Website Investing: Analyzing A Website To Buy!

Update January 2020 – I sold the website that I talk about below at a break even point.

Why? Time!

Growing a lifestyle blog of that size while owning a digital agency and 6 other niche websites was just too much. This was my first “lifestyle” blog and those in my opinion do require more work than post niche blogs. Lesson learned.

In this post I am going to review the steps I took to make the decision to buy a website and why I thought it was a good investment to add to my portfolio.

Even though I sold it pretty quickly, I do still 100% believe there was a ton of additional improvements that could be made to easily increase the monthly revenue.

Is website investing easy?

No —- and no and no. It is not just a “hey let me buy a site” and I will sell it next year for boat loads of money. There is a lot to it – and it does take work, a lot of it.

I have been at this since about 2005 – I took a break for a few years because we were having a hard time financially and actually sold off my inventory of sites to help support us. I had 6 at the time – it hurt to sell them because they had so much potential. But the game then was very similar to the game now so I am happy to be diving back in!

I built all those websites from scratch – but now I want to buy sites that already exist and are make some money and make them better! This is the best way to really start in website investing – it is a shorter time to making your money back and if you buy well you can have a great future investment on your hands.

Starting a website from scratch is great – but it can take years to see the results you want to financially or to be able to make enough monthly income to really attract investors.

Depending on the type of website you want to invest in will determine what kind of passive income you can expect to get.

What is passive income?

Great question! Passive income is where you generate an income with minimal effort. Now some view blogging as a career which may not be “minimal” effort so some do not see it as passive income.

But it depends on the type of blog you create.

Have a lifestyle, pet or fashion blog? You may be putting in a lot of time writing content, reaching out to sponsors, creating videos and images. All of these are time consuming – so while this is still a great way to make income, it is not what I would consider passive income.

Have an affiliate website that focuses on promoting products to earn commissions? This is a site you may not be 100% vested in, my have 20 or so articles and maybe you write a new one once or twice a month.

It can bring in a couple of hundred a month – or maybe upwards of thousands – but this in my opinion is a great example of a passive income stream.

These are the types of websites I typically opt for.

With these types of websites you will rarely see owners share income statements or even tell people about because they are afraid of copycats! I have 3 of these websites – all in outdoor niches – they generate a total of about $3,000 a month on average with Amazon and Clickbank commissions.

These were all started from scratch about 2 years ago and have not had much love. But I will revive them – add more content and hopefully sell them in 2020.

So no monetary output on my part except for domain and hosting – whatever money I receive will be pure profit.

Have a forum or directory website? I usually will throw these in the passive income category too. Outside of monitoring what is going on there is usually not much you have to do. A lot of website investors LOVE these types of sites.

So that is a general overview of passive income. There are other ways to create even more passive income like ebooks, courses (after they are created, it is pretty passive going forward), downloadable items etc.

Buying A Lifestyle Blog

I can write 20 posts on this one topic, but I am going to break it down into as simple of a guide as I can for now!

As you may or may not know – 2 Dogs Media, LLC purchased a website called Plum Crazy

The official name is “Plum Crazy About Coupons” – and I hate the name, and I hate the URL, but I bought it anyway.

Let me preface that this website is what you would call a “mom blog” – in all my years of doing this, I have never owned a “mom blog”. These blogs typically focus on a variety of topics from cooking to fashion to child-rearing.

I have to also add that I am the most “non-mom” person I know and despise anything that involves cooking, crafts or fashion. Yet, I still managed to raise 1 pretty awesome kid if I do say so myself and she loves me for the lousy anti-mom that I am.

So, me buying a mom blog was not even on my radar.

But I saw this website and I had to have it – not because I am a mom.

But because I am an investor.  (Although being a mom will definitely help with this site!)

So, let’s talk about why I bought Plum Crazy – against every ounce of my ever wanting to own a mom blog. Below are all the things I look at when considering a website and why this one was a no-brainer.

While this one I purchased from Flippa – I have also negotiated direct with website owners to get websites and used DigitalPoint to find websites.

FLIPPA 

I visit Flippa often, 99.999999% of the time it is crap. This time it wasn’t – I actually found 2 that I was considering, but after doing my due diligence – Plum Crazy was the winner.

WHO IS SELLING THE SITE?

If buying from Flippa – before I even waste time I look at the person selling the website – if it is someone from out of the country who buys and sells a lot of websites I use caution.

This one had the original owners profile picture and her name and this was her only listing so I knew right off the bat that this was probably her website and it had a good track record.

BACKLINKS

I know this may seem weird – but this is the first thing I will look at because backlinks will tell the true story of how loved the website was. Because backlinks can be so easily manipulated it is common to find websites for sale that have spammy backlinks or backlinks from PBN websites (private blog networks) – both which can hurt you in the future.

So when I look at the backlinks in Ahrefs (my tool of choice for quick looks at websites) – I see a website that has 953 referring domains with 7,570 backlinks.

Not too shabby!

So now I did a bit deeper to see how the following for the backlinks:

• Check domain authority
• Check how many domains link to that domain
• How much traffic do those backlinks get
• What is the anchor text of the backlinks (if I see anchor text that is not relevant to the website it can mean it has spammy backlinks)

Below is a screenshot that shows a small sampling of some of the great backlinks this website had.

This screenshot shows the top anchor text for the website and as you can see there is nothing spammy here – no mention of Nike, viagra or any other common spammy backlinks you may see. All anchors are relevant to actual content on the website.

Backlinks look good now what?

Organic Traffic

Now, I will take a peak at the keywords it ranks for – and it shows me the site ranks for about 15,200 keywords – about 13,000 of those are in the US.

What I really really REALLY love is you can see in the Organic Traffic graph that the organic traffic is really growing. Also note the DR and UR — those numbers are a great indicator to how strong the backlinks are.

At this point I like it enough to ask more questions so I reached out to the seller with some questions and to see if I could get access to her analytics. She responded almost immediately and was more than helpful – another great sign.

Google Analytics

Once she gave me access to GA – I got even more excited – and hopefully you can see why before I even tell you! (I will tell you below the image – see if you can figure out why I got chills when I saw this!)

So – did you see what I see that made me want the site even more?

Check out that Organic Traffic! Seriously – only 11% of ALL of her traffic comes from search. That SUCKS!

Well – sucks for her – great for me because that is a HUGE potential for me to improve the website and improve the income. After all SEO is my thing – it is what I love!

Now – the Social traffic, well that is about 85% Pinterest. I am Pinterest dumb and do not want to jeopardize that traffic so will bring someone on to manage that for me.

She had a really good following on Twitter and FB as well but she did not include those in the sale sadly. I did not think to ask that early in the process – I just assumed those would be part of the sale. When she said no – I still wanted to move forward – it hurt, but I will deal!

While they did not bring in much traffic – I know sponsors and advertisers like to see them and that was my only concern.

Still Like What I See – So Let’s Move On!

Monetization

Ok – next step was to ask about monetization. She was asking a BIN (buy it now) price of $28,000 for the website – way more than I really wanted to spend – but was it worth it?

She sent me over a nicely organized spreadsheet of money made each month in 2018 as well as expenses. It was pretty.

For 2018 her net income was $16,055 which was derived from a combination of Mediavine (started in March), sponsored posts, advertising and affiliate reviews.

A typical website will sell at a multiple of 20-36x monthly revenue depending on the site, the maintenance needed and a bunch of other variables.

The site is averaging $1,338 per month.

I am pretty confident she could have sold this site for a multiple of about 27x monthly revenue putting it at $32,112 – meaning, I got a hell of a deal paying 19x her earnings.

There is a website right now listed on EmpireFlippers (who I will use to sell this when I am ready) – an Amazon Associates website that is earning $1,396 a month that is listed for $37,700 (27x) – so I am pretty sure I can list it tomorrow and make money, so it is already a good investment.

But I offered her $25,000.

She took it.

So even if I sold it tomorrow – I could probably make $7,000 easily.

But I have no plans on selling for a while as I know I can probably double the income and double my investment. (And by doubling I am being very conservative.)

Why this website is a bit of a keeper!

As I already mentioned, the organic and technical SEO on the website is horrible so right off the bat I will address the following:

• Remove outdated content that has no organic keywords or traffic
• Fix the over 1,000 (404 not found) errors
• Speed up the website as it currently is about 8 seconds for load time on average
• Optimize posts that are on the bottom of page 1 and top of page 2 that have high search volume to push them to the top of page 1
• Create a better internal linking structure to build link authority
• Modify content for review pages to better promote affiliate products.
• Revamp the pages to be more personal to me and the direction I am taking the blog in (mid-life mom crisis mode)

The Potential & The Work

As I mentioned at the beginning of this article investing or flipping websites is a LOT of work – but the reward can be huge if done well!

These are the 3 major focus I am going to focus on ASAP to not only get the organic traffic up to a higher level – but also improve the income. My goal is to have these all done my the end of March – then hopefully by summer I should see quite an increase in traffic and revenue!

AMAZON: There are almost 1,000 review posts on the website – a large portion which have Amazon links – but yet the total amount earned from Amazon in 2018 was about $200. Many of the reviews are minimal in content and do not even list the product in the title. I will work on the reviews that rank the highest first and work may way backwards – but expect a pretty large reward from this by mid-year.

CATEGORY IMPROVEMENT: There is a specific category that this website kicks ass in, I am going to work with that category to get the fastest reward. By implementing a full “resource” page around this category where they can find educational information and review — I am confident I can draw in thousands of new visitors a month. (sorry cannot share since I do not want anyone copying!) I am hiring a writer to help me with the content and then get the page launched then build backlinks to get it ranked faster. This should help with Mediavine as well as affiliate income.

PAGE OPTIMIZATION: It would crazy to optimize every post – there are over 2,800 articles on the website – but I will focus on better optimizing any pages that have a high earning potential or are currently ranking in the top 5 pages.

Getting Nichey With It

I have always taught and advocated for “creating a niche” with blogs. By narrowing down your focus you will build a more loyal brand and build better authority with the search engines.

The website now has no real focus – it does everything and the URL does not really emphasize what the site does.

My goal will to have it become more of a “middle age mom” blog that will focus on all the things that 50-something women need to improve their lives. I will cover fashion (one of the things I hate because I cannot decide if I want to dress like a 20 year old or where a mumu) – eating right for our age and things like that. I may also cover the maze that is college for kids – what a learning curve that I can share.

I also do not see a lot of blogs out there for this demographic so hoping I can enter in a niche that is not overwhelmed with pretty 30 year old moms in their perfect kitchens with their perfect kids – because that is NOT me!

I will also create a coupon section so that I am in line with the URL – I thought about changing the domain but given the amount of authority the site has that would be plain dumb so I will work with what I got!

Hoping the above will help a lot in getting Google to love the site a bit more and to attract the right kind of reader who will share our stuff!

A Tale Of Caution!

So even the experienced can learn a thing or to when considering website investment opportunities. In June 2020 I purchased a small review website – paid via Escrow and thought I did my due diligence as outlined above.

BUT, even the most diligent can miss something – and I did.

Thankfully, the seller was honest – if he has not been I would have paid more than double of what the website was worth because he provided me income reports from his Amazon account that showed the earnings for ALL OF HIS websites, not just the one he was selling me!

Not sure why I never thought about that before – but this was a kick in the pants. I asked a Facebook group I am in what they do to ensure this does not happen.

The response was simple, ask the seller for a video walk through of their affiliate accounts to verify the income.

I guess I always thought that was an invasion of privacy of sorts – but clearly it is not, and is what more experienced flippers do.

Website investing has risk – but every step we can take to minimize that risk is definitely a step in the right direction!

The Nitty Gritty

Don’t want to read the above?

Here is a brief overview of what to consider when buying a website for investment or flipping:

• Check website backlinks for spammy domains pointing to the website.
• Review the anchor text of the backlinks to make sure they have relevant anchors and not spammy anchors.
• Check organic traffic amount to make sure it is on either flat level or upswing – if there are a lot of fluctuations or loss it can signal major issues.
• Check Google Analytics – see where they are currently getting traffic from and be realistic about your skills to be able to grow it. With this particular site I KNOW I can kill it with the SEO – if you are not skilled with organic SEO, it would not be smart to invest in it.
• Review how the site is currently being monetized and get proof. We typically would recommend a video walk through to ensure images are not being doctored. It is easy to falsify Amazon earnings!
• Look at the existing content on the website, is it well written and optimized? Have they maximized what they can do in terms of on-site SEO? If you cannot find ways to improve it – it may be time to find a different opportunity.
• BE HONEST ABOUT YOUR SKILLS! I suck at social media. I am not shy about saying it. If this site had great organic traffic and no social – I would have walked away because I would not be able to grow the social side of things. If you are not honest about your skills you will lose money.
• Negotiate! Yes, they want a certain amount – but in many cases they are willing to negotiate. In my case she wanted to get out so she could travel and she felt comfortable with me buying it so she was willing to take a little less knowing she was going to have a smooth transaction.
• Use Escrow if you are buying a large website! This allows you the chance to really see everything before releasing money to the seller. Make sure you get everything that the website includes and that all the information they provided was accurate.
• Do not be afraid to ask someone else to look at the website before you invest!