Buying and selling websites is a lucrative business. Thousands of investors comb the Internet everyday looking for unique opportunities. Website marketplaces that list websites for-sale are a good place to start researching. Whether you’re buying or selling there are a number of important areas you need to be concerned with:
- The Product or ServiceMake sure the product or service is viable, e.g., is it legal, can you buy it at wholesale prices, is licensing required, is it popular, etc.?
- The Brand Name & Assets Being SoldDoes the brand name have a good reputation, e.g., clear of bad reviews, negative BBB ratings, etc.? Make sure the assets being sold are free of all encumbrances. These are called Intellectual Property.
- Website DesignIs the site developed in a popular coding method, or using a CMS, e.g., WordPress, Joomla, or Drupal? This is important because you’ll need a cost effective method for continuing to operate the site, and if someone has custom coded the site the learning curve could be extremely expensive, hence cost prohibitive.
- Search Engine PositioningDoes the site have good positioning among its competitors in search results? Obviously, the better the search positioning, the higher goes the asking price of the website. However, if you’re buying a site chances are you’ll get a better deal if you buy one that needs some SEO brush up work, i.e., many web designers don’t know the particulars about search placement, especially if they don’t understand a specific industry, and/or it’s terminology.
- Hosting & TransferIs the site being hosted on a shared hosting server, a dedicated server, or virtual dedicated server; moreover, is it being hosted at a well known host provider, such as GoDaddy™, or Host Gator™? This is extremely important as the transfer of the site will be effected by this information. You’ll need to make sure you can access the site files through FTP, or SFTP. Also, if you’re buying a site, it’s always a good idea to setup your own separate hosting account, rather than take over the seller’s hosting account, this will insure a clean transfer.
- The PriceThe area most people tend to spend the most time on is the asking price; however, selling a website isn’t like selling a typical business. For example, when selling a brick and mortar business one will base negotiations on amounts of revenue and profits, location, balance sheet items, etc., and although these are certainly areas of concern to sellers, and buyers, of websites, a good sense of growth potential is more important.
- FlipabilityIf you’re a website flipper you’ll need to consider whether the website can be resold quickly. There’s nothing wrong with ‘bottom-feeding,’ when it comes low-balling prices. Some sellers are desperate to sell and will take any offer. You just don’t know unless you ask.
- Sales, Confidentiality and Non-Compete AgreementsIt’s always a good idea to have a lawyer write your sales contract. If you’re the buyer, however, you’ll want to be reassured that the seller won’t immediately go right back into the same business and compete against you; moreover, during and after the sale you’ll need to make sure all confidential information stays confidential.