What To Look For When Buying or Selling Websites In 2020

This year has been quite turbulent. The pandemic is affecting the economies worldwide; many businesses have shut their doors, some saw a staggering drop in their revenue, while few have been thriving and reaching historic highs.

When it comes to the online space we’ve also witnessed some big and dramatic changes: big CPM drops, Amazon affiliate fees change, Google May Core update…

In this post, I want to write about how all this might affect content and affiliate websites and what are the things you should look for in Q2 of 2020 when it comes to buying or selling websites.

Considering I haven’t written for quite some time now I will also give a quick update on my portfolio.

Changes for Content websites in Q2 of 2020

1) Lower RPMs

There is a long article on the Ezoic blog about how coronavirus is affecting ad rates.
They have a lot of graphs, indexes, videos and they regularly update this article with ad rate indexes and projections.

If you’re looking for a TLDR, the CPMs got drastically lower in the second half of March and during April.

Most companies cut their advertising budgets. Fewer advertisers are competing for the ad space so CPM is lower. In some cases, the drop is as drastic as 70%.

From mid-April, there was a small improvement but I’d say that how the rates gonna continue depends heavily on the economy in general.

Whether it gonna be a V-shape (quick bounce up) or a U-shape trend (a long drag on the bottom before recovery), it’s hard to say at this point and you can find advocates of both scenarios.

The consensus is that there will be a drop in global GDP in 2020. So my conclusion is that the overall RPM also gonna be lower in 2020 than what it was in 2019.

2) Change in traffic

Many websites and verticals experienced growth in traffic due to the lockdown. People are staying inside more and in these times the Internet is your best friend.

Whether you’re looking for instructions on how to cut your hair, searching for pics of cute kittens, or searching where to buy a 10-years supply of tuna cans or nachos, the Internet got you covered.

Ecommerce grew quite a bit while many stores were closed and more and more people prefer to get things delivered then queue up in stores.

Not all industries are blessed with this increase, though. Travel bloggers report losing up to 90% of their traffic. Obviously, very few people are looking for travel advice while just going to a nearby store feels like a big adventure.

3) Amazon cut its affiliate rates (drastically)

April started great for many Amazon affiliates. Conversions were among the highest competing to overthrow the December when it comes to volumes and conversion rates.

Amazon was struggling to fulfill its orders due to increased demand and its record sales volumes also drew their stock prices to an all-times-high record.

Then on the 14th of April Amazon sent an email to all their associates how the Affiliate rates are changing from the 21st of April. Looking at the new table made many affiliates’ stomach turn while seeing rates being massacred and cut up to 80% off.

Some industries got hit more than the others and grocery and Health & Personal care got the short end of the stick with a new commission rate of measly 1%!

4) Google May Core Update

Just when you survived the April came May with a Google core algorithm change.

Google announced the change on the 4th of May and soon many webmasters discovered if the force is with them this time…or not.

Like always with core updates, many sites have been affected. Searchenginejournal.com covered this in great detail, as well as semrush.com, including which verticals and which websites saw the biggest wins and losses.

As you can see a lot of things have happened in 2020. Considering all these changes here are my suggestions for selling and buying websites during 2020.

Top 5 things to consider if you’re looking to buy a website in the next weeks or months

buying and selling websites in 2020

1) Asses the traffic trend and check if the website has been affected by the Google update, either negatively or positively

Tools like Semrush or Ahrefs might indicate the organic traffic trend, but it’s best to ask the direct access to Google analytics so you could assess the traffic in real-time.

I guess I don’t need to explain that the negative trend should steer you away from the acquisition and the positive one should encourage you. In the end, it all depends on the price that you can achieve, of course.

2) Project earnings with new affiliate rates and look for alternative affiliate programs

If the website earns through Amazon associates program check what are the new rates for the primary category and try to project earnings in the following months with the new rate.

Look if you could find other affiliate programs to promote. In many cases, it makes sense to ditch the Amazon’s program completely while in others it’s very hard to find an adequate
replacement.

3) Check the backlinking profile

This isn’t so much specific to 2020, but every year and every site. Always check the backlinking profile of a website. A lot of spammy backlinks, suspicious links, potential PBNs are a warning sign.

If anything is strange ask the seller for details.

4) Could you improve the site and what are the easy wins

Is the website super slow? Could you easily improve the speed with a caching plugin?

Are the affiliate links or other links broken?

Try to identify what are some easy wins or improvements you could do in the short term and how would you grow the site long term.

5) Be realistic about how much time could you dedicate to the new website

It’s easy to get overwhelmed with projects. Sometimes it’s better to miss a solid opportunity if it will get you away or neglect your other projects with greater potential.

Asses if it’s worth your effort to pursue it considering your current workload.

Great opportunities ahead but also risk

Times of uncertainty always bring a lot of opportunities. When times are rough people will be willing to accept lower multiples.

Some people might panic and rush to sell their sites when they see their revenue is dropping, either due to lower RPMs or lower affiliate commissions.

If you decide to invest in such a website make sure to project lower CPM or lower affiliate earnings in your calculation.

Top 5 tips for selling your website in 2020?

buying and selling websites in 2020
If you’ve decided to sell your website here are several things to consider to get the best valuation.

1) Is the timing right for selling the website

Timing is an important aspect of every sale. Generally speaking, whatever you’re selling, a house, or a website, the best time to sell would be when you can get the best offer, not when you need money.

Try to estimate if it’s more likely the site will grow, stagnate or decline in the following months with your current efforts.

If you see the potential for growth in the following months it’s better to wait a bit with the sale. In case the niche is seasonal I usually wait and list the site for sale at the end of the high season.

Although experienced buyers will consider the seasonality of the niche and take earnings during the whole year into account, seeing the positive trend and upward movement in recent months usually gets more attention and attracts more eyeballs on your listing.

2) Did you optimize all revenue channels?

Are you getting the most from the ads on the site? Did you try tweaking and optimizing them? Did you try increasing your RPM by implementing Ezoic or Mediavine ad management service?

Did you include affiliate links on all money pages? Do you have comparison charts with affiliate links?

3) Does the site have enough earnings history?

Has the site been making money for at least the last 3 months? Better would be 6 months and optimal is 1 year. The more history of stable earnings you can show, the better valuation you will get.

Nothing sells better than a good track record. My best purchases were websites that weren’t monetized. Or they were but the seller didn’t bother disclosing it.

If there is any opportunity for monetization, make sure you already tested it and can demonstrate some earnings history.

4) Did you exhaust all easy wins but left some space for growth?

Is onsite SEO on point? Did you optimize the website structure and already targeted those low competition keywords?

If you managed to rank for many keywords you aimed for, but now lack the time, resources, or ambition to expand and grow, it might be a good time to sell.

5) Write a great listing

So you’ve decided it’s time to exit. If selling on a marketplace write a very detailed listing with all the details a buyer might need to know.

Include all screenshots and proof of earnings and traffic. Highlight the strengths and mention how the website can be further improved so potential buyers can see there’s still room for growth.

If you follow these tips I’m sure you’ll be able to get the price you wanted for your site.

My Portfolio in 2020

So far I had two completed sales this year, one in April and another one in May. The first one is a smaller website with some potential, which I didn’t manage to scale where I wanted.

The second one, is a website which I wrote about before. Now that I sold it I gonna update that case study.

I bought one website, it’s been just a few weeks, but so far I’m quite happy with the purchase.

In January I was contemplating selling another website but ended up declining an offer that I had on the table. Looking at it now, I’m thinking it would be better I’d have accepted it.

Although it’s standing well traffic-wise, in February that site got banned from Mediavine and so far I didn’t manage to level up the earnings.

Photos credit: Pixabay.com (Tumisu, mohamed_hassan)

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