Building a blogging business and making money from blogging is one of the most attractive opportunities in the new decade. Buying blogs makes a lot of sense post pandemic.
A blog can be a very lucrative business, especially since it cannot be shutdown. When a blog can stay open 24/7 during a pandemic, of course the reliability of its revenue increases.
Further, with interest rates so low, the valuation of blogs has gone way up because blogs are high margin businesses. When you have a cash cow, please hold onto it for as long as possible, especially in a low interest rate environment!
Below is Mike’s story on how he built a blogging business running his own sites, selling blogs, and buying blogs. Today, I’m much more partial to buying blogs rather than selling blogs.
How I Build A Large Blogging Business
Three years ago, I was told by many bloggers, “You will never make money blogging. And if you do, $200/month will be your highest peak ever.”
Three years ago, The Financial Blogger was averaging 500 visits per month and I was ecstatic when I made my first deal of $10 for a link.
Three years later, I now run three financial websites, bought two of them and flipped a blog within a year for over $15,000. Starting your own blog is a no brainer in the internet age.
What used to cost thousands of dollars to start a site now costs as little as $12 a year for a domain name and $2.95/month with a Bluehost account. There’s no reason why everybody shouldn’t start their own to at least own their brand online instead of letting Facebook, LinkedIn, and Twitter get rich off you.
When I asked Sam if I could write a guest post for Financial Samurai, he asked me to include more details on how I appraised blogs and how do I decide to send $10K over the wire (or more!) simply to buy a “.com”. This is how I started my blogging business.
Look at Blogs As A Real Estate Investing Opportunity
When I first started my blog, I went into a partnership with one of my friends (who is the co-founder of our company). He has been in the website industry since the 90s, well before the .com bubble.
He told me to picture a rental property in order to understand how a website can generate income and how it should be valued. Traditional real estate is one of the best asset classes to get rich over time. However, online real estate is the new way to get rich over time.
Why Online Real Estate Is So Valuable
When you value a rental property, you will most likely pay between 10 to 15 times the yearly revenue. Therefore, if the property generates about $40,000 in rental income, you will pay between $400,000 to $600,000 to purchase it.
When you value a website, you will most likely pay 18 to 24 times the monthly income. Therefore, your investment return can easily reach 50% – 100% the very first year!
While both type of properties will generate monthly income, the first one will be paid back over 20 years (if not more) and the latter will have a payback period of just two years.
So now that I have proven that there is a great investing opportunity, how do you value a website?
How To Value A Website
To build a blogging business, there are several metrics when we are about to purchase a website. So before we even start with the calculations, we are looking at minimum requirements. The site must be:
– At least 1 year old (in order to have valid traffic data and to have it recognized by Google). The longer the domain age, the better.
– Minimum of 10,000 visits per month (it’s easy to build a blog with 3,000 visits/month, since we are looking to save time, we need a good visitors base).
– Ideally have at least 50% of visits coming from search engines (we don’t want to have boosted traffic from social media since those readers don’t stay long on your site, don’t click on ads, don’t comment and don’t register to any of your RSS feeds).
– Should have at least 500 RSS readers or 1,000 e-mail subscribers (just to make sure you have a community following you).
– Must not be a Page Rank 0. PR0 websites means that Google doesn’t like them. While I don’t give very much weight to PR, I just want to make sure it’s not 0 because I don’t want my blogs to be penalized by the search engine.
– Must be under monetized. I like to find blogs that are under monetized according to my knowledge. It gives me confidence that I will be able to get my investment returns faster than 24 months.
– Must have a strong brand. Look at Financial Samurai, one of the strongest and most well known brands in the personal finance space. It is impossible to replicate the content on Financial Samurai because it is all written from firsthand experience, is authoritative, and is unique. There are plenty of other sites in the personal finance space that have no soul. All their writing is by freelance writers who really don’t know what they are talking about.
Once you’ve identified a blog with all these attributes, you can then try to buy the blog and build your blogging business.
For more info comparing real estate to blogging, check out the link.
How Do You Assess Blog Income?
Before putting a number on a website, I like to look in-depth at the different sources of income. I don’t like blogs that are dependent on just one source of income (commonly Adsense or Text links). A strong blogging business has multiple sources of income.
The more sources of income the less risky the business is. The best source of income is affiliate income because they blend naturally with your content and should be a great fit as well.
Here are some of the main income sources for blogs:
- Adsense, Adthrive, Mediavine (CPC ads)
- Text Link ads
- Banners ads
- Affiliate ads (CPA)
- Your own Products (ebooks, services, paid newsletters, etc.).
- Sponsored posts
The more diversified the sources of income, the more I will be willing to give 24 to 36 months of income (since you can really consider it as a business and not a small sideline).
You can have additional weight if you have been monetizing your blog for several months. If you can show an uptrend for more than six months, you can definitely talk about potential future growth. Blogging businesses are created one compound growth rate at a time.
Learn how to start a blog with Sam’s step-by-step tutorial if interested. It cost Sam $1,500 to start Financial Samurai back in 2009. Today, you can start for under $3/month, it’s nuts!
Other Blog Particulars
There are a few particulars to look at before buying a website. This is more looking towards what you are looking for and what you want to buy as a blog. You can look at the following points before you start shopping:
Niche Content
Do you want to talk about personal finance in general or a specific aspect such as frugality or investments? Obviously, an investment blog will be worth a lot more because advertisers will pay more to show investing products versus coupons.
Popular Blog Posts
I’ve seen some blogs getting 30 to 40% of their traffic from only 2 or 3 articles. You want to make sure that you have several popular articles in Google so you can count on a steady traffic base.
If most of your pages viewed depend on 1 or 2 keywords, chances are that most of your income depends on the very same words. Therefore, it adds to the risk.
Blog Restrictions
Some blogs are very personal and related to its author. While this can be the purpose of a blog, there are some blogs where readers are less attached to its author than others.
While you want to have a strong community, you don’t want it to be too strong either. A lot of readers may leave if you don’t have the same writing style or train of thought of the previous owner.
Some also consider offering a writer’s position to the previous owner to make sure they keep their readership. It’s not a bad idea at first since it gives you the time to “break-in” your new readers.
Does buying/selling blogs constitute a good business model?
I personally believe that there is a huge investment opportunity in the blog management business since we are currently in a very inefficient market.
Blogs are undervalued! Publicly traded companies trading at higher multiples should buy online media properties for lower valuation multiples all day long. Buying earnings accretive businesses is one of the easiest ways to create a blogging business.
Since there are not a lot of buyers and that blog valuation is still complex and a standard method has not yet been determined, there are several gems available for a relatively good price.
Alternatively, you can go the ultra low cost route and build your blogging business by building your own websites. It takes time, but it is highly rewarding.
Start A Website That Makes Money
Sam here. It’s been over 12 years since I started Financial Samurai. Not a day goes by where I’m not thankful for starting my own site.
The income from Financial Samurai is recurring, semi-passive, and extremely rewarding since I really enjoy connecting with other people and helping them with their financial problems. There is no sell, as people come to Financial Samurai on their own.
I never thought I’d be able to quit my job in 2012 just three years after starting Financial Samurai. I highly recommend EVERYBODY start their own blog to own their own brand online, find new job and consulting opportunities, express your creativity, and potentially make a lot of money in the process.
See how you can set up a WordPress blog in under 30 minutes with Bluehost. It’s cheap and easy to start. The things we do today set ourselves up for a better tomorrow.
Here’s my step-by-step tutorial guide on how to start your own site like mine in 30 minutes.
Finally, if you’re looking to sell or buy a blog, I recommend going with Quiet Light and Brad Wayland. He is very experienced having built and sold many sites before. I’ve spoken to him multiple times and he has an extensive network to tap. The blogging business is one of the best businesses in the world.
For more nuanced personal finance content, join 100,000+ others and sign up for the free Financial Samurai newsletter. Financial Samurai is one of the largest independently-owned personal finance sites that started in 2009. Everything is written based off firsthand experience.
Great article. I was wondering where you find good websites to buy? Most of the sites I look at at the brokers are crap and need a lot of work. Two years ago I bought a site with less than 100 visits, got it up to 30k, only to get crushed a year latter by the Google update.
There are a number of sites on listings. I like to buy sites I actually read. It passes the first quality sniff test.
Dear mighty samurai!
Thanks for your blog, it was fun reading all about it.
I found a website from a blogger that I would like to consider buying how would I go about it?
Thanks!
Generating profits from blogging isn’t as “easy” as it was in 2010, and I’d never buy a rental property if the cost is over 8 times the yearly revenue, but great info on buying blogs/sites.
I don’t know about that. I find making money blogging to be way easier than ever before now. Give him my platform is grown, or to do is write about a product that I really like that I find useful to the community and maybe 10 times more revenue comes in now.
The key is to build a stronger brand.
See: https://www.financialsamurai.com/how-to-build-a-stronger-brand-for-your-business-blog-and-career/
Sam do you do any SEO at all?
There’s a ton of backend stuff you can do, everything from google analytics to keyword search to setting up metatags etc.
Anything website related everyone seems to emphasise SEO.
Hello, My name is Nicole and I am starting my blog and wanted to reference you in the blog post since your articles have helped me get the courage to give blog writing a go. I am new at this and did not want to step on any toes, so let me know if this is unacceptable. I was trying to figure out how to leave my own comment, but as you can probably tell I am not very tech savvy.
This is great for purchasing and evaluating potential purchases, but once you’ve made the decision to buy a blog how much work do you invest in keeping it up and running?
If you buy a blog with 10k/mo visitors, how many hours per week do you need to spend to maintain that traffic? Is it possible to do while still working a full time job?
What about getting started with blogging altogether? I know literally nothing about the monetization side of things. Should I read up on page ranks, Adsense and Text Links before I get started buying or creating my own blog?
Hi Mike,
I just recently bought the website and would love it if you could stop by and leave me some tips in the comment section!
Thanks!
Randi
Wow–this gives a lot to think about (particularly if you are new to thinking about buying and selling blogs).
Thank you for the write-up!
well,does it effect ? now more bloger write it,but it’s a little doubles
Forest and I both come from the same website flipping background, so we are versed (and experienced) on the topic. I have sold numerous blogs and websites in the last two years, but it wasn’t till this year – that I broke out and sold BIG (traffic and revenue generating) web properties.
Not in the PF niche though. Am working on that now with my new site, but it shall take some before it’s ready.
For those interested in what I have sold, see my profile on Flippa. (you must register to view)
On selling to low? A site I sold back in December 2009 I grossly undersold. And by grossly, I mean several thousand dollars undersold. It’s a long story, but essentially I was in a financial bind and sold in a hurry. Big mistake, as the guy I sold it too turned around and flipped it – four months later for $16,000. It still hurts. Ouch!
But we live and learn.
totally – and many still feel that generating income online can be done overnight, thanks to the one page never ending in length sales pages. it does help to acquire something already established, but it has to be maintained to sustain its benefits. sure, maintenance work isn’t nearly as time consuming as the initial start up, but that is why we pay the premium up front to acquire a ready made money making machine. agree with you – cannot sit back at all to run a business. the key term is “business”. if one doesn’t treat their ventures online as a business, it will definitely reflect in their results.
i second Aleks – some more discussion on where to find them would be good. Flippa and similar sites are a good start, and hearing more on this subject from someone who is close to the subject matter would be great.
another important discussion is how to conduct the due diligence (independently verify what you are being told).
finally – one must not forget the time and effort it takes to grow and maintain a popular/high performing blog or website. if you are going to be running a business, there will be business-like work involved. some information on leveraging assistance, automating systems, etc. would also be good as a supplement.
Sunil, i like that line “if you are going to be running a business, there will be business-like work involved”. That is very very true!
Can’t just sit back and run a business that way!
This post is absolutely awesome, and what I have been have been looking for considering my growing interest in blogging.
One thing I did not find, or perhaps I missed it, is where to find those blogs? Is this done via a brokerarge, or do you put your personal network to use? I found quite a lot of so-called blogs for sale, but often the details are not consistent (e.g. indicated 10k visitors per month, but no Alexa ranking or entry in compete.com). Where do I find serous offers?
Thanks,
Aleks
Sounds like “Sitepoint” is the place where you can find some good ones.
Buying and selling blogs can come out to be a very good business model if someone writes blogs to sell them. Thinking long and hard before buying a blog can be incredibly rewarding personally and can be a business standpoint.
Hey all,
just so know, we just finalized the buying of The Dividend Guy Blog (www.thedividendguyblog.com) and we are hosting a contest to win an iPod Touch along with 2 gift certificates of $50 each at Amazon.
Cheers,
@Mike – Thanks for the info, didn’t realise sitepoint had changed names! Been a while since I went prospecting for websites. Re: Selling, I will do! I can’t imagine ever selling, but you never know.
@ Monevator
if you get 35k visit +, you surely have a good part in SE traffic. this makes your website very interesting… I mean, if you ever think about selling, keep my email in mind ;-)
There are a tons of website selling for almost nothing on flippa (previously sitepoint). but there is also a lot of crap too ;-(
Be careful of finding the real reason why people are selling ;-)
Very interesting article – thanks for sharing. I think it’d pretty hard to sell Monevator, even though I am in the ‘huge’ category according to your classification of more than 35K visits per month (doesn’t feel huge! ;) ). It’s clearly “my” blog, a bit like Sam with FS.
Sam – On Sitepoint, websites are regularly sold for around 10x *monthly* income. Often someone new will come in and say “that’s ridiculous” but they rarely go for much more. I think it’s perhaps something to do with the potential infinite competition of online, compared to real estate say where they’re not making land anymore. As well as the vulnerability to Google rankings…
I feel bad for those only selling for 10X monthly income. Seriously.. why would you ever sell for that low a price? Just wait 10 months, and voila, you got the income! Blog 10 years, and voila! You got 10X that income. Perseverance!
@ Forest,
did you sell blog in the PF niche? how did you value your blogs before selling?
@ Andy,
you can always sell your blog and start another one. have you considered this?
It’s a lot of work but it sometimes worth it considering how much you would receive!
As a pf blogger. love articles like these. Excellent breakdown and makes sense. I received a few offers for my site, but still having fun writing and growing the site. But if I sell, the metrics you have here are definitely something I will keep in mind. This article will definitely be in my weekend roundup.
It’s an interesting subject and I’m definitely signing up for your newsletter to learn more! Thanks for sharing.
I really enjoyed this post, since I’ve always wondered how blogs were truly valued by people looking to buy them. I do think a lot of sites are highly under-monetized, so you probably have a lot to pick from :)
hum…. I just love under-monetized blog :-DDDD