Is there a downside to purchasing websites?

[april6e]

Is there something wrong with the websites listed on sites like Flippa or such?

Is there a hidden downside to purchasing a website for, lets say, 8k off a site like that, that makes twice that a year mostly on auto-pilot? Then using the income after a year to purchase a more expense site...

And just working your way up until you own a website that is making whatever income that satisfies you?

I don't see many people suggesting this. Is buying a website off a marketplace similar to buying a car out of a junk lot; it's just never worth it?

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[PureA]

Most figures are flippa are a very optimistic view of what the company actually achieves. Be sure to do adequate due diligence. I would not recommend purchasing a site unless you specifically know how you would add value to the existing business.

 

[biophase]

Is there a hidden downside to purchasing a website for, lets say, 8k off a site like that, that makes twice that a year mostly on auto-pilot? Then using the income after a year to purchase a more expense site...

Will someone sell a site making $16k a year for $8k that is mostly on auto-pilot? Think about it.

 

[Andy Black]

Is buying a website off a marketplace similar to buying a car out of a junk lot; it's just never worth it?

Sometimes buying rather than building from scratch does make more sense.

It's certainly worth buying a car out of a junk lot if you can find hidden gems, or decent ones that need a little work to run better and you're able to get that work done cheap enough to get a positive ROI. Like, say, if you're a mechanic or have access to mechanics.

Will someone sell a site making $16k a year for $8k that is mostly on auto-pilot? Think about it.

Exactly. How much would you sell a $16k/pa passive income for?

...

Me personally, if I get the bandwidth and the capital, I'd be happy to buy websites/businesses that had proven positive cashflow and that I thought I could grow using my own skills/experience. It might be better than getting it built from scratch.

I have a handful of small investment properties rented out. I didn't build them from scratch.

Downsides to buying a website? You pay over the odds. You buy a revenue stream that you don't actually have control over (all the traffic comes from some dodgy SEO strategy etc).

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Digamma]

Is there something wrong with the websites listed on sites like Flippa or such?

Is there a hidden downside to purchasing a website for, lets say, 8k off a site like that, that makes twice that a year mostly on auto-pilot? Then using the income after a year to purchase a more expense site...

And just working your way up until you own a website that is making whatever income that satisfies you?

I don't see many people suggesting this. Is buying a website off a marketplace similar to buying a car out of a junk lot; it's just never worth it?

There is no hidden downside (if you exclude scams, of course, which always exist - Dane Maxwell talked about it in his AMA here if I remember it right). There is, of course, downside. You can buy a business, but then you have to run it.
Two things:

• Autopilot? Running a web based business takes work.
• Your plan works if you never make a losing deal, which is pretty optimistic.

EDIT: the ama post.

 

[april6e]

Will someone sell a site making $16k a year for $8k that is mostly on auto-pilot? Think about it.

If I was bored of having to constantly babysit the site and had other successful sites making more, sure.

Companies sell websites for a portion of what it would make in a year. It's not unheard of at all for someone to sell a site for 75%-50% of what it would make in a year.

 

[biophase]

If I was bored of having to constantly babysit the site and had other successful sites making more, sure.

Companies sell websites for a portion of what it would make in a year. It's not unheard of at all for someone to sell a site for 75%-50% of what it would make in a year.

Then it would not be a mostly passive website. And if you were bored of your site why would you sell for less than what it is worth? Bottom line, people sell for what the website is worth. People on flip pages seem to overpay so it's a great place for a seller to sell some crappy websites.

Also they sell at 50-75% of earnings because:

1) earnings are on a decline
2) their income stream is not consistent
3) the business is at risk of sharp sales declines
4) a lot of marketing and work is required for the income

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[GSF]

Do a search for previous sold website listings on Flippa over the past few years, I think there's an option in the advanced search on flippa, and if you look through them you'll notice a lot of the sellers of these sold websites are now banned or suspended for violating flippas terms, last time I checked there were a lot like this

 

[Grinning-Jack]

If a site making $16k a year, it'd be cost $16k+ at least.

 

[jeffspen]

That would be like google approaching someone like groupon, who makes for instant 5 million turnover, and offers to buy them out for $1m

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[KLNMSoftly]

There is definitely merit in buying an established website over building a new one for example, already profitable, proven business model etc.

When purchasing off a marketplace you should do extensive due diligence. When using a broker due diligence is still required but they will only take on websites they know they can sell at a sensible multiple. Try reading this guide on buying an internet business. Should give you all the info you need.

 

[ZCP]

Do your due diligence. If the numbers work, pull the trigger. Report back with results and do an AMA. You will learn something either way!

 

[mt_myke]

If a site making $16k a year, it'd be cost $16k+ at least.

Someone posted a Flippa slideshow from a few years back, and the multiple was 8. That's a figure I wouldn't expect to vary all that much over time. A $16k site that's legit should cost around $128K minimum, since the 8x includes many poor quality websites being flipped for a much lower multiple.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[lucasmello]

I bought a website last February.

I didn't buy it in Flippa though, I bought in a much smaller website.

Honestly, I didn't buy my business because I thought it would be passive.

I found someone with a website in a place where the market is saturated. Looked around me and realized my market was not saturated. Bought the website, business and stock, and have been running ever since.

It is in no way passive, I work on it daily and have to constantly create/curate content, advertise, etc.

 

[april6e]

Someone posted a Flippa slideshow from a few years back, and the multiple was 8. That's a figure I wouldn't expect to vary all that much over time. A $16k site that's legit should cost around $128K minimum, since the 8x includes many poor quality websites being flipped for a much lower multiple.

Under that logic though, you are basically claiming that the vast majority of websites on the site are not legit. That they either are sinking ships or are outright scams.

Are you making that claim?