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.

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