion in a fast and cost-effective fashion.

Why should you buy a website? To the majority of us, the idea of owning and running a site or community is appealing, though it is hard work and can be costly depending on how popular your site theme is. However, it is quite possible to pick up sites that have an established domain, content and a user base already in place for a reasonable price. Although it isn’t tailored to your specifics, it is saving you a lot of time and potentially money. With a new design and your own content, you could soon be well on your way to having that dream you started with.

Before You Buy

However, there are things to bear in mind before jumping in and making a bid on that site you’ve had your eye on.

Pricing

Firstly, what is a ballpark figure? In general, this is calculated largely from the monthly revenue if the site is making money, be it in products or advertising. A good guess can be anywhere between 10x – 20x the monthly revenue. Newer sites tend to verge on the former, whereas larger, more established sites tend towards the latter and beyond. The reasoning behind this is fairly obvious – a well-established site has built a reputation and regular client base, whereas a new site may be doing well based on an initial marketing campaign which isn’t as guaranteed to continue.

Of course, there are exceptions, certain sites may have potential as they cover a niche market, or the content that comes with another may be good enough to add value to the site, perhaps the domain is particularly relevant and user-friendly, and so forth.

Traffic

Secondly, what is the traffic like? Ask for statistics, and look for consistent page views. Although viewings can be biased, reasonable traffic over a period of weeks is more likely to be genuine. Bear this in mind, as traffic creates revenue from advertising and brings in potential clients. Marketing can be expensive and take time, which are more hidden costs you should be aware of when setting a price.

The Package

Thirdly, check what is included. Although a site may feature fantastic articles and reviews, unless the seller has unique rights to all the content, they may not sell it along with the site. This can land you in hot water, so check who owns the rights to all content on the site and make sure that you have it in writing. Again, this can decrease the value of a site as you may be required to purchase/create new content.

Background Research

Fourthly, do background research on the seller. As with any online business, there are people that are dishonest and may be selling you a duplicate of another site or misrepresenting what they are selling. It is unfortunate, but again this comes under the category of self protection, and it is essential to know not only what you are buying but who you are buying it from. If you are getting a negative feeling from their responses, or have read about problems they have had selling sites in the past, then it is probably best avoiding this particular offer, however tempting it may sound.

Too good to be true?

Finally, if it looks too good to be true, it probably is. Don’t be roped in with flashy sales talk and promises of becoming a millionaire – if that was likely, the owner is hardly going to want to sell the site are they? Check your facts, check the statistics and ask plenty of questions. You wouldn’t want to buy a car or a house that you had suspicions over, so the same should apply to purchasing a website.

Some other factors

There are, of course, other factors you should be wary of. You may also wish to check recent sales if a site sells a product to ensure that sales aren’t dropping off due to a problem and the owner is looking to sell up before the site fails at your expense.

Buying and selling websites is a profitable and enjoyable business or pleasure, and you may find yourself getting involved with topics you had never thought about. As long as you are sensible, take heed of the advice above, and most importantly of all, use your natural instincts, you should be well on your way to avoiding the scams and picking up a bargain. Happy hunting!