- Digital entrepreneurs are applying the same concept of flipping houses to online businesses.
- In 2020, Chelsea Clarke earned $127,000 flipping 13 websites and brokering sales for 50 more sites.
- She said anyone can learn how to flip websites, but it’s more time commitment than a side hustle.
- See more stories on Insider’s business page.
If you’ve watched HGTV, you’re probably familiar with the concept of flipping houses. Entrepreneurs with some knowledge of SEO and affiliate marketing are applying the same approach to websites.
Chelsea Clarke, founder of Blogs For Sale brokerage, can take a rundown blog that’s nearly invisible in Google search and turn it into a desirable online business that generates $16,800 in a year. Just as a home fixer-upper sees the hidden potential in a dilapidated bungalow, Clarke can tell when a website could be a five-figure investment if given some TLC and SEO.
The idea for her venture came when she was marketing and building websites for a brokerage that sold brick-and-mortar businesses. She figured she could apply the same methods to online businesses. “There are so many interesting ways to monetize an online business and you don’t have to be in it forever,” she told Insider. “You can sell it and you can move on. You can take that income and put it towards your next project.”
Clarke said her company really took off last year as more people sought online revenue streams during the pandemic. In 2020, she earned $127,000 from flipping 13 websites and brokering sales for 50 more sites, verified by documents reviewed by Insider.
The process of flipping a website can be broken down into three main steps: buying, investing, and selling
Step 1: Buy a website at a low price, sometimes just a few hundred dollars. It should have something of value to be worth your investment — like interesting content or thousands of monthly pageviews. You can purchase from a broker like Clarke, or marketplaces like Flippa.
Step 2: Invest time and resources to revamp the website and ramp up its value. Most importantly, it must earn revenue through ads or affiliate links. Clarke said you don’t need a lot of money or a team, perhaps just a few freelance writers to help with content creation.
Step 3: Sell it to someone looking for an audience and a revenue stream. Large companies might buy it to market products or another investor may want to resell it. Entrepreneurs or business coaches might buy a site full of content related to their niche to get a headstart on gaining clients.
Training and certification aren’t required, but recommended
Unlike real-estate agents, most states don’t require a license to sell websites. However, Clarke highly recommends getting trained and certified to boost your knowledge and credibility. She trained through the International Business Brokers Association with a program focused on selling brick-and-mortar businesses. She was able to apply what she learned to the digital space, combined with her experience in marketing and content creation.
Then, start small to build up your portfolio of businesses, just as house-flippers work their way up to larger projects as they earn more.
Clarke says, anyone serious about making money will need to make a full-time commitment to build your network and continue educating yourself in marketing and business development. “It’s not a side hustle,” she said. “You are networking with buyers, investors, and sellers every day.”
Understand the legal documents
When you sell a website, the owner is also selling all of their rights to any photos, trademarks, LLC, logos, and content linked to the site. “Everything that goes with the brand goes to the new owner,” Clarke said.
You’ll need to understand where these assets fit into the legal contracts at the point of sale. Clarke works with lawyers to facilitate the legal documents for buyers and sellers and she advises brokers to always have their own lawyer read over every contract.
Finding the right niche: Health, wealth, and relationship sites ‘will always be sought after’
To get top-dollar offers, Clarke said there are three main in-demand niches: health, wealth, and relationships. Websites focused on these subjects get a lot of traffic and provide numerous opportunities to monetize.
The caveat is that these are saturated verticals, so it’s good to also consider niches that are gaining popularity and offer lots of ways to monetize with products, like pets and mental health.
For example, Clarke purchased a mental health website for $3,500. The site had 300 quality articles offering helpful advice, but wasn’t making much money yet, so she monetized it through affiliate programs with mental health companies. Six months later, she sold it for $25,000.
Clarke recommends finding websites on topics that you personally connect with and have knowledge of — it will make developing the site easier and more fun.
Worth the investment: High-quality content is a must
The most important asset of a website will often be its content. Engaging, helpful posts and articles are a must. “Even if a site is getting so much traffic or making a lot of money, if the content doesn’t really resonate and it’s not quality, I don’t see how I can take it further,” Clarke said.
It also helps when the content isn’t too personal, unless it’s part of an appealing personal brand the owner is willing to sell. Service content that helps the reader is the easiest to monetize, because there are more opportunities to link to related products.
Determining the listing price based on 5 key assets
Once you’ve revamped a site, it’s time to sell — unless you want to keep it for a while longer to continue earning revenue. Clarke said buyers and investors will typically pay two to three years times the monthly profit.
There are five assets Clarke contributes to a website’s value and listing price: revenue from ads and affiliate links; SEO rankings and traffic from Google, Pinterest, Quora, and other sites; number of email list subscribers; and digital products or merchandise. Social media accounts are an added benefit, but not usually factored into the listing price.
Clarke recommends using an online service called Escrow for payments because she says it offers secure transactions and holds the money until all the paperwork is signed and the sale is official.