$40k a month membership site at a $140k BIN! GREAT opportunity ... or is it?
  • I've been following this auction with quite a bit of interest lately, as it's a PERFECT example of how some sites may sell for 3x monthly rev whereas others for 30x monthly rev.

    Just look at it - $43k per month and the BIN is $140k - what a bargain, huh? Every sensible person with $140k to invest would hit the BIN button right away and consider themselves extremely lucky. Or at least that's what the "anything-better-than-10x-is-a-great-deal" guys would say :)

    In reality, this is EXACTLY the kind of site for which I wouldn't even pay 3x the monthly revenue - as there's an important part to it which many (well, the current 13 bidders anyway) don't seem to understand: THE REVENUE IS NOT SUSTAINABLE!

    That's actually an interesting concept and, it's so with almost all infoproduct-flips and needless to say, I've used it to my advantage a countless number of times :P Basically, what happens is the following:

    1. I launch my product
    2. I promote the HELL out of it, make a huuuuge launch, have tons of affiliates email their lists etc. etc. I do this over 2 or 3 months, making sure that my product sells almost the same in each of the 3 months.
    3. I've now made $11k in January, $8k in February and $8k in March, making my average monthly revenue a nice $9k. I go ahead and flip the site/product for $35k
    4. The "lucky one" buys the site, thinks they've landed a fantastic bargain, sits back and waits for the cash to roll in.
    5. Much to their surprise, the site's profit will be around $4k in April, around $2k in March and less than $1k from there onwards. End of story.

    And the thing that most people (those who are new to selling infoproducts) don't understand is that most infoproducts generate the vast majority of the income that they'll ever generate during the initial launch phase (can be a week, can be stretched over a few months but not longer) - after which the product will be close to dead, simply because all most effective marketing resources have already been utilized and all you're left with are less effective marketing channels and expensive ones.

    By the way - back to the membership site I mentioned in the beginning of this post - I'm rather sure that this one will go at the $140k BIN :) Congrats paulponna!
    Post edited by Unknown User at 2010-05-18 22:02:54
  • Great minds think alike, it seems. I've been following the same auction closely too.

    One funny point to notice about this auction is Paul has broken Flippa TOS by posting the site for sale elsewhere (WF for example). This would usually be a big no-no for Flippa, but what are the odds they conveniently let this one slip (smelling the fees :D)?

    Classic example of a fantastic launch but a terrible investment. My bet would be if you got it at $40k you will still make a loss.

    Goes to show though: if you have an evergreen product or a good product (shock horror) - there is no reason why you can't have sustainable sales and make the most of the standard selling multiples as Bryan mentioned. Once you've had a site 3 months you can claim an average revenue for the period. This was a smart move by Flippa, preventing people from launching a product, making 10k, and then claiming 10k average revenue and flipping it for $100k. The smart guys stayed ahead of the game ;)
  • I to have been wacthing this site and talked to paul himself the site has 319 paying subscribers

    and stills apparently haven't seen the proof makes $500 a day although his list would a good buy for about 17k... think outside the box.