Site Flipping: Am I Really Missing Something Here?

by John S. Rhodes

Posted: 16 years ago 38 replies

INTERNET MARKETING

I strongly believe in Fortitudine Vincimus (by endurance we conquer).
What I mean is that I take a long term view on business. I have no
problem buying assets and holding them for a long time. I love to
spend money when the ROI is apparent even if it takes years to
recover the initial investment. I will spend $10 to make $11 even
when it takes 1 full year. I'm sure you get the point.

So, I've just started to take a look at domain and site flipping. That
is not my sweet spot. We make money many other ways, but not
flipping. (We do flip PLR. So, flipping is completely understandable.)
In my investigation I've started to realize something...

People are selling their assets for DIRT. Well, that's my perception
at least. I can absolutely see the appeal of quick cash. It goes like
this, right?

1. Get domain
2. Load up site with content
3. Drive traffic
4. Try to get some PR
5. Try to generate some cash
6. Put site up for sale at 6-24x income

I know that there are many variations to this, but that's the gist.
No need to argue those nuances.

My point is that I've seen *many* sites for sale that would easily
generate 5-10x my investment over 1 year.

What am I missing here? Why are so many people selling their web
sites when the medium and long term cash potential -- nearly 100%
certain "autopilot cash" -- is right in front of them?

Let me put it yet another way. Am I a sucker to think this way?
most Warriors talk about SELLING. It's almost always about quick
cash; quick kills. Are any Warriors BUYING sites and holding them
for long term profits?

~ John

#flipping #missing #site

nick1123 16 years ago

Site flipping requires a range of abilities from keyword research and picking the right domain, to content creation, to seo and traffic generation and pr, to monetization, to the actually selling the actual site.

Perhaps few people posses the skills and confidence to all these effectively.
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digitalproductreporter 16 years ago

some people want/need cash today, that's why they sell
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Steven Wagenheim 16 years ago

John, I think it's simply that some people don't want to take the time to
get traffic to their site and all that stuff. They just want to create it and
sell it and be done with it.

Not everybody is a marketer.
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Leanne King 16 years ago

Quick Flips appeal to people who either get bored easily, like creating but not maintaining/want fast cash, don't want to spend lots of time generating traffic/tracking/converting etc. A fellow warrior, Max Davies specialises in building sites up for long term gain and does v. well with that. Everyone has a different comfort zone

Leanne
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TheRealDomainer 16 years ago

As a site flipper, I do the following:
1. I set up my own personal domain registration company
2. I buy up webhosting reseller account
3. I have good number of domain portfolio
4. I sell a percentage on flipping(with content and plr)
5. I make daily income from a percentage by parking
6. I create long term autopilot of some perentage
7. I buy penny domains and optimize it and resell
8. I have domains/sites I am hodling for long term profits

Trust about Internet Marketing is that you start with a narrowed down niche sub-category and move into multiple streams...
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- Eric Lorence 16 years ago
  
  With all the friends I've seen loose retirement benefits, 401k, home values, ect.
  
  And many in their 60's with only a small amount of money saved for retirement.
  
  I consider my websites another form of retirement income and investment.
  
  If you think it's tough to establish a popular website today...
  
  Just imagine how tough it will be 10 years from now, and how much it will hurt to see that site you sold for a couple G's today be sold for several hundred thousand or more years from now.
  
  Food for thought...
  
  :rolleyes:
  
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Marian Berghes 16 years ago

Ive seen a video some time ago....don't really remember where, who was telling you to make small niche wordpress blogs with aff links on them...get them to the point where they make some money and then flip them.

The idead behind it was that if they get to say 500-1000$ profit per month and then you flip it for like 20x profit..now imagine doing that for 10,20,30 websites...if you have some experience as a marketer you can get a blog to 1000$ a month with relative ease.

I saw a video yesterday about something like this only that it was about membership sites.
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George Wright 16 years ago

Hi John,

It would be great to be able to think of long term investment. However the truth is most are trying to make some money today. This may be hard to understand by ones who are established in the business world and who are schooled in the art of business. However, I'd venture to say that the greater percentage of us who fancy ourselves IMers/Writers/Flippers, you name it are coming to the table from Jobs where we have been programmed to get paid every week on most things we do. Holding out for the big payoff is not an option. We need money today.

If I buy a domain name and sell it for $100 I just made over 1,000% markup. In my 1.5% savings account world that is pretty good "interest" on my money.

I always feel a tinge of hurt when I hear other Warriors speak in terms of "being a businessman" instead of just being in it for the quick money.

Truth be told. Most here need the quick money.

Allen Says speaks of the orange stand on the corner, being the purest form of marketing. I feel, and I'll stand corrected, many Warriors and IMers in general are manning the Orange Stand.

I'm sure the owners of Safeway at best don't notice and at worst look down on the orange stand operator.

What's cool about the WF is that we Orange Stand operators and Safeway types interact with each other every day and I really believe learn from each other.

This is not common in the "real world."

George Wright
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14 Banned 16 years ago

People that need to have a website usually go and search for them. They end up at sitepoint. List your site there. Rip off another auction that got sold for big $$$ and change it to yours. Convince people that they should buy your site like people buy your ebooks
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Bishop81 16 years ago

One reason people sell them quickly is because based on their traffic models, the income may not be sustainable for them. Their goal is to build a site, prove that it can generate an income, then sell the site before the income dries up. Chances are, you may know more and better ways to drive traffic that will allow you to earn much more in the long term.

Also for the quick cash. I have a site that is only 2 months old, and has already brought in more than $200 this month. This is very rare for me, and a little scary, because it's my first web real estate that is bringing in money. I very often consider selling it because I wonder how long the ride will last, since it's all based on organic traffic. Luckily for me, 95% of the sales haven't come from Google traffic, but Yahoo and MSN. Guess this means that I should be pretty good for a while.
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Gene Pimentel

16 years ago

Why do people buy a house, spend a few weeks renovating, and put it back on the market right away? Don't they know if they hold onto it, it will likely eventually increase in value if they hold onto it long enough?

It's all about cash flow and cash in hand. Many website flippers keep a few key sites for themselves for the long term, but flip most sites quickly for the instant cash flow.

Like anything else, if you have it down to a well refined system, you can produce in volume.

Thanks
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BuySellSites

16 years ago

John,

There is a HUGE disparity between internet marketers / website owners and savvy business minded people.

As many people mentioned above, the thought of quick cash is appealing to many, which is good for long term investors like us.

These "website flippers" work hard at building sites, creating content, getting links, driving traffic and then they get bored or give up. Their site might be making $500 per month when they decide to throw in the towel.

They know if they stop "working" on their site, eventually that income will decline and they will be left with nothing but a dead site.

Then they hear that they can "flip" their website and get $5,000 in cash right now. They think about the new flat screen tv they can buy with the lump sum payment, etc.

Meanwhile, savvy investors are licking their chops at the chance of buying a good website for just 10 times its monthly profit because they know they can ramp this up to $2,500 per month and sell it to other business minded people for 36 times the new profit.

It happens every single day. People like you and I buy sites for $5,000, ramp them up over the course of a year, and sell them for $100,000 12 months later.

I see nothing wrong with either option. If people need the money right now, then sell your site and move on. If an investor takes on the risk of buying your site and in turn resells the site for 6 figures, good for them.

Everyone wins.

It's mostly a mindset thing. People who have never made $100k selling a website don't "think" they can ever do it, so they continue to sell their sites for $5k rather than look long term.

Max

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Gunter Eibl

16 years ago

Originally Posted by BuySellSites

John,

It happens every single day. People like you and I buy sites for $5,000, ramp them up over the course of a year, and sell them for $100,000 12 months later.

Max

For me the key question is: Where are you finding your buyers that are willing to pay a reasonable price for the site?

Gunter

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Lavender 16 years ago

Originally Posted by Gunter Eibl

For me the key question is: Where are you finding your buyers that are willing to pay a reasonable price for the site?

Gunter

Very good question deserving a straight answer.
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BuySellSites

16 years ago

Originally Posted by Gunter Eibl

For me the key question is: Where are you finding your buyers that are willing to pay a reasonable price for the site?

Gunter

We use a business broker, that's the only way you find real investors with that much money to spend. I've never been able to successfully sell a site on my own for more than $20,000 just using sites like Sitepoint because there are too many tire kickers & dreamers.

Most of the solid internet businesses are sold on sites like BizBuySell.com, etc. They focus on selling real businesses, where the valuations are more realistic compared to Sitepoint typical valuations.

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koolphoto 16 years ago

I don't think selling sites for quick cash is a great business model. You must always keep creating to make income. If you stop creating or selling your cash flow dries up until you start again. It is a vicious circle.

Investing in your own business by building sites and working to get income will give you a better sustainable business. Eventually when money starts if for some reason you can't work for a few weeks you will still see money coming in from your efforts.

I now sell some of my sites only when I want to move into a different area and either have no time to maintain it or lose interest in maintaining it because I have found something else that pays better.

I learned early on to "bite the bullet" by not looking for quick cash in the beginning and build my business. Today, because of this, I pretty much can do what I want and take days off when I feel like it. Something that I could never do when I was working 9 to 5.
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Gunter Eibl

16 years ago

Originally Posted by BuySellSites

Makes sense. That's the only way to get a reasonable price. For some reason, which I will never understand, people are throwing away their sites for a few months earnings on sitepoint. That makes sitepoint probably a good place to buy sites but not for selling them.

Can you tell me how much the business brokers fee is?

Gunter

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SuiteJ 16 years ago

Hi John,

I'm one of those guys who flip fairly often - but typically brand new sites. It's for consistent cash flow and I have a system that works pretty well that I can use on a regular basis.

That being said, a lot of flippers you see (like myself) selling sites regularly are doing so as only one aspect of their business/online endeavors. Or, they may be just creating quick capital to invest in a bigger project.

I also build long term investments to "keep", but they are usually a different niche than what I would sell, and I'd say about 80% of the "flippers" I know also have sites that they keep and/or another source of online income (service, product, etc.)

Also, keep in mind that many "flippers" outsource the tasks required for the bulk of their projects and simply act as a "project manager" while making profits off the sales.

Cheers!
Jay
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Melody 16 years ago

Flipping is simply one more business model that we utilize in our 'multiple streams of revenue' overall biz model. I frequently will build and flip a few sites for a quick cash infusion when we want to launch a new project, rather than take it out of investments or put it on a credit card.

If you have it down to an easily replicated system - it's a few hours worth of work for a very nice return.
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~kev~ 16 years ago

Part of why people are selling their sites cheap might be because of the currency exchange rates. Someone in some third world country lucky enough to get internet builds a webpage using wordpress. Then they sell that site for $100 US dollars. Well, in that country $100 might be a fortune.

Other reasons my include the site was built at spur of the moment. It was something they were interested in for a few months, then lost interest.

How much something is really worth can not be measured entirely in money.
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Edward Aw 16 years ago

There is on old saying "a bird in hand is better than two in the bush". It is a matter of risk and reward.

Not everyone has the ability to take a web site to where it needs to be to make a killing later.

Not everyone can wait until tomorrow. For some, tomorrow will never come.

I got interested in flipping sites because I really really want to get a 15 inch Macbook Pro this year. I have a buddy who works for apple and can get a 1 time a year 25% discount!

In fact, I am wanting to sell three related sites that have been around for 4 - 5 years that is getting 8000 - 10000 uniques a month. I haven't worked on them in quite a while. I also haven't monetized like I should or could. Anyone have any ideas or want to buy ;-)

So why am i selling? I want a Macbook Pro now!

Anyways, I guess it all comes down to a preference.

One more thing... I can focus on projects intensely for a short period of time. Then i lose focus. Web flipping fits me better.

Blessings and Merry Christmas!

Ed
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- debra 16 years ago
  
  I'm just about done building a lead generator for those prepaid legal ppl.
  
  I'm trying to decide on how to present it. I can either:
  
  1. Sale it off as a one time shot.
  2. Sale it off to prepaid legal uplines for more and give them rights to sell to thier downline.
  
  or...so far my favorite...
  
  3. Sale it off cheaper and provide hosting through a reseller account...charging 5 bucks a month. Maybe add an affiliate program a little later on.
  
  I'm looking for immediate reward as far as future rewards.
  
  Then maybe, I'll learn to rinse and repeat.
  
  Thanks
  
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dogisland 16 years ago

I'm definately interested in buying sites. I want to build up a (relatively) passive income and with time constraints it's easier for me to buy my way out of full time employment.

Anyway, please pm if you're interested. Must be reasonably established sites with income. Thanks.
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Debbie Songster

16 years ago

What am I missing here? Why are so many people selling their web
sites when the medium and long term cash potential -- nearly 100%
certain "autopilot cash" -- is right in front of them?

Let me put it yet another way. Am I a sucker to think this way?
most Warriors talk about SELLING. It's almost always about quick
cash; quick kills. Are any Warriors BUYING sites and holding them
for long term profits?

Site flipping doesn't work real well for me. I tried it but I can't bring myself to sell - especially not for what some people want to pay.

My problem is I build them (some of them are quite complex) and then can't part with them because they make money. Most of them show the potential to make a lot more than what I can sell it for so why sell?

I've changed from site flipping to offering semi customized builds.
Semi customized meaning - you provide the topic / niche and 5 main keywords plus the domain name (optional) and I'll build it.
These are less expensive than buying an existing site

So where are the best sites to flip your website at?

Thanks

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kislany 16 years ago

Another perspective. Some newbies like me, who tried several things and only paid money for this and or that wso or ebook or product, and haven't seen a dime yet in income. We keep hearing how easy it is to make money, hey everybody is doing it. But we don't seem to succeed. To not lose interest, focus, etc, we want to see some money coming in NOW. Even if it's only $100, but something that goes in our paypal account NOW, so we can prove to ourselves that yes it WORKS. At this time, the amount is not relevant. It is the point of making money. Once you see that indeed, it works, then you move on to something more longterm. At least that's my take, as a total newbie, at it.
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- summer07 16 years ago
  
  It's a good short-term cash business model to use along with medium and longer term business models.
  
  You can build sites across a broad selection of niches, either to test niches for personal interest or for profitabilty. Once a niche and site shows itself to be interesting or profitable, develop it further. Then sell off the boring or unprofitable sites.
  
  Flipping can actually fund your market research.
  
  Audre
  
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Allegro 16 years ago

its as valid as a businessmodel like every other businessmodel. the principle is easy - i spend like one weekend (with large breaks) on a page. thats like 5-6 hours (yeah i like to sleep long and party hard^^). i put no ads on it, i get no traffic. i just setup my systems, and leave the monetization and traffic to the buyer. selling point? about $1k.
why? easy to tell - the only thing they have to do is to add their ad-streams to it. most people who buy sites have their own setup for this, so why bother and try to get some money out of it? i dont get approved into adsense for what reasons i dont know, but i see no other benefit.
plus i setup some basic traffic sources.

and the best thing: i dont use own content. i build sites that can be easily made authority sites. i can sell the same site over and over again... and its up to the customer to make the site to it - its pure marketing. i deliver him a site that can work without maintenance, and he markets it. easy as that!
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Biggy Fat 16 years ago

Interesting discussion here. I'll be on the lookout for more!
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- NiallR 16 years ago
  
  Boredom is my key point for flipping a domain.
  
  There usually comes a point with some websites where I just lose total and utter interest in the topic. Rather than let it go stale I'll flip it for a few thousand and reinvest that money (or squander it on a motorbike or something else dumb lol)
  
  It's a useful short term business model but there are one or two domains that I've sold that I do kinda regret selling. The long term income is always going to win but the money I made from them was useful at the time.
  
  Just my 1/50th of a Euro :-)
  
  Niall
  
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dndoseller 16 years ago

Allot of people sell because they get bored with a site or don't have time for it anymore as well. I tend to get tired of one site and move on with another and sometimes feel like selling them. However, I don't because its a hassle to sell a website and all the domains I have at least make a profit above the domain and hosting fees.
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Paul Hartunian 16 years ago

ste25,

I read your blog. Are you saying that you have only one keyword per AdWords campaign? So you could wind up with hundreds of campaigns, each with one targeted word?

Thanks.

Paul
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- Martin Luxton 16 years ago
  
  As mentioned earlier, the real money is for the people who buy a site, add more value and resell it.
  
  The "secret" is to have ready buyers who will pay a premium price.
  
  It's the same as real estate. Earlier this year a foreign company bought some land in southern Turkey for $15,000,000. They sold it on a month later for around $80,000,000.
  
  Of course, the original vendors are complaining but it's their own fault. They didn't appreciate the value their land could have to a different buyer.
  
  Martin
  
  Thanks
  
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  IMChick 16 years ago
  
  The better business model is to register, host, build and hold. The quick flips are just for quick cash. Some you win, some you lose on a build and hold if the info ages out of the market or if trends change dramatically. They also take a lot more work than a flip.
  
  I think that the opportunity here is to buy the quick flips from someone who did all the set up work, and hold. Either you benefit from the monthly income or the sale at 10 - 50x the initial flip price.
  
  Looks like lots of people are filpping for immediate cash, though.
  
  Thanks
  
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Charann Miller 16 years ago

I think it's great thing. The flippers get to generate some quick cash which suits them and the buyers get a readymade asset to further grow and add value to without having to have started from scratch.

It's a win-win situation really.
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carolver 16 years ago

Some people just enjoy flipping websites and they can sell them pretty fast.
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yinkamuyi 16 years ago

I prefer parking my site instead of flipping it by doing that you can still generate little income from it.
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Louis Raven 16 years ago

I prefer not to give my opinion but I more or less stand with you John. Why sell your retirement fund for a holiday?

Flip 1 a month and in a year you could have had 12 cash machines all possibly gaining strengh each frickin day lol.

Louis
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Site Flipping: Am I Really Missing Something Here?

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