Why Information is Important
The only way you can find out for yourself whether a website is a good or bad investment is by getting information from the seller. A lot of the time, a seller who has a listing with a broker or on a marketplace will freely divulge a good amount of information for you to process.
The problem with using publicly available information to make an investment decision?
Everybody else has that information too. Your goal as a website investor is to give yourself an edge over other buyers – if everybody has the same information, then any sale of a website comes down to who’s willing to pay more.
On the other hand, if you have more information than the other buyers, you might be able to bid with more confidence. If you want to consistently get good bargains as an investor, you need to have information that is not publicly available – publicly available information is genuinely reflected in the price.
An example -if you saw someone selling a fridge on the street, chances are that fridge isn’t going to be sold at retail price, because potential buyers don’t have enough information about the fridge – there’s a chance that the fridge doesn’t work.
On the other hand, if the seller is your best friend – someone you know personally and trust – then you have an opportunity to get a great deal on a fridge. Other potential buyers don’t have the information that you have (that the seller is trustworthy) and so the price they’re willing to pay for the fridge is lowered.
Now, there’s many ways to get information about a website that others don’t have. The easiest and most straightforward method to do this is to just ask questions. The worst that can happen when you ask a seller (or a broker) questions is that you don’t get answers (or you get dishonest answers).
So, here’s a list of 10 questions you should always ask before bidding on a website:
Questions about Traffic
Can I get access to analytics?
Absolutely essential for doing due diligence – a handful of people will say no to this question, and that’s a clear signal you should move on to other listings. Buying a website without having seen the analytics data is akin to buying a car without test driving it.
How come analytics data only goes back to X?
If a site has 12 months or less of historical traffic data in its analytics package (and the site is older than that), you’ll want to ask why. You’ll need to judge for yourself whether an answer is reasonable or not. If a site has less than 3 months of historical data, then it’s probably safest to just stay away.
How did you build these links? Can you guarantee the links will remain after the site is sold?
A seller should be able to tell you exactly what work he did on the Off-Page SEO of a site. He should be able to tell you (roughly) which links are natural/outreach, which are paid, if there are any PBNs or other links networks being used, etc. Tailor your question to the specific backlink profile of the site, but essentially what you’re asking is – “How did these links gets here, and will they disappear?”.
Question about Monetization
How are you monetizing the site?
Some sites have very straightforward monetization strategies – they use Adsense, Amazon, or a combination of the two. On the other hands, some sites have more complicated monetization methods- it’s good to know exactly where the money is coming from before you buy.
For example, sometimes use lesser known ad networks, have special affiliate relationships with eCommerce businesses, or monetize via guest posts or sponsored content. Find out about all the ways that a site is monetizing – and if you’re planning to buy a site, make sure you have access to all the same methods by applying to ad networks and reaching out to affiliate partners (if you’re particularly proactive, you can even do so potentially before a sale is complete).
What is your conversion rate/CTR and how much do you get per conversion/per click?
I like to ask these questions separately, bunched in between a few other questions. If a seller is falsifying/making up data, sometimes he/she will slip and the numbers won’t add up to the profit he/she claims. It’s important to know what the conversion rate and the profit per conversion is for a website. If you have this data, you can make an educated guess as to whether it’s a potential area of improvement or not.
This may factor in to your valuation of the site – if you’re knowledgeable about conversion optimization, it makes sense to buy a site that the potential to be improved on that front.
How stable are the earnings?
Oftentimes, sellers will try to take advantage of the ‘peak season’ of a site to sell it. A site that sells Halloween costumes might get listed at the end of October, and claim that in the last 3 months, average earnings were $300 per month – when in reality, the site only really has any significant earnings in the lead up to Halloween.
Many products have some kind of seasonality attached, and you should have this in the back of your mind when bidding. You can also catch fraudulent sellers out. If someone with a Ski Jacket affiliate site claims that earnings are stable throughout the year, common sense dictates that they’re is being dishonest, regardless of what screenshots they send you as ‘proof’.
Questions about Content
Is the content unique?
You should always check this independently – but it also doesn’t hurt to ask. If a site is large, it may not make sense to check each and every paragraph on each and every page. While it’s rare that anyone will admit outright to using duplicate content, occasionally people will admit that content is spun or rewritten from other sources.
Who writes the content, and how much does it cost?
This is an important question to ask – especially if the topic of the site is technical or requires a certain knowledge base. If a site has writers (and you plan to keep them), you’ll want to find out how much they cost, and you’ll want to make sure that they’re happy to continue writing for the site under new ownership. Also, get a guarantee from the seller that he will pass the writers’ contact details to you.
Are there any unpublished articles that come with the site?
Sometimes, sellers are sitting on a whole bunch of unpublished content – it never hurts to ask if they’re willing to include this content in the sale. A lot of times, this information will be included in the listing – but if it’ isn’t, then it’s worth asking.
What paid tools/plugins/themes does the site use and will they come free with the site?
A lot of the time, websites that are for sale will use paid tools or plugins that the seller doesn’t mention. In some cases, these paid tools require licenses to remain functional. Make sure you know what the deal is with these plugins. will the plugins remain functional on the site? Will the seller transfer their rights to you? Is the plugin or tool essential to the site’s operation?
It’s not necessarily a deal breaker if a site uses paid plugins that won’t be transferred with the site – but you should know ahead if you need to buy licenses to tools or plugins, and factor those costs into your investment decision.
How do you generate non-organic traffic?
Some sites generate a lot of traffic from channels other than search engines. The most common traffic source outside of organic traffic is traffic from social media. If a site you’re looking at generates a large portion of its traffic from social media, you’ll want to find out what social platforms are being used, and more importantly, how the seller uses them.
Find out if they use any special tools for promoting the site on social media. If the primary platform is something image based like Pinterest, ask them how they create the images, and if they outsource it, how much it costs. Question them about their best practices for social media (you might even learn something new in the process!).