Authour bio: Stacy Caprio
Stacy is an entrepreneur who has bought and sold several profitable websites, and learned a lot of lessons along the way. Her background is in online marketing and one of her favorite things in the world is helping websites and companies grow.
I was trapped.Or at least I felt trapped. Anxious. Smothered.
Sitting in a spacious white cubicle, in a beautiful office complex, inside a building filled with free coffee and tea, sunlight streaming in nearby windows and friendly coworkers stopping by to chat.
I may have looked free to any onlooker, but inside I knew the truth.
There was an invisible chain hooking me to my cubicle, 5 days a week, 8:30am to 5:30pm, and it didn’t matter how much value I provided, or how much work I did, all that mattered was that I sit in my chair during that entire time every day, every week, and every year.
If I did not stay seated that entire time, I would not have any money to live on.
I could not even walk outside, other than on my lunch break, without attracting unwanted attention.
All I could think about was how to break free, but nothing I tried was working.
One of my favorite past-times was, and still is, reading income-report blogs and how other people make money online. One day I was reading a blog post about website investing, and it clicked.
I thought, why not?
I had already tried to start several sites on my own but none were making any money. I wanted to try buying one that was already working and then build on it.
My thought process was, let’s give it a try and see if we can build on an already successful and profitable site and learn to make an income like all my favorite online bloggers are already doing.
I’ll take you through the lessons I’ve learned from buying 4 sites for a total of $35,700, all purchased through Flippa.
My current working view, in large part thanks to Flippa, I’m no longer inside of a fluorescently-lit cubicle, instead able to work outside on my balcony in the heart of Chicago.
Lessons Learned From Buying Websites
Good judgment and experience can come from making mistakes yourself, which I have done, and is where my experience comes from.
It can also come from reading about other’s mistakes, and avoiding them, and then reading about other’s successes, and emulating them.
My hope is that you can learn from my failures, but also my successes, in website buying and selling.
Avoid my Mistakes: How I Lost Money Buying Sites
1. Never trust data unless you verify it
I had just bought my first site and I was more excited than I could remember since Christmas morning when I was a little kid.
The seller had listed the site as making $350/ month, and I had paid him only $1,300 for it.
Of course, it was too good to be true.
If a site is really making $350/month, no one in their right mind would ever sell it for only $1,300, so that should have been red flag number one for me right there.
At a minimum, a site making $350 profit a month would be going for 20X $350, around $7,000 or more, depending on what the site owner was looking for.
The mistake I made buying this site was not only ignoring the price red flag, but going into the deal with blind faith and trust without even attempting to verify any analytics or revenue.
Flippa has a great Google Analytics traffic verification feature and a great Google Adsense revenue verification feature, and after that first purchase, I now never even consider a looking at a site unless the seller has enabled both forms of Flippa verification.
Additionally, I now always request access to the site’s Google Analytics as well as proof of income including video screenshares and income screenshots.
I also use something I call the common sense test.
In the common sense test I combine Google Analytics, average RPMs and conversion rates to determine what the income numbers should be if the site owner is telling the truth. Then I compare the common sense estimates to the numbers the site owner provides and see if they are in the same ballpark.
Learn from my blind trust mistake and always verify traffic and revenue before purchasing a site.
Not everyone is an honest fairy God-mother and some people will try to cheat you out of your money.
2. Don’t buy out of desperation
When I was ready to buy my second website, I was desperate for another income stream.
My life may have looked nice and comfortable from the outside, but I was anxious and desperate to start having more freedom.
This desperation led me to spend a lot of money on my second site.
I had a lot of confidence because I had verified the site’s revenue, the lesson I learned from failed site purchase #1.
My newfound revenue-verification confidence combined with my desperation lead me to spend a lot of money, $10K, on a high-revenue site without really thinking about if the business model was sustainable.
The first few months were amazing and I was even able to more than double the monthly revenue. I was ecstatic, to say the least.
My happiness was short-lived.
The site traffic plummeted when the “fad-site” I had bought turned out to be a short term trend based on an app, something I could easily have spotted if I had been buying out of a calm, measured mindset instead of my overly confident and desperate mindset, possibly the worst mindset to make any decision in life with.
Learn from my lesson and never buy out of desperation. Or worse, desperation combined with over-confidence.
Copy My Successes: How I Made Money Buying Sites
3. Test Ad Networks & Make Partnerships
My third site was my first success. You didn’t think I’d give up after two expensive failures, did you?
I bought it for less than what I’d paid for site #2, because I was still wary that anything could happen.
It was a great deal I found on Flippa with a price of only 20X the monthly profit.
Quickly I was able to test different ad networks and monetization methods until I found ones that were making around double the original.
Then an ad network rep reached out to me and wanted to advertise on the site for a flat monthly fee that was more than double what I had already doubled the site to, so of course I accepted.
For the next few months revenue was 4X what I had bought the site for, since I was still running the better ad network and had an ad partnership that was paying me a flat fee monthly.
This had worked out better than I could have ever imagined, and I made back what I had paid within 10 months, and was making pure profit each month after that.
4. Keep going when you find something that works
My fourth site I used all the principles I learned from my previous mistakes and successes.
I verified the analytics and revenue before buying.
I was not completely desperate, not overly-confident, and used as much common sense as I could, all keys to making a well-informed and level-headed purchase.
I used the ad networks I knew already worked and leveraged my ad partnerships.
Using these approaches, I was able to buy a second successful site, my fourth website purchase total, from Flippa, and build on its success.
This site I also made back the purchase price within 10 months and have been able to grow revenue substantially since then.
The key on my fourth site was buying an online site that was already successful and that I could build on by producing more content.
I worked with adding to what it already had and was able to grow the revenue that way.
The lesson to learn here is you don’t have to start from scratch if you’re looking to own a profitable business or website. You can buy something that is already working and then build on it.
Even more important, once you find something that is already working, run with it and help it grow. To do this, you can produce more content and help it grow in the direction it is already growing successfully to increase profit and revenue over the long-term.
Hopefully this website buying and selling article helps you avoid some of the mistakes I’ve personally made as well as helps you emulate some of the successes I’ve also been able to have.
I am forever grateful to Flippa for being the catalyst that helped me transition from being the girl at the beginning of this article who felt trapped and chained in her cubicle, to the girl I am now, living in my dream apartment overlooking the bean and Lake Michigan in Chicago, with the freedom to set my own hours and run outside by the lake any time of any day without feeling even a little bit guilty.
Let us know your own website buying and selling mistakes and successes in the comments below.