The Advantages Of Buying A Website At Auction

By on January 17, 2017 in Online Income with 0 Comments

buying websites at auctionOnce, you have all the necessary stuff in place, like hosting space, domain registration accounts, it really becomes very easy to start a website.  Granted the first couple I did were a little slow, and certainly looked pretty average.  But I am confident in saying that I could start a new website with very few problems at all now, for under $50 and about 2 hours of work.

Way back in March 2013 saw me purchase 2 websites, well actually I purchased one, but they offered the deal on the other so I bought it as well, through Flippa.com.  I had no real reason for buying these two sites, other then I just took a punt on buying a website, that was in a niche that I was interested in.  I am happy to admit it was money well spent and it’s the first websites other than my own that I have played with in the prior 2 years.  (yes I know 2013 is a long time ago, but this is a rehash article since I got hacked).

If you are new to website design and online start-ups or even if you have a few years and a few websites  under your belt.  I would highly recommend purchasing an established website, and reverse engineering it.

There are multiple benefits

  • You get to see how other people are doing things.
  • You get exposed to a wide range of plugins and themes and what they can do.
    • I got WPZONbuilder with one of my sites, I have since used the plugin on 3 other sites I had.  The plugin has a $99 value for a unlimited license.
  • It can be a huge time saver, especially if you are interested in the niche that the site is in, and don’t have time to build it yourself.

When I bought the first website there was two things I considered.

  • What income was it producing
  • What niche was it in.

Well the site wasn’t income producing, but if it was, it seems to be the accepted norm to buy a small niche website for 20 times earnings.

So for example, say its making $100 per month, that means you can expect to pay about $2000 for it.

Per month earnings X 20 multiple

Now its not an exact science, but that should give you a rough understanding.  Another rule of thumb I use is for small business being the 18 months’ pay back rule.  If I was buying a $10 000 business, I would expect to be able to pay that back through net profit in 18 months.

So it needs to be netting about $7 000 per annum.

Again this is a guide only, make sure you do your own due diligence on it.  Just one rule that you should NEVER EVER BREAK, is NEVER BUY FOR POTENTIAL.

Its pretty easy to wrap a dog of a site or business up in pretty pink ribbons and sell it to some one telling them it has huge potential.  Who gives a rats arse, what it might do, I want to know what it can do and what it has done.

Now the second thing I considered when buying this site was what NICHE was it in.  I bought this particular site because it was a niche that a friend had a site in, and I wanted to see what was behind the curtain on this particular site and to see what we could use on my friends site.   So I was or had a interest in the niche, I would never buy something that I had no interest in at all.  I tried that and failed miserably at it.

Again with this type of thing I would suggest sticking to a budget, especially if you are buying at auction, it can get very easy to get carried away and spend more then what you planned.

Make sure you have a plan and stick to it,  You can accumulate websites and do nothing with them, then they are just a cost and drain on your time and money, so make sure you know how to get them out there making you some money.

My final tip here is, spend a couple of weeks looking at what’s on offer on Flippa, look at hundreds of different websites, so you get a understanding of what they offer, and the lingo they use, It will become pretty easy to find a bargain, and to also find the ones that are worth your time or money.

Happy hunting…

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About the Author

About the Author: Hi I'm Darren Boland, my passion is in creating Passive Income, this site is all about my exploits the good and the bad about how I got about doing just that. .

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