How To Buy An Existing Website The Right Way With Liz and Matt Raad
In the Podcast:
04:08 – How Liz and Matt Started
07:24 – Why Are They Buying instead of Creating their Own Website
08:00 – Kinds of Websites They Are Buying
10:53 – Acquisition Process & Strategy
20:48 – Aspects of a Website They are Buying
24:49 – Price Negotiation Process
27:11 – How Do They Value A Website they Acquire
31:21 – Factoring Site/Domain Age
33:33 – Ad Accounts in Acquisition
36:02 – How do they Find Top Organic Keywords
41:53 – Renovation Process of an Acquired Website
47:03 – Classic Mistakes People Committ
Buying an existing website which is already getting traffic is a quick and easy way to enter a market. However, you need to do proper due diligence first. In this episode, I chat to Liz and Matt Raad about the metrics and key things you need to look at before you jump in and buy a website.
Ilana: Ilana Wechsler here with another episode of Talking Web Marketing. So welcome back to today’s episode, I’m talking about something that we’ve never spoken about before. And that is, I guess it’s a traffic generating strategy by buying an existing website. So rather than you buying a new domain name, and building up a website from scratch, there are people out there and lots of people who go about buying an existing website, which is already got traffic, it’s already making money, and they buy it or someone who, for lots of reasons, doesn’t want to continue with that website anymore. And, you know, that’s, that’s a form of, I guess, buying traffic really. So I’m not an expert in this. So I brought along a husband and wife team. Under the name of I’m Liz and Matt Raad, from eBusiness Institute to talk about the process by which they go about before they buy a website, as you can imagine, it’s kind of like buying a property, right? Where you got to do your due diligence, you got to get a property inspection, you’ve got to have a look at the property, etc. So buying a website is kind of like buying a business or buying a property where you need to do your due diligence. So I’m asking Liz and Matt Raad on the things that they look for before they buy a website? What are the common pitfalls that people fall into, we actually cover a lot of material. So if you are considering buying an existing website as a form of I guess, asset building, or if you’ve never even considered it, after today’s episode, you might certainly consider this as an option. Because it’s a growing market. And there’s lots of reasons people are looking to sell their websites. And if you can find a way to improve it, then that’s a good way of doing business or sleep. So yeah, we’d cover lots of the due diligence process. And the different I guess, ways that you can renovate a website. So these are maps are by sites that are already making money already generating traffic, but then they look for sites that they can improve upon. So obviously, they’re improve that profit and traffic, and then maybe flip it or being they sell it, or they just keep it in their portfolio, and they just keep accumulating these assets. We cover a lot of material in this episode. So we have made a summary of all the information that we talked about in our show notes until you can go to TalkingWebMarketing.com. And download that resource. So don’t worry, if you’re listening in your car or on a walk, I know I listened to podcasts that way. Don’t worry about furiously writing down notes, we will do all that heavy lifting for you and create a nice PDF summary for you that you can download. And let’s get stuck into today’s episode.
Liz: Hi, thanks for having us.
Matt: Yeah, thanks for having us!
How Liz and Matt Started
Ilana: It’s awesome to have you here. And I’m actually really interested in this topic. So I’m going to ask lots of questions that I really want to know the answer of, and hopefully our listeners will as well. So before we kind of get into the nuts and bolts of how to go about buying a website, how to research, which ones to buy, pitfalls to avoid, and all that kind of interesting information. Can you kind of give me a bit of a backstory on who you guys are? And generally what you do?
Liz: Yeah, sure. So we actually started out as Zoologist, funnily enough…
Ilana: No way! (laughs)
Liz: Yes! So…(laughs)
Ilana: That wasn’t the answer I was expecting! (laughs)
Matt: No..never, that was never going to make us money. But it was awesome and that’s where we met. But I always want to be an entrepreneur. And we got into when we finished, we actually got into buying and selling bricks and mortar businesses, and was manufacturing businesses was our specialty, we got really good at…
Liz: Wholesale distribution as well…
Matt: And so basically, where we really started this whole journey was buying and selling bricks and mortar businesses. And we also did it professionally for high net worth and private equity firms and venture capital firms and stuff. So we’ve done stuff up to $20 million, working with high net worth scenarios, but we realized, or what we found was when you’re doing bricks and mortar businesses, all your net worth tied up in stock in the sort of businesses we were dealing in. And we wanted to do it. Once we had the kids and everything, you know, we want to get online because we saw the online model, just the leverage was amazing. Absolutely amazing. It was the best business model we’d ever seen. So that’s we decided to basically take our bricks and mortar buying strategies, just do it online with online businesses. And least being the legend that she is an impatient one. She I remember the day she turned to me go…
Liz: Because First of all, we learned the basics of building a website and doing this ourselves. And we launched a couple. Yeah, I looked into him and said, can we just buy this? I have to do this.
Ilana: So I’ve been there too you know, installing plugins and all that fun stuff.
Liz: Yeah, so we thought, okay, okay, where’s the leverage point here, let’s see if we can get one that’s already up and running. Because I think that’s probably the biggest hurdle I think to a lot of people in gaining wealth is that there’s a lot going on, when you start a business, there’s a lot going on. And there’s a lot of variables that are going on as well, because you’re actually testing something that you don’t know if it’s going to work or not.
Matt: And especially online..
Liz: Especially online. And so that’s what our goal is to take out a lot of that variable in that we’ve been picking a website that’s already up and running, it’s already got traffic, it’s already got profit and income coming in. So it’s already proven itself in the marketplace. We’ve done its big rocket launch phase with all the energy and time that’s involved in there. And so what we can do is just do the little tweaks to get it. Yep, quite quickly doubling or tripling net income. And that’s our goal. That’s our plan.
Why Are They Buying instead of Creating their Own Website
Ilana: Okay, so that kind of leads me into my question of why would somebody do this as opposed to building their own one? I guess it’s for leverage and speed of implementation? Would you say?
Liz & Matt: Yeah, totally.
Matt: And as we said, what’s really important is you’re buying an existing business model that’s proven to work online. So you’re not out there trying to test theories and things you know, you go in and buy. So we can talk about sorts of sites we buy in a minute be buying information or content type site, and you already know its traffic, it’s working, it’s got a following. It’s perfect. You just stepped straight into it.
Kinds of Websites They Are Buying
Ilana: Okay, so that kind of leads me to my next question of what I mean, you know, I’ve worked in this space for a long time now. And I know that there’s many different types of websites out there, you can have a straight kind of content site where they make money via advertising, you can sell obviously, ecommerce products, and you buy that kind of website, SaaS models, and Amazon businesses and all that kind of stuff. So what kind of websites do you guys buy?
Liz: So because our background was manufacturing and wholesale and having huge amounts of stock and all that sort of stuff. We just said at that point. Nope, we’re not doing that ever again. We do own affiliate websites, so Amazon affiliate websites, where we’re sending traffic to places like Amazon, but we get paid a commission when someone buys, we don’t do any of the stock handling, or the refund, we never have to talk to a customer or supplier, that’s our dream business (laughs).
Matt: We have lots of experience with that.
Ilana: Says only someone who’s done it for long enough, good. I don’t want to do this anymore. (laughs)
Liz & Matt: Yeah.
Liz: And the other thing to actually which we should mention, for those of the listeners who already own a business and maybe aren’t interested in buying a website, in its entirety is another business. And you can also buy, we also buy websites just for the traffic. So we might buy a website in a particular niche. That’s like a passion site that amazing your niches online like things like photography and things where people have created these incredible websites with making content and have big followings. But they get a bit downhearted because they don’t know how to monetize it, they don’t know how to take it to the next level. So that’s a really good acquisition. So think about it from that perspective as well, you may not just be buying a business model in itself, you may actually be buying it to own your market place. So we do our own little M&A strategy online.
Ilana: So just to kind of explain that a little bit, you might have your own business, which is selling some kind of….
Liz: Well, like a said it’s a lot of coaching or personal product or coaching and personal development, say you’re in some sort of industry and doing coaching, you could look for websites that have your target people or have authority in that industry already. So you can buy authority as well.
Ilana: So I think that’s kind of like that’s another I guess, completely different website, but still under the same, I guess ownership of your own business. It’s like you’re buying competition, but you still own it.
Liz: Yeah, yeah.
Acquisition Process and Strategy
Ilana: Okay, cool. So that I couldn’t imagine lots of people’s heads would be really somewhat as to that kind of strategies. So let’s say, I say I’ve got a product, which is for the kitchen, right? So a product on Amazon. What if I was looking to do that strategy was to buy a secondary website, that’s also maybe a blog, for example, that has traffic that I can eventually redirect, send some of that traffic to my e commerce product that I sell, what steps would I take to look for such a website?
Liz: Okay, so for that specific one, you’d be looking in, of course, in a specific niche around a specific topic. So our acquisition strategies, I guess that’s what you’re asking, what are the acquisition strategies like the buying strategies that we use.
Ilana: What was the process like, what’s the steps that you take when you’re looking to kind of find a website in a vertical like that, so you know exactly what your niche is one of the steps and that was the process that you go by, to find such a site.
Liz: So the best site, the best place to go to find websites to buy are the online marketplaces like Flippa.com, there’s a lot of brokers that have come up in the last in the recent couple, couple of years, because this is becoming more and more popular, although still really relatively unknown, that you can buy websites. And so this brokers and Flippa.com is probably the place that we recommend you go. And if you want to go and check this out in your beginner, Flippa.com is a great place, because they’ve got such a wide range of websites for sale. Now, we will also buy websites through with direct contact. So you know, you might Google your kitchen product and see who your competitors are, right and, and you may even reach out to some of those and see if any of them are interested in selling their website.
Matt: And one of the little strategies we do there is we actually will contact the second tier or the third tier websites in those niches, not necessarily the leading sites, because they’re going to be expensive. But people got to…
Liz: Got a page two or three..
Matt: Got a page two or three, sometimes up the page 10, because they’re people typically have a website that they’ve managed to build up traffic, but they’re not making money out of it. So that they will typically sell at a reasonable price too. So that’s a really valuable strategy for us. That takes effort, but you can use a VA should take a virtual assistant to help you, you know, target those kind of people, it’s really easy, you just send them an email. So this is what we do if we go into a nice step, as you said Ilana nation were already in and we know quite well. And we want to add to it, that the other thing that we do though, is we were very, very open and excited about buying websites in any nation, we don’t care. It’s just got to stack up and make money. It’s just got to follow our due diligence process.
Liz: So we look for it. Yeah, it’s much easier to find websites for in terms of on marketplaces, when you go into a marketplace like Flippa.com going with an open mind and say, Okay, I’m just looking for the money making system, I don’t know what the topic is, particularly, I’m just looking for the system that works. And I’m buying myself a system rather than a topic. So that’s one of the mistakes that people often make is they go on. Now, obviously, if you’re wanting to buy for acquisition, you do need to go and look in a particular vertical. And on places like Flippa, you can narrow it down to particular topics. But if you’re looking for creating another income stream or wanting to buy a complete online business that makes you money, then you be open to anything, you basically are searching on profits and traffic, not on topic.
Ilana: Okay. And if you go to a site like Flippa is all that data, so their profit numbers and their traffic numbers they verified? I mean, you know, something?
Matt: Really good question. So to a degree, so. So the two main things will just take one step back, just so everyone realizes that because you were asking us before what the main, what’s our process for buying a website, there’s two main things we live and breathe by which I’m sure all of you listening, understand, coming from a website background is profit and traffic. So your question is excellent. That’s basically what our diligence revolves around is looking at and verifying the profit and traffic that they’re climbing. And in this day and age, the good thing is, especially on a platform like Flippa or Empire Flippers are the same. They they to a degree as much as they possibly can verify the traffic, and they actually now on their listings, have a live feed into Google Analytics. And also into AdSense as well. It’s a live feed. So…
Liz: They can’t fake it.
Matt: They can’t fake it. But you still need to do your due diligence, doesn’t mean you just blindly believe the good word of the seller. And you should never do that in any business sale situation, whether it’s online or offline businesses. So you know, there’s, it’s taken us what 20 years, we were experts in due diligence, we can’t just teach it in five minutes. But the big starting point where you really do need to look at is verifying that profit and traffic. And the good news is it is verified generally with live Google Analytics data.
Liz: Yeah. But as you know, Ilana to obviously we need to deep dive into that analytics data and have a look at okay, so yes, it’s getting 10,000 visits a month. We want to know time on page, we want to know, traffic sources, we want to know how much direct how much referral, how much social, how much, because basically, the question, the big overarching question that we’re going to ask about this website is, how likely is this website to keep making the money that it’s showing right now, and keep getting the traffic that it’s showing right now? And so the due diligence process is to find out the answer to that question. Well, that’s what I was going to ask. You say, you say you look at profit in traffic, but traffic is not all traffic’s created the cool right now.
Ilana: Well, that’s what I was going to ask. You say, you look at profit in traffic, but traffic is not all traffic’s created equal, right? As you say, you got to look at the bounce rate and how many sessions I mean, I think about it, you know, me being a traffic person I can I can throw up a Google Display Network campaign and bid one cent and buy all this junk traffic.You know, but if it will inflate the overall traffic numbers, but if that probably will have a bounce rate of 99% Yeah, exactly.
Liz: Yeah, exactly. Yeah. So every…it leaves clues. So it’s quite common sense actually. And and anyone who’s been in this website world, especially anyone who’s in like you like paid traffic or SEO traffic, you know, you understand that what to look for what’s unusual what…. I always quote that 80’s song..things that make you go ‘Hmm’ (laughs)
Ilana: That’s a good one! (laughs)
Liz: Yeah! and sometimes it’s quite simple. Like we were, we often show an example of a website where this is a few years back, and it was one that was making money out of work, I work at home kind of office, and it was called, it was called loot swoop. And when we looked at it had a big fall off the cliff and Google now sometimes that’s actually an opportunity in disguise, because we can recover those sometimes. So we always even though they have had a fall off the cliff head there’s a Google slap, we might look at them to see if we can recover them because we can buy them cheap and and get them build them back up. Because we’ve seen it has been at this level of traffic. So it’s obviously a good topic and a good nation people like it, but Google didn’t like it for whatever reason, they’ll probably doing something naughty. And so this particular one all I did, I could see that drop off so what I did was I ran an analytics session for all the traffic pre the drop off to see okay, what are the top keywords? Where’s the traffic coming from the table Look at all that. Then I ran the report for post traffic drop off what’s happening and it turned out the top three keywords after the traffic drop off. Were get paid to read
Loot Swoop. And lootswoop.com is like the actual URL, and there was a whole lot more direct traffic. So you can see instantly go okay, right, oh, somebody is trying to buy to buy people views to dress this up to look for sale. So you know, it often it’s very obvious, especially in the top keywords. A great example is another site we’re looking at, and it was actually for removals website. But one of the top keywords was color lilies and, and broken wrist or sprained wrist or something you’re going? No, that’s not right. Like it’s, you know, often it’s quite obvious that something’s gone wrong with this website. And yet, we need to investigate and find out. That’s the next level is we find all these things. And then we have to figure out okay, is the owner purposely trying to pull below over our eyes? Are they untrustworthy? Or are they just a bit uneducated? Like, do they not realize what they’ve done? And they’ve messed it up? By and you know, if I had just one recently, I was doing due diligence on and the guy had completely rebuilt the website and totally lost, he didn’t understand about URLs. And so all the ranked URLs, he changed the addresses off…(laughs)
Ilana: Rookie mistake…
Liz: But we could I mean, it might if it only just happened, it might be recoverable, see how we can see an opportunity there possibly to put those pages back create read have those URLs, but if I haven’t been de-indexed, yet, perhaps we’ve got the opportunity to quickly turn that background. Yes, but we have to make that assessment.
Aspects of a Website They are Buying
Ilana: Okay, so going back to kind of the process, so you go to Flippa and have an open mind you open to all niche or niches for American listeners, and you find that guess, accurate profit and traffic number? Do you have some kind of, I guess, sweet spot of traffic and profit numbers that you think are good? Kind of, I guess? I mean, do you go after really high, high traffic websites or low traffic or kind of what’s that sweet spot that you look for?
Liz: We’re actually looking for, it’s actually about lifestyle. It’s not about the so it’s about the deal, and we make sure the system works. So it actually doesn’t matter what the profit and traffic is, as such. It’s does the system work? And can we improve it? Can we add some value to it, but the lifestyle factor is, OK, if that website requires two posts a day to maintain? No, I’m not interested, because I don’t want to pay my team to have to do that. And I don’t want to have to organize, like get my main site manager organizing all that, because it just costs too much. So depending on how much it made, I guess, but it’s also a lot of hassle.
Matt: There is one other aspect to the due diligence that we should mention when we’re looking at these websites. So that might help answer that question as well. There’s a third part on top of profit and traffic, we also look at the market, can we reliably expect this thing to keep making us money for the next five years. So because because as people would realize, I’m sure online, there are plenty of markets where you can actually make a lot of money off websites that do reviews and stuff, and you get paid affiliate commissions, but they’re very transient. So for instance, iPhone 10 websites, you can make a lot of money from Google AdSense on those sites can get a lot of traffic to them. So particularly the tech space, but things go out of out of flavor. So we don’t, we tend to avoid those. And so what we’re looking at is this combination like Liz said it’s not about there’s that sweet spot for profitable traffic, it’s more about lifestyle and the marketplace that it seen that the websites in can we do, we think we can run this thing and make good money off it for the next five years. So here’s a really good example of a nice that we’ve come extremely close to getting into it’s extremely lucrative, but we just haven’t quite done it yet. And that’s the gaming niche. Because whilst we we teach our students look, you can go into it, you can go the nations that you know nothing about without a problem at all. And that’s kind of our sweet spot. So we’ll go into Weeden wonderful niche that we’re going to be Racing Pigeon racing, pigeons and stuff. It’s really easy to work because it’s a process that we understand. It’s just selling an E-Book, dead easy.
Liz: We got Spanish websites,can’t even read em (laughs).
Matt: So as long as it’s selling eBooks or kind of in regards to doing the keyword research, and some of our foreign sites. But the problem with a niche for us, like gaming is probably one of those niches which is you kind of need to understand what is trending at the moment what are these young gamers, and actually, they’re not young By the way, we have done a lot of research in that niche, because you can make a ton of money in there pretty easily. But you still got to know about the niche. So for us…
Liz: There’s so some of that we’re looking for the evergreens health, wealth and happiness.
Matt: And like we said that it’s so that’s easy to have retail lifestyle, so it fits our business model of you know, being able to run these things kind of semi passively.
Ilana: Okay, and is the idea was just to build continually build out portfolios, and hold on to the assets sort of flip it?
Liz: Now we’ve actually, we sold a few over the last couple of years, just and we got good offers on them if we get a good offer. We had one that was some it was a bit time sensitive, but had a date in the URL. So we thought okay, yes, we’ll…things like that.
Price Negotiation Process
Ilana: Okay. So say, we go back to the process, we go to Flippa, we find something that’s got good profit traffic and the market that’s evergreen. And then I know on Flippa they have their price that they listed for is that I mean, are they pretty? I guess it depends on the seller. But is that price negotiable? Does that start a negotiation process? Or is it just a matter of just going? Yeah, I’ll give you that money?
Liz: Yeah, good question. So there’s two types of listing on Flippa. So Flippa, the main platform where they have an auction process for a lot of the listings. So if it’s an auction, it is like eBay you Bid. And so you need to do all your due diligence, and you need to have spoken to the seller, you will always communicate with the seller, I want to know who I’m buying from and, and that’s the other element of due diligence, by the way, which is you need to, we recommend you talk to the seller, or at least message them. Because you’re going to have to work with this person over the coming kind of month or two to….
Matt: And that’s where you might negotiate with them.
Liz: Yeah. And you might negotiate with them. But so then you then you go into the bidding process. So you will, the whole point of due diligence is actually not yes or no, it’s how much am I prepared to risk right on the site. And so we always sit up where we always sit, because we always set a max price, right, this is what I’m prepared to risk on this deal. And that would be what we would beat up to. Otherwise, there are listings now on Flippa, it’s changed a little bit, there are no listings, like you said, where they’re asking a price, but yes, that is the starting price. You don’t just say yep, I’ll give you that. Always negotiate. Okay. And also you can negotiate with different terms. So you might say, I’ll give you half now and 2000 a month for the next six months, as long as it meets these performance criteria. So you can it did very flexible with…
Matt: It’s like any other business..We structured all sorts of that way…
Liz: So protect yourself in that way.
Ilana: I guess you would know all those different permutations of variations of structure, given your background.
Matt: Yeah, yeah, yeah. And it was a nice surprise to see that it’s very nice to do those sorts of buyouts and things, or half now, half later on with online businesses as well.
Liz: And it’s good for both parties in that way.
How Do They Value a Website they Acquire
Ilana: So then, if you know you do your due diligence, and do you come up with a number in mind of how you valued it. So say someone has a website listed, and you know, the auction is currently going for, I don’t know, throw a number out there like $10,000, you look at the numbers, and you say no, like, how do you value your because somebody can probably think their websites worth way more than that. So how do you value a website sort of in a very unemotional way?
Matt: That’s easy. Starting point, it’s just like any bricks and mortar business, it’s a, it just goes off on what’s called a multiplier of the monthly profit. So So if it makes 1000 bucks a month, then in website world, those websites are selling anywhere from 10 to 20 times a monthly profit.
Liz: Well, actually 30 times sometimes. Between 10-30.
Matt: With one of the leading brokers this morning from Empire Flippers, and he was saying they’re selling a bunch of good sites that easily selling on a 20 to 30 times multiplier.
Liz: So the market has grown since we’ve started. But that, so let’s say, let’s say if you want to get out there and have a look at a few websites, and you think or let’s have a look at them, and a realistic price for a website for a good solid website that’s making consistent income that has a decent history, and that we believe is going to continue into the future. These days previously, would have we would have said 10 to 12 times now I would probably say 15 to 20 times is it is a good sort of, not start with starting point like and this is how we negotiate with people often if they’re valuing it, if it’s making 10,000 a month, and they’re valuing it at a million dollars, we would probably be saying, Okay, well, normally the way what we would value a good website at would be 20 times a monthly profit. So we would value that at $200,000. And that gives them a sense of…oh okay, that’s how this world works. And they can decide if they if they’re interested at that level, then yeah, if they’re not, then no. Okay, well, we’ll come back later, when you when you can’t find a buyer at a million. (laughs)
Ilana: How long they’ve been making that profit for so saved for the last three months have been making $1,000 a month? Does that mean that then you can apply that multiple to the last only three months worth of?
Liz: Yeah, good. Good question. So again, I’ll come back to that idea of due diligence is about deciding how much risk you’re prepared to take. So if you see that line, three months, they’re doing $1,000 a month, the last three months, and you believe in your due diligence, looking at the side and looking at everything else that you think yes, I reckon that’s going to keep going. And I think I can maintain that or grow it, then yes, you might value it based on the on $1,000 a month. But if you can see if you’re a little shaky things in there, if you’re a bit concerned about maybe the time on page is a bit low, or that there’s a lot of direct traffic or something and they haven’t explained that very well. You might think well, yeah, I think it might keep going. But I’ve got some reservations about that. So I’m not prepared to risk $30,000, I’d actually if I can get it for 10, then I’m happy to take that risk, I reckon I can because again, it’s about what what our goal is, when we buy a website, we want to try and pay that back to ourselves as quickly as possible. So if we buy it on a 10 times monthly in 10 months time or less, hopefully, if we’ve renovated it will, but in 10 months time, we’ve basically got to pay that money back to ourselves. So our risk in the market is zero. Well, you know, it’s it’s not we haven’t got our $10,000 out there, we’ve paid it back to ourselves. From there on. It’s just profit. Yes. And we own the website. So that’s, that’s our goal. And that’s why we like this strategy so much, because we can pay off these assets. So quickly back to ourselves.
Factoring Site/Domain Age
Ilana: Yeah. What about site age? So how long you’ve had that person’s had that domain? Does that factor in? I mean, back in my…..
Matt: Absolutely, it’s a huge one, it’s just like, it’s exactly seven bricks and mortar businesses, long established businesses so far more, because they’ve got that track history. And you can you can reasonably assume it’ll continue on in a similar manner. That obviously online, you need to get a little bit careful because age sites online, can come with a problem..but the good thing now is it’s been a good few years have gone since all the big dramatic updates like penguin and you know, all the major big updates, it was occurring over the last couple of years. So the good news now is long established websites. Very valuable. I definitely. You know, if I see a five year old website for sale, my ears will pick up for sure.
Ilana: 5 Years? I would have thought 10 to 15 would be considered, all you consider is five years old.
Matt: 10 to 15 years. That’s really a big, good thoughts. And they’re established that there really…
Liz: Because if it is 10 to 15 years means they have to have been rebuilt by now. If it’s like an old HTML site. We’d be rebuilding that.
Ilana: Interesting. Okay, well, I’m going to get to some of your renovation tips in a minute. Okay, so then you start negotiation process and then you go ahead and buy it do you use a service like Escrow?
Matt: We used it in the past, use escrow a lot. escrow is very expensive, though. Small deals on bigger deals to take a but these days good thing is we flip have, they’ve got free escrow service, it’s awesome. works really well. We recommend all our clients use it said even on little tiny $300 websites or $500 websites, which by the way, is where we suggest beginning start out on, you can use escrow. So it’s really good practice to get used to using escrow. It’s totally free on Flippa now.
Ad Accounts in Acquisition
Ilana: What about? I mean, obviously, I’ve got my ad hat on when asking this question. But do people also include in the sale of their website? Ad accounts like the Facebook Pixel, for example, which you know, if your Facebook Pixels been on your website for five years? It’s obviously nicely seasoned and all that fun stuff? Did they sell that ad account with it?
Liz: We have bought a website transferred as an account. We generally we don’t buy websites that have had paid traffic. So…
Matt: But we have one recently…
Liz: We did bought one recently. It was very tricky to transfer. Google was very finicky. It wasn’t an easy process also. But that might have been that particular consultant. Possibly it was I don’t know. But yes, certainly. Now you obviously don’t get the option. Really we shouldn’t have transferred the Google account what we should have done is probably know that might have lost history. So yes, I’m we’re not the experts. That’d be that’d be your ballpark for knowing will they want.
Ilana: My question is what are these people willing to relinquish that as an asset?
Liz: Oh, yeah. Yeah. Because that’s part of the but if that’s, if that’s how the website gets traffic. And basically what you’re buying is the entire system of how this website gets traffic and makes it. So if it includes an E book, you own, you buy the you transfer the copyright of that ebook to you.
Matt: But it also if it’s a website that relies on paid traffic, then what we’re buying is that system, and if the if the owner wanted to help us get that system, then our money is not worth anything.
Ilana: Yep, okay.
Matt: It’s a really good question.
Ilana: What about like… what do they call it top level domains like a “.com”. Do you buy only “.com” Or do you buy “.net”?
Liz: We buy whatever makes money. (laughs)
Matt: We do preferred top level domains, so “.com”, “.net” “.org”, they’re always have preferred. “.business” and “.info”, what’s the weird one “.pianos” and the doc, whatever is not really interested in those.
Liz: Well, but if it’s a system that makes money and someone’s built their system on a “.piano” That’s okay, I’ll buy that.
Matt: All things being equal, these “.com” rock, they’re going to be more valuable as time goes on to.
How do they Find Top Organic Keywords
Ilana: Okay, so let’s talk some tech tips. So you mentioned before that you look at the top keywords that people are using to get traffic to that website. I mean, I, I’m an extensive Google Analytics user. And I know that their search console does not really provide the way of organic keywords. So how do you find those top keywords that are generating the organic traffic?
Matt: A variety of ways? One is we ask the business owner, the website owner, if they’re any good at what they do, most of them, we find know roughly the main keywords that they go, they know what keywords they targeted. So they give us a list of keywords that they are specifically tired of our due diligence is if the owner says, Well, its ranking for these keywords. And guess what my due diligence is I will quietly sit there and my Jimmy James at night and do manual searches, I’ll set my browser to whatever country it is they say the keywords are ranking in, I’ll just use a VPN for that. And then I’ll just manually do Google searches and see where they come up. We also do use tools. So Google Analytics does give you clues. Even though you ignore the not provided it’s not great.
Liz: At least at least it gives you an estimate of the biggest sites and gives you the order of the keywords like it shows you even that shows, you know such small data, at least it gives you an order like as in which ones are at the top. So that gives us an indication.
Matt: Sometimes on biggest sites, SEMRUSH will work well for us, but it’s very variable.
Liz: So these are the parts of due diligence that are, as you know, a little bit like Matt says rubbery.
Matt: You can’t get dead accurate data around the city with your question, though, where we mainly start with the seller. Because the keyword info is so important for us. It’s absolutely gold if we if we can get that.
Ilana: But these you mentioned that when you were doing due diligence on that one example. Sorry, I forget the name that…
Liz: That was a remove a list website.
Ilana: No, no, the other one where they were trying? How did how did you find that keyword that they were?
Liz: That was an old example. Sorry, that was back in the days when you didn’t get all data.
Ilana: Right….
Matt: It’s still isn’t too bad though with the gives you give the link provided it gives you a rough very rough approximation of the main keyword said it’s showing up for that.
Ilana: How about a tool like AHref or mods, do you find that those….
Matt: We compare across all of them. So we use AHrefs. Majestic SEO is a favorite of ours. It’s a really good tool. And sem rush, one of SEMRUSH is kind of the go to, but it only works on bigger sites, which doesn’t always opposites. But it’s a really, really good tool. SEMRUSH.
Ilana: Yeah, I’m a big lover of sem rush, I actually find the data is just so skewed toward USA, like specially in Australia, it’s like…
Matt: Yeah, most of our sites in USA base. So sem rush works well for us. But I agree for sites here in Australia so much. You’ve got so many clients, I couldn’t get any useful data out of this and if you’re a tiny Aussie site you got no chance with sem rush. It’s only good on the big sites and like the US sites.
Ilana: And there any other tech tools that you do use that you find really helpful?
Matt: Google Analytics, Google Analytics, Google Analytics, Google Analytics.
Liz: Yeah…we need to see how people interact with the site as well. So it tells me it tells me what pages are they visiting? Where are they going? How long are they spending, it really tells us a lot. There’s another site, this is a few years back as well. But it says a really interesting, good example where when we looked at the analytics, we saw that so he had affiliate offers on this website. But half the traffic between 50% of the traffic was coming into these two pages that connected nowhere. And so as soon as we bought that site, we just put little banners on that through to the money like pages. And it instantly went up like and so it’s things like that, that you find little opportunities where things aren’t connecting, or people aren’t finding what they’re looking for. And we can see okay, yes, we can we can fix that.
Matt: So depends how advanced you listeners out as well. But because we love SEO. So we obviously also throw aside, just increase traffic with what will have on us in terms of tools will tell you Screaming Frog. Oh, yeah, I do an SEO audit. I recommend that for beginners. And it’s not necessary for beginners. But we’ll do that on bigger sites.
Liz: It’s just a simple SEO things though. Like come page speed. And and you know, your standard SEO kind of fix ups that will often help a site.
Matt: It’s all we are using in due diligence standard SEO tools that any SEO would use. So GT metrics or whatever whole, just a Google speed insights will do the job.
Ilana: Sometimes even just speeding up a website will make a big difference in performance.
Liz: Yeah, so for anyone who knows a bit of SEO, there’s a glaring opportunity there for you to apply those skills onto an asset of your own.
Renovation Process of an Acquired Website
Ilana: Yeah, very cool. So you mentioned you know, when you acquire a website, then you go through the process of the renovation? What are some of the things that you renovate to turn it around?
Liz: Yeah, so we felt we got three areas, conversions, profits and traffic that we look at. And so conversions, first of all, we’ll go over the website and have a look at okay, that’s what I was just saying, Where are people going? are they finding the offers? Are the offers presented well?
Matt: Is there any better offers we can put on there or better higher paying, or…
Liz: That’s the profit, so conversions with just making sure making sure people finding the offers and, and being able to click and being able to access them.
Matt: So for instance, just placing the AdSense blocks in better positions.
Liz: We’re testing some different positions or something like that easy stuff. Second, is in the profits. So yeah, metrics? And is there some better offers that we could put on there? Is there a bit of monetization, so we might have bought a website that’s got AdSense on it, getting two cents a click or whatever? And then we think, Okay, well, we can actually better monetize that with some Amazon product or something else that will make more money out of each individual sale. And if we buy information products will often bundle products. So instead of a $20 $7 sale, it becomes a $47 sale.
And then traffic is the SEO. So an SEO audit, making sure that the site’s clean and tidy, Screaming Frog, the links broken or the or nice on page SEO, check all the titles, check all that kind of basic stuff. And then adding doing the keyword research to add more content and doing a content schedule out to grow the website through the extra content in my some of them that we buy already have a lot of social following as well. So doing adding social, and some have some email list as well. Yep. So improving the communication with email lists and driving people back to the website or over to social or from social to website. So just just doing a general tidy up. And a lot of the cases is actually enough to get that website really, really nicely growing and happening.
Ilana: Yeah, back before I started my agency, seven odd years ago, I actually used to build content sites and put AdSense on them kind of part of my journey. And I found like, we sort of touched on ad placement and moving your AdSense blocks into sort of different areas. I played around with that. And yeah, I went from I think it was like a 1% click through rate of my ad to a 10%. Pure, purely by changing the placement. So it was in line with the content. I was I was astounded.
Liz & Matt: And you think you multiply just say you bought doing that on an existing website is making $1,000 a month.
Matt: So that has 50,000 uniques a month, when you’re talking big traffic, bigger traffic sites that can have a dramatic impact. Just simple little tweaks on your AdSense, you start getting even an extra one or 2% click through rates, that can be a lot of money in your bottom line. And then you multiply that by 30. When you come and sell it. That’s right, get really big leverage.
Ilana: And you don’t need to, you don’t need any more traffic to do that you just all of your exist, what you’re currently getting just I guess, getting the most out of what you’re currently getting. Yeah, it’s interesting as well, I, probably about a year ago, I kind of went down this route to try and buy a website. And I didn’t end up going ahead, but just sort of talking about this. But one of the things I was selling was their database. So I think it was like 10,000 people. And that was like a really very attractive component of this sale and sort of I started my own very, very basic due diligence process. And it turns out that they hadn’t emailed their database in like over two years.
Matt: Ohhh..Okay!
Ilana: I’m like, Hang on a minute, like, emailing these, who I you know, so the value of this 10,000 people database in, you know, after a bit just a little bit of prodding with these potential sellouts like this, there’s not much value in this database.
Liz: Yeah. Perfect. And see how a lot of due diligence is that common sense. A lot of we have a full due diligence checklist. And we always run through it, because sometimes you just forget to ask a question. Like, especially and I know our students, they often come to us, and they Yeah, they’ll have missed something like that, that they’ve just forgotten to ask the seller. Hey, when was the last time the email list was email? And what’s the response rate there? Even things like Oh, did you? Do you have to pay for the theme? And were all the images from?
Ilana: Yes.
Liz: So just a little bit checking everything to make sure that we can keep running that website and grow it.
Classic Mistakes that People Commit
Ilana: Yep. Awesome. Okay, before we wrap up? Are there any kind of common or classic mistakes that you see people make like sort of newbie rookie mistakes?
Matt: Yes, yes. The common sense one of marrying up profit and traffic. It’s not a rookie mistake. It will some seller will claim their websites making $1,000 a month of you know, 500 visitors a month or something like yeah, and you know, it is a mistake that people make. So one of the things we get our students to do is just one of the final checkpoints is it’s the common sense checkpoints that there’s the profit makes sense in light of the traffic. And sometimes the reverse is true. Just recently, we’ve helped some students do due diligence on really good websites, where the owners were getting 100,000 visitors a month, and they’re only making like 10 grand, and I was at a couple of thousand bucks a month. And I was saying, well, in my experience, I should be making heaps more money from that in that niche.
Liz: Only on the niche, of course. I think, probably the common mistakes, getting overexcited and believing the good word of the seller. So it was always just taking a step back and thinking, Okay, well, let’s do the due diligence, let’s ask all the questions. Let’s make sure this is real, before you go in and make offers and get all excited.
Matt: And actually, you’re right Liz that is the number one rule from the start.
Liz: Yes and it is it’s really exciting. It’s like I don’t know, if anyone, if any of you have bought a property before, you know, the feeling of you know, just before it’s happened, it’s so exciting and you get drawn into the emotion of it all, it is really important to do the due diligence and, and not get too excited by the deal until you’ve made sure that it’s all legit, then that’s that you can actually keep that website running.
And the best thing I think the best advice we can give is start small this is the best thing about this marketplace is that you can go on Flippa and buy a website for under $500. go through the process, it may not be perfect, it may not take all the due diligence boxes or anything like that. But at least you can go through the process of buying a website and having a play with it. breaking some things possibly if you’re just starting out and seeing how it all works. And then you can just add zeros. So that’s the wonderful thing you can scale up as you go. And we’ve got students who’ve bought website, the very first websites they’ve bought, they’ve kind of played a play with them done a little bit of a Reno and then forgotten about them for a year. And then come back and gone. Oh, this is making me $100 a month, or $50 a month or whatever and you go Yay. Literally done nothing to it for a year. And they could sell that we actually a student of ours just recently, he sold a website it was making, was it $200?
Matt: $200
Liz: $200 a month, and he sold it for $22,000.
Ilana: Wow!
Liz: So there’s value in it.
Matt: And we just sold another one for…
Liz: A 50 times multiple I think it was.
Ilana: I guess it’s all about what value? What’s the value to somebody else, you know, if the right match for somebody’s business, in the m&a strategy that we talked about in the beginning, then it’s worth maybe worth of 50? Multiple for that, right?
Liz: Yes.
Matt: So that’s the main thing, though, is you start small. That’s my advice it because it’s the rookie mistake, people go in and go too big too quick. Whereas in this marketplace, you don’t have to spend half a million or a million dollars, like you’re doing property or traditional bricks and mortar businesses, you can go in and buy a website for 500 bucks.
Ilana: Yeah, cool. That is so interesting and helpful. And I’m sure our listeners have picked up lots of nuggets of gold that you’ve shared with us today. How can our listeners find out more information about what you guys do? And possibly how you can help them?
Liz: Well, you can go to the website, ebusinessinstitute.com.au or follow us on Facebook. Because we do. We’re doing videos constantly showing you websites that are available in the marketplace and some tips and tricks on how to buy and what to do and so you’ll get inspired and, and hopefully and we’ve got it we actually do some free training as well if you find that on the website. So if you want to learn more, and actually dive in and buy your first website, then just do the training first.
Matt: Yeah.
Ilana: That’s on your website?
Liz: Yeah, and at least get a bit of an idea of what’s going on before you go in there and buy.
Matt: Have a look eBusiness Institute website or as we sit on our Facebook page is not actually the Business Institute.
Liz: Oh it’s “MattandLizRaad”
Ilana: That’s “R” double “A” then “D”?
Matt: Yep, “MattandLizRaad” Facebook
Ilana: Awesome. Thank you so much for your time. I know I’ve certainly learned a lot from talking to you both and I might have to revisit this strategy after
Liz: I think you do Ilana! (laughs), you’ll be good at this.
Ilana: Alrighty! (laughs) ‘ll let you both go. Thank you so much for your time. And yeah, it’s been great having you on.
Liz & Matt: Fantastic. Thanks so much for having us.
