Informally known as online flipping or flipping internet sites
- this business approach can be extremely fruitfulif executed properly. Just like buying a house and fixing it improves its appraisaland can lead to a windfall payoff upon a sale, so does the art of buying a online business and giving it a makeover increase its value that will
ultimately lead to a profitable sale.
Flipping websites for profit is not but one does need to focus on
particular details in the process - particularly when looking for a good opportunity to purchase a online business to enhance further and sell at a later date for more green.
Internet Businesses For Sale
Comparable to real estate opportunities, you want to focus on what you are thinking to buy - look under the floor at the foundation to make sure there is no rotting. Some internet sites are full with troubles and issuescreated by the former owner that will be tough to fix - such as being penalized by Google for trying to game the system. The most obvious being found no where in the organic search reults even when searching the url or having zero PR even after several years. Other red flags one needs to be aware of are sellers who show massive backlinks in a short period of time - these folks often have set up dozens of accounts at social bookmarking sites, and set links back to their site from these.
Most issues about a site can be bypassed if one pursues certain guidelines when checking websites topurchase, modify, generate cashflow and flip. Search for sites that have history - as a rule 1 year - the longer the better, as this establishes stability and the likelyhood of most of the pages being indexed by the search engines. Check the organic positioning for the key words and sentences related to the website and see how well it places now. Often times you can make quick adjustments to on page optimization like changing the meta tag title and description to get a quick jump in positioning. Next review the site’s material - is it unique and well written - is it duplicate content or search engine fodder scribbled by someone in Slovakia? Use copyscape.com or duplicatecontent.com todiscover if it is original. Don’t waste your time on websites/sites with non-useful copy written for the search engines but not for surfers. Steer clear of sites with duplicate content - this will be penalized by search engines and be a problem.
Once you have determined the site has original interesting content, has more than a ten pages, has been around10-12 months, has some history in the search engines,and is displaying at a minimum PR2-3 as well, it is time to summarize how the site is presently being monetized, if at all, and reveal the potentials to leverage the cashflow exponentially!. Sometimes a website is already churning descent cashflow, and just by applying superior SEO strategies as above will dramatically improve the traffic and therefore the revenues - particularly for pay per click adsense sites and affiliate program models.
Buy a Website
The primary areas to audit and scale up cashflow are the following:
For Content driven websites including blogs or forums begin by adding PPC - Google adsense or yahoo - if notconcurrently included on the site. Most likely the PPC code exists - but check out the positioning and layoutsbeing used - sometimes tweaking the positioning or layout can dramatically augment the clickthrough rates and revenues. Think about installing ad networks like Tribal Fusion, Buzzlogic.com , etc. There are tons of affiliate products related to specific subjects - both material products and also electronic software or ebook products available that convert great and pay handsomely - check clickbank and cj.com for potential candidates. Depending on the traffic copy and PR of a web site you can sell text links directly by coding an advertise link page on your site. This willearn upwards of $10 - $500+/month per link depending on the traffic and niche and exposure on the page. Another opportunity is adding a paid directory for services or products. If, for example, the site is about [spin]diabetes|laser hair
removal|body building[/spin], a directory of these businesses in every state could be created and marketed on the site. This will increase the pages and copy of the web site while driving in $50+/per listing potentially.
For membership oriented models or subscriber based internet businesses refining the content of the site to improve conversions and sign ups will be critical. Also, implementing a hover style ad that can not be blocked by pop up blockers will lead to much more registrations for newsletters - there are several to choose from like floatingadz.com
that can be used to craft these hover ads. Creating member incentives to proselytize the club is another method of leveraging current members to increase the membership, traffic and income to the site. Offering rewards, etc can totally turbocharge the existing members to promote the site.
For e-commerce websites selling products there are many ways to increase sales. Start with improving the look and feel of the site - giving a website a graphical change can improve stickiness and keep people from bailing the site after a nanosecond of arriving! Buying sites that can be enhanced to a web 2.0 look can do wonders for the revenues - because the site will exude a more trustworthy appeal. Replace old photos with professional digital images - create consistency of thumbnails and larger images as well. Once the site is visually appealing, begin adding new products and product categories to offer - this by itself can often ramp up sales significantly year over year with similar traffic. In addition, the new products and categories once optimized can quickly get indexed in the search engines and produce more visitors to the website Every product pageshould have original content including the url and title tags. Incorporating a PPC campaign or expanding on a current campaign by focusing on a multitude of very specific product keywords and keyword phrases can explode the targeted traffic to the site that monetizes very well. Most people only hone in on the obvious keywords - perhaps only a dozen at most- when there are hundreds more that get nominal clicks per month but added together create a torrent of traffic. Adding an affiliate program, establishing a newsletter and building an email list, doing online Press releases - PRweb or PR.com, can all be used to increase visitors and revenues and ultimately increase the equity of the online business for resale.
Sell a Website
After addressing all the SEO modifications, and improving the cash flows of the website, the revenues and profits are going to improve if you have done this efficiently. The catch now is to create enough history with the increased profitability so you can list for a lot more than you bought the site for originally. There are a couple ways of pursuing this.
Depending on the deal you struck to buy the internet business, you may be able to make the changes and flip within 1 - 3 months - and realize a significant gain. It is possible to snap up a website for a multiple of 10-15 times the monthly cashflow depending on the seller. In this case, you may be able to get a quick profit selling for 18-24 months providing you can use the former owners history and trends with the new appearance and revenue models.
If a website can begin creating significantly more cash than with the previous owner, it is a prudent idea to operate at this higher income level for at least another 6- 12 months. With 12 months being the actual acceptable basis for yearly cash flow - called trailing 12 months cash flow - that an appraisal is based upon, you will get much more ‘dinero’ both during this period as well as at finalizing a deal. Depending on your motive, the quick flip may be more attractive but usually there is more profit to be made by a longer term play. In addition, the tax implications are much better when you hang on for a year because the revenues will be taxed as a capital gains(15%) verses regular income tax(25%-35%).
A final word of wisdom - take your time! There are plenty of opportunities listed every day on websites like sitepoint, digitalpoint, and websiteproperties.com. Do your homework and follow the suggestions described above and your probability of success and carving a living from buying and selling internet businesses will be very promising.
Good flipping!
David Fairley
President, Website Properties.com