Last Updated on February 9, 2021 by Filip Poutintsev
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There are 1,8 billion registered domains and almost 200 million active websites in the world. If you consider that number, the amount of websites being sold is minuscule. Buy scraping all online marketplaces, you will find only around 10 thousand websites being sold at a certain time. This is an extremely low ratio that you don’t see in any other industry. There’s no existing explanation for this, as even businesses are being sold way more often than the websites. What makes this dilemma even a bigger mystery is that the sale of domain names thrive.
If you look at one of the biggest website and domain marketplaces Flippa.com, there were 1,46 million domains on sale and only 5000 websites at the time of writing this article. This means that there are almost 300 times more domains on sale than websites, while there are only 10 times more registered domains than active websites. Thus selling only a domain name is 30 more popular, than selling a whole website. And this is considering that buying a domain name on the aftermarket is most often unfounded, as there are billions of untaken domain names that anyone can register for just $10 apiece.
The reason for the high volume of domain sales on the aftermarket is pretty simple. Buying a domain name and then reselling it is very easy and risk-free. Even if you aren’t able to sell the domain fast, keeping even for years will not cost much, and once sold, you will multiply your investment buy thousands of time. This business doesn’t require any special skills, and thus is practised mostly by various gold-diggers. The whole industry is likely inflated by the same companies that sell domains on the aftermarket. They created and promoted the idea that it’s crucial to have a .com domain and other TLDs are not as reputable. Their propaganda worked so well, that even after ICANN introduced new top-level domains in 2012 particularly to fight this problem, the domain name aftermarket didn’t die out and is still booming stronger than ever, even though there are currently over 1500 TDLs, which means that no matter what domain name you want to register you will likely find hundreds of untaken TLDs with that name.
Buying a website
Even more mournful fact about website sales is the selection of them on the market. All website marketplaces can be roughly divided into 2 groups: low quality and overpriced.
Poor quality – Flippa.com
Most websites sold on Flippa were specifically created for selling. This leads to quite poor quality and a huge amount of starter websites with absolutely no traffic.
Terrible domain names
Most websites sold on Flippa have long domain names consisting of several words and high amount of hyphens or random numbers in the domain name. Some domain names look like they were chosen with absolutely no thought like a random username, as even after quick research one is able to find a better domain name with different TLD.
No traffic or just fake traffic
Majority of the website on Flippa have absolutely no traffic. Most of the ones that have some traffic are those where over 90% of traffic is direct or referral. Everyone who knows even a little bit about the online business will understand that this type of traffic is fake. It’s the type of traffic that is sold in bulk for extremely low prices and is often delivered with the help of bots or simply by a bunch of 3rd world people clicking through thousands of sites per day and changing their IP address in between.
Black hat SEO techniques
As the websites are solely created for a fast profit, the seller does not care about long terms effects of his actions. This leads to completely unsustainable techniques such as black hat SEO. A great number of websites sold on Flippa that actually have real organic traffic have tons of spammy backlinks from very suspicious websites. It is clear that at some point, Google will take actions, and the website will lose most of its search rankings. Thus buying such website will lead into buyer losing his investment in a very short time.
The content on these websites is usually poorly written, copied or has absolutely no informational value. It’s only there to create the illusion of established website and mislead inexperienced buyers.
Overpriced – EmpireFlippers.com
Websites sold on EmpireFlippers are the opposite of the websites sold on Flippa. They are all established online businesses with real traffic and real sales that were run the previous owner for years until he decided to sell it. But there’s one but. All of the websites are with decreasing traffic, decreasing sales, on the verge of being abandoned. In addition to that, they are all highly overpriced. They usually use 3-5 year profit multiplier, but to calculate average earnings, they only take into account a few successful months. This and the decreasing revenue make it doubtful that the website will ever be able to pay off.
All other market places are so small that they are not worth mentioning, and they all fall in one of these 2 categories. It’s extremely difficult to find any legit online business website, as 99% of the websites on sale are garbage. Sure there are some gems to be found, but you may end up waiting for months until you come across one.
Buying a domain
Buying only a domain name is a huge waste of money and totally unjustifiable for most cases.
Buying domain for SEO purposed
Buying a domain on the aftermarket for SEO purposes is a waste of money. Even though these domains may have some backlinks, their benefit will be non-existing as the website has been inactive for a long time, and has lost all its rankings. Ranking such domain would be almost as hard as ranking a completely new domain. Thus the money spent on the domain would be used much more effectively on the actual SEO. If you still want to buy an aged domain for your website, it would be much wiser to buy a recently expired domain, which you can look up at https://expireddomains.net.
Some domain market places actually do sell established websites by accident. This happens when the domain is put on sale, but the previous owner has not deleted the old content. Buying such a domain is of course as good as buying a complete website. Sadly, as these marketplaces solely focus on selling empty domain names, there’s mostly no way to filter out domains with a website. And even if such an option exists, other filtering options such as domain authority and traffic are unavailable. This forces the seller to export the list of all available domain, and check them with the tools provided by other companies. Such practise is very inefficient and leads into buyers ignoring these marketplaces completely.
When is it justifiable to buy a premium domain name?
It all depends on your budget. If you are a solo- entrepreneur, even paying $10’000 for a domain name is way too much. However, if you are a multi-million or billion-dollar company, and you want to get that branded domain name, then it could be reasonable even to pay millions for it. A good example of this would be how Tesla bought Tesla.com domain for $11 million. But unless you are as rich as Elon Musk, it probably doesn’t’ make sense to spend so much on a domain name. After all, buying your own TDL would be cheaper.