How to buy a website - Everything you need to know!
When you think about buying an established website you should know which factors are the most important before purchasing it and how to analyse them. During this article we will provide you the best tips to know when it is time to buy an established website.
When you face to buy an online business usually you ask yourself some questions such as:
- “Is it safe?”
- “Can I trust the seller?”
- “Is the information trustworthy?”
- “Is the business profitable?”
During this article, we will show you the best tips to buy a website and we will clarify all your doubts and make sure you will make the right choice.
Currently, there are many marketplaces and brokers where you can buy or sell digital properties. At Trustiu’s marketplace you can find the best websites for sale, profitable and trustworthy assets.
Here is a list of the most important factors to keep in mind when you want to buy a website.
Knowing the broker’s role
The broker is very important to act as intermediary of a business and its role must ensure that everything is done safely. You should know how the website comes up to the marketplace and how it is evaluated. Knowing if the seller is trustworthy is just possible if the broker has an established process to guarantee the safety of a deal.
At Trustiu, before any seller puts his website for sale, he must go through a strict process to validate the data and confirm that the asset is able to be sold:
- Meet the seller - The first step is knowing who is the seller and why he intends to sell.
- Seller identity - Every person who wants to use our marketplace must prove its identity.
- Check the earnings and costs - We only sell profitable projects. This is a crucial point to follow the process.
- Income proof - The seller must prove the veracity of the incomes and costs of his online project.
- Analyse the traffic - The traffic is very important to understand where the visitors come from and validate if the seller is running for paid advertising or there are external factors that justify the traffic of the website.
Return on Investment
One of the main concerns when someone buy a website is the ROI. Once you invest, how long does it take until you see a return on the investment? Actually depends but there is a way to figure out how many months it takes until you return the investment according to the current performance of the website. This is called the sales multiple. The sales multiple represents the number of months that it takes to achieve the amount that was invested, based in the net profit average.
Check the following example:
The net profit is the beginning to calculate the sales multiple. It is possible to reach the average dividing the net profit by the number of months (in this case 12 months).
The next step is knowing the price of the property to achieve the multiple.
In this example, the sales multiple would be 24, that means the number of months until return the investment if the websites keep approximately the same metrics. If you improve the metrics of the website, of course the multiple will be lower.
Usually, the sales multiple between 12 and 24 is good but it also depends on the business model that we are talking about.
Below, you may find some examples of the best listings with the lower multiple:
- Spanish Tourism E-commerce for sale - Sales Multiple: 13
- Spanish Children's Decoration Website for sale - Sales Multiple: 24
- Stock Images and Videos Website for sale - Sales Multiple: 30
- E-Commerce about Kids Decoration in Spanish for sale - Sales Multiple: 25
Analyse the performance
The website performance is one of the most important tips when you consider to buy a website. You should be focused if the business is regular, if it is reported revenue peaks and why it is happening.
You also should have access to Google Analytics reports to fully understand the traffic and the performance of the website. Google Analytics can explain a lot of facts that are happening and which factors influence the business.
You must access the reports about the last 30 days, last 12 months and since the website is running, to make sure that the good performance is not something sporadic and evaluate the growing.
At the online market, a business is never 100% stable and is normal when there is some oscillation regarding the visits and incomes.
Below, is an example of a very well profitable website with that variations:
The broker must provide a sales contract
You are buying an asset, for that reason check if the broker will provide a sales contract to explain and report the deal. If you have a contract, you are legally supported for established terms signed by seller, buyer and broker.
A contract may avoid future problems about the transaction and once the broker has this service, this represents a positive factor and nothing is being hidden from you.
The opportunities represent the path you can take through the online world. Many websites are not 100% optimized and you may have the vision and knowledge to take advantage on that.
It is necessary to understand what the website is about and how your skills can be positive to improve it.
Digital Marketing is becoming more important than ever. Generally, SEO and SEM knowledge are constantly requested to handle an online business but there are many ways that can be taken by you. Try to be creative and contribute with your digital skills.
When you are looking for a deal, you must always check the opportunities described by the broker.
Why are you buying a website?
This is the last point and also one of the most important. You should be focused and establish goals for what you want. You can buy a website to be your job either as a part-timer.
Existing websites can generate a lot of money and you can dedicate your time just working on it. Meanwhile, there are other websites with different characteristics and you can find your own purpose and goals. Both can be very useful!
- Knowing the broker’s role - Do your own Due Diligence and make sure that broker is trustworthy. Meeting all the parties involved in a deal is crucial.
- Return on Investment (ROI) - Do not forget to analyse the most important factors and calculate the potential of the business.
- Sales Contract - Being legally supported is a huge detail you must consider. You are owning a proof of the transaction.
- Analyse the Performance - Do not forget that every case is different. Everything is possible to explain, try to understand the website’s behavior.
- Identify Opportunities - You should analyse the metrics but also the opportunities. The more you identify the right opportunities, the more you will make growing up the project. Use Digital Marketing strategies to achieve your goals.
- Why are you buying a website - If you know why you are buying a website, you will set the right path towards your goals.
Now that you know what the main factors to take into account when buying a website, do not forget to check the available websites for sale on Trustiu and if you have any questions do not hesitate to contact our brokers through the following email: email@example.com