There is no question that the market for buying and selling web sites is depressed due to the worldwide economy and pressure from Google’s Panda and Penguin updates that have reduced the profitability for many web sites. That means that there are tons of opportunities for buying web sites at bargain prices. This also means that hungry scammers are coming out of the woodwork with new ways to steal your hard-earned money.
These are my best tips for buying web sites, while avoiding scams that may rip you off. They also apply to anyone wishing to sell a web site because they help to determine a web site’s value.
1. Revenue is King
Proof of revenue, not claims of potential revenue, is what is important. The average monthly revenue over the past year times a multiplier is a good general method for determining value. Sellers like multipliers of 20 or 30. Buyers like multipliers of 3 or 4. Most negotiated prices fall somewhere in between. I use an estimate of 10 times the average monthly revenue for most web sites.
Keep in mind that reports indicating AdSense revenue, Amazon affiliate commissions, and other sources of income can easily be faked with PhotoShop. Make sure that the numbers look real given whatever else you discover while investigating the site. Other factors, such as rapid revenue growth over the past year, large amounts of traffic, or a prime domain name, can add to the price.
2. The Domain Name
The quality of the domain name is critical. There are basically two types of domains that have value: branded domains and exact match domains (also called EMDs). If the domain does not fit into either of these categories, then it has no value.
A branded domain name should ideally be short, easy to remember, and easy to pronounce. A good branded domain has already built a reputation and has a large number of people who regularly visit the site. Brand recognition or an easy to build brand are important factors with a branded domain.
An exact match domain is an exact match for a popular search phrase. You can use the Google Keyword Tool to determine the average monthly number of searches that are performed in Google for the EMD search phrase. Make sure that you check the box in the left column that indicates the Exact Match Type. Broad match numbers are useless. A very good exact match number is 1,000 or more exact match searches each month.
When I say exact match, I mean an exact match. A exact match domain applied to a good quality site still has an advantage in Google rankings for that exact keyword search. If you determine that “WidgetShop.com” is a popular search phrase (I know it is not :D), the site should show up on the first or second page in Google when searching for “widget shop”. TheWidgetShop.com is not an EMD if no one searches for “the widget shop” and the presence of keywords in the domain does not add EMD value. The Google EMD ranking bonus only applies to .com, .net, and .org domain names in the USA. Forget the .us or .info domains unless the sites already rank well. They will rarely rank well for the exact match search without a lot of work.
3. Original Content is Critical
More content is better, but it is only better if it is original and unique content focused on a uniform theme throughout the site. General sites that cover too many topics rarely rank well. Look for a focused theme. A site with 500 pages of original, focused content is worth much more than a site with 10 pages.
Some sites stuff the pages with syndicated articles, or worse if it uses stolen content. This is duplicate content that has been actively penalized by Google since they started their Panda updates in 2011. “Spun content” that has been altered to make it appear to be different no longer gets past Google’s Panda filters. All content must be unique and original. Stolen content or images can create copyright infringement issues that you, as the new owner of a site, could be liable for. Use the tool on the home page of the Copyscape site on a random selection of URLs in the site you wish to purchase to see if it is original enough to get past Google. You should not see any similar pages in the Copyscape results. Dishonest sellers routinely lie about the originality of the content in their sites. If you want a site to rank well, do not buy one with duplicate content.
Check to see how many of the site’s pages are in Google’s index. Use the “site” query in any Google search box. Just substitute the domain of the site you wish to buy.
Make sure this roughly matches the seller’s estimate. Sites with fewer pages in Google’s index may be penalized, in the process of being de-indexed, or banned (removed from Google).
4. Good Rank Positions for Popular Search Phrases
The seller of a quality site should be able to give you several search phrases for which a site ranks well. Verify these with the exact match estimates provided by the Google Keyword Tools. A number one ranking for a search phrase that no one searches for is pretty much useless. if a site does not rank well for any popular search phrases, it is worth much less.
5. Backlink Profile
Use a backlink checking tool to obtain a list of web pages linking to the site. Watch for lots of links from low-quality or unrelated web sites. Google’s recent Penguin updates penalized millions of web sites that were using poor quality link building services. Most backlinks should ideally be from pages with related articles and the links should be embedded in the content, like the reference links I use with this article.
Do not focus solely on Google PageRank. PageRank is easy to fake and no longer has a large impact on a web site rankings. If a site has a high PageRank but not very many links from high PageRank sites, PageRank is likely being faked to boost the price. There are several tools on the web that check for fake PageRank. A site’s home page should always have some PageRank. If it doesn’t, either the site is very new, or there aren’t any backlinks, or the site has been heavily penalized by Google.
6. Proof of Ownership
Lots of scam artists try to sell web sites that they do not own. They may even pretend to be the person for which the domain is registered. If they own the site, they should be able to add some text that you provide to a page in the site where you can verify that they have full access to the site. This is a simple way to help assure that they own the site.
7. Payment Method for Purchase
I use PayPal or Escrow.com and have never experienced a problem. For small sales, PayPal works pretty well. PayPal does not operate in countries where fraud in rampant, which helps to give you a little piece of mind. Also, PayPal almost always sides with the purchaser when a dispute arises, but you cannot absolutely depend on that. Do not use some obscure payment processor that you have never heard of just because the seller insists that you should.
For any website selling for more than $500, I always use an escrow service, such as Escrow.com. It is easy to set up an escrow account and transfer funds into the account. The fees are minimal and can be paid by either the buyer or seller, which is something you need to agree to with a seller when you negotiate a price. With an escrow service, the funds are held by the service and not transferred to the seller until proof is show that the transaction is complete. In the case of a web site, that would mean that both the domain name and the web site have been transferred to the buyer.
I hope this helps to make it easier for you to buy a web site and avoid the common scams.