A couple of days ago, I revealed that the first case study I will be working on is developing a voice chat software with Perrin. Now its time to reveal the second case study of the year. That's right, both of these are going to run simultaneously throughout the year!
This second case study will be buying and selling not one, but 2 sites! Throughout the process, I hope to show you the steps of what it takes to buy at website (at a good price), and how to take that site and increase its earnings and traffic, and then how to sell the site for a profit.
In fact, I've already purchased 2 sites, so this case study is well under way. So, today I'm going to share what I've done so far with these sites and how its going, along with the next steps in the process.
How to Buy a Website
I'm not an expert when it comes to buying a website. I know the best way to learn something is to actually do it, so that is a big reason I am going through the process of buying at least a few websites this year.
Although I've never purchased a website, I've owned plenty of them, so I know a few things to look out for. Some of those things include:
- Earnings and Expenses history
- How long has the site been around
- Where is the traffic coming from. Is it 100% from Google, or 1 keyword, or one other vulnerable source?
- What country is the traffic coming from?
- Can the site be improved?
- Links pointing to the site: Natural or Spammy?
This is primarily what I look at, but there are other things that can be considered as well. I just recently did a podcast interview with Justin Cooke from EmpireFlippers, where we discussed buying and selling sites a bit.
Where I Bought My 2 Websites
Shortly after publishing my goals post here, where I explained that I wanted to spend $25k this year buying websites, I received a few emails from readers offering to sell their websites. I was only interested in one of them, and after exchanging a few emails, getting access to the Google analytics, and earnings screenshots, I made an offer.
To give you an idea of price, the Empire Flippers list all their sites at a buy it now price of 20 times monthly earnings. This is definitely on the high end. From what I've seen on Flippa, a more “normal” price for a website would be around 12 to 15 times monthly earnings. (Obviously, a large site could go for more 2 to 3 times annual earnings).
The site I was looking at was making about $450 to $500 per month mostly from Google Adsense and a little from Amazon associates. After we exchanged several emails negotiating the sale price, we agreed that I would buy the site for $5,000. I think it was a great deal, as I was able to pick up the site for about 10 to 11 times earnings.
Then I was able to pick up another site on Flippa. Again, I've never purchased a site on Flippa (although I have sold a couple there before). So, it was a new experience for me.
Essentially, I was hoping to find a site that was getting a lot of traffic, but perhaps the owner wasn't monetizing that traffic properly. I was looking for upside potential with all the websites that I reviewed. What I found is definitely rough around the edges.
I found a website that was getting about 3,000 visitors a day, but was only making about $250 per month. I saw some potential; I'll explain more below.
So, instead of just inputting a bid and crossing my fingers. I contacted the seller privately and he wanted to discuss things via Skype chat. I was able to get A LOT of direct answers, and again access to Google Analytics to get all the details I needed.
I learned that the site was banned from Google Adsense, and that most of the content was copied. I could also see that almost all of the traffic was coming from Pinterest.
So, tons of red flags; BUT these were also reasons why the site could potentially be improved. I also knew I could buy it for cheap. So after negotiating quite a bit, I made him an offer for about 8x monthly earnings and he accepted. We did the entire negotiation on skype chat, and he immediately closed the Flippa listed after I input my bid (which was well below his original asking price).
The site was making about $250 per month, and I paid just over $2,000.
So, both sites are not huge websites, but they will be great testing grounds.
Adsense Site Details and Strategy
As mentioned earlier, I was contacted by a reader of NichePursuits.com and purchased their site that is making about $500 per month primarily from Google Adsense. The site was making a little bit from Amazon Associates and eBay affiliate program as well, but its pretty small.
This particular site doesn't have any problems, its been a solid earner and ranks well in Google. The site gets about 200 unique visitors per day.
So, even if I did nothing but maintain the site where its at, I would recover my initial investment in about 10 months. However, I thinks this site has a lot of growth potential for 2 reasons:
1. The site only has 5 pages of content. Adding more quality content can increase the traffic.
2. The site only ranks mid-first page or top of the second page of Google for most of its keywords. I think some additional SEO/link building can push those keywords near the top of Google, potentially increasing the traffic quite a bit.
So, the strategy for this site is pretty straight forward: Write more content, and increase existing rankings in Google with more links.
I will likely just build links via Rank Hero or my own Private Blog Network. That may be all I need to do to increase the rankings in Google.
And of course, I've already done the keyword research using Long Tail Pro to find 7 or 8 additional keywords that I'd like to target and add content for. I'll be getting that content up in the next couple of weeks.
The one minor difference with this site, is that it was an PHP site, rather than WordPress. However, the existing owner was willing to convert it over to WordPress for me. So, I've now got the site up on WordPress, and I'm closely watching the rankings, traffic, and earnings to ensure that the move doesn't make any of those take a dip.
Pinterest Site Details and Strategy
The second site I bought is my new problem child. However, I knew this going in, so its not like I didn't know what I was getting myself into.
To recap, I bought this site on Flippa for around $2,000, and its making around $250 per month.
The problems lie in the fact that nearly all of the content on the site is copied (“curated”) and its been banned from Google Adsense.
Because the content is copied, its doesn't get much traffic from Google; however, it gets a TON of traffic from Pinterest. In fact, the site gets close to 3,000 unique visitors per day, and most of that is from Pinterest.
Here's a screenshot from Feb 1st to Feb. 9th, 2014 of Traffic Source for the site:
The organic traffic you see is mostly from images searches on Google.
This site is in the craft niche, so most of the content on the site is of images and blog posts about craft items. The previous owner did a good job of basically pinning all images from the site onto Pinterest. These images in turn get re-pinned and drives all the traffic.
The Plans to Fix the Site
The previous site owner had let me know that the site had been banned from Adsense, but he said he didn't know why. So, my first priority was to see if I could get it reinstated with Google Adsense.
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As you are likely aware, simply getting the site back with Google Adsense could easily double the income of the site overnight. Google Adsense just pays more than other options.
Google is still not easy to get a hold of; however, they have added the ability for some Adsense account holders to email an account rep. Luckily my account has that option…this is the first time I've tried to contact Google Adsense through this newer system.
I essentially told them that I just bought a site, and was told by the previous owner that it had been banned from Google Adsense, and was hoping they could tell me why.
We exchanged a couple of emails, and Google Adsense responded with this:
My first thought was well, I'll just take down the copied content, or add original content to the current post; BUT there are over 1,500 articles on the site!
So, I was left with the choice: I could do all I could to get the site in compliance with Adsense by taking down copied content and adding original content. OR I could just ride the current strategy and improve what I could.
At this point, I've decided to just forget about Google Adsense and monetize the best I can with other sources. If I took down the content, I would be starting from scratch, and I don't want to do that.
The Content Plan
The site actually has good metrics, Page Authority of 33 and a PageRank of 4. It also gets lots of natural back links; mostly from others linking to all the images on the site.
But I don't know if original content will rank well on the site; I'm hoping it does. So, essentially, I've gone to Long Tail Pro and found several keyword ideas that I could write original content on.
I'm going to start with one solid article targeting a low competition keyword that I should be able to rank for, built some links to that article, and then see what happens.
If I can rank new original content in Google (despite the rest of the site being copied content), then I should have no problem increasing the earnings of this site over time.
In addition, I've contacted and hired the previous content provided on this site. He is still “curating” content for me to take as much advantage of Pinterest traffic. The freelance “author” comes pretty cheap and is a pretty minor expense.
If original content doesn't rank in Google, I'll just do my best to grow the Pinterest traffic and monetize it better.
I've already started to test out some different ad layouts, but I will dive deeper into improving the monetization of the site in a future post.
Overall, I'm excited to take both of these sites and increase their earnings. For the most part, I'm hoping to use these sites as a learning experience to provide the knowledge I need to buy and sell sites on a larger scale at some point.
I would love to hear your thoughts on this project so far. I've just given an introduction to both sites, but hopefully its enough to pique your interest.
Have questions or comments? Let me know what you think below!