I actually sold the site, as mentioned in this post here. The primary reason for selling was opportunity cost. Perrin and I were spending alot of time on the site and we weren’t seeing a huge return. The earnings peaked at a little over $2,000 per month (mostly through Kindle eBooks sales).
When I launched my first Amazon FBA product just a few months ago, the sales of that product surpassed the earnings of our authority site in about 30 days. As a result, I made the decision that rather than spend more time on the authority site, I should focus on building my FBA business with my limited time.
The results have been phenomenal, and it was clearly a smart decision for my business. It’s only been about 6 months since I launched my Amazon FBA business, and it just did a little over $40,000 in the past 30 days.
However, that still left me with a great authority site that I was no longer putting time and effort into. I was chatting with a friend about business in general one day, and the subject of my authority site project came up. I showed him the site, and he immediately expressed interest in buying the site!
I really hadn’t considered selling the site previously, but this friend made me an offer and we made a deal!
I’m now happy to reveal that the buyers of the Authority Site are Hayden Miyamoto (remember that guy!) and George Do. They have gotten into the business of investing in websites and renovating them for profit. They believe that my authority site is a perfect candidate for that model.
I agree. In fact, I only sold 66% of the site to them, and I retain 34% ownership. I believe that getting great individuals involved that are able to put more time into the site will yield some nice returns.
So, with that I’m actually turning over the rest of this blog post to George Do, one of the new owners of the authority site. George will explain the plans for the authority site, and share a few other details.
Remember Spencer’s Authority Site Project?
We’re bringing it back from the dead.
I’m George Do from WiredInvestors, a site dedicated to helping people learn about buying websites as investments. I’ve teamed up with Hayden Miyamoto from NoHatDigital (who you’re probably already familiar with) in order to work on this case study.
What We’re Doing
We pooled together our resources to buy 66% of the Education Authority Site that Spencer was working on before he shifted his focus to Amazon FBA. Spencer still owns 34% of the site but we’ve agreed that he’ll be a passive partner since he’s busy killing it on Amazon. We’re going to be running a case study on what it’s like to buy a website and revamp it to boost earnings.
This case study is going to be old school – we’re going to be revealing everything – the domain name, the site, and all the tactics and strategies that we use to improve it. You will literally be able to visit the site and see what we’re doing, and then read about what worked and what didn’t in the weekly update.
We know that Spencer has been burned before with regards to publicly revealing the domains of sites that he’s working on, so Hayden and I came up with what we think is a good compromise – we’ll be revealing the site that we’re working on exclusively through a newsletter. You can choose to follow along and get all the details by signing up for updates below:
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If you’re only interested in the broad strokes of what we’re doing and you’re not too fussed about seeing the specific strategies that we use or live changes on the site itself (which you’ll be able to follow along with), we will be providing more general updates on a monthly basis on NichePursuits where we go over what we’ve done to the site and whether or not it’s been effective.
Why are we Doing This?
Hayden and I both believe strongly that given the current climate in online business, buying a site and making improvements is a model that makes much more sense than building a site from scratch. We also believe that investing in websites has the potential to be extremely lucrative (for those who know what they’re doing).
The Google Sandbox (and constantly changing SEO landscape) make it difficult to rapidly validate website ideas. While it is certainly possible to build a profitable authority site from scratch, it will generally take about 6 to 12 month’s worth of work to truly find out whether a site is ‘hit or miss’.
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It therefore makes more sense to buy a site that is already a ‘hit’ and try to ramp up earnings instead. If you’ve done your due diligence, the worst case scenario is that you’ve bought an income generating asset that provides pretty good returns. The best case scenario is that you can significantly increase the earnings of the site and end up with an asset that provides you with outstanding return on your investment, regardless of whether you choose to hold or sell.
About the Purchase
Just a couple of notes about our purchase of Spencer’s Authority Site Project. Right now, a large part of the value of the site comes from the Kindle Library – I would say that about 85% of the valuation comes from Kindle sales. We view the Kindle Library and the website itself almost as two separate assets (although there are obvious cross-promotion opportunities available).
The Kindle library is a nice cash-flow purchase and I think we can grow it modestly with very little effort. We also want to do some testing in using Kindle for lead-gen.
That being said, our primary focus in this case study will be on making improvements on the website side – that’s the area that both Hayden and I are most familiar with and where we feel there’s most room for massive growth.
The Case Study
These are the goals of the case study:
- To provide a clear roadmap for people to be able to buy a site, ramp up earnings, and either sell the site for substantially higher than the initial investment or hold the site as a long term, near-passive income stream
- To validate the idea that buying a site makes more sense than building a site due to the larger ROIs, better scalability, and the ability to test/validate ideas from day 1
- To showcase a range of useful, evergreen techniques that can be used to improve either traffic, conversion, or monetization on a site (with the help of multiple outside experts)
- To educate people about the both the risks and the considerable rewards of website investing, and to highlight the importance of knowing what the heck you’re doing
The Project Itself
Now, don’t get us wrong. This project is not purely educational. It’s equally, if not more important to us that the site itself is successful since we’ve both got money on the line. We’re taking the success of this site pretty seriously and we have both short term and long term plans laid out for it.
Everybody has their own style when it comes to investing in websites (find out which style you fit into here). For this site, Hayden and I plan to apply the 80/20 approach (Pareto Portfolio) in the short term, and we will attempt to validate some longer term monetization ideas (the three models Hayden uses most are Info Products, Productized Services and Lead Gen). If this validation is successful, we’ll be overhaul experts in the long term.
How will we Validate our Monetization Plan?
Because the site already has some traffic, we will create a couple landing pages and an email funnel there. We’ll also invest in some FB traffic.
Here are the two scenarios that we foresee for the project:
Scenario A: We manage to validate our long term monetization strategy
- We’ll apply the Monetization Overhaul mentality to the site – and validate some product creation ideas to see if we can move up the monetization value chain (move from ads/affiliate offers and kindle sales to product creation/lead-gen).
- Other long term strategies we might apply to the site include: white hat SEO, building authority and traffic via social media.
- On the Kindle library side, we’ll be playing with pricing, doing some promotion, creating a funnel from the books to our products, and potentially producing new ebooks.
- In the short term, we’ll apply 80/20 principles to the site: things like On Page SEO, link-building via contributor accounts, Funnel Design, and CRO
- We’ll be working actively on the project for 6-9 months
- The goal is to substantially increase the entire project’s earnings (more than 4x) by 1.5 years
- If we were to sell in 2 years, our total 2 year ROI will be 535%, and our annual ROI will be 152% (compounded)
- Our plan here is to buy and hold, so we don’t anticipate selling the site unless we get a great offer
Scenario B: We can’t validate our long term strategy
- We’ll 80/20 the site – this will include things like sprucing up On Page SEO, targeting uncompetitive LT KWs, improving funnels, and working to optimize conversions on ads, affiliate offers, and ebooks
- We’ll 80/20 the kindle library. This will include playing with pricing, book descriptions, covers and promotion.
- We’ll be actively working on the site for 2-3 months
- Our goal in this scenario is to 2x the entire project’s income in a year
- Assuming that the site’s income ramps up in month 8 and 9, and hits 2x in month 10, we’ll have 3 months track record by the end of the year and will theoretically be holding a site worth 2x what we paid for it
- If we then choose to sell, our one year (annual) ROI will be 164% based on the income stream each month and the selling price of the asset
- Note that although we’ll only be actively working on the site for 2-3 months, we don’t expect earnings to increase until a few months after we’re done making improvements (this is particularly true for SEO related improvements)
- Our plan as of right now is to keep hold of the site unless we get a great offer
As we progress week by week, we’ll be bringing in various experts to help us on specific aspects of the site.
You know those heist movies where they round up a group of specialists to break into an impenetrable vault? That’s exactly what we’ll be doing. Hopefully, some of you will find it just as riveting (it’ll be tough though – a good heist movie is hard to top).
Now, if any of this sounds remotely interesting to you (or if you’re just dying for a fully transparent case study – they’re rare these days), you should definitely sign up to receive our weekly newsletter updates. Each week, we’ll go over the changes we made on the site, what we’re testing, and our overall thoughts on how the case study is going. You can do that below:
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If you guys have any questions or comments about this case study, website investing in general, or anything else online business related, both Hayden and I will be doing a quasi-AMA over the next week or so in the comments section.
Feel free to Ask Us Anything and we’ll do our best to answer any questions you might have.