Leveling Up from Small Websites to Large Websites
This article is for entrepreneurs looking to purchase a four- or low five-figure website, gain experience while growing it, and then sell the site in order to “level up” to a larger website purchase.
The online business space is ripe with opportunity and high returns for investors who have four, five, or six figures ready to deploy into an online asset. In this article, I’ll take you through why online assets are highly sought-after investments, explain changes you can make to a website to quickly increase its value, and the different options that are available for when you’re ready to buy and then sell.
Let’s get into how you can reach your financial goals.
Why Should You Consider Buying a Website or Online Business?
To give some context, I purchased my first content website from Empire Flippers for $49,000, and in four months, I flipped it for $75,000. I then purchased another website for less than $25,000, and after just 18 months, it’s now valued at over $100,000. Several of my friends in the digital asset space have also had tremendous success over the years with purchasing sites in the $2,500 to $15,000 range and growing them to reach the mid-five figure range.
Not only do online businesses offer financial growth, but they also offer owners a level of freedom not typically possible with a traditional 9 to 5 job. A majority of these online businesses can be operated with simply a laptop and internet connection. Even the inventory and shipping aspects of an e-commerce business can be outsourced, leaving the owner time to travel, invest in additional ventures, or spend more time with family and friends.
With unemployment levels across the world still at all-time highs (largely due to the global COVID-19 pandemic), website ownership can offer financial advantages while offering the freedom to work from anywhere.
For first-time website owners, having a newly acquired asset creates an excuse to learn new programs and tools. These skills can be put to use immediately and have significant and measurable results. The excuse of having nothing to do will never exist, as I guarantee you that there is always something that can be done to improve your website and enhance the user experience.
Many website investors, myself included, own multiple websites at any given time. Once you learn how one website operates and generates revenue while becoming familiar with the nuances of search engine optimization (SEO), it’s fairly easy to replicate the system across many websites. All of this increases the speed at which you can level up.
Website Growth Strategies
As mentioned previously, I grew and flipped my first content website in just four months. It should be noted, however, that growth tactics for non-content based websites (such as e-commerce sites) will likely differ. Below is a list of tactics and changes that I implemented for quick growth and an even quicker flip.
- Moved several affiliate accounts away from ShareASale—I found that several of the companies being promoted on the website had their own proprietary affiliate programs, which meant more commission when not going through a middleman.
- Made the side banner ads change based on content—Instead of having one static banner for the entire website, I had functionality added that would serve a banner ad geared to the page the user was on. For instance, why would someone want an ad about a drone when they are reading about 3d printers?
- Removed Google AdSense—At first I had no choice but to remove AdSense ads, as I didn’t have an approved AdSense account. Instead of just accepting the loss of revenue and moving on, though, I decided to sell the ad space directly to manufacturers and retailers. This allowed me to earn double what the AdSense ads were generating before. Additionally, it created relationships with manufacturers and retailers that allowed me to offer sponsored email blasts and product giveaways, earning even more revenue.
- Utilized Google AdWords and Facebook ads—As with many websites, the bulk of this site’s revenue was linked to a handful of top performing articles. Even though these articles were already ranking high in search engine results pages (SERPs), I knew that with increased traffic, I could generate more revenue since the content converted well. I began running AdWords and Facebook ads promoting these “cash cow” articles and saw clear results: the ads were leading to significantly increased affiliate commissions. Overall, comparing two weeks of no ads to two weeks of running ads, I saw around an $8,000 increase in affiliate sales leading to an increase of $580 in commissions. Essentially, I was able to add $1,160 of revenue per month by using ads to boost articles.
I had virtually no website ownership, management, or SEO experience prior to my first website purchase. To counter my lack of skills in these areas, I used general business and marketing acumen to find low hanging fruit opportunities that directly impacted the profitability of the site.
Low Hanging Fruit Opportunities You Should Look Out For
There are hundreds of opportunities that you can find when doing pre-purchase due diligence for a website. I have put together a five-page PDF that outlines my thought process when looking at a website and determining potential opportunities or snags. You can download the PDF here.
To ensure this article doesn’t become an hour-long read, here are the seven main low hanging fruit opportunities to be on the lookout for.
- Is the website monetized using only one method? If so, there could be huge potential to add new affiliate offers and increase advertising revenue.
- Does all the traffic come from one source? Driving Pinterest and other social media traffic to a website that has a strong organic search presence, or vice versa, can be a game changer.
- Is the website mobile friendly? How quickly does it load on different devices? Optimizing a website for mobile can be a quick win—the beneficial impact will become apparent quickly. Increasing the loading speed of a site will lower your bounce rate and increase time on page, which are both important for search rankings and profitability.
- Are the Amazon Associates (affiliate) links localized? If the current website owner is not localizing their Associates links, then traffic coming from countries outside of the US will not be monetized. This is often overlooked! For those unfamiliar with localization, this simply means ensuring that an Amazon link directs the user to the Amazon marketplace for the country they are currently in.
- Are outbound affiliate links directing users to dead, old, or incorrect product pages? By simply checking and updating your affiliate links, I guarantee that your conversion rates will rise.
- Do all outbound links open in a new tab? If links open within the same browser tab and thus redirect the user off your webpage, then the time on page and resulting profitability will be negatively affected. Have outbound links open in new tabs to keep the user on your webpage.
- What’s the status of the website’s email list? In the best case scenario, the website comes with an email list, which is probably a “dead” list. Start marketing to these email recipients and turn it into a sales channel.
Typically, websites that are owned by the original creator and were created out of passion for a particular niche are under-monetized and can offer huge opportunities for the addition of affiliate offers, new content, more product reviews, and more. For this reason and others, I prefer buying from an original owner whenever possible.
How to Prepare Your Website for a Quick and Easy Sale
When you’re ready to sell, and if you decide to sell through a broker (which I highly recommend), you will be required to share proof of traffic and income. Proving traffic is fairly straightforward, as potential buyers can easily be added to Google Analytics, but putting together income reports can be more time consuming. As soon as you reach out to a broker, start putting together screenshots detailing the revenue generation over the last 12 months. Use descriptive titles when naming each screenshot, and then categorize them within different subfolders.
Then, using the numbers in the screenshots, build a comprehensive profit and loss statement that accurately reflects the financial status of the business. By having these documents and screenshots already organized, the broker won’t have to spend as much time going back and forth with the seller, and you can get your website on the market sooner.
Speed can make or break deals. Whether you’re a buyer or seller, do not lag when the other party or broker needs supplementary information.
Having all of the usernames and passwords associated with the website stored in an Excel spreadsheet will also save time and headaches when it’s time to migrate accounts over to the buyer.
When purchasing or selling a business, simply being organized and having all of your ducks in a row will go a long way in facilitating a speedy transaction. I aim for quick purchases, as you never know when the next website opportunity will arise and having liquid cash may prove to be very important.
Options for Website Buying and Selling
Over the years, I’ve had the opportunity to do several transactions with Empire Flippers, always with stellar results. To date, they have brokered over $148 million in websites and online businesses. When buying or selling an online business valued at over $30,000, they are the go-to option.
When just starting out, you may be looking to make your first acquisition below the $30,000 mark, with the goal of leveling up far past that. The sub-$30,000 market used to be underserved by reputable brokers.
Money Nomad Marketplace, a subsection of MoneyNomad.com, is dedicated to serving website buyers and sellers in the ≈$5,000 to $30,000 range. As the owner of Money Nomad and Money Nomad Marketplace, I’m able to use my real-life website buying, selling, and ownership experience, along with my experience of being a yacht broker, to facilitate website transactions in an important market segment.
My goal is to give buyers the opportunity to get into online business ownership through Money Nomad Marketplace, and then have them utilize Empire Flippers to facilitate the sale once the site has grown—a sign of successfully leveling up.
Why Online Business Purchases Are Lucrative—Historical Trends
Empire Flippers is known for their transparency. They publicly report sales figures, trends, revenue, and other metrics for anyone to read. Their yearly “State of the Industry Report” (the 2020 edition can be downloaded here) gives us a glimpse of where the online business mergers and acquisitions (M&A) industry is and where it’s headed.
For any savvy investor, an upward trend of demand and growth is highly desirable. With regard to content websites, Empire Flippers saw the average sales multiple increase by 2.59, from 27.17 in 2018 to 29.76 in 2019. This means that theoretically, if you owned a content site during those years, it would have increased by roughly 10% in value if you simply maintained the profitability. Additionally, the average sales price jumped from $78,231 in 2018 to $99,525 in 2019, an increase of 27%.
From 2018 to 2019, display advertising websites saw an 8% increase in their sales multiples, and Amazon Associates websites saw an 11% increase! This growth was not an anomaly, as there was also steady growth from 2017 to 2018.
What do all these growth percentages really mean? Demand!
There is increasing demand from investors to purchase websites, which in turn drives up listing multiples and selling prices. While the stock market can offer 10% returns, the growth taking place within the online asset space should not be overlooked. Any increase in profit will help to exponentially grow the value of your website.
Earlier this year, I wrote an in-depth piece about how online assets will outperform stocks and real estate.
Leveling up to larger asset classes occurs in every industry. However, the growth and demand taking place in the online asset space has created an abundance of opportunities. Whether you’re a first-time website buyer or a seasoned operator, starting with a small site and growing it into something much larger continues to be a viable way to effectively build your wealth and skill set.
Just know that the teams at both Empire Flippers and Money Nomad Marketplace are here to help you achieve your goals, whether that is to become a solopreneur, quit your job, travel the world, or simply supplement your full-time income.