Owning and operating a niche site can make you a lot of money.
It doesn’t need a lot of investment to start a niche site and the upside can be really high.
And in case you have some budget, you can also buy a ready-made niche site that’s already making money. There are many market places where you can shop for a niche site (after proper due diligence of course).
I have done both – built sites from scratch as well as bought money-making niche sites (3 in the last 12 months, each priced in the range of $5K to $20K).
If you have the budget, buying an already profitable niche site is a good idea. It by-passes a lot of time taking activities that you otherwise need to endure when building a site from scratch.
In this article, I will cover some benefits of buying niche sites and some drawbacks/issues you need to know about.
Benefits of Buying a Niche Site
While buying a new site means that you have to incur a large cash outflow, to begin with, it has some significant benefits over building a niche site from scratch.
Let’s have a look at some of these benefits.
You Get a Proven Money-Making Business
When you buy a new niche site, you bypass all the uncertainty that comes with building a new one from scratch.
You don’t have to worry about how long the site would take to get out of the sandbox or whether you will be able to rank well for money keywords or not.
You don’t have to worry about wasting months of effort just to realize that it’s hard to monetize a niche or the conversion is not that great.
Many times, you start a niche site after all the research and analysis, and despite all your best efforts, it refuses to take off.
There are hundreds of different factors that come into play when you want to rank a new site, and you may not always get lucky when you start one.
On the contrary, buying a new site means that you invest in a proven business model that is already making money.
Opportunity to Stack Different Income Sources
If you have been in the business of operating and monetizing niche sites, I am sure you have some methods that you prefer while monetizing the site.
For example, I love using display ads, and AdThrive is my preferred ad network.
If I can find a niche site on sale that is already making money through affiliate or by selling info products, all I need to do is add a couple of ads on the pages that are getting a lot of traffic.
This instantly generates additional dollars for me, without any extra effort.
Similarly, if you are an expert at building email lists, and you find a site on sale that is not doing it, it’s an opportunity for you to buy that site and start building an email list (which can be hugely profitable).
Another example could be when you have access to a higher paying affiliate network.
If you buy a site that is using Amazon affiliate, and you switch all the existing links to your higher paying affiliate network, it’s an instant increase in income with disproportionately low effort.
This is exactly what the new owners of HerePup.com did when they bought the site. They switched many of their Amazon affiliate links with the links from Chewy (which is a popular pet affiliate program).
In 4 months, they were able to double the revenue from $6,988 to $14,677 (note that they also did some other things such as publishing more content and improving the site, but the majority of this increase was attributed to switching to a higher-paying affiliate program)
Opportunity to Fix and Scale
Most of the sites that are up for sale will have a huge potential for improvement.
It could be the On-page or Off-page SEO, Conversion Rate Optimisation (CRO), content improvement, site structure, email funnels, etc.
You’ll often find these basic issues in sites that are being sold by beginners. These sites are good options as you will see an instant increase in traffic/income by fixing some simple things.
For example, one of the sites, that I bought recently, had many pages that were low quality and were missing important sections. I improved some of the existing articles and it led to a 50% increase in the overall traffic.
Opportunity to Improve and Sell (Good Return)
If you look at most of the sites that are listed on market places or social media channels, you would find a lot of scope for improvement.
The more experience you have in building and scaling new sites, the more opportunities you will be able to find.
Often, it could be simple things such as doing more internal linking or building more links or improving the content that can make a huge difference in the overall traffic and income of the site.
If you find such sites where you can clearly see this area of improvement (which also happens to be your strength), it would be easy for you to quickly improve the site and enjoy higher monthly earnings or sell it to make a quick profit.
It’s a Good Way to Diversify
If you already have a niche site or a portfolio of niche sites, buying another one could be a good way to diversify your income and reduce the risk.
For example, if you have niche sites in the health niche (which has been seeing a lot of ranking fluctuations lately), you can buy a site in a different niche – such as tech or outdoor or gardening, etc.
It’s also a good way to normalize your earnings in case you are in a seasonal niche.
For example, if you have a gardening site, you will get a lot of traffic during spring/summers, but there is a dull period during the winter.
In such a case, you can buy a site that makes money all the year round or is seasonal and makes money during the winters (to counter the decline of your gardening site).
Issues/Drawbacks of Buying a Site
While there are big benefits to buying an existing money-making site, there are also some risks and drawbacks you should know about.
Big Outflow of Cash
While you do get a proven business that is making money, it comes at a high cost.
As of now, niche sites are being sold anywhere between 30 to 40 times the monthly net income (profit).
This means that a site making $1000 per month would be sold in the $30k-40k range.
With my experience, I can start a niche site and take it to $1000 per month level in less than $10,000.
I even documented the process for one such site I started where I was able to scale it to $1000 per month in less than 12 months with a total expense of less than $8,000.
Then why pay so much when you can build one in less than half the money? Because it takes time for a niche site to grow and not everyone wants to wait that long.
No Control on How it’s Built (You get what you get)
When you build a site from scratch, you have full control over how you structure the site, how you plan the content, how you design it, etc.
But when you buy a site, you get something that has been planned by someone else. That someone may or may not have your level of expertise.
Even if the seller is an experienced niche site builder, he/she may have a different approach to building these sites.
There are some things you can easily change when you buy a site, and some are harder to change.
For example, the seller may have acquired links from PBNs or low-quality forum/comment sites that make the site’s backlink profile a little bit risky. You obviously have the option to disavow these links and build better ones, but that may have a short-term ranking impact on your site.
If you find a site that you like and would like to buy, spend some time analyzing how much time it would take you to clean it up and make all the necessary changes. If it looks like a lot of work, maybe you’re better off building a site from scratch.
Risk of Performance Decline
Imagine you buy a new site for $100,000, and after a few weeks, a new Google core update rolls out and your site is impacted.
It’s not uncommon to see traffic go down by 30% to 40% during these updates (and of course there is also a chance of traffic going up because of these updates).
Since buying a new site means incurring a huge outflow, even a minor performance decline of the site can mean a significant decline in the overall valuation of the site.
The risk is there for all sites – whether you build one or you buy one. But when you build a site from scratch, you have a lot more control and can course correct in case there is a Google update that affects your site.
Also, you spend money gradually while building a site. So, in case a major update happens and your site is completely ruined, you can simply stop spending money on that one (or pause till the time you see some recovery). Or you can pivot and focus on other traffic sources such as Pinterest or YouTube.
But this is not an option when you buy a site.
You have already spent the money, and any negative impact on your site would be a big blow to the overall valuation of the site.
In April 2020, Amazon decided to slash their commissions for some of the categories by as much as 5% (such as from 8% to 3% in pets, furniture, home improvement niche). Many of the new buyers were impacted by this, but they could hardly see this coming.
The same happened with many of the Google Core updates.
Unfortunately, there’s not much you can do to avoid this risk (apart from doing proper due diligence while buying the site).
There could always be some Google core update or some social media change that can impact your site, and you just have to be cognizant about it.
You Inherit any Future Issues (Lawsuits/Copyrights)
Imagine you buy a site and after a few weeks/months, you get an email about some of the images that are in Copyright violation and you need to remove these (or worse, pay for the violation).
Or your domain name is in some trademark violation, and you need to change your domain (true story, happened with someone I know).
While this may not be so common, it is definitely likely.
Since you are the new owner of the site, it’s now your responsibility to deal with all these legal issues. Even if you have nothing to do with it and is the doing of the past owner.
You can try and mitigate this risk by asking the previous site owner to give you all the information – such as where are images sourced and whether the owner has the permission to use these or not.
Buying a niche site could be a great decision. It can help you diversify your niche sites portfolio get your hands on valuable assets that you can easily scale.
There are a number of risks that come with buying a site, but if you are diligent enough, you can avoid most of these.
My suggestion would be to build a couple of your first niche sites and have that experience before you go on a buying spree. This will help avoid rookie mistakes and make the most out of your new purchase.