Guide to Buying & Selling Web Sites

A lot of ambitious folks are into "flipping" real estate — they buy a house or a building, make a few improvements, and then resell it for a tidy profit. But what about virtual real estate? Can websites be bought, beautified and flipped? Is online presence a marketable item?

Not surprisingly, the buying and selling of virtual real estate is a booming business. On the block are:

1. Domain names: Existing names that already have a following. Buy the name, you get the following.

2. The site without the domain: A prebuilt site with page content, forms, CGI scripts, user registration, blogs and other features, all ready to be edited and slapped onto the domain of your choice.

3. Complete, established sites: Sometimes also called "turnkey" sites, these are essentially online businesses — website, domain name and all — available for complete transfer of ownership.

Site code and domains are a simpler sell, so there's plenty of traffic there. But the growing business is sales of established sites, either to those who want to run the business or to those who want to make a few improvements and flip. Unlike site code or domains alone, buying an established site gains the buyer a trove of valuable intangible assets, such as registered customers, blog and FAQ content, existing links (and user Favorite menu entries) from other sites, trademarks and patents, and perhaps most important, existing popularity rankings and keyword relationships on the major search engines. Buy an established site and from day one you have a mature web presence. Sell a site and you can get good money for that presence.

Here are the most effective solutions for buying and selling websites:

Action Steps
The best contacts and resources to help you get it done

Do your homework

Do you know what a site's worth? Before buying or selling, you must assess the value of a site and its assets. Doing so when buying guides not only what you should pay, but whether any improvements you make are likely to yield a profit. When selling, an appraisal gives you a ballpark figure from which to negotiate with buyers.

I recommend: You can buy professional appraisals from Venture Planning Associates and TheSiteDoctor.com. The Business End of Websites is an eBook course in website valuation, including a spreadsheet for doing the math. If you're more interested in the value of the domain than in the site's value, try Zetetic's Fair Market Value Domain Appraisal or Sedo.com. Sites advertised on DealASite.com are appraised by other users -- an interesting if not entirely reliable way to go. Although it's not anywhere near as thorough as an appraisal, you can learn something about a site or domain's value by checking its ranking for relevant keywords in the major search engines. Enter the site URL in Google's My Sites page and visit YahooSearchRankings.Com, or see what Rankwhere.com thinks of the site.

Network

As with real-estate, some of the best buyers, sellers and advice-givers run underground in professional communities known only to insiders.

I recommend: Read Site Flip, a blog for those in the brave new business of website flipping. See what professional webmasters have to say, and ask your questions, on Webmasters.com's forum for Professional Webmaster Business Issues, the SiteSalesBlog, or the Daniweb Buy or Sell Websites and Domains forum. Get advice on appraising sites from the experts on the Monetizing and Appraising Your Website forum.

Go big-time: Use a broker

Online website/domain brokerages work essentially like real-estate brokers. They take a commission for marrying a buyer and a seller. A broker is the way to go when there's a lot of money on the line; the broker can make sure the appraisals add up, the contract is solid, and so on. As you would when buying or selling a house through a broker, read the fine print first, which differs by broker; for example, some brokerages charge the buyer, some the seller, some both.

I recommend: Popular brokerages include eBizMLS Business Brokers, Websitebroker.com, Time2Sell.com, WebsiteAuctionHub.com, DealABiz.com and Sunbelt eBusiness Advisors. Sedo.com is mostly focused on domain name sales, but features professional services such as research and appraisal and escrow accounts to make transactions safer.

Consider alternatives to a broker

Besides brokers, there are alternative ways to buy and sell websites, such as online auctions (which may or may not work out to a better deal than with broker) and classified ads.

I recommend: You can buy or sell for free with classifieds at Tidget.com or at DealABiz's free sister site, DealASite.com. Sitepoint.com offers classified auctions for sites and domains, as does WebsiteAuctionHub.com. If you're in a pinch or in a hurry, you can unload your site on (yes) I Buy Ugly Sites.

Tips & Tactics
Helpful advice for making the most of this Guide

• There's a controversial phenomenon in Google called the "Google Sandbox Effect" in which newly listed sites tend to be ranked very high for their first few weeks and then drop quickly after that, regardless of their traffic. One advantage of buying an established site is that it has matured past the sandbox. To learn more, search for "google sandbox" in Google.
• If you buy site content separately from your domain, you'll need a web developer to tweak the CGI scripts, eCommerce-related code and other behind-the-scenes stuff to make it work properly on your new domain.
• For any transaction, consider using an escrow service such as PayPal to help ensure a safe deal for both buyer and seller.