Purchasing a developed website is like all other investments – it can be a source of profit and a great addition to your portfolio, or it can be a total disaster, costing you more in the long run. There is middle ground, of course, with websites that are not great but with a little more work, will produce far better results. The only question is being able to tell the difference.
So how can you tell if a website is worth your time and money?
Answering this is easy, as soon as you break it down into a list of 5 questions our SEO and web development team had put together for you. So, without further ado, here it is.
The 5 Questions to Ask When Considering to Buy a Developed Website.
Current Profit Rates. Here it’s important to emphasize that you are not looking at revenues, but at the net profit, which takes into account any amortization you will be expensing on the purchase as well as maintenance costs. Look beyond what the site is grossing. It may still be losing money.
Revenue Diversity. If a site is only making money on one thing, like selling ads, or offering a single product, its value is reduced. This is the proverbial basket with all your eggs in it. Drop it, and your entire profit stream dries up overnight. However, if the revenue source is not diverse but the site presents opportunities for adding more, it might be worth looking into.
Traffic Diversity. Every Toronto SEO company specialist will tell you that traffic also has to be diversified. A single Google Update can cost you 20%-40% of your traffic, depending on how you attract it. If your traffic comes part from Google, part from Bing, part from ads and part from Classifieds Boards, getting hit in one traffic source will not cripple you altogether.
The Site’s History. If the site is relatively new, it may have not grown into it’s full potential yet, but then again, it might never do. If it’s been around for years and only generates $10,000 a month, then it’s also very iffy. The site must have enough history to show it’s sustainable. How does the traffic curve look over the years? Examine the ups and downs, ask what they represent, what segments of the market were reached, which were lost and why?
Content Quality. Is it all fresh, original copy, what are the content development costs? Read enough site content to have a general idea, and check a few pages at random for duplicate content. This is important because duplicate copy can backfire badly, dragging down an entire website in the process. Content development costs are very important as well, especially for essential topics. If a site has writers on board, you need to either keep them or replace them with your own. If a writer is expensive and hard to replace (an expert on a technical topic), you may end up sitting on a landmine. Finding out those costs in advance will save you from unpleasant surprises in the future.
We hope this was helpful, but if you are still not sure, it’s always a good idea to consult an expert Toronto SEO company to assist you in doing the math and making the right decision.