Purchasing a Website

What are reasonable expectations?

[chaplin]

Hello all!

I have some cash (not too much but some) which want to invest in web. I have not too much experience with web business that's why i don't feel sure investing too much money in my own projects (lthought i have lots of ideas).
It seems to me as good idea to start with buying website. Something with a price 0.5-3k and revenue from $100 to several hundreds per month sounds like very good deal.
What do you think? Is it a good idea to buy ready website? How can I be sire that what the sellers sais about his revenue and traffic?

Thank you! Hope somebody has experience with that.

Chaplin.

[raywood]

Chaplin, I don't think your numbers make sense. Using the low end of the ranges you specified, you want to pay $500 for a website that returns $1200 per year or 240% ROI in the first year. Let me know if you find any. I'd like to buy a few.

If you have ideas, you can get that kind of return or better building your own sites. But I doubt if you can buy the results of someone else's hard work that cheap.

[ergophobe]

I don't disagree with your conclusion, but your reasoning is a bit hasty. The original poster specified a *revenue* of $100/month, not *profit*.

So it could well be a break-even or money-losing site. Of course, unless it's three amateur-looking pages that's actually losing money, I couldn't see selling it for $500 unless there was some other factor involved.

Tom

[chaplin]

Yeah, I agree, just gave some averages. I wonder generally if buying a ready site will be a plus (having already traffic and all the work on it etc.).
For example i found a nice adult sitefor 1000$. The sellers says its revenue is 700$ per month. That is not too realistic i suppose? How (and can i at all) can i find out the real revenue?
Thank you.

[wayzel]

If you are looking for "real" data on revenues, ask to see the owner's past 6 months of merchant account data. Those are the statements that show the daily credit card transactions as well as things like credits, etc which may be important to look at as well. If the website owner doesn't have a merchant account and is using something like Paypal instead, I think it would be reasonable to request copies of the credit card statements of the Paypal credited card.

[raywood]

I aplogize for my hasty conclusion.

Chaplin, to do your due diligence, I suppose you could ask the owner for server logs to verify traffic. And if the site is set up as a business, it should have a set of books and tax returns for you to review.

Buying a ready made business is easier than starting from scratch. I've done it both ways. Never bought a website, but I would if I found a good deal.

[chaplin]

Thanks both!
Your help is verry appreciated.
I will look arround a few time yet - i am visiting regularry few broker's places - and if i buy something may share my first impressions here.

Thank you guys
Chaplin

[chaplin]

Thanks both!
Your help is verry appreciated.
I will look arround a few time yet - i am visiting regularry few broker's places - and if i buy something may share my first impressions here.

Thank you guys
Chaplin

[madmatt69]

You guys want a site like that to buy? Sticky me ;) I've got a site that I'm not personally making much on, but has tonnes of potential for someone who wants to put the time and effort into it.

[paybacksa]

yeah, that's the ticket. Personally I would stay away from any site that shows itself as very successful, and look for sites that don't know how successful they could be.

It is very hard to optimize an optimized site, and very easy to break it.

It is very easy to optimize a sub-optimal site, and very hard to break it. It's also a safer purchase.

I'd buy based on content quality within industry, traffic quality and volume, and technology (suitability to adoption and scalability), and not at all based on earnings or revenue (although if that data was available I'd certainly analyze it -- mostly looking for warning flags).

[paybacksa]

I have bought and sold active businesses, and one of the best moves I made early on was to study up on how to sell a business. As a buyer, I learned more from how to sell training than I could ever have learned from the various middlemen, brokers, and professionals as a buyer.

Once you know how to sell successfully, you are a qualified buyer.