What comes to mind when you think about high-ROI investments? If you’re like most people, websites and online businesses are not on that list. Thatโs unfortunate, because website flipping presents incredible opportunities.
It’s possible to realize outstanding returns by investing your time and money into online businesses. It’s also possible to turn a relatively small investment into a career that allows you to work from anywhere on projects you enjoy. This article covers all the important details you need to know.
My Experience Flipping Websites
Over the past 10 years, I’ve sold a number of websites and online businesses, with the combined sale prices totaling more than $2.2 million. Most of those were sites I started from scratch, but a few were existing sites that I purchased.
The information in this article covers what I’ve learned by growing and selling sites in a few different industries, including web and graphic design, photography, travel and personal finance.
What Is Website Flipping?
Website flipping involves buying an existing website or blog, improving it, and then selling it for a profit.
You’re probably familiar with the concept of house flipping. Website flipping is similar, but it involves digital real estate rather than physical real estate.
House flippers aim to complete their work as fast as possible in order to minimize carrying costs. That’s not usually the case with website flipping. Some website flippers aim to complete the project within six months to a year; others will hold on to a site for several years before selling.
If the website generates monthly profit, there’s usually no rush for a quick turnaround. In fact, longer projects often result in higher profits because they provide more time for the site to grow and more time for the owner to collect monthly profits.
A website flipper’s work may involve:
- Increasing the site’s traffic.
- Improving conversions and increasing revenue.
- Adding new revenue streams to increase profit.
Alternatively, it’s also possible to start a website from scratch with the intent of selling it when it reaches a certain value. Starting a site from scratch is cheaper than buying an existing site, but it requires more time and effort.
Additionally, there’s no guarantee that the site will grow or succeed. When you buy an existing site, you know exactly how much traffic it gets and how much profit it generates when you buy it. So, you can skip the initial grind of getting the site off the ground.
Why Flip a Website?
Websites and online businesses can be extremely valuable assets. A flipper can make an excellent return on investment (ROI) by taking an underperforming website and increasing its profitability and value.
The income potential is virtually unlimited if you have the skills and know-how to improve websites. By making improvements and finding untapped potential, it’s possible to improve a site’s value rather quickly (usually faster than building a site from scratch).
Website flipping can be seen as a high-risk, high-reward alternative investment. If you’re a successful website investor, you can earn an ROI that exceeds what you’d earn from a more traditional investment.
Related reading: How to flip money fast.
Is Website Flipping Profitable?
Website flipping has the potential to be highly profitable. Let’s look at a fictional scenario as an example.
Say you invest $100,000 to buy a site that nets $3,000 per month (a valuation of 33X monthly profit). Let’s then say you make some changes to improve conversion rates on that site, and you add a new revenue stream, increasing the monthly profit to $4,500.
After one year, you sell the site for $162,000 (at a slightly higher valuation of 36X monthly profit).
This project will have generated $54,000 in profit during the year you owned it ($4,500 x 12), plus $62,000 in profit from selling (selling price minus the buying price), for a total of $116,000. That’s a 116% ROI in one year.
Of course, this is a fictional scenario where things go as planned. That said, it’s not an unrealistic example. Still, it’s important to remember that you must also consider the time you spend working on the site while you own it. Many website flippers outsource most of the work, but every project will require some of your time.
If you outsource the work, managing multiple projects at a time is possible, increasing your potential profits.
It’s also essential to recognize that a complete loss is possible. While all investments involve risk, online businesses are especially risky. Your website could suffer from an unexpected drop in traffic due to a Google search algorithm update, increased competition, or any number of other factors. Websites with downward traffic and profit trends are difficult to sell, so they can quickly lose value.
The amount of risk depends on how much you invest in the site. Starting small is a good idea, as it limits your exposure.
Valuation Guide
When buying or selling websites or online businesses, it’s essential to understand the valuation process. While exceptions exist, online business values are usually determined by their average monthly profit. The average is typically calculated based on the past six or 12 months. The trailing 12 months is generally used for businesses that have been around for at least a few years. Using the average of the past six months is more common for newer websites and businesses.
The average monthly profit is then multiplied by a specific number to determine the value. The multiple may be expressed yearly or monthly. For example, a 3X yearly multiple is the same as a 36X monthly multiple.
The multiple used will depend on several factors, including the buyer’s preferences, the business model and monetization methods, the niche or industry, and the business’s profit. Businesses with higher profits are often valued at higher multiples.
As a general guide, most websites and online businesses currently have a value between 36X and 48X average monthly profit. Please refer to my website valuation guide for a more detailed look at the subject.
Why Sell a Profitable Website?
You may be wondering why anyone would sell a website that earns a healthy profit. Well, holding on to the site long-term is certainly an option too, but there are a few significant reasons for selling.
- Cashing out. When you sell a site, you’ll get a lump sum (although large sales are sometimes paid out over time). At that point, you’re done with the site. If the site’s value drops, it doesn’t impact you. This is especially important if you bought the site because it allows you to recoup your investment and take the gains.
- Lack of time. Running a website takes time and effort, even if you hire others to do most of the work. Maybe you don’t have enough time to give the site the attention it needs.
- Loss of interest. You may have lost interest in the site if you’ve been running it for a while.
- Reached the ceiling. Maybe you feel like you’ve taken the site as far as you can. In that case, it’s better to sell while the value is high.
- Need money for another project. Maybe there’s another website or business you’d like to start, but you don’t have the capital for it. Selling your site could be the answer.
Those are just a few of the reasons, but as you can see, selling has significant benefits.
Step 1: Buy a Website to Flip
If you decide to try your hand at website flipping, the first step is to find the right online business to buy. Buying the right site is essential to your success.
Where to Buy Online Businesses
Buyers often find the best deals privately, without going through a broker or marketplace. It’s possible to purchase a website privately for a lower multiple because you won’t have competition from other buyers and because the seller won’t have to pay broker or marketplace fees.
However, finding a good website off-market requires a lot of time and effort. You’ll have to find sites that interest you, reach out to website or blog owners to see if they’re interested in selling, and it may take a long time to find the right person. You also have no idea how much a site makes, so you won’t even know if it’s within your budget before reaching out.
The most common way to buy websites is through a broker or marketplace. Here, you’ll find websites the owners are looking to sell. You may pay a higher price than you’d pay off-market, but it’s much faster and easier, and there are still good deals to be found.
Flippa and Empire Flippers are both excellent starting points. Motion Invest is also a great option if you’re looking for a content-based website. There are also a number of Facebook Groups for buying and selling websites. The sites in these Facebook Groups are often small and lower-priced than what you’d find elsewhere, so it can be a good option if you want to start small.
Some of the top Facebook Groups include:
Evaluating Websites
There are a lot of websites for sale, so you’ll need to evaluate them to find the right opportunity. Here are a few keys to the buying process:
- Choose a type of website. Do you want to work with content websites (blogs and niche websites), e-commerce, membership websites, SaaS, or something else? Content-based websites can be a good place to start because they’re relatively simple compared to the others, and there are a lot of them for sale. You can narrow your search once you know what type of site you want.
- Find the right opportunity. To maximize your results, you need to find an underperforming site. For example, a site with existing traffic that isn’t monetized very well, or a site with good content but poor SEO practices. These types of sites provide opportunities for quick wins. Most website flippers are not looking for highly optimized sites already reaching their potential. The best projects are often a little rough around the edges.
- Buy at the right price. In the fictional example I used earlier, the site was bought at a lower multiple than what it was ultimately sold for. Most successful flippers look to purchase sites that represent a good value. The less you pay for a site, the higher your profits when you sell it.
Once you’ve found a site you’d like to buy, it’s time for due diligence. This is also an essential part of the process, but it’s especially important if you buy a site privately, on Flippa, or through a Facebook Group. Marketplaces like Empire Flippers vet businesses before they list them, but you should still verify any important details (like revenue and expenses) for yourself before committing to a purchase. The sellers should be willing to work with you to verify income and expenses. If theyโre not, thatโs a red flag.
Completing the Purchase
Now, it’s time to complete the purchase. An escrow service like escrow.com can be used to protect both the buyer and seller. Some marketplaces and brokers provide their own escrow service, so in that case, you don’t need a separate provider.
Step 2: Increase Profit
Since website valuations are primarily based on profit, improving profitability is the best way to increase a site’s value. Of course, there are countless ways to increase profit, but here are some good places to start.
Improve Conversions
Improving conversion rates is often the easiest and fastest way to increase revenue and profit. You may be able to make a few small changes that drastically increase revenue without increasing website traffic. Here are some options.
- Add product comparison tables with a tool like Lasso. Comparison tables are extremely effective for affiliate and e-commerce sites.
- Add product promo boxes with a tool like Lasso. Create attractive call-out boxes for affiliate products or your own products and place them in relevant content.
- Add promos in key locations. Areas like the top of posts, end of posts, and homepage that get a lot of visibility are excellent for promotions.
- Add pop-ups, slide-ins or sticky header bars. Yes, they’re annoying, but they work.
- Improve the calls to action (CTAs). Use buttons, experiment with different colors, and test different wording.
- Use more calls to action. A blog post with three CTAs will likely generate more revenue than the same blog post with just one CTA.
- Use countdown timers with offers. A sense of urgency is extremely effective for improving conversion rates.
Add New Income Streams
Adding a new income stream or monetization method is another excellent opportunity. Some of the options will require more time and effort than others, and the available options will be impacted by what’s already being done with the site you buy. Here are some possibilities.
- Add display ads to the site. Some affiliate websites are only monetized through affiliate programs. Putting ads on the site is generally an easy way to improve the site’s revenue.
- Upgrade to a better ad network. Top-tier ad networks like Mediavine and Raptive drastically outperform most other advertising options, including AdSense. You’ll need to reach a specific level of traffic to apply (50,000 monthly sessions for Mediavine or 100,000 monthly pageviews for Raptive), but if you can get in, your revenue will likely increase significantly.
- Add video ads. If the site isn’t already using video advertisements, consider adding them. Video ad units typically out-earn almost any other type of ad unit.
- Negotiate higher affiliate payouts. If the site consistently generates sales through specific affiliate programs, reach out to the affiliate managers and ask for an increased commission. You can also offer additional promotions if they’re willing to increase your payout.
- Join new affiliate programs. Look for other affiliate products and services you could promote in your content, especially existing content. This can also include branching out to Amazon’s affiliate program in other countries to earn commissions from a higher percentage of your visitors. Use Amazon OneLink or a third-party plugin to direct visitors to the appropriate page automatically.
- Create and sell digital products. Certain types of digital products are relatively easy and inexpensive to create (for example, printables).
- Add new products and bundles. If the site already sells products, adding more products may be a good option. Bundling products together is also an effective way to increase the average order size.
Grow Traffic
More traffic generally leads to more revenue. I like to focus on conversions first because of the quick impact, but getting more traffic is also important for the site’s long-term health. Here are some effective ways to get more visitors to a site.
- Improve and optimize the site’s existing content. Use a tool like Semrush or Ahrefs to find pages that rank somewhere around 5-15 in the Google search results for the target keyword. Moving higher in the search results can lead to exponential growth in the page’s views. Use a tool like Surfer to optimize content for search.
- Create new content that targets low-competition keywords. Use Semrush, Ahrefs, KWFinder, or another keyword tool to find relevant search queries with low difficulty scores. You may be able to create content that ranks immediately and starts driving new traffic.
- Build links. Backlinks from other sites leading to yours are among the biggest factors influencing search engine rankings. Getting new links from high-authority sites relevant to yours is one of the best things you can do. Use HARO, write guest posts, create useful tools, give away free resources, or use other legitimate link-building methods.
- Use social networks. Identify the social networks and platforms that your site’s target audience uses and maintain an active presence there.
- Build an email list. You can continue to promote your site’s new content to email subscribers, allowing you to drive traffic without relying on a search engine or social platform.
Step 3: Sell the Website
When you’re ready to cash in on your efforts, it’s time to sell the site for a profit. Since buyers typically use the average monthly profit for the past six or 12 months, you’ll need to sustain your growth for a while to have the full impact on your site’s valuation. For example, if you buy a site and take the profit from $1,000 to $2,000 in the first month, you’ll need to prove you can sustain that level of profit before it fully impacts your site’s value.
Buyers like to see sites with increasing profit, but one or two good months aren’t enough to convince buyers that the profit will remain at that level. This is why most website flippers hold sites for at least six to 12 months, if not longer.
Where to Sell
When it’s time to sell a website, you have a few options. You can try to sell it privately and find a buyer on your own, list it on a marketplace that provides exposure to potential buyers, or use a full-service broker to market your site to potential buyers and negotiate on your behalf.
Marketplaces and brokers charge fees, so you might think you’ll get more money if you can sell it on your own. That’s true in some cases, but finding the ideal buyer is challenging. Brokers and marketplaces provide valuable exposure that can lead to more demand and higher sales prices.
At the end of the day, the amount you take home is what really matters. From my experience, a good broker can often get a higher price that fully covers the cost of their service (most brokers don’t charge anything unless they sell the site).
Some of the leading marketplaces include Flippa and Motion Invest. Some of the top brokers are Quiet Light, Empire Flippers and FE International. The downside is that brokers typically don’t deal with smaller transactions. For example, your site must make at least $2,000 per month to be eligible for Empire Flippers, and that’s on the lower side for brokers.
Even if you decide to sell the site on your own, speaking with a broker and getting a free valuation is advantageous. Empire Flippers offers an easy valuation tool to get an estimated asking price in just a few minutes. And most brokers give free consultations/valuations. Getting a professional’s opinion can be extremely helpful for understanding your site’s true value.
Once you’ve sold the site, you can reinvest some of the proceeds to buy another site and start the process all over again.
Frequently Asked Questions
You should have at least a few thousand dollars to buy an existing website. Anything under $2,000 could be considered a starter site, and it probably won’t be making very much, if anything. For example, if you want to buy a site making $300 per month, you’ll probably need around $10,000 (a valuation of around 33X monthly profit). You can start with a smaller investment, but it will be closer to starting from scratch.
If you don’t have the money to invest in a site, consider starting a site from scratch, which can cost less than $100. Grow that site and eventually sell it. Then, use the proceeds to buy another site.
Both approaches can work. It really comes down to this: do you have more time or more money? If you have time but not money, you can start from scratch. If you have the money to invest, you can buy an existing site and try to get a faster return on your investment.
Make Money Flipping Websites: Final Thoughts
Websites and online businesses have the potential to be extremely lucrative investments. While it’s essential to recognize the high level of risk associated with buying an online business (or any business for that matter), opportunities are available if it’s the right fit for you. You can also continue to reinvest and scale up to work on bigger projects as you gain more experience.
