Midascode | Buy & Sell Websites

Content Is King - Buying Websites Guide

Welcome to part eight of the Midascode.co.uk buying websites guide.

Today we are going to look at the quality of content, and how that affects the value of a website.

If you haven’t already done so, please read through the previous chapters.

* Everything changes
* Site buying multiples
* Industry importance
* Traffic relevance
* Traffic quantity
* Established Websites
* Time Is Money

Content Is King

You have probably already heard the phrase “Content is King”, but it is one that is especially important when buying websites.

There is a vast difference between a links directory and a content rich blog with hundreds of unique articles. Content can drive traffic and attract readers. It can also help create a brand.

Also beware when buying online stores. A lot of the content from online stores is often taken direct from the merchants feeds, and essentially you are just using the same content as thousands of other sites.

Summary: Quality content is a valuable asset to a website. Signs that a site has quality content are:

1) It ranks well in the search engines
2) Has a lot of comments
3) Has a lot of backlinks.

Midascode.

Time is Money - Buying Websites Guide

Welcome to part seven of our buying websites guide. Today we will discuss the importance of the time required to run a website, and how the amount of time needed should reflect the value.

We recommend you read through the previous chapters first:

* Everything changes
* Site buying multiples
* Industry importance
* Traffic relevance
* Traffic quantity
* Established Websites

When you run a website you will often be required to take over the daily tasks associated with running and maintaining the site. These can range from adding content, deleting spam, link building, finding new content etc…

All of these tasks require your time, and never forget that time is money!

So when you are looking at buying a site you should look at the amount of time required to maintain the site. For example, if you are buying a new forum that only has a few members, then the amount of time required is going to be huge. But if you are buying an established and automated site then the time required is much less.

Many site sellers will say things like “it only takes an hour a week to maintain”, but remember that there is a big difference between maintaining a site and creating a highly successful site.

MidasCode.co.uk

Welcome to part six of our buying websites guide.

Today we are going to discuss the importance of knowing whether a site is established or not. Before we continue I should remind you that there are five previous chapters:

* Everything changes
* Site buying multiples
* Industry importance
* Traffic relevance
* Traffic quantity

Is the site established?

Knowing whether a site is established or not is vital in knowing its value.

So what is an established site and how do we know if a site is established?

Authority websites have generally been online for a long time, they are also near the top of their industry. They will normally have things like advertisers, return traffic, and a good brand image within the industry.

Established vs Authority

It is important not to confuse established sites with authority sites. An established site will have all of the above features, but an authority site is truly at the top of its industry. It is the sort of site that people will think of when you tell them the industry:

Search engine = Google
Online Encyclopedia = Wikipedia
Site Buying Experts = Midascode.co.uk

If a site is an authority site then expect to look at yearly multiples instead of monthly ones. It is not un-common to pay more than 3 years revenue for an authority site, but rarely would an established site go for more than 18 months.

So when you are looking at a site, make sure you try and see if the site is established, and be prepared to pay a little extra.

The other side of the coin is authority sites. Authority sites have usually been around for a long time and are the top site in their industry. They usually have a list of current advertisers, returning traffic, good public relations, etc.. If a site is an authority, then the multiple goes way up. While widgets.com has been around for 2 years and has a steady base of return traffic, it’s not what I would call an authority site. Because widgets.com is “established” but not an “authority”, the multiple remains at 8.

Welcome to part five of our buying websites guide.

Previous chapters included:

Site ownership changes
Site buying multiples
Importance of the industry
Traffic relevance

Today we are going to look at how important the quantities of traffic are for a sites value.

This is going to be a tricky one to explain without contradicting myself, but I will try my best.

Traffic Quantity - Buying Websites Guide

The traffic levels are the main factors used to gauge a sites value. But I feel that this is a factor that is often over valued. For example, I have seen sites that have 10,000+ visitors per day that make a loss, and I have seen sites that have 20 visitors per day that make a lot of money.
So focus more on revenue than the traffic levels. Also pay more attention to the traffic relevance than the actual traffic levels.

This is probably the main error site buyers make when valuing a website (the other error is paying too much attention to pagerank).

Summary: Don’t be blinded by the numbers! focus more on the quality of traffic.

Welcome to part four of the Midascode Buying Websites guide.

If you haven’t already read the previous chapters then visit website ownership changes, website buying multiples, and industry importance.

Today we are going to look at traffic relevance as a factor in buying websites.

Traffic Relevance

This is one area where I have been guilty in the past. I had a sports gambling website that provided free tips for upcoming games. However, I started to rank very highly on Google for terms related to “football transfers”. During transfer season I was getting a few thousand visitors per day from Google who were looking for transfer information.
I eventually created a transfers section and I got 10,000+ people to subscribe to an opt-in list for free transfer info, but I didn’t make a whole lot of money from this traffic.

Many gambling terms can be worth over $10 per click, but I doubt this football transfer traffic was worth more than 1c per click. So although my traffic figures looked great, they were not as impressive or profitable as they may have seemed.

Websites accidentally rank for terms all of the time, so it is important to ask these questions before buying a site:

*How relevant is the traffic to the site?
*What is the average value of this traffic?
*What could I do with this traffic?

Let’s go through those three points:

How relevant is the traffic to the site? - My site had lots of info and adverts for gambling, but the visitors were looking for free football info. At best this was only partially relevant to my site. How many of the 10,000+ subscribers joined my poker club = 3. So always check the traffic relevance before making a bid. You can usually see the traffic from screenshots of the stats package.

What is the average value of this traffic? - Unless the site uses PPC or has a very complex tracking package, the best you can do here is look at the top 10 terms the site ranks for, and then use a keyword research tool such as Googles or Overture to get a rough idea of the value of those terms. Example, if a site gets 1000 hits per month for the term “Free hosting” and you know that the average bid for that term is $10, then you get a monthly traffic value of $10,000 just from that term.

What could I do with this traffic? - Not everyone is a marketing expert, so ask yourself what you could do to make money from this type of traffic. Could you write and sell some ebooks? could you use affiliate programs? could you create a store or a forum?. There are many options, but certain webmasters prefer certain techniques. Try and see of the traffic matches your preferred techniques.

Summary: Before buying a site, make sure you get to see the types of traffic the site gets. Then assess the value of that traffic and see if it fits your business model.

Midascode

Welcome to part three of the Midascode.co.uk website buying guide. We have already covered ownership changes and the website buying mutliples. Today we are going to focus on the websites industry.

Industry Importance

If you are going to buy a website then it is important that you get to know more about the industry. This is particularly important if you have no prior experience in the industry.

The industry is not something most site buyers see as a factor that affects the value of a site, but I can assure you that it plays an important part in the valuation process.

I recently purchased a gambling website. Some people think that gambling websites are not worth much, but infact the opposite is true. Gambling is an industry where you can earn an awful lot of money with the right type of traffic. It is not un-common for gambling site owners to earn $300 per sale, but a site that sells joke books may only make an average of $2 per sale. So I am willing to pay extra for a site like this.

Also look at the competitive nature of the industry. For example, if you are buying a site in a very small niche and there are only 3 competitors but the site for sale is the leader, then the site may already have peaked.
If we look at it from the other angle, if you are considering buying a 3 month old, pr2 hotel review site, then you will have millions of quality competitors.

Also check the amount of keywords available for the industry, and the value of ranking for those keywords. e.g if you buy a site that is to p10 for “cheap viagra” then you may be able to earn a lot of money via adsense.

Summary: The industry does play an important role in valuing a website. Do your research before parting with your cash.

Midascode

Welcome to part two of my Buying Websites Guide.

If you haven’t already read part one “everything changes, then please read that before continuing.

In todays website buying guide I will be discussing the multiples used when buying or selling websites.

Most people like to use monthly revenue multiples when buying websites e.g if a site makes $100 per month, then x8 months would be $800.

However, this really is too vague for most sites. There are way too many factors involved in the site buying process to be able to just throw multiples around.

That said, I do have a set of guidelines that I use more as basic guide than a strict set of rules. But I will share them with you anyway:

* I rarely pay more than 6-8 months for a myspace/proxy/arcade or any other low quality turnkey site.
* I also would not may more than 8 months for most automated blogs.
* I use 12 months as a guide for most sites that have a good foundation, but need more investment and time to reach their potential.
* I use 12 months max for blogs that are partially or fully dependent on the orginal owner.
* Unless Youtube is for sale, I rarely consider ANY site worth paying more than 30 months for.

Feel free to use this as a rough guideline, and compare the figures with your own valuation.

Part three of the buying websites guide is coming soon.

Midascode.

Welcome to part one of my whopping 11 part site buying guide.

Each part of this site buying masterclass will explain one factor that you will need to understand before purchasing a website. If you use these 11 factors then you can avoid buying a duff, or being ripped off.

Buying Websites Guide part one - EVERYTHING CHANGES

When you buy a site it will operate differently than when the previous owner ran it!

It may be the same site, but there will be some changes that you have to be aware of. The most important of these will be links from within the previous owners network.

For example… I was offered a football transfers website. It had decent traffic and ranked well in Google, but the majority of the links were from sites from the same owner. If I had bought the site I would have lost over 3,000 sitewide links overnight.
It is fair to presume that this would have a major effect on the sites rankings and traffic, and therefore ultimately it would effect the revenue.

So when you are considering a site purchase, make sure you do a WHOIS check to see if the owner has any other sites that are linking to the site.

Also, note that it is not un-common for a site to be placed back in the sandbox after purchase. Many people believe this is due to the WHOIS details being changed, so don’t rely solely on search engine traffic to get a sites value.

Also check if the site has any exclusive deals that may be void for a new owner. For example, perhaps the owner has a lot of power in the industry, but if that same power does not transfer across to the new owner then current deals may vanish. This applies for affiliate deals, content deals, ad deals, link trades etc….

If the site has moderators or staff, then check to see if they intend to stay onboard. This can be tricky if the current owner doesn’t want to tell the staff that he/she may be selling the site.

Finally, if you are purchasing a blog then beware of blogs that are built on the owners reputation or personality. For example, if a blogger has a distinct personality that his/her readers enjoy, then you are potentially going to alienate that audience when you take over. In this example it would greatly de-value the site, and it may be worth trying to get the old owner to continue blogging for x months.

Dean

There are some tools to help you with your sites value.

Ideally you should already be using these tools, so here are my top four tools you will need to help value your site:

Alexa We don’t treat Alexa as importantly as many other people, but it is a good rough guide to your traffic.

Keyword research tool Look for the main terms you rank for. Check how often they are being seasrched for and if possible also get the average PPC value of those terms.

Sites log files - We need to see your site data, so please provide access to your log files, or detailed screenshots.

Financial data - How much money you make is the most important factor. If you are not willing to provide this info then please don’t bother contacting us.

In the next edition I will be sharing factors that we are NOT interested in.

Many thanks,

Midascode

I often get people e-mailing me to ask how much their website is worth. So I have compiled a list of questions I will need answers to before I give you a site value.

If you cannot provide any of this info then don’t expect to get an accurate appraisal.

- What is your current revenue?
- What % of this is profit?
- Do you have any ongoing liabilities?
- What methods do you use for revenue? (revenue model)
- What is your position in the inustry?
- What is the value of the industry?
- How many unique keywords do you rank for?
- Do you use PPC? and what is the CPC average?
- How many major competitors do you have?
- What is your Alexa rank?
- Are you in a niche with Alexa bias? (e.g webmasters, SEO etc)
- Do you get any traffic from type ins?
- What are the current traffic levels?
- Do you have an estimated value per visitor? (uniques per month divided by monthly profit)
- Have you built a brand (reputation)?
- What are you conversion figures?
- How hard would it be for a competitor to re-create the site?
- Do you have a members base? (opt-in, registered members etc)

Please try and answer as many of these as possible before contacting Midascode.

Many thanks,

Dean