I was at a BBQ a few days ago and a mate was asking me to tell him how I made money  trading websites online.

He couldn’t figure out how one could really build and then trade a website. He believed I must be selling one of those pyramid schemes. So I reached for the number one BBQ stationary – the pen and napkin – and I drew out the whole method for him.

Buying and selling websites all takes off with research. Get that wrong and everything that follows is typically a waste of time. If you plan to start from scratch, you have to find a market. I recommend you look into Market Samurai, or if you don’t want to spend any money at this point, Google’s free keyword tool works fine.

The first thing to do is decide on a market – anything that you wish – and just put that label into the software. The results you want are under 60,000 competing pages and at minimum 100 searches per day. That way, you are sure that you won’t be in an over-competitive market where you could struggle to achieve results, but here, there is enough of a market to make some gains.

The second step is to develop around three related keywords to bolster your key phrase. This will work with site traffic and to get your primary keyword to list higher and faster in the search engine results.

The next step is to register your primary phrase as a domain. Use a host like godaddy or hostgator and begin with trying to find if the dot com is available to register. If it’s not available, try having a suffix or extension to your domain name, such as blog or site. Let’s pretend you were looking for shoes but shoes dot com was not available, go with shoesblog dot com etc. till you come across a name that is right. Dot com is still the most prized of domain extensions, but if you can’t come up with anything good, then move on to dot org. I don’t usually drill down any further to dot info or any other extensions.

Once you have registered your domain, you then have to have hosting for your new site. This is where your website will sit and you can generally buy hosting by the same provider that sold you the domain in the first place, especially if you use one of the larger hosting companies.

At this stage, you need a website. I recommend you build your website with Wordpress, and the simplest, most efficient way to create a Wordpress blog is with Wordpress Direct. Wordpress Direct is efficient and totally basic to use for both setting up and developing your sites.

After your site is ready to go, you will have to have some content. To get you started, check out six or so YouTube videos from your market. You can do that from inside Wordpress Direct. For every video, write around 100 words of a comment as part of the post and there’s your original content.

The next thing to do is to make sure that Google and any other search engines know your website exists. The quickest way to make sure of this is by social bookmarking. Submit your posts to sites including Digg, Mix, Propellor and Twitter. This will ensure that the search engines see your site and let the world know it is there.

In the installation process, you install both Google Analytics and Google Adsense. Analytics will remember all the statistics from your site and Adsense is the advertisements that visitors click on in your site and this garners gains. Both of these may be brought up with a typical Google search.

Now you are running, you need visitors to move you higher on the search results to the first page of search results, where all the fun happens.

This is a two part process and it requires fresh content and backlinks. Content is the simple part; it involves you posting articles, adding more videos and other content on your site regularly. Backlinking is the procedure of having other websites linking back to your site. It’s kind of like the other site telling Google that your site is a good site and that Google has to tell others that they should go to your site too.

Now, when it comes to trading websites,the easiest process of acquiring backlinks is by leaving interesting comments on blogs and forums that relate with your market.

All you have to do is repeat this strategy for three to six months and you may have a site that is now ranking on the first page of search results and making a couple dollars a day at the least.

You are now ready to sell your site on flippa dot com.

I’ll tell you all about selling websites] over dessert, it’s time to return to the BBQ!