The internet has become the single most important source of information for most people. It has become a nearly indispensable educational tool. People are always looking for all sorts of information on the internet to do research or to check product and service reviews and thereafter make a purchase.
As the internet has become so important to our daily lives, the buying and selling of websites has become big business. Like buying or selling anything else, however, this is all about creating the product you want to sell and determining what potential buyers are willing to pay for it.
Website Flipping, Why Buy An Existing Site?
One advantage of buying an existing website (website flipping) over building a site from scratch, whether as an investment or to take over and run it yourself, is that it will have a track record of some kind. Even if the site wasn’t making money before, you will at least have some kind of idea of how popular the site has been in the past in terms of traffic and what kind of income potential if any, it may have.
Being able to look at this can help you evaluate if the site is actually worth what the seller is asking for it and if you’re planning to buy the site and resell or if it is a potentially profitable investment for you.
Another reason for considering website flipping that is buying an existing site is that it will generally have a pre-existing audience and if the site is commercial a customer base. You may also have some support from the previous owners during the transition period-and of course, you’re much more likely to be successful with an online business that is already established.
However, there are some downsides to buying an existing site. Website flipping costs can be high, at least for more valuable websites. You’ll need to handle a lot of paperwork before and during the transition and you will also have to take a significant amount of time to do your due diligence before committing to a purchase of an existing website that is being sold.
I have written a post about why it is better to buy a website rather than build from scratch.
Four Effective Website Flipping Evaluations Tips
Here are some things to think about when evaluating a site to buy and sell:
1.) Site Infrastructure
These sites will already be up and running, with all of the important infrastructure in place as well as a built-in clientele if they are commercial sites, so you can take it over and run the site as your own rather than having to reinvent the wheel.
2.) Flexibility of Website Flipping
Depending on the buyer, you may be able to bargain on the price of an existing site, whereas the costs of building your site from the ground up are fairly well set.
Especially if you’re buying a site to re-sell it later, you should try to find out how much wiggle room the buyer has on the price.
3.) The Cost of an Existing Site vs. Building Your Own
While it is a lot of work to build your site, there are some cases when the asking price for an existing site is so high that it simply does not make sense to buy. Always evaluate these costs of website flipping before you make a decision; if you think it would be cheaper to build your site, chances are your prospective buyers will too.
4.) Competition in Website Flipping
You can either try to eliminate the competition of website flipping or if you can’t beat them, join them! You may want to buy out your competitors or if possible, negotiate a merger with them. Whether or not this will work depends on the industry and the personalities of the people involved, but it can be a good strategy to help your business get to the top. Think about the web hosting business, where there are frequent mergers and acquisitions as one example.