What do you think of my strategy/action plan?
  • Hey folks,

    I've dabbled a bit in building sites but I've put pen to paper and I'm going to get serious about it, treat it like a business venture and really invest time, money and effort into it but in a controlled and planned way.

    Remove distractions
    I currently own 3 niche/adsense sites and 1 forum. I'm going to dump them all over the next few weeks to clear the deck of any distractions and to get a bit of cash that I can put towards my first major flip. I'm selling my car too (doesn't get used) and I've cleared almost all my debt in the month just passed.

    My budget and expectations
    I'm hoping to pick up a Clickbank site that has either been poorly marketed or is in decline and needs work to get going again. Budget will be $1000 with a further $1000 to market the site. Profits will be used to market the site further, increase conversions and increase profitability.

    My target site
    [*]Site should be in a niche that I enjoy and am already enthusiastic about (more enjoyable to work on).[/*:m]
    [*]Niche keyword CPC should be indicative of buyers who will spend money on the site.[/*:m]
    [*]Clickbank site with gravity of 0-2 (more than 0 means they have had affiliate sales in past 8 weeks, 2 is low enough that they will sell for a good price)[/*:m]
    [*]Niche must allow me to introduce a range of products to sell[/*:m]
    [*]Products should sell for about $150 (good figure to work with as you don't need to shift tonnes of stock to hit target profits)[/*:m]
    [*]Site must be getting 1000 uniques/month (plan to pay for at least some of my traffic anyway so this is less important)[/*:m][/list:u]

    My gameplan
    Without going into too much detail, I read Justin Gilchrist's ebook about taking poor-performance eCommerce sites, increasing traffic, conversions and profits before selling them on at significant profit margins.

    I'm hoping to pick up a poor-performance or declining site by talking it down and making the owner glad that they are getting anything for it. Hopefully this will mean a site doing $100-$250 for up to $1000. I'm hoping to boost this figure up to $1000 in about 6 months, feeding profits back into the site. I'll then work my magic and sell a site complete with stats showing continual growth for at least 12x monthly profits which should hopefully be about $12,000 by that stage.

    From that point on, I'm hoping to up the budgets and increase the length of time I hold onto my sites.

    How does it sound to you? Have I missed anything in my calculations? I'm going to start shortlisting sites that I can contact in the next few days but ultimately the goal for me at this stage is to think everything through and make sure I'm making all the right moves.
    Post edited by Unknown User at 2012-01-12 10:38:51
  • I believe you may need to flesh out how you are going to go from $100-$250/month to $1,000 per month within 6 months. In this scenario, it would be best if you already had relationships with affiliates who would be ready and willing to promote your product and you are great at driving targeted traffic.

    Have you thought through the revenue increase phase yet?
  • Hey Crhis,

    The jump from $100-$250 a month will come from a better product range, reduced overheads and increased traffic and conversion rates. That all sounds great but drilling down a little more, one example might be an affiliate site, specifically Amazon who offer very poor percentage payouts.

    I buy an Amazon Associates site, convert it to dropship physical products, outsource and automate as much as possible, then drive more traffic to the site using SEM, SMM and PPC. 6 months later, the site should be generating much more revenue and be a true online business for sale as oppose to a site with a bit of weak content and some affiliate links.

    Having spoken to a few people, I've been encouraged to consider holding onto the site once it is producing this amount of monthly profit unless I'm trying to ramp up my capital really quickly.

    The *real* problem right now is shopping for sites; I'm not totally sure if Amazon associates sites are really the way to go. I've got a few niches I'd like to shortlist sites from but I'm getting too many sites and I think they are too established to fit into my price range of $1000 or less.
  • For some reason I thought you were looking at clickbank sites rather than amazon. As long as you are aware that you need to become really good at outsourcing in order to scale beyond a few sites with the ecommerce model, I think what you are doing can certainly work. Here's an excerpt from something I wrote on the topic of finding the best monetization. Essentially what you're considering doing is cutting out some middle men in exchange for doing more of the work yourself.

    Choose the Best Monetization

    Principle 12: Best monetization = fewest middle men + companies with most to gain

    Now that you’ve have taken over the website, the next piece is choosing the best monetization. Monetization is simply the process of turning traffic into money. Monetization is one of those areas that you can focus your efforts and time on to get the biggest leverage or return on your time.

    Each method of monetization varies with how many middle men or other people who are taking a piece of the pie and how close you are to the actual company with the most to gain from your traffic. The best monetization comes when there are no middle men and you are the company with the most to gain from the traffic. The worst comes when there are a lot of middle men between you and the company benefiting from the traffic and the actual company benefiting doesn’t have the most to gain.

  • Haha, you weren't mistaking Chris, I had originally said that I was interested in aged. I bank sites because they would offer existing traffic, a product to up sell or downsell and an existing affiliate network who could be leveraged to promote a new product range that I was going to introduce (converting an info product sales page into a full ecommerce site).
  • *had picked click bank websites

    Basically, something that I don't think was covered at all in your ebook was the process of devising a strategy upon which to build an investment portfolio.

    I'm trying to figure out the best way to proceed with my own site flipping and having read a couple, I think that ecommerce offers the greatest returns in the shortest period of time. I'm trying to put the pieces of the puzzle together here to devise a strategy but it feels as though I'm stabbing in the dark.

    How can I develop a strategy that works for me?
  • I'll keep your comment in mind for our 2012 edition of KFS. Thanks for the feedback.

    First, what I want you to understand is that strategy is not the same as tactic. We attempt to teach strategy in our course, and I think what you're looking for are specific tactics (buying aged clickbank sites, etc.).

    I would recommend first starting with your personal goals. Are you looking for one big paycheck, consistent monthly income, a little fun money, etc.? Then start putting specific amounts and dates together. From your goals you can find the best strategy. Once you have your strategy defined, you can then start picking specific tactics that will support your overall strategy.

    For instance:
    a.) Goal: $500 extra dollars a month from 1 hour a day of work.
    b.) Strategy: Buying undervalued sites and selling them at their real value within 30 days.
    c.) Tactic: Buying PR3+ Aged Domains for around $50 from Sites Like Digital Point, Adding a Site on Them, and Selling on Flippa for around $300

    I could give you a big list of tactics, but they may not apply to your personal goals and overall strategy. The clearer you can get with what it is you want, the less likely you'll feel like you're stabbing in the dark.
  • Whatever you want to call them, I think the course is very good at defining how to buy sites and sell them and goes some of the way to defining strategy as you define it but what I feel is missing is setting the goal as defined in your post here.

    Using someone like me as an example, I've got a number of years building and marketing websites under my belt but I'd like to build a portfolio of sites that generate money for me instead of my current setup in which I only get paid when I work. Additionally, building and selling them would provide a means of building capital relatively quickly.

    How would someone like me, who wants to earn a 5 or 6 figures per year from either flipping sites, building a portfolio of monetized sites or a combination of the two get started? What kind of site should I go for? Why should I pick a forum over micro niche or ecommerce?

    If my goal is to earn that sort of money from 5-10 manageable sites, where would you recommend I start? How can I go from strategy to tactics?
  • Let's work this through together. Please answer these:

    1.) How much money do you have to invest now?
    2.) How much time are you willing to put in each day/week/month to reach your goal?
    3.) Would you be okay with reinvesting every penny for a year to reach your goal? If not, how much do you need to make each month for the next 12 months?
    4.) What activities do you prefer to spend a majority of your time on and are the best at?
    5.) Would you rather buy or build sites?
    6.) How much risk are you willing to take? Could you lose $100, $1,000, $10,000 if I deal didn't work out?
    7.) Specifically how much do you want to make from the 5-10 sites and by when? Be more specific than 5 or 6 figures a year. I'm looking for something like I'd like to be profiting $5,000/month by 12/31/2012.

    Can you see how answering these questions help you?

    It sounds like a couple potential approaches can work for you based on what I've read from you so far but I'd like to see what your answers are to the above.

    Also, I hope you understand if I'm being a little abrasive it's because I can't answer these questions for you. I'm happy to give my opinion, but you need to ultimately choose what's the best approach for you and spend the time learning from experience what's best for you. Our personal site buying/selling business model has changed significantly 3 or 4 times due to the experiences we've had along the way.
  • To be honest Chris, don't worry about being abrasive. I've been at the make money online for several years now and although I've got enough knowledge to make plenty of cash, I end up working on way too many things without proper planning and losing hope/energy when they don't work.

    I don't need to be spoon-fed but I'm looking for a push in the right direction the will give me something to start with that, like your own business model, can evolve over time.

    1) How much money do you have to invest now?
    $1500 - $4500 of my own money. I could probably collect a further $10,000 - $20,000 from my family to invest.

    2) How much time are you willing to put in each day/week/month to reach your goal?
    Depends on how much I'm making but I'd like to make at least $1500/month profit from my site(s). In return, I'd work up to 8 hours/day, 6 days/week, but I would find it impossible to put in this much work if I wasn't seeing growing revenue and profit margins.

    3) Would you be okay with reinvesting every penny for a year to reach your goal? If not, how much do you need to make each month for the next 12 months?
    In short, no but I could reinvest every penny by supplementing my income by freelancing but this would result in fewer hours on my site. Alternatively, I could reinvest only part of the revenue that my sites make, but I can live quite

    4) What activities do you prefer to spend a majority of your time on and are the best at?
    Probably guest posting or article/video marketing. I'm also pretty good at on-site SEO (setting up WP, migrating content, styling Thesis theme, automatic tags etc).

    5) Would you rather buy or build sites?
    Short-term I'd like to grow my capital to invest in bigger, more-stable projects in the long-term that need less work and produce more steady income. Does this mean building them now and buying them in 2-3 years?

    6) How much risk are you willing to take? Could you lose $100, $1,000, $10,000 if I deal didn't work out?
    I'd be comfortably losing $1000, could afford to lose $5000 and would stake $10,000 on a low-risk investment.

    7) Specifically how much do you want to make from the 5-10 sites and by when? Be more specific than 5 or 6 figures a year. I'm looking for something like I'd like to be profiting $5,000/month by 12/31/2012.
    [*]I'd like to be profiting $3250/month by 12/31/2012, working no more than 8 hours/day, 6 days/week.[/*:m]
    [*]I'd like to be profiting $4250/month by 12/31/2013, working no more than 6 hours/day, 6 days/week.[/*:m]
    [*]I'd like to be profiting $5250/month by 12/31/2014, working no more than 4 hours/day, 6 days/week.[/*:m][/list:u]
  • Based on your answers, I have a few thoughts. It looks like a hybrid approach is going to work best for you, meaning buying some sites to flip and holding others. The reason I say that is because you aren't able to re-invest and you're also looking for a continual revenue stream.

    This is just an example, but it might look something like this:
    Month 1: buy 3 sites for $1,500 each
    Month 2: Increase revenue to $300/month per site
    Month 3: Sell 2 sites for $3,000+ each. Increase revenue to $300/month on the third site.

    At the end of those 3 months you have $6,000 to work with and a $300/month revenue stream. Put $1300 in your pocket and repeat the 3 month cycle but with a $5,000 rather than $4500 investment this time (trying to maintain all the same ratios. Each month you'll also want to grow each site's revenue stream by say $50/month.

    You'll have to create a spreadsheet to figure out exactly how you can reach your $3250/month goal by end of year and play around with different profit ratios, etc.

    Now, as far as the types of sites, you didn't mention anything about wanting to spend your time processing orders, dealing with refunds, etc. Unless you are confident you can outsource that work, I'm not sure ecommerce is going to be ideal for you. You seems to want to focus on SEO.

    The obvious approach to me for someone who is great at SEO is to pick a niche and buy quality sites that are currently on page 2 or 3 for relevant keywords. Then do your SEO magic to get them to page 1. Ideally you're buying sites without any monetization so you can quickly add adsense, affiliate links, etc. or sell ads on them.

    Any thoughts?
  • Thanks for the great advice Chris,

    At this stage in the game, no I'm not interested in processing orders, dealing with refunds etc. Maybe down the line I'll pull the trigger on a $20,000 eCommerce site but perhaps one shifting information products, iphone apps or software in which there is less overhead involved in the order processing. The reason I was so attracted to eCommerce was that they seem to sell for pretty poor profit multiples and as such can be flipped pretty easily for large profit margins once you get them valued based on their monthly profit and other things like traffic or email list for example. It all looked great on paper but probably isn't the best route for someone in the early stages of going full-time.

    Your suggested business model itself is pretty similar to what I was planning in my head anyway. I wanted to get into site flipping/ownership quickly as its what I want to do long-term but obviously need a bit of cash flow in the near future. I'm happy that you laid this on the table for me with solid figures to work with and given me a push in the right direction.

    Having spoken with a few individuals, it has been suggested that I approach site owners directly (what you are suggesting I think) as Flippa is a seller's market and DP has a lot of junk to filter out before you find something worthwhile. Thanks for narrowing it down to pages 2 or 3, that gives me and idea for now and I can use a couple of tools to establish how difficult it would be to get onto page 1 for a given niche.

    With that in mind, do you now recommend picking a niche, a type of site (micro-niche, blog, forum etc) or both? You've seen my other posts about prospective niches and I'm not totally sure about how to proceed from here. Obviously I need some criteria in order to determine what sites to look for and who to approach.

    What do you think?
  • Someone recommended DomainFace.com to find older domains, which I assume could be put to use for sites. The article I read was more about purchasing aged domains to flip but the author stated that so long as the site didn't go against their personal values (porn, viagra etc) they didn't care what the topic or monetization method was.

    You've swayed me away from ecommerce but beyond that I'm not really particular about one type of site over another.
  • [quote="jcpeden"]
    Having spoken with a few individuals, it has been suggested that I approach site owners directly (what you are suggesting I think) as Flippa is a seller's market and DP has a lot of junk to filter out before you find something worthwhile. Thanks for narrowing it down to pages 2 or 3, that gives me and idea for now and I can use a couple of tools to establish how difficult it would be to get onto page 1 for a given niche.

    With that in mind, do you now recommend picking a niche, a type of site (micro-niche, blog, forum etc) or both? You've seen my other posts about prospective niches and I'm not totally sure about how to proceed from here. Obviously I need some criteria in order to determine what sites to look for and who to approach.

    What do you think?

    Regarding contacting site owners directly, this is a good strategy. I never focus on just one method. If I find sites on Flippa that meet my buying criteria (something you and I haven't talked through), I'm happy to buy them there. However, you have to know what sites meet your criteria and the max you're willing to pay for a site ahead of time so you can take the emotion out of the bidding process.

    Regarding picking a niche, I might recommend starting with niches you or someone you know has knowledge about and has decent CPC. Just make a list of all your hobbies, etc. If that doesn't help, search the sold sites on Flippa to find ones making good money and try to buy the sites on page 2+ so you can implement the same monetization method as the auction site.

    What I might suggest for you is to use SEMRush and look at the following metrics.
    1.) Average position of top 5 volume keywords. You'll probably want this to average around 9+.
    2.) SE Traffic price Divided by SE Traffic. You'll want this to be probably $0.50+.

    Gather together a list of potential sites in a spreadsheet and plug these numbers in and you'll see what I mean.
  • Hopefully this post will serve as something as a step-by-step for people who follow on after me!

    So, rather than starting with my hobbies/expertise/interests I've tried to let the marketplace lead my research. As I'll be aiming to grow and flip sites early on I'm looking for sites with plenty of bids (more than 20) that sold for large multiples of their monthly profits.

    <formatting of the table looks horrible so I ripped it out>

    I tried to focus on valuation as oppose to declared monthly profits but (in an effort to shortlist) removed sites on topics that did not interest me or were earning less than $150/month.

    As I don't want to spend too much time creating content and there are two forums in my shortlist, I'm leaning slightly towards forums at this point in time.

    I'm also interested in video sites so my plan at this stage is to take these niches and try to find under-monetized forums and video sites in the niches listed above appearing on pages 2 or 3.

    I'll then take my list of sites and run it through a trial membership on SEM Rush using your recommended stats to drill down to a handful of sites...hopefully!

    Do you think I'm on the right path or could I direct my efforts better?
  • You can check out my short list at Google Docs.

    As I said, the plan now is to flesh out a list based on these niches and trying to target video sharing sites and forums on pages 2 and 3 of Google Search.

    I'm not familiar with SEM Rush but as I understand it I'll then be able to trim down the list based on the criteria you outlined above.
  • Something you should do for comparison is include the stated monthly unique visits in your spreadsheet. Forum type sites are likely getting a lot of repeat traffic that SEMRush wouldn't show. SEMRush basically tells you about how much traffic a site is getting from Google and how much that traffic would cost if you were to pay for it.

    If you come across any site flipping related sites that you think would be good and don't plan to buy, let me know. :)
  • So, based on my aforementioned plans I built a long list of 289 sites in a range of niches, usually forums, all appearing on pages 2 or 3 of Google for a niche-specific search term e.g. 'play snes games online'.

    I got a free 2-week trial with SEM Rush and have worked my way through all but 40 of the sites (reached my daily viewing limit), eliminating any sites that have an average position of less than 9 for their top 5 search terms and any with a low (less than $0.50) search engine paid traffic/search engine traffic value.

    This has left me with 89 sites that range in search engine traffic volume and search engine paid traffic volume.

    I assume that the suggestion you made of SEPT/SET gives a rough estimation of CPC value and therefore monetization potential?

    Is the next step to reach out to these sites to figure out how much they are making or can I short list more?
  • Spent the past hour or so chatting with my girlfriend's brother who used to sell SEO packages about the data that I'd compiled over the evening.

    I've been left with 89 sites that range in organic search traffic, an estimate of the same volume of traffic from ppc and the value of paid search/organic search that you suggested I use to shortlist my sites.

    I was trying to get my head around what I was looking at and decide if I needed to target high paid search/organic search sites (which I assume equates to approx CPC), high paid search values (which either means low CPC/high vol or high CPC/low vol) or finally high CPC/low volume sites which I can boost traffic to, hence earnings and hence value.

    In the end, Mike suggested that I take a step back and look at this from a more straightforward standpoint. He suggested that if the aim was to take a site on page 2 of Google to page 1, I'd need to out rank the competition. We checked out some prospective sites and I instantly realised that it would be hugely expensive to push a few of the sites up the SERPs.

    I then recalled the monetization review outlined in the eBook. I decided that a quick pass of all the sites to see which were using advertisements would quickly show me the sites that I could throw up a few adsense modules, sell a few TLAs and very quickly boost the site's value. I'm not expecting many of these but it will then at least allow me to rank sites and look at 10-20 sites in detail before moving on if none are appropriate, as oppose to trying to deal with 89 sites in one go.

    In brief, I'm now going to sort my sites by seeing if I can add to their existing monetization strategies and by checking the competition to see how difficult it will be to improve their SERP performance.

    Make sense? :D
  • What you're saying is great. Just keep in mind cold calling takes a little volume. You might only get 1 out of 10 people to reply to you (let alone sell).
  • Spot on, I've shortlisted 10 sites that had little or no obvious monetization. Some of them, I'm almost certain won't sell but I've taken a look at comparable sites on Flippa that sold for good margins and have listed a number of additional ways that I should be able to monetize my 'top 10' sites.

    So, as I've said the plan would then be to increase traffic AS WELL.

    My one question at this stage would be is there any obvious way to estimate how much a site might be earning beyond asking the owner directly?
  • The best way I know how is to evaluate the monetization strategy and estimate the traffic. For instance, you can use sites like compete.com, semrush.com, alexa.com to get a rough estimate of how many unique visits per month they are getting. If there is any monetization, a rough guess might be something like $0.05 per unique visit. However, if the site is monetized by something like adsense, I think an accurate way to check that is to take the SE Value number from SEMRush and multiply it by 5% (the estimated CTR). Aside from that, you just try to get the conversation started with the site owner before you make any offers. If you do make an offer without having all the info, you'll probably want to say it's contingent on you reviewing the traffic and financial numbers.

    Hope that helps.
  • Hi Chris (and anyone else following this thread)!

    I ranked my shortlisted sites and ran a WHOIS lookup to get an email address for the top 20 (based on existing monetization and competition). I managed to remove a number of sites that looked appealing as, in SEM Rush, I had forgotten to specify region-specific search engines and was using Google US for the most part. Some UK, CA and AU sites did very poorly in Google US results but were receiving huge amounts of traffic and dominating their local SERPs. Just something to be aware of!

    As for the remaining sites, I've had a few replies in the past 48 hours ranging from people who don't want to sell, to folks who told me that looking at monthly profit alone was no way to value a site and have not replied since, to a couple of promising leads.

    I'm trying to remain detached from the process and to think entirely with my head. This means, I'm digging into the Analytics data I've been provided, asking questions to establish a fairly accurate estimate of monthly PROFITS (not revenue) and then the plan is to throw as much data into Flippa to see similar sites that have been successfully sold and for how much.

    One early valuation from a potential seller was (monthly revenue * 60 months) + ($1500 bonus) which I think was a *tad* high. My only worry is that if these sellers all massively over-value their sites then I'll never be able to barter them down. However, as I said I'm trying to remain as objective as possible so if they don't come down then I'll just have to move on.
  • So, I've had a few responses from prospective sellers but they all totally overvalue their sites. I'm going to hold fire on continuing down the path of approaching more sellers and hoping that a few of them want to let their site go for anywhere close to 10x monthly profit.

    I'm going to keep an eye on Digital Point and Flippa. I've played around with my cashflow, budget and profit projections and in order to make things a little more conservative, I've dropped my original target of $3250/month to a more modest $2235. I've also upped my start up fund to $6000 in the hope that I can pick up 3 sites doing a total of $600/month in profit.

    I'm going to pick up sites that I can increase SERP performance and are under monetized. I'll mix selling sites with buying and growing new sites. I'll generally aim for 10x monthly profit or less when buying and never sell for less than 10x monthly profit. I've also assumed that no site will make more than $600/month which may or may not be the case but should help to balance out sites that perform very well with duds.

    In terms of picking up sites, I'm going to offload a few of my own over the next few weeks. I'm also going to keep an eye on DP forums/marketplace and Flippa. I'll probably write a quick post on Warrior Forums and Experienced People forums...see what turns up!
  • Overally I'd say you're on the right track. It's amazing how sellers who aren't really motivated to sell will want huge valuations. They're probably basing their valuations on what's typical in the offline world and never heard of typical online valuations. The under-monetized sites are the ones where the money is. You could pay 60x monthly if you can improve the monetization quickly but you have to be confident.