What I look for when evaluating new potential portfolio sites center around two main things: traffic and proof of income. This may seem logical and maybe too simplistic, but those are really the big two things that really matter. But, as with anything, there are caveats to these also. You are going to have to learn how to read traffic charts and also need to ask the right questions to determine if the income is truly consistent or if it is from separate project that the owner was working on (a pay per click campaign, for example.) Traffic is going to depend on the scope of the site you are dealing with. If you are looking for a simple Adsense site, then you are going to want a lot of traffic, in my humble opinion. If you are looking at a dropship site, you might not need an exorbitant amount of traffic as long as the conversion on the site works well. So they both are going to be a dynamic evaluation.
Other things that I would look at: backlinks, advertising paid for, current and/or pay per click campaigns,
Let’s take a look at each of these.
-Backlinks
Google ranks a site based on popularity. Also, they look at how popular sites are that link to your site. So knowing where inbound links are coming from is helpful. To find out how many links are coming to you site, you go to google and search for:
-Current traffic
Some site sales postings will talk about how much traffic is coming to the site. One of the questions that needs to be asked is if this traffic is paid for or organic (link to definition). Why might you ask is this important? The main reason is that a site could be making a ton of money on affiliate programs, but if the owner is paying out half of the profit in PPC traffic, the deal might not look so sweet. Plus, while PPC is a good game, there is definitely a process behind it. One of the best people to learn this from is Perry Marshall, whom I would call a PPC expert. One example that I once saw was a site for sale that claimed income of around $150k/month, but he was also spending around $45k/month in advertising. While this is a good thing, I am not quite at a point where I can afford spending $45k on advertising in a YEAR let alone the first month out of the gate. So there is just some planning that needs to be done.
-Current advertising strategy
Knowing this, as mentioned above, will help you determine the profitability of the site. I have seen some sale postings that offer up the advertising campaign as a bonus with the sale of the site (which I think should be a mandotory when buying a site). This includes the PPC campaigns, but also other types of promotion the current owner may be doing such as banner advertising, ezine ads, offline marketing (postcard mailings, classified ads, etc) and so on…. the point is, don’t assume…ask. If a site owner doesn’t want to fess up, then buy beware. They might be hiding things for a reason.
Another thing that I watch for is salesy copy when selling a site. I am not saying that when selling a site, you shouldn’t promote it…. but one of the things I see quite often is the claim that the site has “huge potential.” Okay, I don’t care what you are doing on the web, EVERY site has HUGE potential. Look at Alex Tex and the MillionDollar Homepage. Who knew that his model would be as wildly successful as it was. Alex did some ingenious things to get that site going, but no one thought he would make a cool million in just over a half a year. So when I see in a sales posting, that a site has a huge potential, I enter with caution. I have a ton of site ideas on my whiteboard in my office, and they all have potential too. It’s what you do with the site that counts. Just use discretion. You have to do your research to find the true gems.
Stay tuned: I am thinking about having a ’site for sale’ posting area. I will explain why in the next entry.