Buying a Website: Top 10 Tips You Must Know
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Internet > Online Business
Nov 30, 2007
Adam Diver
Buying a Website: Top 10 Tips You Must Know
When looking to buy a website there are many factors to be considered and important information that needs to be known before the purchase, just as with any business.
The following is a list of the top 10 factors that need to be looked into and how to go about doing so.
1. GOOGLE PAGE RANK
Google Page Rank (aka PR) is very important to many webmasters. In short terms PR is measured on a scale of 1-10 based on the amount of links and the importance of those links pointing to a site. So a site with higher PR generally will be more popular and in turn have more traffic, which leads to a higher value for that site.
How can you tell the Page Rank of a site? The easiest way is to download the Google toolbar, which displays the rank whenever you visit a web page. However, some unscrupulous webmasters have found a way to inflate their sites PR illegally. To learn the legitimate, unaltered PR of any web page check http://www.seochat.com/seo-tools/future-pagerank/ which draws its information from third party data centers that cannot be cheated.
Although Page Rank is important, any established website cannot be rated solely on Page Rank for a variety of reasons. Firstly and most importantly PR is not a direct relation to search engine ranking. A higher PR will not necessarily beat a site with a lower PR.
Why? Because sites like yahoo (PR 10) would automatically rank 1 for just about every single search term.
The second problem is that a site can be inflated by one link from a very high PR site. This inflation could be due simply to the Webmaster buying a link from a high PR site. Once this link from the high PR site expires the falsely inflated PR of the site you bought would fall back down.
The third problem is that PR is not updated daily. So a site with PR 0 may have started getting lots of natural links and actually be a PR 4 but will not be recognized until the next update which could be months away. Conversely, you may come across a PR 6 site that is losing many links for various reasons and could fall to a PR 2 by the next update.
2. INCOMING LINKS
Incoming links are vitally important to gaining traffic, high rankings and high Page Rank. But how can you tell how many links a site has?
To gain a fairly accurate perspective on the number of incoming links any website has check http://www.marketleap.com/publinkpop/ for info from Yahoo/Fast/Altavista and Google/AOL/HOTBOT.
When trying to judge the value of a site the most important thing to check is the type of links they get. There are pricey software programs that can do this but there is also an easy free way to get a good gauge on the types of sites linking to a certain website.
Just type link:www.domain.com (replace 'www.domain.com' with the site you wish to check) in yahoo search and a list of pages with links to the site will show up. If a site has natural one way links, the chances are that it will get more links in the future on its own which is a very useful piece of information to take into consideration.
3. SEARCH ENGINE RANKING
Around 70% of website traffic comes from search engines making a sites position in them very important.
There are a few useful programs out there, one of which is http://www.digitalpoint.com/tools/keywords/ which will list Google rankings for you (Google is by far the most popular search engine and thus the most important).
The software only looks up keywords that you list so when checking a website use the most obvious first. A program like Google Adwords can be used to think of related search terms. It might, however, be easier to send an email to the owner asking what keywords the site gets traffic from and then search the rankings of them.
4. NUMBER OF VISITORS
A brilliant site with heaps of design, content and ideas is worth nothing unless someone is visiting it. In a purely economic sense a website is about income and income comes from visitors. This is why knowing the amount of visitors a site gets is vital.
For larger sites, www.Alexa.com gives a great idea of the number of visitors. It ranks websites by the amount of traffic they receive (at the time of writing this www.Yahoo.com was number 1) and any website in the top 100,000 is doing extremely well.
For smaller sites you would need to ask for the site statistics, which should be provided to the website by any decent host. Again, this will involve a simple email to the webmaster.
Even with their statistics you cannot be 100% certain that those are real visitors. Many companies sell visitors to sites who have no interest or are completely unrelated and as thus should not be factored into real visitor statistics.
Generally common sense can tell you when this occurs. Things to look out for include:
1. Sudden massive increases in traffic
2. Poor PR
3. Low incoming links
4. Links from known sites who sell traffic
5. Poor search engine rankings
5. NUMBER OF MEMBERS
A member list can be a very valuable thing because it can provide consistent traffic, a market to sell to, a continued income stream or even a strong knowledge base.
Any site that does well from repeat sales would obviously do very well if they had a large member base and thus would be valued a lot higher. Also sites (like forums) with members who are experts in a particular market have distinctive advantages over their competition, which also influences the value.
6. INCOME
This is possibly the most important factor to consider when buying a website, however, probably the hardest to validate.
When a Webmaster is selling a site they can tell you they make whatever they want since there is no software that could possibly prove or disprove them.
Here are a few things you can do to verify the validity of any Webmasters claim of income:
1. Ask for a copy of a bank statement declaring income from the site.
2. If money is earned from affiliate programs, ask for their affiliates statements of income.
3. Check the other factors of the site (links, traffic) and see if they match the suggested income. A good rule of thumb is that only the very best sites will have sales conversions of over 1%.
4. Simply look at the site and ask yourself if it is something you would buy from or something you could see others buying from.
It is impossible to get an exact amount of income without trusting the website owner so when buying a website it is recommended that you consider the other factors first and foremost.
7. MARKET
Another important factor is the type of market the site is in because it is key to determining the actual value of a site.
Here are a few reasons why:
1. The site may be in a declining market or a booming market thus having a major impact on future returns and value.
2. The site may be in an ultra competitive market or possibly in a niche market making it more valuable.
3. The market may have very low margins of profit. In competitive markets this makes success much more difficult and advertising hard without a lot of money.
4. The market may not be completely established yet meaning that an advertising budget will have to be spent on educating a market for your site.
8. THE WEBSITE ITSELF
Many people who buy websites are web designers and are actually buying traffic, search engine rankings, aged domains or links. When doing this they usually figure they will update the site themselves to how they like it. However it would be wise to consider the cost of the building of the website itself.
Things to think about are obvious: excellent design, logo designs, shopping carts and advanced coding. Advanced coding refers to sites with logins, user interaction, flash banners, games or anything that gives users extra interaction with the site. To hire qualified programmers to design these features is extremely expensive and has to be factored into the cost of a site.
9. BONUSES
Bonuses are anything that the previous owner has paid for in which you will get for free. These include things like scripts, software licenses, website design, advertising, articles, content, product licenses and products or stock.
In addition the domain name itself is worth examining. The shorter and more concise it is the more value the domain has. An example being that www.soccer.com is worth a whole lot more than www.greatsoccerwebsite.com. In fact, many domains have been sold for tens of thousands of dollars.
10. YOU
The final major consideration that should be taken into account before you buy a website is yourself. You should know the industry, have a passion for it and have enough time to manage the site.
If you are NOT interested, you will NOT put the necessary time into it and you will NOT be as successful as you should be. So if you know nothing about golf do not buy a golf website unless you are willing to put 100's of hours into learning about golf and most importantly the golf market.
CONCLUSION
You now have the ability to determine a sites value and to decide whether buying a site is right for you so next time you are looking for a website be sure to take those 10 factors into consideration and you should be able to make an intelligent and eventually profitable purchase. Adam Diver has been a web entrepreneur and designer for over 7 years. He now manages his new website Buy Established Websites and is considered an expert in buying,selling and flipping websites. send email to Adam Diver
The following is a list of the top 10 factors that need to be looked into and how to go about doing so.
1. GOOGLE PAGE RANK
Google Page Rank (aka PR) is very important to many webmasters. In short terms PR is measured on a scale of 1-10 based on the amount of links and the importance of those links pointing to a site. So a site with higher PR generally will be more popular and in turn have more traffic, which leads to a higher value for that site.
How can you tell the Page Rank of a site? The easiest way is to download the Google toolbar, which displays the rank whenever you visit a web page. However, some unscrupulous webmasters have found a way to inflate their sites PR illegally. To learn the legitimate, unaltered PR of any web page check http://www.seochat.com/seo-tools/future-pagerank/ which draws its information from third party data centers that cannot be cheated.
Although Page Rank is important, any established website cannot be rated solely on Page Rank for a variety of reasons. Firstly and most importantly PR is not a direct relation to search engine ranking. A higher PR will not necessarily beat a site with a lower PR.
Why? Because sites like yahoo (PR 10) would automatically rank 1 for just about every single search term.
The second problem is that a site can be inflated by one link from a very high PR site. This inflation could be due simply to the Webmaster buying a link from a high PR site. Once this link from the high PR site expires the falsely inflated PR of the site you bought would fall back down.
The third problem is that PR is not updated daily. So a site with PR 0 may have started getting lots of natural links and actually be a PR 4 but will not be recognized until the next update which could be months away. Conversely, you may come across a PR 6 site that is losing many links for various reasons and could fall to a PR 2 by the next update.
2. INCOMING LINKS
Incoming links are vitally important to gaining traffic, high rankings and high Page Rank. But how can you tell how many links a site has?
To gain a fairly accurate perspective on the number of incoming links any website has check http://www.marketleap.com/publinkpop/ for info from Yahoo/Fast/Altavista and Google/AOL/HOTBOT.
When trying to judge the value of a site the most important thing to check is the type of links they get. There are pricey software programs that can do this but there is also an easy free way to get a good gauge on the types of sites linking to a certain website.
Just type link:www.domain.com (replace 'www.domain.com' with the site you wish to check) in yahoo search and a list of pages with links to the site will show up. If a site has natural one way links, the chances are that it will get more links in the future on its own which is a very useful piece of information to take into consideration.
3. SEARCH ENGINE RANKING
Around 70% of website traffic comes from search engines making a sites position in them very important.
There are a few useful programs out there, one of which is http://www.digitalpoint.com/tools/keywords/ which will list Google rankings for you (Google is by far the most popular search engine and thus the most important).
The software only looks up keywords that you list so when checking a website use the most obvious first. A program like Google Adwords can be used to think of related search terms. It might, however, be easier to send an email to the owner asking what keywords the site gets traffic from and then search the rankings of them.
4. NUMBER OF VISITORS
A brilliant site with heaps of design, content and ideas is worth nothing unless someone is visiting it. In a purely economic sense a website is about income and income comes from visitors. This is why knowing the amount of visitors a site gets is vital.
For larger sites, www.Alexa.com gives a great idea of the number of visitors. It ranks websites by the amount of traffic they receive (at the time of writing this www.Yahoo.com was number 1) and any website in the top 100,000 is doing extremely well.
For smaller sites you would need to ask for the site statistics, which should be provided to the website by any decent host. Again, this will involve a simple email to the webmaster.
Even with their statistics you cannot be 100% certain that those are real visitors. Many companies sell visitors to sites who have no interest or are completely unrelated and as thus should not be factored into real visitor statistics.
Generally common sense can tell you when this occurs. Things to look out for include:
1. Sudden massive increases in traffic
2. Poor PR
3. Low incoming links
4. Links from known sites who sell traffic
5. Poor search engine rankings
5. NUMBER OF MEMBERS
A member list can be a very valuable thing because it can provide consistent traffic, a market to sell to, a continued income stream or even a strong knowledge base.
Any site that does well from repeat sales would obviously do very well if they had a large member base and thus would be valued a lot higher. Also sites (like forums) with members who are experts in a particular market have distinctive advantages over their competition, which also influences the value.
6. INCOME
This is possibly the most important factor to consider when buying a website, however, probably the hardest to validate.
When a Webmaster is selling a site they can tell you they make whatever they want since there is no software that could possibly prove or disprove them.
Here are a few things you can do to verify the validity of any Webmasters claim of income:
1. Ask for a copy of a bank statement declaring income from the site.
2. If money is earned from affiliate programs, ask for their affiliates statements of income.
3. Check the other factors of the site (links, traffic) and see if they match the suggested income. A good rule of thumb is that only the very best sites will have sales conversions of over 1%.
4. Simply look at the site and ask yourself if it is something you would buy from or something you could see others buying from.
It is impossible to get an exact amount of income without trusting the website owner so when buying a website it is recommended that you consider the other factors first and foremost.
7. MARKET
Another important factor is the type of market the site is in because it is key to determining the actual value of a site.
Here are a few reasons why:
1. The site may be in a declining market or a booming market thus having a major impact on future returns and value.
2. The site may be in an ultra competitive market or possibly in a niche market making it more valuable.
3. The market may have very low margins of profit. In competitive markets this makes success much more difficult and advertising hard without a lot of money.
4. The market may not be completely established yet meaning that an advertising budget will have to be spent on educating a market for your site.
8. THE WEBSITE ITSELF
Many people who buy websites are web designers and are actually buying traffic, search engine rankings, aged domains or links. When doing this they usually figure they will update the site themselves to how they like it. However it would be wise to consider the cost of the building of the website itself.
Things to think about are obvious: excellent design, logo designs, shopping carts and advanced coding. Advanced coding refers to sites with logins, user interaction, flash banners, games or anything that gives users extra interaction with the site. To hire qualified programmers to design these features is extremely expensive and has to be factored into the cost of a site.
9. BONUSES
Bonuses are anything that the previous owner has paid for in which you will get for free. These include things like scripts, software licenses, website design, advertising, articles, content, product licenses and products or stock.
In addition the domain name itself is worth examining. The shorter and more concise it is the more value the domain has. An example being that www.soccer.com is worth a whole lot more than www.greatsoccerwebsite.com. In fact, many domains have been sold for tens of thousands of dollars.
10. YOU
The final major consideration that should be taken into account before you buy a website is yourself. You should know the industry, have a passion for it and have enough time to manage the site.
If you are NOT interested, you will NOT put the necessary time into it and you will NOT be as successful as you should be. So if you know nothing about golf do not buy a golf website unless you are willing to put 100's of hours into learning about golf and most importantly the golf market.
CONCLUSION
You now have the ability to determine a sites value and to decide whether buying a site is right for you so next time you are looking for a website be sure to take those 10 factors into consideration and you should be able to make an intelligent and eventually profitable purchase. Adam Diver has been a web entrepreneur and designer for over 7 years. He now manages his new website Buy Established Websites and is considered an expert in buying,selling and flipping websites. send email to Adam Diver
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