The fact that you are flipping websites doesn’t mean you should purchase any website blindly. You want to ensure that you purchase websites that are in line with your business goals. Performing a website due diligence is probably one of the most important things you can do. It tells you the actual value of a website, but it is also a way of authenticating if the supposed seller is the actual owner of the website. But then, how do you perform due diligence on a website? Well, in this post, we will share 6 steps to help you perform due diligence on a website.
1.Traffic Analysis
Traffic stands for the number of visitors that visit a site, and a website that doesn’t get traffic is non-functional or dead; therefore, you want to make sure that you perform some traffic analysis on the website before any bidding or purchase to ensure that the type and number of traffic coming to the site is in line with your business motive.
Here are a few things to look out for when performing traffic analysis of a website.
i.Traffic Source
This means that you want to analyze where the traffic is coming from; is it organic traffic from Google or any webpage search results? Or are they derived from paid ads, social media campaigns, email marketing, or affiliate marking campaigns? Usually, if a site has more inorganic traffic than organic traffic, the site might not be well-ranked on Google, and vice versa.
ii.Page Views
The page view is a way of telling the views each page gets. This helps you understand the pages on the website that attract visitors or users the most, and those that do not.
iii.Visits
This is a metric used to measure the traffic a website gets. Usually, this will be categorized into days, weeks, months, and years. For example, if 1000 people visit your website today, instead of saying you had 1000 traffic, you will say, you had 1000 visits today.
With visits, you usually want to find out if there are any drops in the traffic generated by the website. Usually, you want to look out for spikes and drops and find out from the website seller why that happened.
iv.Bounce Rate
The bounce is usually a negative metric that tells you the number (in percentage) of visitors that visit any page on your website and leaves immediately. Usually, the higher the bounce rate of the website you are to purchase, the less engaging the website might be. Generally, we recommend you bid or purchase a website with a bounce rate ranging from 26% to 70%. Getting a website with a bounce rate higher than 70% could be bad for you; unless you have a reason.
v.Average Time Spent
This metric tells you the average time visitors spend on your website.
So, How Do You Measure These Metrics?
There are various online tools you can use to view the traffic analytics of a website; however, the 4 tools we recommend are:
Also, during the analysis, you want to ask more questions about the various spikes and falls on the graph. Assuming you see a spike/peak, you want to find out why the visits spiked up during that period, and also if you see a trough, you want to make sure that you ask them what caused the trough. Asking these questions will not only tell you what triggered the actions, but it will also highlight how well the seller knows his/her website.
2.Financial Proof and reports
Financial proof becomes necessary when you are looking to bid for an affiliate website or an e-commerce store. Often, most sellers will send you screenshots of their profit and loss statement, which isn’t enough. This is because most financial proofs can be edited or falsified if screenshotted. Therefore, you want to ensure that you are getting a legitimate financial report or proof from the actual site to ensure that you are getting the exact figures the website the seller portrays.
A good way to ensure to get an authentic financial report on a website or affiliate account or even an e-commerce store is to request the seller to give you read-only access to thier account. With this access, you only get to read the information on the store or website. With stores like Shopify, the seller can give you collaborator permission to their website, where you can be allowed to see only the financial report page.
Alternatively, if the client doesn’t feel comfortable giving you access to their account via read-only access, an alternative is to either meet them in person so they can let you see things for yourself. However, if you are far apart, you can have a video where the person shares their screen with you for you to see things for yourself.
So, make sure that you discuss this with the seller to ensure that what you see correlates with the profit or losses they claim to make. We entreat that you avoid settling for just screenshots of the financials of the website.
3.Backlinks
Besides traffic, another important analysis to look for is backlinks. Backlinks are a way for websites to show that they are authoritative and trustworthy.
A backlink refers to one website or a webpage linking to another website or webpage. This can be either inbound (when someone references your webpage/website from another webpage or another website). Or, it can be outbound (referencing someone’s website/webpage from your webpage or website ).
Backlinks are an important ranking factor when it comes to SEO. This is because when more websites point towards yours, Google or search engines tend to perceive your website to be credible and authoritative; hence, it ranks you higher. However, having certain websites pointing at your website can hurt your ranking. For example, Google will blacklist your website or prevent any traffic towards your website if you use spammy websites to point toward your website.
This is why you must check the type of websites pointing to the website you want to bid for. If they are from spammy websites, you might want to avoid bidding. Also, if the backlinks are from Private Blog Networks, Google will penalize the site by not ranking the website and preventing any traffic from visiting that site. Therefore, you want to check for that too.
Here are some links that might be a red flag:
- Spammy Links: Usually these links are from countries outside your core visitors.
- Private Blog Networks
- Adult Websites
How To Analyze The Backlink Of A Website:
Analyzing a website’s backlink doesn’t have to be difficult; by just using tools such as SEMRush, Ahrefs, RankSignals, and RankActive. To determine the type of backlink a website has, all you need to do is to copy the domain name or URL on any of these sites and the backlinks should show.
4.Running The Website
Knowing what it takes to run the website is another crucial thing to consider. This is because the cost involved in purchasing a website and the cost involved in running it are two different things. Therefore, you want to make sure that you are prepared financially and emotionally for the demand the website comes with.
So, the first thing I want you to do is to have a monthly budget you want to spend on running this website. For those of you who might not have an idea of how much to spend, generally, it should cost you between $20 to $500 to run and maintain a website; however, bigger websites might cost more. So, you want to ensure you have a budget
Having a budget is important because sometimes you might see that the sales and finances of the website are great; but the question is: Do you have what it takes to maintain the website to generate such finances or profits? Well, this is why you need to ask the seller what it takes to run their website to ensure that it is in line with your budget.
So, what questions do you ask?
Well, you want to ask questions about their:
- Content marketing strategy
- Marketing campaigns such as cost per acquisition or cost per mile.
- The cost involved in maintaining the website
- SEO strategy
Again, asking these questions makes you understand if you got what it takes to either maintain or improve on what they have. That being said, if you think your monthly budget to maintain and run the website will be less costly than what they spend and whatever you are to do is in line with your goals, you can go ahead and purchase the website.
In addition, you want to analyze the niche and competitors to find out how much money and effort you will need to put in to stay on top of the competitors; or maybe the amount of money you need to spend to catch up with them– thus if there is a gap between your website and its competitors.
5.Domain History
The domain of any website might seem insignificant; however, it is the most crucial feature of every website. For those of you who might not know what a domain is, a domain is the website’s name. So, for example, with a website like WWW.Shopify.com, Shopify is the domain name. Therefore, a domain name is a way people identify our website and even brand.
So, why is searching a domain history important?
A domain name becomes important in your due diligence process because some websites are penalized by Google; hence they cannot rank higher. On the other hand, other websites are trusted by Google, hence they rank highly on Google and are promising for any business. Therefore, by performing your due diligence, and researching the domain history, you can know if the website is worth purchasing or not.
So, how do you perform domain background research? Well, using a tool like the Internet Archive should help you find every information you need to know about a domain.
6.The Seller
Finally, you want to ensure that the seller is trustworthy and is the actual seller of the website. To know who the actual owner of the domain is, you want to use the tool Whois Lookup to find the actual owners of the domain.
Summary
So, with these 6 tips, you should be able to properly do the due diligence on any website to ensure that you have something authentic and in line with your personal or business goals. A quick recap on the methods:
- Perform traffic analysis
- Demand for some sort of financial proof
- Find out the backlinks of the website
- Find out the cost of running the website
- Research the domain history
- Ensure the seller is trustworthy.
Start flipping websites now
If you love this article; then there are similar articles on the topic of flipping a website. Ensure to read through them for more information that will equip you with the relevant knowledge you need to grow as a website flipper.
