Website investing

The first time I decided to buy a website, it didn’t go well. I was scammed and I lost $2,000. Thinking about it, this may have been the only bad thing that ever happened regarding website investing. It took me a few years to bounce back, and try again, but once I did, there was no turning back.

In case you haven’t figured it out yet, you can actually build or buy websites that are generating cash flow. But my guess is, since you are reading this article, you already know about this option, and are interested to learn more.

Don’t be put off by the way my story started. As a matter of fact, don’t be put off if your website investing journey started the same way! These websites are revenue-making cash cows. Golden egg-laying geese. And guess what, they are for sale!

If you are outside of the chosen few, when you think about a website, you are probably thinking about Facebook, Gmail, Google, Amazon. You could also think about a small website that is owned by that small brick-and-mortar business where you occasionally buy food for your pet. But it’s a brave new world out there.

Not so new anymore, but still a lot of land-grabbing opportunities. How do I know? Well, just a few years ago, people were asking for 12X multiples when they were selling their websites, now it goes up to 40X. This is 40X monthly profits.

Why invest in a website?

Obviously, when I say “website investing” I don’t mean “invest in your company’s website”. You don’t have to be a business owner with a website to “invest in a website”. What I mean is “buy a website”, or several websites that are monetized by themselves. In many cases you don’t even need a product, or build a product or a service. 

On these websites, you can resell products and services from other companies, or display ads and not sell anything. Another great thing about this is that you get to choose which products you want to “carry” on your website. This way, you can choose the best, most ethical, highest quality best selling products, and sell those!

Sell only the best products, from the most reputable companies

A small website that’s making just $500 per month, is like a small business. And you can invest by purchasing it. It is an asset and treat it as such. This, on the other hand, is a pretty broad topic (how can a website make money), but I had to mention it in order to get your gears running. This is different from domain investing because most domains don’t generate cash flow.

Often times domain investors turn into website investors. There’s more work involved, but so is the paycheck. Furthermore, if you have all the skills of a domain investor, your website investing game will profit from it!

Profits are better than wages.
— Jim Rohn

If you are still working for someone else, it probably means you have to show up at a certain location, at a certain time. If you own a few websites that are generating income, that’s not the case. Essentially, you are your own boss, you get to chose your hours. It’s like owning a small website portfolio, a small company. Better yet, you can keep your old job, and make something on the side. (As long as you keep things legal and report your revenue).

How are these websites generating revenue?

There are plenty of options so, let’s name a few:

  1. Content websites (with various ads)
  2. Content websites (with affiliate links)
  3. E-commerce
  4. Flipping

There are many more combinations, but if you are starting from scratch, you will probably get into one of those. You could say I am a more seasoned professional, so on top of the one I already mentioned, I also operate a SaaS business (software company). Running a software company is not exactly connected with website investing, and most entrepreneurs just run their software company and that’s it.

However, there are investors that buy, keep and sell software companies, as a part of their portfolio of websites. Now mind you, I am doing this on a very small scale, but there are investors that buy software companies for north of million dollars, and then they go on and buy an E-commerce website for 2 million dollars, and then they buy a content site for half a million, and so on.

  1. Content websites (Monetization: ads)

If you are own several content websites you have an easy and passive option of monetization. Running ads. Again, you could take a more active role (sell ad space) or a more passive role (display ads from platforms such as Google AdSense).

I own about two dozen small content websites that bring around $1,000. For all you meme lovers, here’s an appropriate one.

This is not all I make in my life, but let me tell you, these are the easiest $1,000 per month I make in my life. And then again, raise your hand if you would like $1,000 per month added to your bank account. Thought so.

  1. Content websites (Monetization: affiliate links and ads)

The following is basic knowledge, but let’s cover it quickly for those who need it. In the first category “Content websites (Monetization: ads)” you make money when someone clicks on the ad displayed on your website. You can get from 0.50 to $5 (or more) depending on who clicked the ad, and what the website is about. 

In this (affiliate) category, you get your commission when the item is sold. You get $0 no matter how many clicks the ad gets. This is a great thing because these affiliate commissions can bring you as much as $100, $1000 or more depending on the product or service you sold.

These can be products on other E-commerce stores, services from other professionals and companies and anything that has an affiliate program. Usually, in the past, in situations like this, I would mention a certain product to show you an example, but links placed like this rarely entice the purchase.

You really have to go above and beyond to provide value to the reader before they will be moved enough to purchase the item. Also, the reader has to be in buying mode. Anyway, don’t expect a single paragraph like this to exlain how to make sales with affiliate commissions. There’s both art and science to it. Again, the great thing is that these websites are for sale as well so you can buy something that’s already working well, and then learn and build on top of that.

  1. E-commerce

You could say that any time you are selling something on your website, this is e-commerce. But there are also full-blown online stores with thousands of items. And then again, there are online stores with thousands of products, and there are “Amazons” of the online world. So, if you have 2 products in your online store, or 2000 or 2000 million, it’s E-commerce.

As a website investor, you can buy an online store with X amount of products. These products can be developed and produced internally, or sold via affiliate links. For example, I own a “web store” that offers thousands of products, which are all coming from Amazon. 

I bought this website for $700 back in July 2017. At the moment, it is February 2021, and this website made over $2000. I haven’t invested any time and money (apart from the initial $700, and the yearly shared web hosting + domain name) into this website.

It would have probably made more if I worked on it, but I mostly spend time in my main business, and sourcing website deals (buying and selling). Also, I no longer buy such small websites. This one I bought when I was still testing the website investing waters, and didn’t have money for expensive mistakes.

  1. Flipping

You buy a website, the website is growing, generating revenue, you made your investment back. And then along comes a potential buyer, and offers you 40X on your monthly revenue. You can then decide to sell, or as they say in the biz, flip the website.

You might be asking, why would you sell a website that’s doing great. Well, take my story as an example. I am testing the waters as a website investor. I buy a website for $1000. In 24 months, the website is doing great, and it has made me $1000. So, after 24 months, I have $1000 in my bank account, and own a website that is making roughly $40 per month. Not much, but it pays some bills. 

Then someone comes along, and offers $1600 to buy this website. It is a premium multiple of 40X on monthly profit, so you are excited. Besides, in the past 24 months, you bought other websites, some ten times bigger! And working on small website making $40 no longer excites you. You sell the website for $1600. 

Let’s do a little math. You invested $1000, and after 24 months, you made $1000 (revenue) + $1600 (sale) a total of $2600. Somebody check my math, is that a 260% return in two years?

Some of you are not excited about $1000, so just add a zero to it when you are buying a website. There are small and big websites that are for sale on marketplaces such as Flippa, Empire Flippers, FE International and many others.

Now let’s get back to the beginning. If you have a website that has some traffic, here are some ways how you can monetize it.

Monetization platforms:

  1. Google AdSense and similar ad platforms
  2. Amazon associate and similar affiliate platforms
  3. Direct affiliate commissions
  4. Selling various digital products
  5. Selling various physical products
  6. Sponsored articles, banners, backlinks

Main traffic source (free and paid):

  1. Search engine (free or paid)
  2. Social media
  3. Email list

As I mentioned earlier, I can write a lot about this topic, but it was important to at least just mention this so that you get a better understanding.

Have in mind, this is barely scratching the surface because a combination of each item on the list is possible. You could have a website that is selling man beard products, with the main source of traffic from a search engine, and another website that is selling the same type of products, with a different source of traffic like social media and email marketing. And yes, you can have a combination of those on a single website.

On the other hand, you could sell software, or a plugin, or a widget or an app you developed, or you could just drive traffic to your website, and resell software someone else spent millions of dollars to build. Moto here is, if you can’t beat them, join them.

Build or buy? Fastlane to website investing.

Sooner or later, everyone faces this dilemma. Why spend $10,000 on buying a website, and risking that money, when I can build a website from scratch. I’ve tried both, and I can say I am now in the second tent. Maybe, you will be in the “build the website myself” tent. I will take buying a website any time over building a new one.

You could say I am biased, but you can (and should) treat this post as one man’s opinion. But I am not biased. Webmaster.ninja (the tool that helps website investors, and managers) doesn’t care if you built a website, or bought a website. So I don’t really profit if you built or bought a website. 

The thing is, once you start doing it, it’s going to be impossible to just stick to a single website! And once you have several websites, it becomes hard to track and manage them all.

  • Some people are good at building, and some are good at investing. Others just like the process of building, while others are more excited about investing. Some people read books about building, coding and designing, some people read books about financing and investing.
  • Building a website takes a lot of time and effort before you start getting any ROI. If you buy a website, you start getting returns the very next day.
  • If your hourly rate is $100, it doesn’t make sense to invest 100 hours into setting up a brand new website and writing initial content. And if your idea is to “just outsource everything”, you better keep track of all the expenses, so that “building from scratch” doesn’t become more expensive than “buying a website”. And also, be certain that after you spent $10,000 into a website, it will give returns.
  • I will say this, there is a time, where I would pick building a new website from scratch. Sometimes, you want to get into a certain niche, or you have a limited budget, but you can’t find a website that’s for sale. Months go by, and no one is selling. Then it could be a good idea to just build a website, and get into that hot niche you are craving, and do it fast.
  • Naturally, if you don’t have any money to invest, then you have to build a website from scratch. That’s where you should start. Besides, it will be a great learning experience later when you are managing your websites.

Is it too hard to own and manage several websites?

Depending on the size of your business, and the number of websites, it could become difficult at some point to manage all your websites. For me, it’s a bit easier because I use a special tool that helps me keep track of everything. That way, I can just log in twice per day (once in the morning and once in the evening) and check how the websites are doing. I absolutely love the process.

Website investors keep track of a ton of things:

  • Is the website up and running?
  • When are my domain names going to expire?
  • When are my SSL certificates going to expire?
  • Has my email been blacklisted for spamming?
  • Is the traffic coming to the website at the rate I am expecting?
  • Do all my websites load in under 3 seconds?
  • Is my AdSense income as I am expecting?
  • Does the website look like it’s supposed to?
  • Is there a WP error like Error Establishing a Database Connection?
  • Was there a surge in backlinks?
  • Am I ranking for some new keywords?
  • Which of my pages are getting the most traffic from Google?

For me personally, this is second nature because I ran a small web hosting business. But I can see how this could become stressful for someone managing even a small website portfolio. That’s why we built Webmaster.Ninja. To help website investors manage and track their portfolios.

Webmaster.ninja tools and monitoring can help you with website investing

Webmaster.ninja tools and monitoring can help you with website investing

Where can I buy websites?

I wrote an extensive article on where you can find online businesses and websites that are for sale and begin website investing. If you are serious about looking into websites that generate revenue and that you can buy, I definitely recommend reading that. I guarantee you will find at least one good opportunity on any given day. It is a growing industry, and each day more and more websites are for sale. Not only that but old marketplaces are being upgraded, and new ones are showing up.

I don’t have a course where I walk you through the process, find great deals and help you to protect yourself from scammers. Right now I am trying to post as many articles as possible, and I am working with my team to improve Webmaster.ninja tool that helps you manage your website portfolio. If you have any specific questions regarding website investing, I am more than happy to answer them.

ABOUT THE AUTHOR
I have been an Internet entrepreneur since 2006. Co-founded and sold a small web hosting business. I am the CEO of WhoAPI and Webmaster.ninja. I also own 25 small websites in various niches.
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