How To Make Money Flipping Websites
If you’re like me, you’re always looking for a few ways to make some extra cash. If you have a background in IT, chances are you may have picked up some side work fixing somebody’s website or setting up their home network.
Obviously, there are a myriad of opportunities available for the tech-savvy among us. Even still many people overlook some really lucrative opportunities that you can get started in fairly easily.
Even though flipping houses has traditionally been reserved for those with considerable startup capital, the revolution of the internet has made this type of activity quite viable. People nowadays are capitalizing on their programming and web-design knowledge to buy websites and flip them around for a profit!
What is website flipping?
If you’ve spent any time online, you’ve probably noticed the sheer amount of ugly or unusable websites floating around the net. The truth is that the vast majority of people have no idea how to design and run a website.
This is where you come in!
Flipping websites is a lot like flipping houses; you look for a nice property that needs some work at a discounted price, and you renovate it to sell for profit. It’s become a popular mainstay for real estate enthusiasts and traders all over the world.
The idea is that if you have the skills and motivation to rehabilitate a property for cheap, you can usually find somebody without those skills who’s looking to sell. Then you put in the effort to make the profit that they weren’t able to!
With all the low-quality content being released on the web, it’s no surprise that many business owners aren’t taking full advantage of their online presence. Many business websites nowadays might not take full advantage of search engine optimization, and it shows in their traffic.
Many of these websites don’t even monetize their traffic! This means that it can be simple as putting in a decent AdSense campaign to make a bad site profitable!
So this sounds fairly promising, what kind of advantages and disadvantages can I expect?
The pros and cons
Just like with flipping houses, flipping websites can be very demanding in terms of money and time investments. Even still, there are some definite advantages to going down this path:
- Capitalize on existing skills. If you have a background in IT, then you probably have a lot of the skills and knowledge necessary to tackle the challenges you will encounter flipping websites. This makes it a perfect option for those who enjoy website design, but aren’t interested in building a brand to design their own websites.
- Get in on an active market. Domain names are a hot property if you have the right set-up. Monetization and marketing tools available are always being developed and invested in by big names, so the future for anything web-related is bright.
- Build marketing and IT related skills. Utilizing your IT and marketing knowledge effectively is going to be a huge part of your job flipping websites for profit. Even if you have considerable skills in this area already, you will undoubtedly gain a lot of experience dealing with emergent scenarios and managing your time effectively.
- Versatile strategies available. There are a lot of ways to profit from flipping a website, and some of them have different investment requirements. Depending on your skills and lifestyle, you’ll be able to set up your website flipping business in a way that works for you.
- High buy-in price. This is the killer for many potential flippers, both in real estate and website flipping. It takes a lot of money to acquire domains viable for renovation. This can be curbed somewhat by being market-savvy, and being able to use your renovation skills efficiently.
- Large time and money requirements. This isn’t typically something you can do just in your spare time. It takes a lot of attention and evaluation even to identify good websites to flip. Putting in the actual work and dealing with any challenges which may arise can quickly become too demanding for some.
- High skill requirement. Being a typical high school code monkey isn’t going to cut it. You will need to be able to employ professional website design and business skills in order to be successful flipping websites.
- Changes in the industry. Although web design has a bright future, streamlined web-design tools and specialized renovation firms pose a real threat to the viability of individual website flipping. While there’s not likely to be an upset any time soon, it’s important to keep informed on what’s going on.
What can I expect going in?
Like any other flipping or trading activity, there is risk involved. It takes a lot of work and know-how to identify what’s wrong with a website and make it better; especially if you have to worry about grabbing it at the right price as well.
So, as always, its best to familiarize yourself with certain market concepts and technical aspects before moving forward. How well do you know web design? Have you ever done work renovating websites before? What kinds of challenges did you encounter?
In fact, you can go ahead and take a look at some of the specific skills required to effectively flip websites, and see how they apply and grow:
- Web design skills. The biggest requirement here is the actual web design. Have you ever designed a website? How confident are you in your ability to identify and solve problems with an existing website? Make sure you have a solid technical basis for what you’re going to be undertaking.
- Marketing skills. The other side of the coin here is your knowledge of marketing. The vast majority of profit driven activity on the internet is centered around advertising. Even if you make money through an actual product or non-marketing service, you require marketing knowledge to ensure proper demand for your product. Making sure you have a solid knowledge base in marketing will be a huge advantage to you going forward.
- Search Engine Optimization. One of the main aspects which will determine your success and failure in flipping websites. Knowing what makes websites visible and how to get them to appear higher up on search lists is key to making a dysfunctional website profitable again.
- Knowledge of buying and trading. Of course, in the end, this is an investment. Knowing how to evaluate proper market prices for what you’re looking to buy or sell is an obvious cornerstone to turning a profit flipping websites. Read some economics textbooks and look online for some advice with buying and selling.
- General awareness. All of these skills more-or-less boil down to one thing: It’s important above all else to keep your wits about you and not get lazy. It can be easy to get into a groove and let your work start to slip, and that’s when losses happen.
If you’re sure you know what you’re doing on the technical side, you can focus a bit on finding the right website. This is going to be your first hurdle; finding a good website is going to be half of the battle for you turning a profit. the best candidate for your website will probably be:
- Fairly dysfunctional. If the website already works properly, there won’t be any improvements you can make which will increase the value. You need something that can have value added to it easily.
- Obviously, the lower your acquisition price is, the better your budget will be for the flip, and the higher your potential profits will be!
- Easy to fix. If your acquisition is a complete re-write, it’s probably not viable for flipping. Remember, you want to find a website that you can add value to for minimum effort and cost.
- Huge potential. Even though the website you buy to flip should have an obvious area for improvement, it’s better if they have some obvious advantages as well. This will make a huge difference in your profit margin when you eventually rehabilitate the website.
Of course, these are only guidelines. Just like with house flipping, you obviously don’t want to buy a website that is too dysfunctional.
Essentially, all the same guidelines apply for acquisition of websites compared to houses for flipping. Buy low, renovate cheap, sell high. Keep an eye open for websites that have unique and promising niches, or which can implement new technology well. These will be big bucks when you flip them to take advantage of their good qualities.
There are plenty of aspects of real estate flipping which apply just as well to flipping websites. Above all else, if you plan on renovating websites for resale, you must make sure you have the necessary skill set in order to do so.
If you go in on a house with the intention of renovating it, but you don’t know anything about home renovation, you’re going to have a bad time. This is where a background in IT is going to really help you out. Knowing your way around a website on a technical level will help you identify prospective websites for flipping and evaluate how much work it will take to make them attractive to buyers.
Of course, the factors which go into a successful website are very diverse, and there are some things which people can overlook if they go into it with a one-dimensional idea of what they’re doing. Here’s a list of some of the essential factors for website flipping:
- Search Engine Optimization. One of the largest factors which affect the profitability of a site, and its attractiveness to potential buyers, is the Search Engine Optimizaion, or SEO. These are things about the website which will make it appear higher on google searches and generally be seen by more people. This is a very complex field of study with specialized experts of its own, but it’s a good idea to have a fairly thorough understanding of SEO before attempting to flip a website.
- Marketing Tools. Just like with SEO, there are a variety of marketing and ad-related tools and opportunities which will make your site more visible, and allow you to profit more from selling advertising space. Google AdSense and AdWords are examples of the kinds of tools I’m talking about. These kinds of things form the bread and butter of website flipping, so understanding them is key.
- New websites vs. Established websites. When you buy a website from somebody who is unwilling to invest in renovating it, you’re investing in an established property rather than trying to start a new one. This may seem obvious, but there are many factors which affect website flipping in particular that make it worth mentioning. A good example is the supposed “Google sandbox”, which seems to keep new websites from appearing as top results on google searches.
- Investment Basics. Understanding the basics of how value and trading works is an essential step to making a profit from flipping websites. The typical startup capital required to buy a website for renovation is rather high, so in order to minimize your risk factors, it is important to fully understand what you’re getting yourself into. If you haven’t already, read up on some economic concepts so that you aren’t blindsided by buzzwords and expectations when you attempt to buy or sell.
- Knowledge base. Above all, your greatest tool here will be your knowledge, and how effectively you are able to apply it. The more tips and tricks you know about website design, the better your renovation process will be. The more market-savvy you are, the easier it will be to buy and sell a good property at the right price. Remember to always keep ahead of the learning curve.
Once you’ve got a handle on the basics, you will have a good idea of where you stand and where you can improve. I mentioned earlier that there are a range of strategies available for making money flipping websites. Let’s go over a few of them.
Since there are a lot of different ways for websites to make money, the possibilities for flipping websites are equally diverse. Perhaps you want to refurbish a shabby domain for a quick resale? Maybe you want to acquire a healthy IP to fix up a lacking ad campaign on their website? The wide range of possibilities is one of the main advantages to website flipping.
So let’s look at a few of the different strategies we can use to profit from a website:
- Buying a site to build ad revenue. Many people with otherwise healthy websites have poorly monetized traffic, and generate less-than-optimal advertising revenue. In this instance, you can buy the property and set up proper monetization and marketing without changing much of the site itself.
- Buying a site for a quick resale. If somebody has a website with a lot of potential that they simply aren’t utilizing, you can give their site a makeover to resell it quickly. This is fairly risky, as there’s no guarantee that changing the website will make it attractive to potential buyers, but it can be viable if you find the right property.
- Buy a site with a healthy community. Websites with large communities that generate content and traffic by themselves are very attractive to potential advertisers. These kinds of sites can be expensive to acquire and maintain, but the profits can be very worth it.
- Buying sites related to popular keywords. If you know that a certain product or site has large potential for employing popular keywords, you can take advantage of that to make a profit flipping the site. If you expect a certain keyword to get a lot of attention in the near future, this can be a very profitable quick-flip.
- Buying for good domain names. For many sites, the domain name that the user actually visits has a huge impact on their traffic. Getting the right domain name can be expensive, but buying up potentially good domain names can be very profitable. If you’re up on the trends and have a keen eye for seeing what’s coming, this can be a very good strategy.
- Buy a site related to something you already do. If you buy a site catered towards the customer base for another service you offer, you can use the site to direct interest toward your product. A good example would be if you bought a website related to gardening and you happened to also sell plant food.
As you can see, there are a lot of different ways that you can make money flipping websites. The possibilities listed above are just the beginning, your own investment strategy will depend entirely on your own creativity and skill.
So now that we’ve gone over a few of the strategies for flipping a profitable website, we should take a look at some of the ways website flippers usually fail:
Words of Warning
Just like with real estate, website flipping is a risky activity. There can be a huge amount of time and money that needs to be invested to make a website profitable, and sudden challenges can arise at any time without warning.
That being said, there are a lot of easily identifiable mistakes that people tend to make, which can be avoided entirely by a careful professional such as yourself. One of the biggest mistakes people tend to make is simply not knowing what they’re getting into.
Especially with websites that exchange high amounts of data that could breach legal boundaries or copyrights, biting off more than you can chew will quickly cause your investment to fail. Always stay on top of any legal and technical minutia. In particular, having a good idea of your strategy before you invest is key.
Overall, making sure that you know how your investment strategy is going to play out will curb a lot of the challenges you will face.
Another thing to keep in mind is that the market for flipping websites is international, and there are many other buyers who may have more knowledge of their own specific markets than you do.
Remember that if you have the skills to design websites, it may be a more attractive option to simply build a website yourself. The investments can be a lot less risky. The large possible gains of flipping a good website are attractive, but they can blind some investors to the real risks at play.
There are some other tips about the industry I should give you before you move on as well. One of the main things is the supposed “Google Sandbox” that I mentioned earlier.
Remember that Search Engine Optimization is very complex, and forms part of the backbone of what you will be doing to flip websites. Popular search engines such as Google don’t simply publish the algorithms their search engines use to operate, so studying how websites appear on search engine results is key to understanding how to profit from a website.
Case in point, there are certain criteria that your website must meet for these algorithms to find your content of importance. One of the most prevalent ways this affects website owners is that new websites appear to have difficulty achieving a high spot on search lists. If you’re building a brand new website from the ground up, this means that you will have some difficulty attracting advertisers or buyers for the first little while. It’s kind of unfair, but unfortunately, it’s a reality.
This is just one example of the different ways in which SEO developments can affect your profit margin. Remember that your best bet is to stay informed.
Overall, the risks associated with flipping websites are similar to those involved in flipping houses. If you stay smart and keep your wits about you when you’re evaluating a website for acquisition, you won’t fare too badly even when you lose.
So with that out of the way, I can point you toward some of the tools you can keep at your disposal for moving forward with your website flipping.
The art of website flipping isn’t new, and just like with real estate, there are a myriad of third-party resources available to assist with your buying and renovation.
Brokers. There are a wide range of websites that are available to offer sites in a variety of price ranges:
- This is a very high end broker for websites. You can expect listings in the sic and seven figure range. This isn’t really a realistic option for beginners, but it can be viable if you know what you’re doing and have the money available.
- Empire Flippers. Empire focuses on sites ranging from around $10k to around $100k. However, they still regularly list sites in the under $10k range. They boast a 20x monthly net profit.
- Flipping Enterprises. Another higher-end option with listings ranging from $50k and up.
There are also large communities online centered around flipping websites, and informing beginners on how to get started in this exciting prospect:
- Return on conversion is a resource list for different online resources related to website flipping. This is a great trove of centralized information for newbies.
- Reddit has a great community of entrepreneurs. While this isn’t website-flipping specific, there are many users there who have plenty of entrepreneurial advice to give. Some existing threads on website flipping exist.
- Domaining is a blog aggregator for domain investment blogs. This is a great way to see what other website flippers and domain investors are saying about their business and success.
- Domain Sherpa features video interviews with domain investors and informative videos on website flipping.
- Domain Flipping Myths is a good site for dispelling a lot of the myths about website flipping that can keep new investors from taking the plunge.
In the following video Doug Cunnington explains how he built and sold his Amazon affiliate website for $10,000 in just 8 months.
There are many other forums and resources scattered around the net, and its a good idea to get in the habit of sifting through the information yourself as you learn. Take a peek through google and see if there isn’t any information that stands out to you.
There are a few things I’ve mentioned in passing that may deserve a bit more in-depth explanation, and some others which I haven’t mentioned at all. Let’s go over a few of these now.
These are a few things which I felt didn’t need their own sections, but deserve a bit more explanation:
- AdSense is a program that allows publisher on the Google network to display automated ads to targeted audiences. This is an essential part of any profitable ad campaign on your websites. Understanding how the service operates and what it can do for you will be a huge boon to your efforts in website flipping.
- Google Ads. Is an online advertising platform that allows advertisers to display advertisements, offers, videos, and mobile app installations for a price. The advertising system is based on cookies and keywords that advertisers associate with their products and services. This is another aspect of a successful ad campaign which you will do well to learn about. Google is by far the most popular search engine on the internet, and it’s advertising platforms are the most powerful in the industry if you use them properly.
- Amazon Associates. Amazon offers a portion of advertising revenue for advertising certain Amazon listings on your website. While this is a much less important service than Google’s advertising platform, it still gives you an option to set up an easy profit stream from a flipped website.
- Search Engine Optimization. I know that I went over this extensively throughout the article, but the importance of search engine optimization cannot be overstated. Almost all of the important aspects of your revenue stream will depend on how well you employ SEO principles. Do some reading on how it works, and how you can learn more. There are plenty of textbooks and other resources on the topic, as well as full-on courses to educate you. There’s no excuse to be ignorant of one of the most important factors of website flipping.
There are many other concepts not included in this list, and many others popping up every day as the industry develops. As long as you remember that knowledge is power, you will probably do just fine.
Keep up on the news, keep up on the tools at your disposal, and keep your wits about you.
Where do I go from here?
Website flipping is a very versatile investment strategy which can have huge payoffs for a smart investor. Choosing the right time to invest and put effort into developing your web design skills will make it much easier for you to move forward with domain acquisition and website flipping.
I’ve pointed you toward some very good resources for learning what you need to know, so hopefully you’re well on your way to getting started. Like I said, if you have a background in IT or marketing, this will probably be a piece of cake for you!
That being said, just keep in mind that this is an investment, and a comparatively risky one at that. Don’t get carried away biting off more than you can chew, and make sure you keep your investment strategy in mind every step of the way. Losing track of what you were doing is one of the easiest ways to shoot your investment in the foot. Scope a good property, and lock in a good strategy to make it viable!
If you keep all of these rules of thumb in mind, you won’t have any trouble starting or expanding into the world of website flipping. Once you’ve gotten some practice with some safer strategies, you can play with some larger investments and start making some really nice profits.
All it takes is patience and awareness.Updated on: November 12, 2018