Buying and Selling Websites

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This presentation is from Affiliate Summit West 2014 (January 12-14, 2014 in Las Vegas, NV). Session description: Expanding your affiliate business through website acquisitions and sales? Our experts will provide detailed strategies for buying and selling websites guaranteed to maximize your revenue potential.

Published in: Business, Economy & Finance
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Buying and Selling Websites

  1. 1. Lessons Learned from Several Million Dollars Worth of Site Acquisitions Chuck Mullins Founder CashForYourSite.com Chuck@CashForYourSite.com
  2. 2. Questions to Ask Yourself        Why buy and sell websites? How much is my time worth? Do I want a Job or an Investment? What kind of return on my capital investment do I need? What size deal makes sense? What kind of risks does the site have? What are my plans for this site?
  3. 3. Why Buy or Sell Websites  Know your reasons for buying: − − − − − Cash flow Asset appreciation Synergy Untapped potential In-house link network
  4. 4. Why Buy or Sell Websites  Know your reasons for selling: − − − − − Cash out Redeploy capital Declining market Focus on core business Bored
  5. 5. How Much is Your Time Worth $100k a year / (52 weeks x 40 hours) ≈ $50 per hour. Don't work for less than you are worth: Website Monthly Income = $1,000 Hours Required Per Week = 10 $1000 / (4 weeks x 10 hours ) = $25 per hour Website Monthly Income = $10,000 Hours Required Per Week = 10 $10,000 / (4 weeks x 10 hours ) = $250 per hour
  6. 6. Do You Want a Job or an Investment Site For Sale : $3000 a month pure profit. Would you buy this site for a 6 month multiple @ $18,000? What are the real costs in terms of time? Hours Required Per Week = 40 Hourly Pay = $50 $50 x (4 weeks x 40 hours ) = $8,000 $3000 / (4 weeks x 40 hours ) = $18.75 per hour
  7. 7. What Kind of ROI Do You Want  Typical investment: − − − −   CD Rates 1% Bonds 2-6% Stock market 7-12% Real estate 5-14% Why do these investments pay different rates of return? What kind of return do you want?
  8. 8. What Size Deal Makes Sense $100k x 25% = $25k per year $50 x 40 hours x 12 months = $24k per year. Total return needed on $100k investment would be $49k or a 49% time and risk adjusted return.` $500k x 25% = $125k per year $50 x 40 hours x 12 months = $24k per year. Total return needed on $500k investment would be $149k or a 29.8% time and risk adjusted return. The larger the deal, the less your time requirements impact the return.
  9. 9. Is The Investment Worth The Risk How do you evaluate the risk of an investment? Which company looks the most risky to you? Price evaluation and risk are two very different things.
  10. 10. Is The Investment Worth The Risk  Has the site been affected by Google updates?
  11. 11. Is The Investment Worth The Risk    How much competition is there? What are the barriers to entry? What kind of SEO has been done? − White hat vs black hat
  12. 12. Is The Investment Worth The Risk  What is the traffic mix? − − − − − − Organic traffic Paid traffic Social traffic Direct traffic Referral Affiliate
  13. 13. What Are Your Plans For The Site  Get a detailed plan and time line before closing on a deal − Migration      − Operation  − Backup website Transfer domain Update income sources Take/transfer accounts Transfer website Who, what, when Expansion  Who, what, when
  14. 14. How to Transfer the Site  Communication is Key −  What is your pain point? −  Agree on specific terms and a transition plan before you agree to purchase the site. High value vs. low value sites Prepare a contract detailing the terms of sale: − − − − − − Time frame and consequences for transfer Payment Terms Seller Support Non-Compete Non-Disclosure Non-Performance
  15. 15. How to Pay For a Site Send Payment First: • Escrow.com • Paypal.com After Transfer of Domain and Files in Hand: **Warning these methods have little to no recourse! • Check • Cash • Wire Transfer • Western Union
  16. 16. Where To Buy and Sell Websites Auctions - Flippa.com - Ebay.com Broker - QuietLightBrokerage.com - Latonas.com - WeSellYourSite.com - AcquisitionsDirect.com - WebsiteProperties.com - W3BusinessAdvisors.com - WebsiteBroker.com
  17. 17. Where To Buy and Sell Websites Market Place - CashForYourSite.com - BuyingandSellingWebSites.com - BizBuySell.com Miscellaneous - Craigslist - Forums - Contact Site Owners - Networking
  18. 18. Due Diligence Tools            (F/P) - OpenSiteExplorer.org / Moz.org (F/P) - SEMRush.com (F/P) - MajesticSeo.com (F/P) - SpyFu.com (F) - BannedCheck.com (F) - SeoMastering.com (F) - YouGetSignal.com (F/P) - DomainTools.com (F/P) - CopyScape.com (F) - Alexa.com (F/P) - Compete.com F = Free P = Paid
  19. 19. Due Diligence Tools           (F) – Archive.org (F) – BuiltWith.com (F/P) – Topsy.com (F) – TradeMarkia.com (F) – SocialMention.com (F) – Google Trends (F/P) – WhoRush.com (F/P) – ReverseInternet.com (F) – SpyonWeb.com (F/P) – KeyWordSpy.com F = Free P = Paid
  20. 20. Additional Due Diligence           Read the comments of other prospective buyers Research the seller not just the company Ask questions that you have already researched and know the answers to Ask seller to add you to their Google Analytics account Ask questions about potential revenue streams Ask what plans the seller had for the business moving forward Ask seller to verify all claims with documentation Ask about anomalies Ask about skills and time required to operate the site Ask, Ask, Ask!!!
  21. 21. Lessons Learned from Several Million Dollars Worth of Site Acquisitions Chuck Mullins Founder CashForYourSite.com Chuck@CashForYourSite.com

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