If you are an investor looking for passive income, buying a blog can be an appealing option.
Unlike other online businesses, buying an existing blog can generate income without you having to do anything. There is no inventory to manage, no customer complaints to address, and no employees to supervise.
Blogs are generally monetized through ads or affiliate links placed on the website (we'll discuss more about these monetization channels later). So you get paid every time someone visits the blog and clicks on ad or buys a product through one of your affiliate links.
It's really that simple.
In addition to being mostly passive, a blog can generate incredible returns. You have the potential to make upwards of 30% annualized returns on a passive investment.
But that type of return does not come without risks. I am not going to sugar coat it: Buying a blog carries significant risks.
We’re going to talk about those risks in detail, but we’re also going to give you some strategies on how to address or mitigate them.
Here’s a preview of what we’ll cover:
The 10 biggest risks of buying a blog for passive income are:
- You get scammed
- You fall for fake or misleading numbers
- You buy a blog with questionable backlinks
- Google algorithm updates hurt your blog
- Traffic sources are not diversified
- You buy a newer blog based on “potential”
- Your blog has the wrong type of content
- There is strong competition in your space
- You mismanage your blog
- Monetization channels change or go away
The concepts we are going to discuss may be new to some readers, so I will start with some basic definitions and answers to high-level questions on the blogging business. If you want to skip the introductory stuff and jump straight to the “10 Biggest Risks of Buying a Blog For Passive Income” section, click on this link.
The information contained in this post is for informational purposes only. It is not a recommendation to buy or invest, and it is not financial, investment, legal, or tax advice. You should seek the advice of a qualified professional before making any investment or other decisions relating to the topics covered by this article.
What Is a Blog?
According to Wikipedia, a blog is a discussion or informational website published on the web consisting of discrete, often informal diary-style text entries.
For example, this website is a blog. Simple enough, right?
How Do Blogs Make Money?
There are four main ways that a blog can make money:
- Ad revenue
- Affiliate Marketing
- Sponsored Content
- Selling Its Own Products and Services
You can make money by getting ad revenue from an advertising network, like Google AdSense, Ezoic, Adthrive and Mediavine. If your site gets a lot of traffic, that’s valuable online real estate. Companies want to place ads on your website so that you can drive customers to them.
Ad networks have relationships with these companies. So when you work with an ad network, they will place ads on your website and you will receive part of the money that these companies pay the ad network for this placement.
Generally, you get paid in two ways: (i) on a “per-click” basis, which means you make money each time a visitor to your website clicks on one of the ads on your website; or (ii) on the basis of “impressions,” which just means that the more people view the ads on your website, the more you will get paid.
You can also make money by affiliate marketing. That’s when you have an arrangement with a company to market their products and services on your website.
You do this by adding custom links or banners throughout your website that link to that company’s sales page. That link allows the company to know that you are the source of the referral.
If a visitor to your website clicks on the link and purchases the promoted product or service , then you get a commission based on the sale.
You can also make money by agreeing to write sponsored content. Similar in concept to affiliate marketing, this is where you write posts that promote a company’s products or services.
Sell Proprietary Products and Services
You can also make money by selling your own services and products on your blog. This could include t-shirts, informational courses, memberships, or any other products or services you create.
How Do I Buy a Blog?
The easiest way to buy a blog is to go on one of the online marketplaces that buy and sell online businesses.
The best-known are Flippa, Empire Flippers, and FE International. Flippa has the cheapest sites available, with Empire Flippers occupying the middle slot, and FE International operating at the high-end of the price range.
You can also find a blog that you like and reach out to the owner to see if they are willing to sell. There’s a lot less structure and hand-holding with that method, though, and it may be a challenge to navigate the entire sales process if you are a beginner.
Ok – now that we’ve covered the basics, let’s dive into the biggest risks of buying a blog for passive income.
10 Biggest Risks of Buying a Blog For Passive Income
You Get Scammed
Scams abound in this space.
People set up sham websites and try to sell them. Or they may take your money and never deliver the website. The website could be propped by fake numbers. In short, the scams can take many forms.
The best protection against these types of scams is thorough due diligence. Don't take things at face value. Dig into the claims made by the sellers. We talk about some of the things you should do in the following sections.
And if you can afford it, go with one of the premier selling platforms like Empire Flippers or FE International. They vet the websites being offered on their listing platform, so you know that experienced pros have examined the websites beforehand. They also have in place escrow services and other protections that help prevent fraud.
You can use an auction-based site like Flippa and there can be some great deals there, but it is much more like the Wild West. You have to be skilled at figuring out the good from the bad. If you are a first-timer, I would be extremely careful.
You Buy a Blog Based on Fake or Misleading Numbers
Some sellers may provide inaccurate or misleading numbers. These include traffic numbers, income numbers, and expense numbers.
With regard to traffic, make sure you get access to the seller’s Google Analytics account, so you can see the numbers as reported by Google. This is standard practice.
Sometimes you will see a sudden boost in traffic – there could be a lot of reasons for this, so make sure you get to the bottom of it. Was it due to paid advertising? A flurry of blog posts? Bots or other sketchy strategies to boost traffic? You need to find out.
With regard to income, make sure you confirm the revenue numbers that the seller is providing against statements from affiliated programs and advertising networks (and any other monetization channels). Make sure the numbers match. Check expenses too and make sure they make sense.
If you need help or feel something is off, you may want to hire a due diligence specialist who can look into all of this.
You Buy a Blog With Questionable Backlinks
You want to avoid sites that have used questionable backlinks strategies. A backlink is a link from one website to another. If the site giving the link is a good one, the website receiving the link will get a boost from google because it is now viewed with more credibility.
If this happens in the normal course, that’s fine. For example, if a website owner finds your content helpful, they may link to it in one of their articles. I give backlinks to sites that are helpful to me all the time.
But some people use sketchy strategies for building backlinks, like buying backlinks from a site or putting in spammy links pointing to their site in the comments sections of other websites.
Google does not like these practices and if it finds out, the website could take a hit. You can use tools like SEM Rush, Ahrefs or other backlinks evaluators to see if these questionable practices are going on.
You also want to be careful about private blog networks (PBNs). These are a network of websites that link back to the main website. Google does not like PBNs either and may penalize a site that participates in one.
Source: Neil Patel
A lot of buyers don’t like PBNs, so some online platforms will require sellers listing with them to state whether there are any PBNs in place.
Google Algorithm Updates Hurt Your Blog
You probably know that Google runs periodic changes to its search algorithm. In most cases, they are minor tweaks, but every so often, the changes are significant and can have a profound impact on how search results are determined.
Obviously, such a change can impact a blog’s profitability.
It’s not always a bad impact – it can be good too. But the point is that when you buy a blog, you won’t know in advance whether a future change is going to be harmful or helpful to that blog.
It’s a risk of doing business.
If the blog’s content is in line with Google’s overall goal of delivering relevant and helpful information to its users, the blog will have a much better chance of gracefully weathering these types of algorithmic changes.
But if the blog uses questionable backlink tactics or other practices that Google frowns on, there is a much higher chance that a Google update hurts the blog.
Traffic Sources Are Not Diversified
If the blog heavily relies on a single source of traffic, look into that to make sure you understand the risks there.
If the majority of the traffic is coming from organic search, I tend to like that.
But make sure the site follows Google’s guidelines and best practices. Check to see if any manual Google penalties were assessed against the site. Look for trends and any unusual activity (sharp spikes up or down). Get to the bottom of them.
The same thing holds for social media traffic and referral traffic.
Some diversification of traffic sources is helpful. As I mentioned before, I prefer a site that has solid organic search traffic rather than one that relies a lot on Pinterest or other social media channels.
These social media companies understand that they make more money if users stay on their site, so they may throttle your ability to have people link away to your site.
The bottom line is that an over-reliance on any single traffic source creates risk.
On a related point, if all of the traffic is coming from just a handful of blog posts, that’s a red flag too.
If someone writes a better blog post on the topic, your site could be badly impacted. Or if a google algorithm update occurs and those posts are negatively impacted, your website could be in trouble.
You Buy a Newer Blog Based on “Potential”
If you are looking at a newer site that isn’t making money yet, be careful. Maybe you are hoping for it to mature into a profitable site. It’s a big gamble.
A lot of things can impact a site’s profitability and a lot of things have to go right.
Even if you buy a profitable site, but it’s still fairly new (less than a year old), be cautious. It is much safer to buy a website that has had steady and stable traffic for a while. You know that there is consistent search volume for the topics covered by the blog.
In fact, a recent, sharp upward curve in traffic is not necessarily a good thing. For young websites, there is often volatility in traffic: the sharp spike could soon be followed by a sharp drop.
Be especially careful if the new site focuses on YMYL topics. YMYL stands for your money or your life. Google will be very cautious about putting new content in front of people when the topic relates to a person’s health or their finances, career, etc.
That means that the new site that focuses on YMYL topics may never take off.
Your Blog Has the Wrong Type of Content
Make sure that the focus of the website is not on a fad that can disappear. The numbers may be good when you buy it, but where will the traffic be in 3 years?
You want to see evergreen content that is going to be relevant for a long time.
There is Strong Competition in Your Space
The internet is a competitive place. You are going to be competing against a lot of other sites (both existing and new ones). And your blog may be in a particularly competitive niche. If it is, you need to be aware of this and be prepared for the dogfight ahead.
Due to the competitive nature of this business, your site may lose its current search position in certain areas, which could impact its revenue.
The first thing you can do to protect yourself is to make sure that the seller signs a non-compete agreement with you when you buy the blog. You certainly don’t want the seller to turn around and immediately create a competitor site to yours.
You can also try to protect your bottom line by writing more articles (or hiring people to do that for you). Or you can improve the quality of your existing articles.
You could also expand your monetization channels or switch to a higher paying ad network (if you qualify).
All of these strategies can be used to protect against any losses you might experience from competitive pressures.
You Mismanage Your Blog
You could harm the revenue of your site by mismanaging it. Often a new owner of a blog wants to improve a blog’s operations or profitability.
That is completely understandable. But in the process of doing that, you don’t want to undermine some of the good things that the site has in place.
For example, you don’t want to start engaging in questionable SEO tactics or other aggressive practices that could turn around and bite you. You may see a temporary bump, but it may not be the best long-term strategy.
Or you could neglect certain key functions that the old owner used to perform (either themselves or outsourced through assistants), such as social media activity that drove some of the traffic.
Monetization Channels Change or Go Away
Your monetization channels may change and these changes can affect your revenue.
We already talked about google algorithmic updates that could impact your ad network revenues.
But changes to affiliate marketing programs could also impact your income.
For example, let’s say a lot of your money comes from affiliated marketing commissions. You have a great affiliate marketing partner and most of your articles are written to drive traffic to that partner.
But if that partner goes under, your blog could be in a really bad spot. The same thing holds if the product is discontinued or even if the partner reduces the amount of commission it will pay for the traffic you drive to them.
Some sites are engineered to promote a specific product or company, so you should be mindful of this issue when buying. Consider buying a site that has diverse monetization channels and doesn’t rely too much on a specific source of revenue.
Buying a blog can be a massively profitable and passive investment if done correctly, but there are a lot of risks you need to consider and address if you want to be successful with this strategy.
One of the best ways to protect yourself is to start a blog yourself and learn the business. There is no better instructor than first-hand experience. There are a million little things you will learn doing this that you will never learn any other way.
You won’t eliminate all risk by taking these steps, but you will be much better-positioned to avoid many of the biggest pitfalls.
If you are interested in learning more about starting a blog, check out my article on passive income blogging. I give detailed step-by-step instructions on how to set up your blog, position it for success, and structure it to generate passive income.
If you want more great passive income ideas, check out my ultimate beginner's guide to passive income [25+ strategies that work], where I cover tons of effective strategies that generate passive income.
One of my favorite articles on passive income is my piece on businesses that run themselves. In that article, I cover some great businesses that can generate attractive levels of return without a lot of day to day involvement by the owner (obviously, blogging is included in the list, but there are many more). Check it out here.
Also, if you want to learn about other great passive income ideas that you can start with no money and very little efforts, check out my article on 15 ways to make truly passive income with no money.