After you confirm there will be enough traffic to justify the price, here are certain questions you must first ask before making the final purchasing decision. Read on to discover the fundamental questions, along with a description of why you should ask these questions.

What Are Similar Websites Selling for on the Internet?

There are always other sites for sale on the net that fall into a similar category as the one in question. Looking at other virtual properties for sale will give you a general idea of the going price for a website in your niche. This can be helpful in determining if the price is too outrageous – considering the market for which they gear it. If it seems to be far lower than other, similar, websites, then this may be a red flag as well – since there is usually a reason for a drastic difference in selling price.

Is This Site up for Sale in Other Places on the Net?

Sellers list houses for sale and then advertise in many areas. However, the price listed below the house, no matter where they post it, is often the same price. This isn’t so with items on the Internet. The Internet is an enormous place and still relatively unregulated. A website may be up for sale in one area for a certain price and for a different price in an alternate location. This could be because the seller wants to see which price receives the most attention, or a broker may sell the site for the owner and factor in their commission. One way to check for various prices across the web is to Google the website domain.
Place the URL between quotation marks and then add the words ‘for sale’ after this. Entering this into the search engine should provide you with all, or at least most, of the seller’s listings. This is the quickest way to find out what the going rates are for this piece of virtual real estate.

Is There a Way to Get a Deal for This Website?

Checking on expired listings is one way to find a website that is cheap. You can also find an auction that hasn’t expired yet and look for the ‘buy it now’ price. Sometimes if you offer to pay cash for a website, you can get it for a lower than listed price in the ‘buy it now’ section of the ad. You could also contact the owner of the site and offer cash for lower than the buy it now, probably the starting bid, and sometimes you can get a better deal this way too. There are some website owners who are looking to unload some of their sites and will gladly take a lower price than what they are asking–since it is often easier for them to sell for less than they wanted rather than maintain the site.

What Exactly Is Being Paid For?

Some sellers try to list the site for more than it’s worth. There could be several reasons for this:

• The domain name could be over ten years old
• The ads on the site may bring in a lot of revenue
• The ads could direct a lot of traffic to this site

It’s good to develop a list and try to make note of the pros and cons, just to see if this site is worth the asking price.
You should seriously consider the expected benefits from the purchase of this site. There should be some reason behind the seller trying to get a lot of money from a site that doesn’t seem like it should cost that much. Try to find out why they listed the site for 20 times the amount of its monthly revenue. Once you know why the asking price is the amount listed, then you can decide if it is worth spending this amount or not.

Only if the price is right should you proceed with the terms of the transaction.

*Originally published on WorldStart June 11, 2010

What does Search Engine Optimization have to do with traffic and why is it so important? To give you a brief rundown of what makes traffic so important, we will answer four of what should be your most pressing questions:

1. What are the third party numbers?
2. Where is the traffic coming from?
3. How much funding is necessary for directing traffic?
4. What is the amount of traffic available.

We are also going to discuss JV (Joint Venture) partners, along with other affiliates from which you may increase your revenue. Now, straight to the point:
Another aspect you need to consider when buying Virtual Real Estate is the current traffic situation with your intended purchase. The information listed below involves a few considerations you need to address before deciding on the purchase of a website.

What Are the Third Party Numbers?

It’s always helpful to know about the competition and what you will be up against with your new website. There are sites available for checking the number of views per month for a single page, entire website, or even domain such as Alexa. This provides a great visual for seeing just how popular a website is. The number of unique views is also helpful in finding how many new people are being directed to the site. Sites that offer this information usually list the monthly revenue total and the total number of sites linking back.
Note: Sites that don’t make the top 100,000 most visited websites on the internet list may not have much data.

Where Is the Traffic Coming From?

Knowing where the traffic is being directed from, and what percentage from each place, will be helpful in deciding where the target needs to be. For instance, there’s no sense in pooling a bunch of money into trying to direct traffic from a search engine that isn’t contributing that high of a percentage to the website’s traffic. Some may come from Google and the rest from Bing search engines. There may even be other sites directing traffic towards your intended purchase.

How Much Funding Is Necessary for Directing Traffic at the Moment?

You must know the amount of money needed to bring in traffic. If the site requires a massive amount of money for bringing in traffic, then it’s good to know this in advance. Deciding to purchase a site where you don’t know the amount of money needed for bringing in more traffic may end up turning into a lemon.

What Is the Amount of Traffic Available?

Each niche has a certain number of followers. Some niches will bring in many new people regularly, especially if it is becoming more popular with the public. Knowing what the niche is like and if it’s popular or just catching on is crucial. You also want to know if it’s possible to increase the target market. If the website is in a niche that seems to be slowly dying out, then it may not be a wise purchase.

How Many Related Sites Can You Find on the Internet Right Now?

Performing a search for sites that are similar is a great way to find out if the popularity is so slight that it will be hard to bring in traffic. Knowing how many individuals are even interested in similar sites will provide more information on if they will be interested in this site. To bring in higher numbers of traffic, there may need to be a site-targeted marketing campaign set up. This will definitely drive in much more traffic geared towards this site.

What Is the Search Volume for Designated Keyword Phrases?

Learning which keywords most commonly bring in traffic is the best way to decide what changes you must make to the site itself. There are websites, such as Google’s Keyword Planner, that enable you to type in the URL to bring up the keywords for the site connected to the domain. These show the different percentages connected with each keyword and enable you to determine what changes you must make to bring in more hits.

What about JV Partners and Other Affiliates?

Partnering up with other owners of similar websites can increase traffic to both websites–offering the ideal win-win situation. There is often much collaborating going on when running a successful website. Getting traffic rolling in at a steady rate is the common goal of most website owners.
Be sure to estimate how much this will cost before you negotiate the price.

*Originally published on WorldStart May 07, 2010

After you confirm the quality of the content, check if it’s optimized to gain traffic through search results on major search engines. The closer your site is to the top of the search results, the more people will view the site. This is often true, as people frequently click on sites ranked towards the top of the page first and work their way down. The following offers some key points to look for in the SEO of the website you are looking to purchase.

Find out What the Current and Potential Rankings Are for This Website

There are helpful sites that can show the potential amount of traffic available for a URL. These websites also display the keyword for a specific page and what position – such as page number 310 on a search engine site. Besides finding the rank of a particular website, they can also display the search volume. Many such SEO tools will also give the top keyword that enables the website’s current position when being searched. You can get basic information for free. However, for more in-depth data, you often have to pay a small fee.
It is frequently difficult to justify buying a website ranked low on lists produced by search engines, but low-ranking doesn’t mean the site isn’t worth the money. It all depends on what you can do with the site, renovations to increase the property value, once you have purchased it.

Look for the Current Number of Backlinks

Having many backlinks will boost a site higher in the search engine rankings. There are many plugins available for checking the number of sites linking back to your own. Many sites fail because of too much competition within the same niche. Knowing the number of backlinks to your would-be competitors’ websites will help you calculate how many you will need to gain to rank in the search engines.

What is the SERP Competition?

It’s also good to know what sites are ranking above your website. To learn the quality of their SEO, you can use Google to see what the competition is like by typing in a shared keyword for your prospective purchase. Then view the top ranking sites on the search engine results page. Some similar tools are free and some are not. Most will provide domain backlinks, page backlinks, Google PR, age of the domain, and various other rankings. However, the Firefox SEO plugin, described below, is one of the most recommended tools by many website owners.

How Is the On-page Optimization for This Site?

OPO (On Page Optimization) will help a website get high rankings all on its own. However, it may depend on the competitiveness of the keyword or phrase. Link building is also part of this – they complement one another and this is how the site can become more successful. Generally, OPO will bring in many natural links – which can easily multiply exponentially when combined with engaging content.

Using the Firefox Seo Plug-in

This plugin can do all the above checks for the website you intend to purchase. You’ll quickly discover meta tags, keyword density, and indexed pages. It even provides a link report, sitemap, and list of backlinks. This is great for checking the keyword density on the website you are looking to buy. For instance, if you know of a specific keyword that is causing a similar page to rank high on the search engine lists, you can plug this into the keyword density tool. This part of the SEO plugin will show the number of matches on your website for this keyword. It searches the entire page; title, body, headings, links, bold print, Meta description, and Meta keywords. If there are matches present, it displays the percentage off to the side as an indication of the traffic you could attract….

*Originally published on WorldStart June 02, 2010

After you research the domain history, you should break down the total revenue available from purchasing a website to determine how much is being made. This breakdown also provides a visual of where you can strengthen the revenue. If you are serious about Virtual Real Estate, the following considerations are a must. Remember, you make a profit during the purchase, not the sale!

Check the Claims Being Made by the Seller

It’s a sad truth that sometimes sellers inflate the worth of their site to make it more appealing to the buyer. Forming a contract between buyer and seller is one way to make sure the claims made by the seller are truthful. If a seller has to sign accurate statements, they are less likely to exaggerate.

Time Estimate for Investment Return

Knowing how long it will take to recover your initial investment before buying the site is hard to determine. If you can estimate an approximate timeframe, it’s better than sitting and waiting it out. A good starting point would be to take the total purchase price and divide it by the monthly Net Profit, or Gross Profit less expenses, for an estimated breakeven analysis.

Yearly Projected Earnings for the Website

Trying to calculate the yearly projected earnings depends on the growth of the revenue – whether it’s declining, booming, or maintaining a steady rate. The best way to estimate this would be to ask the seller for evidence of at least the past three months of revenue and then multiply it by a factor of four for the year.

Note: Do not forget to ask the seller about, and factor in, any seasonal variances – especially for websites related to holidays, vacations, etc.

Earnings That Are Consistent

Serious buyers prefer a consistent revenue stream. A sudden surge from time to time is also good, but no one wants to see their revenue suddenly plummet. Knowing how long the site has been making the current amount of money will be helpful in figuring out the consistency of earnings. A mistake commonly made when buying a site is to purchase it when it is suddenly doing well. This will often provide false hope and will be a tremendous disappointment if revenue declines.

Note: It’s also wise to ask the website owner why the site is being sold. Some owners get too many sites going and need to be free of a few for their own sanity. Others are merely trying to make money.

Gross Revenue Vs. Net Revenue

Many sellers will provide gross revenue, drastically inflated, to make the site look like it is doing extraordinarily well. The gross revenue can look impressive, but the amount spent on advertising or site operation can decimate the net profit. For example, gross could be 15,000, but the advertising and operating costs might be up to 12,000. Subtracting these two provides a net revenue of only 3,000 dollars. Going into a purchase with the thought of earning a fistful of dollars regularly from the website isn’t always a good idea. Check the net revenue for a more accurate total.

Gross Revenue Vs. Net Revenue

Bringing in additional help may be possible, but it depends on the budget. Determining what you can do to bring in more revenue creatively is always something to think about. Maybe you can put more of the income towards additional advertising. You may also want to hire the current seller to help keep the site up and running, but to still make money at the same time.

Are There Any Areas with Untapped Revenue?

There may be ways to integrate links into a blog or monetize the traffic generated by a newsletter. Sometimes there are loads of free content you can sell for a profit. There are often plenty of areas with untapped revenue you can develop without spending more money on advertising.

Note: For more on this, refer to my previous article Cash in the Virtual Attic.

In summary, test your own expectations and needs from this transaction. If they’re too high, you may end up going broke or in debt to purchase the website of your dreams unless you confirm it has enough high-quality content.

*Originally published on WorldStart May 19, 2010

Once you confirm that the website fits into your plan, it’s always good to know from whom you are buying the website. Dealing with a seller who is not cooperative can make even the best deal turn sour fast. The checklist below can help you remember major points to address when working with a seller on purchasing their website. Best of all, they can fix many of the issues listed below before you even place a bid. It may take some time and a little effort on both parts, but it’s well worth it.

Finding Marketplace Feedback

There are many marketplaces available for buying and selling websites such as Flippa.com, DigitalPoint.com, etc. These are great locations to research a specific seller and see what sort of feedback they have received from buyers in the past. It’s a quick process and can provide you with much helpful information in a short amount of time.

Can You Catch the Seller in a Lie?

Be sure to check traffic claims, income claims, and any of the other major claims made by the seller. If everything checks out and all the numbers add up, then there shouldn’t be anything to worry about. There’s nothing more frustrating than taking the word of a seller and having it be a complete lie.

Is the Seller Willing to Go the Extra Mile to Help You Out?

Surely the seller can produce a quick screen capture that will provide you with the information you seek. If you make a simple request and the seller won’t comply, they may be trying to hide something. Asking for something as simple as a screenshot shouldn’t be too much. This is a good way to verify if the seller is telling you the complete truth about the site. If you plan to shell out thousands of dollars for a website, the seller should allow you at least some simple verification that you are getting what you pay for.

Can You Persuade the Seller to Be Available for a Few Days after the Sale?

Find out if the seller will stick around for a bit after the sale is final, to help with any issues. Get this in the contract, just to make sure that all parts of the transaction go smoothly. You may have some questions that don’t come to mind right away. Access to the site may cause many questions to arise. It will be much easier to get them answered if the seller is available. Since the seller should know all the ins and outs of the website, this person may be the best reference you have.

Try to Contact Previous Buyers

While feedback is a significant source of information for a quick positive or negative comment, having an actual chat with a previous buyer can be even more beneficial. This is a great way to find out the buyer’s personal experience with the seller. Was this seller helpful? Was the seller a tremendous pain in the neck? Be sure to speak with multiple buyers. It’s better to get an average from many buyers, instead of relying on the experience of only one person and basing your impression on what that person says.

Don’t Be Unreasonable, but Do What’s Necessary

Even if a seller doesn’t have a ton of feedback, this doesn’t mean the seller isn’t reliable. If site flipping isn’t what this person is into, then they may only have one or two reviews. You can usually contact the seller and chat a bit. Be cautious, but not over the top with requests and expectations.

The key idea here is to find out if this seller is an all-around trustworthy individual or if they are simply trying to get rid of this website. Now it’s time to research the domain.

*Originally published on WorldStart April 05, 2010

It’s always a good idea to make a complete plan before you purchase a website. Try to think of every aspect of owning a website. Coming up with foolproof answers to these questions will be your best defense against making a purchase you will later regret. This plan is often better implemented when you write it out. This provides a visual reference as a checklist, so you leave no question unasked or unanswered. If you go into a purchase without a plan, the outcome usually isn’t a positive experience. Here are some further questions to ask before you consider your plan complete:

Is This Site Going to Fit into Your Business Model?

You need to figure out how this website will fit in with other virtual properties you already own, if it even does. Maybe you are looking to purchase a site and flip it. It’s a consideration you need to make before finalizing the purchase.

Do You Have an Exit Strategy to Implement When You Want to Sell the Site?

It’s often unlikely you will keep this site forever. Even if you are certain you won’t ever want to part with your newly purchased site, it’s always a good idea to have an exit strategy. Are you going to sell it? Can you combine it with another website you own? Are you willing to let it just go by the wayside? These are all considerations you need to figure into your plan before purchasing a new site.

What Will This Site Do to Help Your Business Grow after You Buy It?

Don’t buy a site just because it’s shiny. You should have a good reason for wanting to make the purchase. Maybe it will lead more traffic towards a few of your other websites. It may attract many more new customers to your current business, thus helping your company quickly expand. There are many possibilities. It’s always helpful to brainstorm several ideas and keep an ongoing list, in case one idea triggers another later on.

Who Is Going to Be the One to Do All the Work on the Site?

Be sure to have someone who can keep the new site going. If it will not be you, then you definitely need to have a person who will be in charge of keeping the site running smoothly. You can’t purchase a new site that is doing well and expect it to continue being successful without at least some maintenance. Hiring someone may be necessary, unless you want to take some of your own time to make sure the new site continues to be profitable. It won’t be worth the money spent if you let it go by the wayside, just because you didn’t figure upkeep of the site into your purchase plan.

Where Is the Money Going to Come from to Keep the Site up and Running?

A good business plan budgets for investing. Borrowing money is sometimes the only way possible to afford the purchase of another website. Be sure to count the cost. Knowing exactly how much money you will need to buy the site, and the amount necessary to maintain it successfully, is the key to not going broke from the purchase. It’s also important to know where this money is coming from. Are you going to borrow from a bank? Are investors going to supply the funds? Some loans charge a high interest rate, so you’ll also want to know this in advance.

Many sites are so successful, the revenue covers the cost and any ongoing maintenance. There also may be enough revenue being generated from other sites you own, providing a plentiful flow of money coming in for whatever you need.

Making a website purchase on a whim can excite and pose many problems. It’s best to learn more about the seller.

*Originally published on WorldStart June 18, 2010