Website traders get rich quick by following a well-established off-line model — buy, fix up, and flip:
Dave Hermansen did not own a bird or a cage when he bought bird-cage.com, an online store, for $US1800 three years ago. He simply saw a website that was “very, very poorly done”, and begged the owners to sell it to him. He then redesigned the site, added advertising and drove up traffic. Last December, he sold it for $US173,000.
While there is no data on how many people flip websites, the number of sites sold on eBay has doubled over the past three months, the company says. At SitePoints marketplace, a similar forum where users can auction off websites, sales have quadrupled in the past year, says site founder Matt Mickiewicz.
The changing economics of the web have made it easier to find and exploit niche communities on the internet. Building niche websites and small-scale online stores has become cheap and easy. Free software, advertising systems such as Google’s, and “drop shipping” services that allow website owners to handle products through a third-party supplier, have lowered the cost of doing business.