There is a growing trend in the digital world on the aspect of trade. You most likely are familiar with the “buy and sell” kind of trading and that can also be done to websites.
In a nutshell, this new trend is that you buy a website, improve it, then sell it. This is called as Website Flipping.
Sounds simple? Yes, it might sound easy but gaining the much-sought profit only comes when the trade is done right.
Let’s find the answers to the questions like how does this work, how to do it right, what could be the potentials and the risk of doing website flipping.
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Maximizing Your Digital Space Properties through Smart Website Flipping
The Internet has connected the world like never before and has changed the landscape of trade and commerce.
A few decades ago, you have to go to physical stores to get the goods and services you sought for. Nowadays, it’s all in the palm of your hands.
Although there are dedicated mobile and computer applications that serve as a platform to purchase goods and services, websites will always be a vital part of every business that is happening online. Why so?
One major reason why websites are very essential especially on businesses is that it serves as an authenticity marker for them.
Thus, the business demand for websites will never fade to obscurity and the business of Website Flipping was born.
What is Website Flipping
Website Flipping is the practice of investing in a live website that is already income-generating, improving it, then selling it for a higher monetary value.
It begins in buying a live website with existing traffic and must also be considered income-generating.
This is an important prerequisite that you have to understand if you are serious about flipping websites. Income generated by websites comes through ads, traffic, and sales that accompany the traffic.
Investing in this already working website talks about improving and increasing the traffic flow of the website.
This can be done in various ways and involves technical knowledge, especially on Search Engine Optimization.
Doing it Right: Know the Website Worth
How do we do website flipping right? How do we achieve our goal of getting profit over a website that we’ve bought? Here comes the investing part. Where to invest? How to invest? How do we do investing correctly?
The general rule of thumb on website selling value is around 24 to 36 times the amount of the monthly website revenue.
Yes, a website with a good amount of traffic earns through paid ads that are posted on your website.
That means a website that has monthly revenue of $500, doing the math, could have a price potential of 12 to 18 Grand.
It could be very enticing to read the potential prices, the selling price multipliers, all these figures but in reality, several factors affect the value of the website so much to a real estate property.
There are various sites with easy-to-use interfaces wherein you can calculate the potential value of your website but of course, their approximation, however accurate it could be, is based on value indicators that you must know.
Understanding how a website gains its value is the key to doing website flipping right. The bottom line can be easily understood using the very famous quotation, “know you worth”.
You must know what defines the worth of your website to pinpoint where and how you would invest in your site.
Monthly Net Margin
Basically, you get the monthly new margin value by dividing your Net Profit over the Revenue.
Your net profit is what’s left for you to keep after you deduct all the operational costs, taxes, and other relevant expenses from the revenue.
- Operational Costs
It should be a fact that maintaining a website has a corresponding cost. Whilst domain names can be leased in a contract of let’s say, 3 years, payment for the website hosting is incurred every month.
Both the domain name cost and the monthly website hosting is included in the computation.
- Revenue
Your website earns revenue from the advertisement that is populating your page or from the commission you earn from affiliate marketing.
If you’re working on an eCommerce website, that includes the number of sales you gain through your website.
Added to the cost is the amount you spend on the actual website maintenance if ever you’re having it from a third-party service provider.
Especially on your search engine optimizations if you are getting a service of a webmaster.
Monthly Net Margin is one of the major considerations by website buyers as everyone eyes to make money over the digital space they own just as you are.
The higher the net margins are, it’s more likely it that your website will sell high.
Traffic Sources
One of the key determinants on the appraisal of the website is traffic. No one would have an interest in buying a dead website just as no one would like to buy a storage space where no people are passing by.
- Organic Traffic
Having a high organic traffic score is a great saving for you especially if you’re the one working on your website SEO.
Organic Traffic is the number of clicks and visits your website earns by simply people searching for keywords on the search engine without you having to pay for paid advertisements for your site.
While this can help you save a lot, this also requires you to be technically knowledgeable on how to optimize your website in the search engines.
- Paid Traffic
On the other hand, you can boost your website traffic by paying for advertisements where your website can be found by your target market whatever site they visit.
This is a good investment when you are building up the website you want to flip over.
Monetization Diversity
The way you monetize your website also has an impact on how you could price it for reselling.
The saying “don’t put all the eggs on one basket” will really make sense here as the digital marketing landscape is very volatile.
Changes in commission rate for affiliate market, cost of doing paid marketing, and annual revisions on SEO rules are some of the variables you have to consider.
So you must see to it that as you invest in the website you want to resell, you diversify your monetization methods to improve the selling price.
Practical Application
Knowing and understanding these basic principles in a website flipping venture will help you obtain your business targets in a shorter period of time. Keep in mind that time is always our most valuable resource.
Here are some power moves that can help you do website flipping right:
- Establish and Improve Your Website Branding through the use of better digital material and website designing.
- Invest short-term on paid advertisement for your website to gain better exposure across the target markets.
- While on Paid Advertisement, strengthen website SEO to boost organic traffic and reduce the spending on paid advertisements.
- Have a smart diversification of monetization methods
Happy Website Flipping
The business of website flipping is not an easy-go-lucky venture. It is always based on measurable data where forecast can be made and future decision making can be calculated.
Don’t get hyped with the figures but rather, use it to keep you working smart on doing your website flipping right.
