Over the years, I have received many emails from curious readers about buying websites to make money with. Well, today, I have a great article to share from Stacy Caprio on how she buys websites and makes money doing so. Enjoy!
My name is Stacy Caprio and I own the website Her.CEO that features entrepreneur case studies as well as helps people learn how to buy and sell websites profitably.
I have spent a little over $35,000 buying websites and made much more than that in passive income from the sites and now continue to make pure profit passive income on the site investments I’ve already made.
Websites investments are great, not only for the recurring revenue, but also because you can improve and flip them if you choose, giving you the option to get a larger cash lump sum up front if you’d rather receive that than the recurring revenue.
I have also recently sold one of my website purchases for more than I bought it for, making a little over $8,000 from the sale when you subtract the broker fees.
I used to work a 9 to 5 job in the digital marketing world for a finance company and before that I ran paid ads for a Google ad agency and a Facebook and Pinterest ad agency, so my full-time job specialty was in search marketing and paid ads.
I’ve always loved and been drawn to the online marketing world, however sitting at a desk for 8 or 9 hours everyday was never for me, and I knew this early on, even in my first full-time role.
I’ve always craved the flexibility of being able to go on a run in the middle of the day or even get up and stretch or take a quick walk to clear my mind before getting back to work.
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Unfortunately, most full-time jobs frown upon any time that is not spent sitting and glued to your computer screen, making most days not the most enjoyable or as productive as they could have been for me had I been allowed more flexibility.
Additionally, I have always craved the ability to have impact on more than just revenue and growth, and to be able to take part in guiding a company’s strategy, and getting to share in the returns when it does well.
Working full-time for a company does not allow for this type of strategy or profit-share for the majority of positions, even if you work your way to the top of your field or promotion ladder in most cases.
After working for companies for a little over 3 years, where I learned a lot of online marketing and website growth skills, I finally followed my heart and left my cushy full-time position to work on what had been my dream for the past few years, to work for myself and grow a business.
While at my full-time role, I had started purchasing websites and had already bought a few smaller sites, making my share of website buying mistakes and starting to learn how to buy sites that were actually making money as well.
The first site I bought I didn’t do a good job at verifying the revenue the site owner said it was making, and the owner of the site had been lying about the amount the site was making.
Consequently, I ended up paying around 20 times more than the site was actually worth, and to this day have not made back the money I spent on the site. Fortunately the site was only $1,300, so I have been able to chalk it up to a learning experience to always verify revenue and analytics with a fine tooth comb before buying any site in the future.
The next site I bought I also rushed into. I did a good job verifying traffic and revenue and was able to quickly double revenue by switching ad networks. However, this website was based on a trendy phone game that dove down in popularity a few months after I purchased it.
My revenue dove with the traffic and I still ended up making around 70% of what I paid for the site back, but it was still a net loss. This site taught me to buy with a clear mind and not rush into anything, as well as to focus on sites with long-term potential and more traffic history. Each site purchase, both the mistakes and successes tend to teach you a lesson, and I am lucky to have had my fair share of mistake and success purchases to learn what to look for when buying a website.
At the time I left my full-time position, I was only making around $1,000 a month on the side and had purchased two mistake sites and one successful website. The successful site purchase gave me a little confidence that I could continue to grow the site as well as make other site purchases if needed to increase my monthly income.
When I left my job, my 93 year old grandma was generous enough to let me live with her while I was growing my business so I wouldn’t have to dip into savings for rent or living costs while it was growing. She would brainstorm with me and go over business results every night at 9pm when I lived there and is one of the main reasons my business has been able to grow.
Since I was saving money by not having to pay rent, I was able to purchase another website, this time spending more on a website than I had ever spent on anything in my entire life. It also ended up being the best purchase of my entire life and continues to return revenue each month.
To date, I have spent $35,700 investing in websites and bought a total of 4 websites.
The ROI and recurring revenue has been a great benefit, and learning how a successful site functions and monetizes has been another great benefit, one that I would never have received had I not taken the time and money to buy a few sites in the first place.
How can you buy a website on your own?
There are many approaches you can take when buying a website, including purchasing a site from an online marketplace such as Flippa.com, going through a broker, contacting individual site owners and making offers, or even joining a website flipping group on Facebook and messaging individuals who post sites they are looking to sell.
Online Website Buying and Selling Marketplaces
Flippa – I have personally purchased my own sites from Flippa because you can get sites for lower multiples than many of the other marketplaces and brokers. You do have to go above and beyond when doing due diligence however, to make sure what you get is what you think you’re getting.
Latonas – I sold one of my sites using Latonas, and found the brokers to be hardworking and responsive, all great things when selling a site. I had a great experience selling my site on Latonas. One word of caution to buyers however, Latonas can have pretty good site deals, but you should always go above and beyond to verify them since the brokers don’t do much in terms of verifying site revenue or profit before going to sell the site.
Empire Flippers – I almost sold a site using Empire Flippers and they have a very in-depth revenue and traffic verification process requiring month by month screenshots and more. They tend to have one of the highest multiples so you’ll be paying more when you buy a site from them. The best part of buying from Empire Flippers is they don’t release the funds to the seller for 14 days so you have a safety net guarantee if the seller is scamming you, you get to return the site and get your money back in that time period.
F.E. International – If you have a large budget you can also check out F.E. International, although you now have to sign NDA’s before getting more information on any site, making it more hassle and potential legal trouble than it can be worth. However it is still a good website marketplace to check out if you’re looking to buy a site.
There are many other website buying and selling sites out there and you can search on Google to find more.
Starter Site Marketplaces
You can buy a starter site from a company such as Spencer Hawe’s Motion Invest or the Human Proof Designs team as well as a few others out there, however I wouldn’t recommend this since the starter sites can be quite expensive even if they are not making any money at all when you buy them.
This is due to the cost of creating them along with a built-in profit margin for the creator, whereas when you buy any site through a marketplace or broker, you’re paying based on what the site is already making in profit.
This means buying a site from a marketplace is usually a much better deal than buying a starter site since you’re more likely to get a website that has a strong base to scale from and start earning a lot more if you focus time and energy on it.
I have never personally bought a “starter site” making no money, except accidentally I suppose when I purchased my first mistake site on Flippa, and that particular website never ended up making much more, so starter sites are not an area I would ever look to invest in the future.
Buying a Website: What to Expect
When I first started buying websites around 4 years ago, the going rate was a 20X monthly profit multiple. This means if a site was making $100 a month in profit, you could expect to pay $2,000 for the site.
Today, a few years later, more people have entered the website buying space and now the average seems closer to 30X the monthly profit multiple and can get as high as 60X if you’re buying a website from a specific broker, a SAAS business, or one with a lot of success and potential.
Personally when buying websites I look for ones selling at as low of a monthly profit multiple as I can find. This takes away some of the risk because if you know you can make it back in a short time period, then you’re more likely to get your initial investment back without having something catastrophic happen.
For example, if you buy a site at a 20X monthly profit valuation and aren’t able to improve the site traffic or income, you can still likely make back your money in under two years and then continue to profit afterward. If you buy a site at 40X its monthly profit, there’s a lot more that can happen in three years as opposed to under two, and it is significantly less likely you’ll make your money back, however if it’s a good site then it could still be worth the investment.
You’ll have to use your common sense and most importantly think about how you can improve the site to grow traffic and revenue once you purchase it. It’s much better to know you can quickly double revenue or traffic once you purchase the site so you can make your money back as fast as possible instead of having to wait around for it to be made back.
How to Vet a Website Before Purchasing it
I have a few criteria I specifically look for when vetting a website purchase:
- Criteria 1: I look for a price around or under the 20X-30X monthly profit valuation that is the current industry average.
- Criteria 2: I must be able to wrap my head around how the site makes money and how it functions as well as why people like to visit the site.
- Criteria 3: The site must have the traffic, revenue and profit the owner says it has, and I must be able to verify all of that in several ways.
- Criteria 4: I prefer to look at passive sites that don’t require continual upkeep.
- Criteria 5: The site must not be a trend, and it must have the potential for stable, long term traffic, preferably from multiple traffic sources including a strong brand and email list in addition to organic traffic. Look for sites that have been around longer than a year and are not based on a passing trend, with longer track records even better, since this points to stability.
The main thing to remember is you should never buy a site without verifying all of the owner’s claims, and you should have a plan for the future of the site that involves more than simply maintaining revenue.
This is because buying a website, even one making what the owner says it is making, is risky, since the online world is always changing, and websites can be on top of the world one day and making nothing the next. This means the faster you can make your money back the better.
Once you have a successful site, now what?
I prefer to hold on to successful sites once I find them long-term for the cash flow. I like getting the monthly revenue deposits and have found it is easier to hold onto and grow successful websites than it is to find and buy new websites that have potential.
Finding a good website is akin to finding a needle in a haystack, and often once you find that needle, your time is better spent on making it the best needle it can be.
Michelle’s site Making Sense of Cents is a great example of a website that she has been able to nurture into making a large amount of cash flow each month, and it appears she also enjoys the monthly over $100K cash flow as opposed to looking for someone to sell the site to for a larger cash windfall.
How to grow website revenue after purchase
There are a few ways you can quickly increase your website’s revenue after buying it.
Speed up the website.
Speeding up your site will help user experience as well as drive more mobile traffic. To do this, you can implement a caching plugin, use a CDN, compress the images, switch to a leaner theme, implement AMP, or hire a developer to take away excess code on your site.
Add more monetization methods.
If your site only has ads, you can start to add affiliate links (related: 8 Reasons Why I Absolutely Love Affiliate Marketing For Bloggers), you can also private label and sell actual products on your site, or even go the full ten yards and develop a product on your own to sell, you can also create something yourself to sell to your existing audience such as your own ebook or course. If the site is not already collecting email addresses, it will help to start collecting emails and have a list you can monetize down the road as well. Get creative in ways you can make money from your site in order to maximize your potential revenue.
Try testing different ad networks.
Often you can simply switch ad networks and test different ones to find the network that pays the most for your niche. Ad networks pay different amounts for different niches which is why it is always important to test ad networks. Test your ad placements as well to maximize revenue.
Reach out to brands.
Often brands will be happy to partner with you for sponsorships and paid posts. Brands are often happy to pay to have a banner a post on your site, or even send you free products. You can do outreach to secure these relationships.
Long term SEO and content strategy.
Not as flashy as the above “quick wins”, but even more effective, is simply to develop a long-term content and SEO strategy to gradually increase your website’s traffic and revenue over time.
Buying a website has been one of the best actions I have ever taken for myself financially, and I am happy I took the leap and bought my first site a few years ago.
I hope this article was helpful in giving you some background on the benefits of buying a website as well as some background on how you can get started looking for your own site. Let us know in the comments below if you have purchased a website in the past or plan on doing so in the future.
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