In order to run a successful e-commerce business or revenue-producing blog, you have two main options: you can start your own from scratch, or you can purchase an existing site and manage it. If you’ve never considered the second choice, now may be a good time to weigh your options and see what opportunities exist.
The benefits of buying a revenue-producing website
One of the biggest challenges internet entrepreneurs face is growing revenue without increasing the time and energy they invest. In other words, if an entrepreneur is making $3,000 per month and wants to make $6,000, it’s not realistic to double the time invested in order to achieve this goal. There’s only so much time in a day and it’s inefficient to scale this way.
If you’re looking to build your business and grow your revenue, launching another e-commerce site or blog from scratch probably doesn’t sound very appealing. You’re already busy and likely don’t want to take on the responsibilities that come with managing another business with the same time commitment. But what if you could buy a website that’s already producing revenue without all of that upfront energy?
Believe it or not, people sell revenue-producing websites, and anyone with the resources can take over these sites and enjoy a steady income.
The primary benefit of buying a website that’s already making money is that you don’t have to go out and spend the one or two years that it typically takes to gain SEO traction, build an audience and make sales. Even in today’s climate with easy website builders, developing a site from scratch can be expensive; however, buying an existing one provides a shortcut to making money.
If you’re particularly experienced in the area of website monetization, it’s also possible that you could find some hidden gold mines. Many entrepreneurs who are selling websites haven’t maximized the value of the sites. While they may be producing positive cash flow, you maybe be able to come in, make a small tweak, and grow revenues by 20 or 30 percent.
As with any investment, there’s obviously some degree of risk that comes with buying a website. You might spend $5,000 on a website that’s making $500 per month, anticipating that you’ll break even in 10 months. However, soon after taking over the website, the niche becomes less popular, traffic numbers dip and it barely makes $100 per month. There are countless stories like this and you have to be aware of the challenges you could face. If you can’t afford to lose the money, don’t invest it.
4 things to consider when purchasing a website
If you’re serious about buying a revenue-producing website and using it to supplement your income, you’ll have to do some research. Here are a few things to look at when evaluating a website:
- Traffic numbers
One of the first things to look at when running across a website is traffic. How many visitors is the website averaging per month? Are the numbers increasing, decreasing or staying the same?
When studying traffic numbers, be mindful of the source. Is the seller simply sending you a spreadsheet with inputted data, or are the numbers coming directly from a trusted analytics platform? The benefit of buying websites from an official marketplace (such as the Shopify Exchange) is that you don’t have to take sellers at their word. Website data is official and can’t be manipulated.
- Sales numbers
Traffic numbers are one thing, but they’re useless if these visitors aren’t being monetized. You’ll also want to take a look at monthly sales numbers and track the month-to-month trends. Maybe the average monthly revenue is $10,000, but what if the last three months reflect revenues of $4,000, $3,000 and $1,500? Clearly, things are going in the wrong direction and the average is inflated by previously high numbers that are now irrelevant.
On the other hand, if you see sales number steadily inching up, then you may be catching a site that’s in the midst of growth and shows signs of unlimited potential. The key is to make sure you never study sales numbers in isolation and always zoom out so you can analyze the big picture.
- Popularity of niche
What sort of niche is the blog or e-commerce site in? Not only do you want to find a niche that’s at least somewhat interesting to you, but you also want to make sure it’s sustainable.
For example, a website that sells fidget spinners might have been an awesome business to own at the beginning of summer, but it would be essentially worthless now. You have to think about long term value and avoid hot trends that come and go.
- Dependency on advertising
Revenue can be misleading. What you really want to know is how much profit a website is making. For example, just because a website is making $15,000 per month, doesn’t mean it’s wildly successful. For all you know, the current owner is spending $17,000 per month in PPC ads.
It’s not always a good idea to invest in advertising-dependent websites. Some ad spend is normal, but if there’s no organic audience, you might have a business that’s built on a faulty foundation.
Do your research
The importance of research can’t be understated when it comes to investing in a revenue-producing website. A cursory look at some numbers that are handpicked by the seller isn’t enough. You need to do some digging, use your own intuition, and scrutinize every possible lead. By putting forth this sort of meticulous due diligence, you can greatly increase your chances of being successful and profitable.