Buying & Selling Fixer-Upper Websites
Like in real estate, acquiring, improving, and flipping fixer-upper websites can be very lucrative. Some website buyers specialize solely in fixer-uppers.
The returns are significantly bigger in websites than in real estate because the cost to “renovate” a website is much smaller than to renovate a house. In some cases, if the buyer is proficient in website development or design, it may cost him nothing more than his time.
The reason why there are tons of opportunities for buying and selling fixer-upper websites is that most website owners invest in websites part-time. That is, they have day jobs. As such, they often lose interest in their websites over time as their real jobs demand their focus. They purchase a website, add some content to it, do a little advertising at first, then neglect the website later. Thus, traffic and revenues drop. This, in turn, discourages the owner from doing any further work on the website. At this point, he may choose to sell and exit the website.
Even websites with declining traffic or revenues can have significant inherent value overlooked by the previous owner. The pages of content indexed by search engines, backlinks, subscribers (if any), and the age of the website are all very valuable assets. A buyer can purchase many things but he can never purchase age. Nobody can buy time. This is why it’s generally better to purchase an aged website than start one from scratch. Age is one of many factors that search engines use to rank websites.
The most important act in purchasing fixer-uppers is to buy at a bargain price. You want to buy as cheap as possible. The sale price will depend on the assets, traffic and sales levels as well as how much they may have suffered from neglect.
Of course, you must perform further due diligence to be sure that the website has never been penalized by search engines, blacklisted, or has any pending legal issues like involvement in a UDRP case. In a nutshell, you’re trying to establish that the sole reason for the website’s woes is due to neglect by its owner. With knowledge and focus, these woes can be turned around for big profit.
Before you make your purchase, draw up a detailed plan for what you intend to improve on the website. This could be adding new content regularly to improve traffic, re-initiating contact with subscribers, or offering new products to visitors. Establish the Return on Investment you expect to receive from your website investment after you improve the numbers.
Finally, acquire your new website and get to work.
Author: Kris Tabetando
Kris Tabetando provides mergers & acquisitions (M&A) advisory and brokerage services to Internet companies. He also partners with investors to acquire & manage Internet businesses.
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