3 Red Flags to Be Aware of When Buying a Website

By Ryan Kaufman

f you are looking to purchase an existing business website rather than build your own, you should accomplish the research and ask questions just as you would when deciding to buy a car, a home or a brick and mortar business. Here are three questions or red flags you need to wave in front of any website broker you may do business with:

1. Is the website already generating an income? If it's making money, then it is already in good business shape. That's not to say it can't be improved upon, but an existing income is a great indicator. Get a year's worth of sales data to determine if your new potential income source is steady, improving or if it is slowly decreasing over time. If the website has been active for less than a year, you need to get the full history before deciding to purchase.

2. Is the website new? If it has been active for only a few weeks or even a couple of months, it doesn't have very much history yet with the various search engines and probably very little, if any, traffic. There is no reason why you can't let the current owner do the work, establish a popular, high traffic website and then purchase it for your own use. If the site is new and does have significant traffic then you should check the backlink profile to make sure there aren't any "blackhat" or spammy links pointing to the site. Many times these types of links can rank sites fast, but once detected by the search engines they quickly get discarded.

3. What are the advertising costs? The best way to determine this is to ask for the current owner's advertising specifics. Which service is used (Bing, Google, etc.), number and type of keywords used, negative keywords used, price per click and so on. If there is simply a lack of strong keywords or the current owner is not budgeting enough for visitor traffic, then this could be a website campaign you can easily improve upon.

If these three questions can be answered to your satisfaction, then this may be a smart purchase. Don't forget that if you ever decide to sell your website in the future, you'll need to make sure you can answer these same questions to a buyer so you can get the best possible price. Buyers will insist on having a very complete and transparent picture of the traffic and revenue details if you wish to maximize your site valuation.


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