Website traders get rich quick
theage.com.au
theage.com.au
Turning any business around effectively still requires skill and knowledge of the market and methods.
In a way, this article reminds me of other I read of people that buy poorly advertised items on eBay (poor description, no pictures) and turn them around for profit simply by putting up more detailed information and high quality images.
Essentially anyone can do it (low barrier to entry etc.), but the difference between those that do it well and make good money and those that can't/don’t really is often down to persistence, practice, more practice, and yet more practice, and in many cases fortunate timing. The fundamental lessons of flipping houses, flipping websites, or flipping any commodity seem to be the same.
I wonder how this can apply to flipping start-ups.
The point is, that there were finite number of such opportunities, and this I think applies to this article as well.
There are a few missing pieces as well. Sure the dude bought a website, but how's the rest of the business being run? It's not just a "website", it's a whole store. They're going to have inventory to manage, suppliers to deal with, etc, etc.
It's possible they solved the inventory problem by letting their suppliers drop ship things, but there's still quite a bit of effort required for something like that.
I guess they're doing their own inventory.
Edit: This article was linkjacked (i.e. stolen) from the nytimes. Here's the link: http://www.nytimes.com/2008/07/29/technology/29flip.html
The picture and the birdcage are there.
No just reprinted in a local newspaper and fully attributed. This is no different to physical print newspapers reprinting articles from foreign newspapers. Individual newspapers don't have access to every piece of news. They also reprint material to place their own advertising. Though you might have thought Sitepoint being a Melbourne based company, "The Age" would have printed the story and not the other way around. Reading through the entire article the majority of the content is US based companies using this idea to make money.
Is "NYT" simply reflecting the "make money" signal New York emits? It might also explain why "The Age" hasn't bothered and why Melbourne is the "Artichoke-end" of the Startup world.
I went there after reading NY Times article a couple days ago.. its the largest such marketplace. "$729k in websites sold in 18 months". All and all, kind of cool, but still an emerging industry. Reminds me of domain names a few years back. If you can code well, you can probably make a lot more money selling sites to clients who have money.
The opportunities I saw: 1) Buy a site that has traffic existing customers/visitors (will cost 1-3X profits). This could be a way to validate a product/service idea, and then make it better. 2) Build scripts for websites that you can license repeatedly for $200-$1k.
Many people operate by building quick affiliate based sites, growing traffic and then selling it with "proven income" to someone for 1-3K 6 months (or less time depending on how good you are at driving traffic).
To make that type of money flipping sites, you need to spot the right opportunities and make all the right improvements: programming, design, copywriting, marketing, SEO, and optimizing the conversion process.
Anyone with the ability to do all these things well deserves to make money. I'm also skeptical that finding a buyer who can pay 6 figures is as easy as posting to SitePoint.
Better luck next time.
The article pertains to a different breed of online 'entrepreneurs', called salvagers.
In the 'ground-up' startup world, the reality is not the same. It's not as simple as it sounds. Building a startup and running it profitably is equally difficult (and self-satisfactory) as running a brick-and-mortar business.
Btw, here's the original NYT article: http://www.nytimes.com/2008/07/29/technology/29flip.html
I think it's because of two factors, as the article mentions:
"Creating the value, though, is the tricky part."
and
"The average selling price of Web sites on eBay was $78 last month."
Where stories about weight loss, Hollywood-grade entertainment industry rumors and get-rich-quick speculators routinely get voted up to the top, while kick-ass Rails API documentation site I submitted yesterday was not even noticed.
What's next? Britney's next pregnancy prediction?
Maybe Rails isn't that popular here. (Personally I'm not crazy about it.) And Rails docs aren't really "news", are they?
The real insight here is that profitable sites can the built and sold much more quickly by buying old sites and renovating them. This is because of Search, where old sites that already have some authority and rankings have a great advantage over recently registered domains.
I think that those of us with our collection of domain names are going to see an exponential increase in value over the next two quarters. The question is, how bothered are all of you about the impending Get Rich quick rush.