Revenue trend

As I’ve said a couple of times already, we need to be buying a website that’s healthy and is either growing or staying very consistent over the period of a year or two. An easy way to determine this is by looking at a website’s revenue graph and trending it out! You’ll see several different revenue trends, so let me share with you what they are and which ones you’ll want to avoid.

Downhill trend

The first is the downhill trend, meaning that over the course of a year, a website makes less money month-over-month. This is a clear indication of a dying website, and 99/100 times you’ll want to walk away upon seeing this.

A downhill revenue trend usually corresponds with a downhill traffic trend, which is obviously not optimal either.

However, decreasing revenue trends aren’t always bad!

Some websites may have consistent traffic with decreasing revenue trends. If this is the case, you’ll want to find out what sources of revenue are bringing in less money over time. Say, for instance, if a website has consistently made less and less money from a particular affiliate offer over a year or two, changing out that offer may be a quick win for you!

A trend like this may scare away quite a few potential investors, lowering competition. This is why it’s always important to research a website fully and really consider the full scope of what you can do to make money off of it.

Hilly trend

A hilly trend is when a website’s revenue is inconsistent month by month with no clear pattern. This isn’t always a bad thing, but it requires you to make sure that the website passes every other aspect of your due diligence with flying colors.

This trend is usually caused by website traffic that fluctuates proportionately. Organic traffic doesn’t tend to fluctuate in random patterns like this, so it indicates that most of the traffic is paid. Once again, this isn’t necessarily a bad thing, but it’s a major factor to consider. If money needs to be spent to bring money in, you need to make sure that the website isn’t losing money.

Seasonal trend

You’ll sometimes find websites whose performance fluctuates with the seasons. For example, a camping website will tend to see higher revenue in the summer since that’s when people go camping the most, so winter months see lower revenue.

If the niche makes sense for a seasonal revenue trend, you have nothing to worry about! You can cross-check the revenue trend against a Google Trends chart for a related topic to make sure that the revenue trend actually corresponds correctly.

Seasonal-trend websites tend to be evaluated based on their past 12-month’s revenue because of their fluctuations. If they were judged on the past 6-month’s revenue, it could be unfairly skewed higher or lower.

Steady trend

Some of my favorite websites are ones where their revenue has stayed consistent over a long period of time. These websites tend to be “stuck”, indicating that there’s probably something you can do to get it showing an increasing revenue trend!

A steady trend also indicates a very healthy website that’s stood the test of time.

The only time where this could be concerning is if the website owner has been pumping a lot of money into the website and not seeing it reflect on the revenue.

Increasing trend

Of course, my favorite trend to see is an increasing revenue trend. This is where revenue has been growing month-over-month, and it indicates a healthy, growing website — exactly what we want!

The only thing to be careful about here is verifying that the increase isn’t because of a seasonal trend on the upswing. Just look at a year-long view of the revenue to make sure of this.