8 Quick Tips for buying a website or blog

I’ve covered previously at 901am how to value your site, but what happens when you’re a buyer as opposed to a seller? The second hand website market has been thriving for years, and in the last 12-18 months blogs have joined the resale market in strength as well. What follows is by no means a comprehensive guide, you’d literally need an entire book to cover buying sites, but some quick tips you can use to pick up a bargain.

1. Avoid eBay at all costs

eBay should sell websites with the words “Caveat emptor” (let the buyer beware) is flashing bold writing across the top of every screen. 99.99% of all websites up for sale at eBay are essentially attempts to sucker in people who know no better into buying crappy websites with no real value for an inflated price. There’s so much crap on eBay that it’s nearly impossible to discover anything of real value. The best places to buy websites and blogs from at DigitalPoint Forums (DP) and Sitepoint Forums (SP), with DigitalPoint providing better value at the lower end of the market

2. Avoid Impulse buying

I’m guilty here, I’ve bought websites in the past on the basis that they sounded cheap only to find that once I take possession I know nothing about the market they are servicing or even how to implement affiliate codes.

3. Do your homework

This is related to point 2 to some extent. If you’re looking to buy a website or a blog take the time to study the market. In my case I regularly take time out to read listings at DP and SP, even with websites I would probably never end up buying, just so I can get a feel for what’s available, going rates, interest in the sites and revenue and traffic potential for such sites. Most good listings include revenue and traffic screen shots: they’re a great way to learn about sites in each niche, where traffic comes from etc…

Also if you’re looking at a particular niche, look at the origin of a site, for example an Arcade Site might be based on a script that costs $97 to buy, or is available for free. I’ve seen Arcade Sites sell for $100 + with no revenue and traffic that were tweaked versions of a free script. If the buyers had known what they were looking at it would have been cheaper for them to set up the site themselves.

4. Know your multiples

Perhaps I’m a little obsessive on this point, but multiples are everything when you’re buying or selling. An average site sells for roughly 10-12x revenue, but different sites have different multiples, for example proxies generally sell for between 2-4x monthly revenue due to the high risk factor in them being banned. Web 2.0 sites with great coding often go for 20x monthly revenue and even higher, particularly when it’s difficult to replicate the site. Indeed uniqueness is a factor that increases multiples, turnkey sites are low, unique sites are higher. When you’re looking to buy a site, the lower the multiple on revenue, the better value the buy.

5. Reputation

Digital Point has an eBay style reputation system called iTrader that gives points based on being a good trader on the forums. Generally speaking someone with a higher iTrader score is more reliable, although having said that, such systems are a double edged sword, after all we’ve all got to start from 0 and there’s nothing worse than being told you cant bid on something because your iTrader score isn’t high enough.

6. Ask questions

Whilst you should have done your homework per point 3, don’t be afraid to ask questions. Admittedly you don’t wont to sound stupid either, for example I regularly see people ask questions like “how much space do I need to host the site on a shared server” for a proxy auction: proxies need VPS minimum but realistically a dedicated box. Sounding stupid makes you look like a sucker and unscrupulous sellers will take full advantage.

Often you see that sellers make claims relating to traffic and revenue that aren’t backed up with proof. By all means ask for proof, often they are happy to PM (Private Message) you the details. If they won’t provide proof you should avoid their auction.

Ask questions such as how long has the site been making $X. How old is it, where is the domain at, is there a backend CMS, how hard is it to update…all of these type of questions are relevant if the seller hasn’t detailed them in the listing. When I am a seller I try to cover all bases, but not all sellers have that level of experience and they are all questions you need to know when buying the site.

7. Closing time/ BIN

This isn’t an issue at Sitepoint as the auctions are listed with a closing time, but it’s a regular issue at DigitalPoint. If the seller hasn’t listed it ask when the auction will finish, and what the BIN (buy it now) price is. Also if the BIN in unrealistic (and it usually is in say 25% of auctions) ask if there is a reserve, or whether they will take private offers. I’ve picked up sites before by making a direct offer for a site that I thought was reasonable and to which the seller agreed, after all, who wants to go through a 4-10 day auction when you receive a good money now!

8. Timing your bid

This is the hardest part of buying by far, because you never know how quickly a site will reach BIN (presuming there is one). Look at the time the auction was listed and the interest in the auction in terms of bidding to date, and the value of those bids relative to what the seller is seeking for the site. Doing your homework per point 3 helps a lot with this. I recently missed out on buying 20 sites in a particular niche because I procrastinated. I noticed the auction just before I went to bed, thought I’d sleep on it. Next morning I decided to buy the sites, but just before I logged on, in came the Sitepoint auction notice email stating that they’d reached BIN. The price being asked was a total bargain and I should have bought them the night before. General rule of thumb is that you don’t bid too hard until near the end of the auction. Bidding early can cause a bidding war and you end up with a price that you didn’t have to pay. But then again, if you see a bargain, knowing what you’re looking at, go for it.

There are probably a whole pile of other tips I could share but I’m not paid enough to continue this post :-) If you’ve got any tips, feel free to share them in the comments, and good buying!

Originally posted on March 8, 2007 @ 12:55 am