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Website Flipping: The Art of Buying Websites Low and Selling High

April 4th, 2011

Many internet entrepreneurs are turning to website flipping for new opportunities. While the basics of turning over virtual real estate are essentially the same as physical real estate (buy low, improve and sell high) the details involved are substantially different. The basic criteria which determine what sites are potentially the most lucrative are simple to understand. When you really break it down, there are three primary categories to cover; what, where and when.

What Sites Do I Buy?

If you’re still new to flipping sites, you’ll want to proceed with caution. This essentially means limiting your purchases to sites that are priced low and yield only a small profit. You may want to take the risk and dive right into the big league but it’s important to gain some experience first. Low cost, low profit sites are your best chances to hone your site flipping skills while avoiding potential financial losses. If you search at the right places, you will find blogs or small websites that are already turning up a modest profit but don’t cost too much. You get to try for yourself how it is to turn a site around without having to start from scratch. Even if the profit is not that big, the more significant payout is in the experience.

If you set yourself a budget of about $200 you will have access to a wide array of simple sites. But you may want to avoid anything labeled as a turnkey website. These can be appealing because they are fully built and only require a new owner to “turn the key”. However, the truth is that these websites are often poorly made and not optimized at all. Without the proper experience, you may struggle to turn them around.

Where Should You Purchase Your First Domain?

After you know what to look for in a domain, you can start considering your first purchase. This can be overwhelming since there is no shortage of places to buy from. Fortunately, there are some places that are far superior to others. While you should certainly browse everywhere you can, starting at the most active sites will give you a better chance at finding what you are looking for. Flippa is widely considered the center of the virtual domain market. It contains forums for discussion as well as one of the most active domain marketplaces you will find. DigitalPoint and Warriors Forum are similar sites which you should also pay attention to when you are browsing for potential purchases. But don’t just focus on the marketplace, the forums are a wealth of information for beginners.

One big thing to avoid is a site which does not focus on selling within the site flipping business alone. For instance, you can buy domain names on eBay or Craigslist, but you’re not going to find the same quality and deals that you will find at specialized sites. Most people who know what they are doing will avoid these sites, which means people looking to take advantage of someone new are more likely to frequent them.

When is the Right Time to Sell?

Knowing when to sell your domain is largely a matter of experience. The entire point of site flipping is to buy a site which is performing poorly or has little visibility and turn it into something that someone wants to own. Once your site is holding steady traffic or turning a decent profit, it’s time to sell. This is all relative to the amount you paid for the site to start with. A good benchmark for a site that has reached its selling point is when it will make back a buyer’s investment within 6 months. That benchmark can also help you determine the selling price, although you will also want to do plenty of research to make sure that your site’s price makes it competitive with similar sites.

While you could spend hours studying the virtual real estate market and knowing how to earn from it, experience would always serve as the best teacher. Choosing your first site would be the biggest challenge, but if you make good in your first site flipping venture, it would be easier the next time around. Once you’ve tried it out and experienced for yourself the hard work and corresponding thrill that comes with buying websites and then selling them for profit, you will understand why some people have made a full-time career of it.

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