To help those who are at the beginning stages of their journey of investing in web-based properties (domains, established websites, apps, etc.), I decided to interview a first time buyer, Bastien.
Bastien currently works as an analyst at Cycle Capital Management, a clean tech venture capital firm based in Montréal, Québec. He holds a Master’s degree in Environmental Assessment from Concordia University. For more information and to get in contact, please see his Linkedin profile.
When did you first become interested in buying websites and web-based businesses, and why?
I became interested about a year ago. I was looking to increase my monthly cash flows with a side business and stumbled upon Flippa, a website marketplace. That’s when I discovered this entire industry.
What industry are you currently in and how do you feel your unique skill set applies to investing in online properties?
I currently am an analyst in a venture capital firm. My unique skill set I believe is to be able to automate and optimize existing processes and business models. That’s why this industry has been a revelation for me. I know I’m not the greatest at starting a website but I can turn an existing website into a sustainable business. I notice websites that are doing good but could become great with a little more attention to the data.
As I understand, you have yet to purchase a website. What have been some of the biggest roadblocks leading up to this point?
My main roadblock is the capital. I’m still paying my student debt and promised myself to get rid of that before investing. It is also quite rare to find quality websites on marketplaces like Flippa for instance. I actually bought a website for $400 once but discovered it was simply a template website with a possible business model but no real traction. The seller was super slow and it never took off. That’s how much I paid for my education in this industry :). I don’t regret it because it could have cost me a lot more.
That’s why I started to look for alternative ways to buy a website and how I discovered that there are brokers that sell them. I started following all the brokers I could find and would sometimes ask for the listing details. The packet detailing the websites wasn’t remotely comparable to what you can find on the marketplaces. Almost everything is answered and you can avoid a lot of back and forth with the buyer thanks to that. The packets (also known as prospectuses or information packs) are always organized in the same order with the same sections and it becomes super easy to find what you’re looking for.
What business type, industry, and niche do you feel has the most potential for growth, and more importantly, a positive ROI for new buyers?
If you’re a new buyers and don’t have much experience with websites go for content or 100% dropship e-commerce 100% sites as they are usually the simplest to manage and easiest to scale. Content sites can be scaled with better or more content, or greater ad placements etc. Growth opportunities are easier to find and the site itself is less risky: you could do everything yourself like producing the content if you wanted to for instance.
E-commerce sites have to be 100% dropship or digital delivery for them to be easy. That way logisitics is outsourced and usually well handled. Growth can be fueled via increased efforts in marketing, creating an email list, better conversion rate, better user experience while purchasing, easier way to purchase or purchase more (“items related to your purchase” section for instance).
Are there things that you’d like to see website for sale marketplaces, brokers, due diligence consultants, and other players in the industry do differently to help first time buyers?
Create a guide! Explain how you can get financing or where you can partner with other potential investors.
Any other piece of advice, services you’ve used that are helpful, people you can recommend, etc. that you’d like to mention?
1. Centurica.com: due diligence services for first time buyer.
2. AcquisitionStation.com: Ryan Sorensen is a great broker I’ve been following for 2 years (while at FE International).
3. Neil Patel guide on buying and selling websites.
Please leave a comment below if you have any questions or would like to help others by sharing your experience of buying websites.