How to Buy a Website
Buying a profitable website can be a great investment and allows you to own and operate a revenue-producing asset that can often outperform alternative investments. The honest truth is that starting a brand new website from scratch is hard. It takes a lot of time, effort, and perseverance before you start to see an increase in traffic and earnings. This guide will show you how to buy profitable websites and internet businesses.
How to buy a website: the short version
This article is going to be a long one, so if you’re in a hurry and just want to know the absolute basic steps on how to buy a profitable website quickly, here are the steps you need to know:
- Make sure you only invest the money you can afford to. Investing in websites, like all investments, is a risk.
- Spend the time to decide what type of website you’d like to buy so that you don’t waste time on the wrong ones.
- Learn where to find websites for sale and start to make a shortlist. This could be auction websites or reaching out to website owners directly.
- Brush up on your website valuation knowledge so you know what price to offer the seller.
- Make sure you do your due diligence and fully research the website you want to buy, highlighting strengths, weaknesses, opportunities, and threats.
- Use a safe escrow payment service to make the purchase, ensuring both you the buyer, and the seller are protected
Need more information on buying a website? Keep reading for the full version which breaks down each step.
The complete guide to buying a website
I always put a disclaimer here that I will try to be as comprehensive as possible and outline my own process for buying a website, but there is no “one size fits all” approach to website buying. This is the most complete guide I can write, and it’s worked for me for 10 years.
So you want to invest in an established website?
Buying an existing website can be a great investment opportunity if you do it correctly and it offers many benefits compared to starting a brand new website from scratch:
- You get web traffic to your site from day one
- The site will most likely already be profitable from day one
- Established websites already have links and SEO value to them, which means you get to focus on the site and not backlinks
- If you buy an “evergreen” website on a topic that never goes out of date, you’ll generate revenue for many years.
- You even have the opportunity to “flip your website” and sell it for a bigger profit later.
The very first step in deciding you want to buy a website is figuring out your budget and how much you want to invest.
Only buy a website in your price range
It should go without saying that whenever you invest money into something, there is a risk that you won’t get that money back.
The first rule in buying websites is only to invest what you can afford to lose.
If you buy many websites you will slowly learn the skills needed to be confident in your investment and at that point you’ll be able to “invest up” by acquiring bigger and bigger websites.
When I was starting out I set myself a few rules before I went looking to buy a website so that I didn’t over-invest:
- Decide right off the bat how much money I want to invest. If you have $5,000 allocated, make a conscious decision to only buy a website up to this price. It’s very easy in negotiations to see this creep it to $5,500 or $6,000 but if you over-invest you may come to resent the purchase and add stress to your life as you try to get a return on investment (ROI).
- Set limits on the level of traffic a website has. I use SEMrush to find profitable websites (more details below) and it’s quite easy to predict how much traffic a site has based on the SEMrush score. Starting out, I focused on websites with a SEMrush score of 1,000-2,000 as I knew these were likely getting enough traffic to make a small amount of money, but I wasn’t wasting my time emailing sites that I could not afford.
- Work out a valuation for the website before trying to buy it. I’ll cover valuation a bit later in the article, but it’s important to know what a potential website is worth before you make an offer to the owner. For me, this meant getting very rough earnings and traffic numbers and then working out what a decent sale price would be for both me and the seller.
- Offer lower than your maximum. Let’s say you found a site that is making $1,000 a year in profit and you have $3,500 budgeted to buy it. Instead of offering your full budget upfront, start lower (maybe around $2,500) so that you have room and opportunity to negotiate up to somewhere in the middle that works for you both.
It can take some practice when starting out but, over time, you’ll be able to quickly run through these steps in your head to avoid time wasted on the wrong websites.
Deciding what type of website you want to buy
It can be really helpful when you start the process of buying a site to first figure out exactly what kind of website you actually want to buy.
There are lots of different types of sites out there, including:
- E-commerce websites selling physical or digital goods
- Content-based websites (usually monetized with advertising)
- SaaS websites selling a software product or service
- Membership websites (these are similar to content sites but the visitor must pay for access)
- Forum based websites (these typically can get a lot of traffic but are hard to run and monetize)
- Affiliate websites built to review products and services that pay commission
It really depends on what type of investment you’re looking for as to which type of website you want to buy.
For me, I’m not interested in buying web forums, SaaS websites, or e-commerce websites as they require a level of time investment that I don’t want.
Content-based websites, whether monetized by ads, affiliate products, membership, or your own products, are much more passive in nature and these are the type of websites that I’m interested in purchasing.
Once you know what type of website you’re interested to buy, you can begin research niches and topics to find some potential candidates.
Where to find profitable websites for sale
A quick search online will lead you to most of the common marketplaces you can use to buy a website. Each of them has its advantages and disadvantages for you as the buyer.
Buying a website on Flippa
Flippa is one of the most popular and well-known website marketplaces on the web. They were one of the first marketplaces of their kind and, as a result, have a huge audience of sellers.
Flippa is really the eBay of selling websites. Mass market, easy to list, and lots of potential buyers.
The problem with Flippa is that because it’s so accessible, buying a website with them is littered with potential problems. In particular:
- A lot of the listings are fraudulent. I’ve seen first-hand websites for sale on Flippa where the earnings are completely fabricated by the seller and the traffic has been inflated through spammy means.
- Many sellers price the website too high. Sites making $2,000 a year are listing with Buy It Now prices of $25,000 or more. Do you want to wait a possible 12+ years to get a return on investment?
- Bidding on listings makes it easy to over-commit. Remember the budget you set? It’s very easy to get into bidding wars on Flippa and before you know it you’ve paid way too much for a website.
Buying your website with a broker
Using a website broker to buy a website is often a much, much better option than Flippa. Brokers like FE International or curated marketplaces like Empire Flippers act only sell truly established websites and they do a lot of due diligence before the seller can even list the site for sale.
With FE, you can browse the listings on their website and then fill out a form for the websites that you are interested in. The first time you do that, they send you a non-disclosure agreement (NDA), and once signed, you can request the prospectus for future listings.
With Empire Flippers, you need to place a refundable 5% deposit in order to see the URL of the website. This helps to filter out the buyers who are not serious and, once you have paid a couple of deposits, you’ll be seen as an established buyer and won’t need to do that anymore.
To summarise: buying with a broker is much better than buying on an open marketplace, but you often have to pay the higher end of the valuation for the website.
Buying a website directly from the owner
My preferred method of finding a website to buy is through good old-fashioned email outreach. Finding a buyer directly has many advantages:
- A lot of websites have good traffic but are not well monetized
- They have less expectation of the value of their website
- Many hobby website owners no longer update their sites
- You don’t have to compete with other buyers
- You can negotiate a lower price because the seller won’t need to pay a broker/final sale fee
- You get real websites that were not built with the purpose of selling
Like anything, finding websites to buy directly from the owner is a skill that can be learned. The basic steps I follow when finding websites to approach are:
- Create a list of websites I might want to buy. To do this I can search Google for topics I’m interested in, making notes on possible sites. If it’s a content-based site and the copyright is from years ago, it may no longer be updated.
- Use SEMrush to find related websites. I use SEMrush a lot to find websites to buy. You can enter any URL and then look at their competition to find dozens of similar websites in the same niche – many of them are great examples of websites for possible purchase.
- Add all of the website names to BuzzStream. Buzzstream is an email marketing outreach tool and is usually used to try and get backlinks for your website. I use it to outreach owners of websites. The software finds email addresses and contact forms for the sites and allows you to sync your email address so that you can create outreach emails to try and reach them.
- Set up a sequence of 2-3 emails in Buzzstream. I keep the emails simple and to the point, i.e: “I found your website and really like it. Would you be interested to sell it?”. If they don’t reply to the first email, I set up a short follow-up email just to check they received my first one – just doing this one follow-up increased my reply rate by 50%.
Once you get replies from website owners who might be open to selling, you can then start to negotiate a price with them.
Which leads perfectly onto the next section of this guide on how to buy a website: valuation.
How to value your website before you sell it
There are many ways to value a website as a potential buyer, and it can depend on many different things, like:
- The age of the website
- The number of visitors the website gets
- How much the website earns
- The monetization methods of the website
- If it has an email newsletter or popular social media accounts
- The quality of the content and backlinks to the site
I read a “competitor” blog post recently which said:
most” websites sell for 6-10x their monthly profit
This is completely untrue and you would be very, very lucky to buy a website this cheap. In fact, if I saw a website for sale at 6-10x their monthly profit, I would be very suspicious.
The multiple is often 2-4x your annual profit, depending on the factors above (and more).
Ultimately it comes down to the potential you as a buyer sees on the website. If I already had a number of websites in similar niches and I could see the potential to create another profitable revenue stream, I might pay a higher amount than you would expect.
Similarly, if the site is relatively new and doesn’t have a large number of backlinks, it’s a more risky investment and the offer would reflect that.
The most common issue I see with sellers is that they overvalue their website – often by a lot!
Sometimes you’ll just be too far apart on valuation and in those cases what I like to do is politely thank the seller for their time and end the conversation.
In 6 months’ time, I follow up with them to see if they sold and, if not, whether they would be willing to revisit.
Buying a website can often come down to timing and whether the site owner is in the frame of mind or a place in their life where selling makes sense. Persistence is a very valuable trait for a website investor.
Once you have a ballpark number that you and the seller both agree on, you can start to do your due diligence and research the website to make sure it feels right to invest in it.
Do your due diligence before buying a site
Over the years I’ve developed a natural instinct for assessing websites and knowing what data to look at and what data to ignore has helped me to refine a process that is simple and straightforward.
The below list of questions should cover most of the common due diligence pieces you’ll want to do when you’re looking to buy a website:
- Can you provide proof of your website traffic? If the seller uses Google Analytics, they can give you read-only access to their profile so that you can dig into the traffic. If they don’t have Google Analytics, ask them to provide screenshots or video evidence.
- Can you provide proof of earnings? Similarly, you’ll want to confirm that the website is making the money they claim. For AdSense/Ezoic this could be screenshots or videos of their earnings reports, or screenshots of their affiliate earnings reports. For product sales, you could ask for read-only access to Stripe or for the seller to provide PayPal sales reports.
- Do you have a complete P&L for the last 2 years? This might only be applicable to larger sites, but a profit and loss statement allows you to see the revenue streams, costs, and net profit over time.
- Can you provide information on freelancers/employers? If the seller employs writers, developers, etc you need to know their details in case you decide to continue a relationship with them post-purchase.
- What, specifically, is included in the sale? Here, you can confirm the assets included in the sale. For example, the domain name, the email list, the social media accounts, any patents or copyright they hold, etc.
- Have you had any legal issues with the site? If there have been any copyright issues, or their domain infringes on a trademark, you need to know this before purchase.
- How much time do you put into the business? This gives you an idea of ongoing management for the website after you buy it and it’s useful to ask the seller for a list of the tasks they do, and the time it takes them to do those tasks.
- What are the unique selling points of your website? A great way to see future potential in the business is to ask the seller to highlight the unique parts of their business and why they differ from the competition.
- Why are you selling the business? Usually, people sell their website because they have other projects or interests they want to invest in but it’s good to confirm the reason.
- How you would grow the business if you weren’t selling? It’s likely that the seller knows the business and the market better than you. Asking them to list the improvements they think would have the biggest impact will give you ideas for the future potential of buying their site.
- What skills will I need to run the business? Ask them to list out the skills needed to run the business so that you can decide what resources you will need in order to run it successfully.
- Is the website fully compliant with Google terms of service? For websites, any kind of bad search engine optimization (SEO) can increase the risk to you as a buyer. If the seller purchased links, received a manual penalty or warning from Google, these need to be disclosed.
- Can you provide handover documents? If the website requires it, a great way to make it easy for you to hit the ground running is to have detailed handover and training documentation ready to go. This means you can follow the seller’s standard operating procedures (SOP) to run the website efficiently.
These questions are important when you’re buying directly from a website owner, but a good website broker can help you to perform due diligence properly to make sure your investment is based on good information.
The beauty of using a website broker as a buyer is that the seller is the one who has to pay the broker fees, not you.
It’s good practice to think about the due diligence required because, in the future, you might want to deal directly with a buyer and it pays to know what due diligence will be needed.
Payment methods for buying a website
If you’ve got this far into the article, well done! The final step on how to buy a profitable website is the most exciting of all – making payment and receiving your new asset.
Once the negotiations and due diligence and handover documents and back and forth are said and done, making your payment is a relatively easy process.
Use Escrow.com to buy a website
Unless you’re buying for a low amount (less than $1k) or buying from a seller you’ve worked with before – using Escrow.com is an absolute no-brainer.
Here’s how it works:
- Set up the transaction
- The buyer (you) and seller agree to the terms of the deal
- You deposit the money for the sale
- Escrow.com confirms receipt of funds
- Seller transfer all assets to you
- Seller confirms transfer has been completed
- You confirm the assets have been received
- Your inspection period to confirm traffic and revenue begins (usually 14-30 days)
- Once you are satisfied, you accept the transaction in Escrow.com
- The funds are then released to the seller
Since the money is held in escrow by a third party, it’s a very secure process that protects you as the buyer, as well as the seller.
The inspection period allows you time to take control of the website on your own hosting and to change any advertising, affiliate links, social media accounts, or other accounts so that you verify the earnings in real-time.
There is a fee for Escrow.com but it’s so low that it’s worth it for any transaction over $1,000 in my opinion. Usually, as the buyer, I offer to pay the escrow fees.
Again, if you have a history with the seller, you may trust them enough to wire the funds straight to their bank account and then they will transfer the assets but, for most website buyers, Escrow.com is the ticket.
Now you know how to buy a website
This article is the result of 10 years of knowledge I have buying and selling websites.
There are plenty of other ways you could buy a website, other avenues to explore, and new ideas I haven’t used.
However, this method has worked for me time and time again. I like to keep my website buying process simple and easy to follow.
Good luck on your journey to buying a website and if you have any questions or advice, feel free to get in touch.