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December 21, 2010

7 Tips for Flipping Websites for Income

Flipping websites is a lot like flipping houses – except that they’re totally different. When you flip a house, you buy it for $100,000, spend $30,000 more than you expected fixing it up, which takes three months longer than you hoped to make mortgage payments, then sell it for $120,000. Or so I’ve heard from some folks who have been a little burned.

With flipping websites, it’s a bit different in that you’re dealing strictly with digital goods, so to speak, so there’s no material cost involved. And there are many more opportunities for old-fashioned, do-it-yourself, boot-strapping – IF you know what you’re doing. And if you don’t? You can still get burned, so be careful.

Here are some tips for launching a website flipping venture:

Stick With Well-Known Sources

My own favorite is Flippa. At one time it was under the umbrella of the marketplace and eventually launched as Flippa. Flippa offers some nice and helpful features such as:

* Current revenue, with verification of anything suspicious.
* Detailed traffic and ranking information.
* A secure transaction method.
* Domain registration information.
* Both bidding and buy it now possibilities.
* Incredible searching and sorting abilities so you can find a niche-targeted site in your price range easily.

There are other sources, such as the Digital Point forums and even eBay, but the few sites I’ve bought and sold have occurred on Flippa.

Watch Out for Spam and Scam Sites

Yep, they’re everywhere, and sometimes they sneak through on Flippa as well. You’ll often see sites for sale that seem fishy, make too many promises, or look way too familiar. Go with your gut and walk very carefully. Do your research and verify claims of original content, high traffic numbers, and revenue earned. Make sure they haven’t been blacklisted by Google and be sure to ask every question that crosses your mind before purchasing to see that the owner answers well.

Stick to Your Budget

If you’ve decided to invest $300 into flipping a website, don’t give into the temptation to spend $500 on the hope that you can turn the website around and make even more.

Write Out an Improvement Plan

Before buying, make a list of the things that you think you’d need to do to turn the website around. Such as:

* Freshening up the graphics.
* Freshening up the typography.
* Addressing usability issues.
* Re-structuring the content flow and/or sitemap.
* Adding social sharing features.
* Moving to a new platform.
* Adding more features and services.

Consider Your Time and Expense Budget for Improvements

Decide how long the changes will take, how much money you might spend on graphic design, data migration, etc., and whether these changes will actually improve the site enough to sell it for a profit or not.

I once heard that improving a kitchen or bathroom will yield more than a 100% on your investment when selling a house, but adding on a deck will wind up costing you. The same is true of websites. If a complete redesign is in order, it may be smarter to buy your own property (domain name) and build from scratch to begin with.

Do It Enthusiastically, or Not at All

If you’ve been around the WordPress world much, you might know the story of Small Potato, who sold to a guy who made great promises to the site’s community and then never really showed up again. His lack of passion created a community backlash from the people who had been so loyal to Small Potato. It was really the first premium WordPress theme marketplace around, offering “premium” themes for a $5 membership fee. Small Potato felt so bad about the sale that he refunded everyone’s fees personally, of his own accord.

So, if you’re passionate about selling bells and whistles, then by all means, buy a bells and whistles website, fix it up, and sell your bells and whistles website after building the community. But if you don’t know a bell from a whistle, veer in a different direction.

When It’s Time to Sell It, Sell It

If you’re growing a site, chances are it’s because of the energy you’re pouring into it. In many cases, continuing to pour more energy in will produce even greater results and growth. But at some point along the growth curve, you have to determine when it’s time to sell it, if at all.

The Internet is filled with stories of startup companies who were offered great sums of money for their growing ventures. Some turned down those opportunities to sell, only to go on to even greater heights. The obvious risk is that someone else will beat you to the punch and release a better website first, but this is the open world of the Internet. There is room for multiple sites about bells and whistles.

Brandon Cox has been involved in many areas of entrepreneurship and web development, including helping people flip websites for cash.