Midascode | Buy & Sell Websites

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

5 Great Reasons to Buy Websites

I have compiled my top 5 reasons to why you should buy websites. Enjoy!

1. To sell a product or service. If you are selling a product or service then you can be guaranteed targeted traffic and an existing customer base to promote your products to. When buying a website try and see if it is an audience that you can sell to.

2. Make advertising money. By far the most popular reason for buying a site is to try and make advertising revenue from the site. For many webmasters this will mean Google adsense ads, but there are also affiliate ads and text links to consider as well.

3. Buy a site to re-sell it for a profit. This is commonly known as site flipping. The concept is to buy a site at a low price and sell it soon after for a higher price. To make a good profit from this technique you really need to be an expert at evaluating a sites market value.

4. Purchase for the domain. We have seen terrible sites on great domain names, so by purchasing the site you automatically get the domain included. This can help branding, and even if you are un-able to build a great site on the domain, you can always just re-sell the domain name for a profit.

5. Increase your portfolio. So you are doing fairly well with your three celebrity blogs? imagine how much more power you would have if you had 5 quality celebrity blogs! buying your competition not only removes the competition, but it also makes you more powerful within your niche.

By DeanHunt.com

More and more people are buying websites, so what are the main advantages of buying a website?

Advantage 1 (Midasrank 9/10) = Established audience: If you buy a site with an existing audience or userbase then it will dramatically cut down your advertising budget. It also means that you have an audience who trust what you say, and will be more open to promotions etc…

Advantage 2 (Midasrank 8.5/10) = Existing Backlinks: Even newbie webmasters appreciate the value of backlinks for SEO purposes. So it goes without saying that having a decent amount of existing backlinks is going to save you a lot of time and money.

Advantage 3 (Midasrank 7.5/10) = Avoiding the Google Sandbox: New websites go into the Google sandbox for an average period of 9 months. So buying an established website that has been online for more than 12 months is often a great way of bypassing the Google sandbox. In many ways you are getting a direct VIP pass into the SERPS.

Advantage 4 (Midasrank 8/10) = Existing revenue: It is always nice to make an investment that starts returning your money from day 1. This is the great thing about buying websites as opposed to buying stocks and shares etc….
Also, if you can see that a site is making xxx per month, then you know the potential of the site and the industry, thus saving you valuable market research time and money.

Advantage 5 (Midasrank 5/10) = Brand recognition: I recently bought a blog that was pr6 and had a good reputation in its niche. So when I contacted sites for link trades, content deals and advertising deals etc I got a positive response due to the power of the brand name in my niche. This can make life a lot easier, but also bear in mind that many sites have a bad reputation, so do your research first.

By DeanHunt.com

The past couple of weeks have been a tricky time for buying web sites.

This is due to the Google pagerank update that has been bouncing around like a rabbit on drugs.

Like it or not, Pagerank still plays an important part in determining a sites value, so during an update can be an awkward time to buy or sell.

I have seen many sites listed with titles like “Pr4 site for sale”, but when I check they are pr2. This of course can work both ways, and if you are sharp you could look for sites that have recently gained a large pagerank increase, and then bid on those sites.

So what is the purpose of this article? am I saying to avoid buying or selling sites during an update? of course not! but you do have to be careful.

The best way to check is to use the following tool to check the pagerank of a site from multiple datacenters: Pagerank Checking tool

If the pagerank is lower than the seller is quoting, then tell the seller. If it is higher, then it may be worth putting in a bid ASAP.

Like anything on the net buying web sites is a gamble, but bear in mind that during a pagerank update the odds can change in the blink of an eye.

Good luck.