How To Make A Purchase
May 27, 2012 Investing In Websites
In any of these situations, you will need to make a purchase of the website or at least the domain name. If you plan to purchase a domain name, there are plenty of ways to do that. Simply choose your favourite service, choose the right domain name (keyword filled is best, of course) and then purchase it. While about 8 or so years ago a domain name would cost you $60 or more, today, you can get a year's worth of domain name ownership for under $10.
For the most part, the purchase of a website to invest in comes in when you are using one of the two other methods of investing: flipping the website or buying the website to develop.
You can find a number of websites called "trading sites" where you will find websites being bought and sold. These can work for some investments, but keep in mind that it can be really difficult to find the low end bargain you are looking for. Unfortunately, there are too many people using the websites and many website owners have very high expectations as to what their website is worth. Use them if you like, but also consider finding websites to invest in, in different locations.
Doing The Research
A good place to start is just with web research. The best bargains on the web are those websites that are buried deep in it. Here are some tips to help you make this successful.
- Use Google and Yahoo! to find great opportunities to invest in. Choose the industries that you are most comfortable with. Then, search for websites that rank well deep within these search engines.
- Look for smaller websites for the best profit potential. The larger sites may be too costly to purchase or to update.
- Look beyond the first two to three pages of search engine results. Websites that show up in the first pages are well managed and most likely have an owner unwilling to sell without a sizable (perhaps even six figure) dollar amount in mind.
The best websites to invest in are those done by single webmasters, those that may not be looking for a profit right off. For example, they may have added regular content to the website over its lifetime, but they have yet to be passionate about the website's true potential.
When looking for websites, be sure you are looking for the right type of website. You do not necessarily want a website with great ranking and outstanding keyword use. Rather, you want a website that has the potential for great things. On the other hand, you may want a website with decent ranking but without a lot of profit coming in. You may want a really bad, but ranked website instead.
Taking the time to purchase the right website really does make a difference in the profit you may see from the purchase. Website investing is like any other type of investing: you are still taking a gamble with the investment. There is no guarantee you will make the profit you are seeking from it.
You can reduce many of the risks by investing time in doing this research into the right websites yourself. Ultimately, you need the right combination of elements to come together. The good news is that there are plenty of potentially good websites to choose from. Since the web is full of websites that are good intentions never realized, it is up to you to find the profit in them.
Purchasing The Site
Once you believe you've found the right website to purchase, do continue looking into the website for the quality it offers. Here are some areas to consider.
- Watch the website to see how many changes can be seen. Does it have a forum? Is it active and on topic? Does it have a blog being used and commented on?
- Learn the history of the website, if possible.
- Find out what back links the website has just by looking around.
- Is the website's design structure working for it? Don't be too critical, just be observant. While it may not be what you consider to be the right way, it is still may be working.
- Look at keywords and search engine optimization. From your experience, is this website optimized well? Could it get more traffic if the website was improved in this way?
The more information you have on the website, the better off you will be when you talk to the website's owner. Most websites have some form of contact information on them which you can use. If this is not the case, you can look at the WhoIs.com website where all website information is available.
As you contact the owner, keep two things in mind. Websites that are just hobbies for the owner are likely to be an easier sell. Websites that are businesses will take more of a fight, more negotiation and definitely more cost. Be prepared for what the owner tells you. It's often a good thing to approach an owner with just a bit of praise and ask questions just to get an idea of the owner's willingness to sell.
Prior to making a purchase, you do need to consider the website's actual facts and details. This includes knowing the websites:
- Costs of running it
- Revenues the owner is receiving
- Information on the website otherwise
- Problems with the website
Some of this information the website owner may not be happy to provide to you. Still, it is crucial in determining the value of the website. The best way to get this information is to actually be willing to talk to the website owner as a friend, someone that wants to do better for the website. Don't be pushy or over the top in your recommendations.
Once you have gotten them interested in buying from you, remember that there are several things that need to be taken into consideration here.
What Needs To Happen
Now that you have the website's owner on board, how does the transaction happen?
- Agree on a price after through negotiation and time spent researching the value.
- First, transfer the website's domain name to your own. This will also include changing the business name and incorporation information if needed.
- Transfer the hosting into your name as well.
- If the website uses any type of software that is in addition to the above, that software also must be changed into your name, otherwise you will not be able to use it. To change this information simply contact the company and make the request. Generally, both parties will be involved.
- Use a contract for the sale of the property (just like you would in real estate) which outlines the transaction in detail. For larger websites and more hefty purchases, use an attorney to help here. You need all involved in the website to sign the contract. It should include any and all information on the website and a clause that ceases the previous owner from accessing the site. Additionally, most contracts also include a portion designed to insure the owner does not start a new website that's competition right away.
- Gather the information on email lists the website has. You need to download these and keep them in your hands throughout the transaction. You don't want anything to be forgotten and the email lists are perhaps the most important element for sales growth!
- If the website has editors, programmers or others working on it, gather contact information and make arrangements to fit your current program.
- Follow up on everything. Don't count on the website owner to make any changes promised or to follow through on their end.
The purchase of a website is a complex process, one requiring a great deal of time and effort. By taking the time to work through the process, you'll strengthen your ability to make it the most profitable transaction possible.