I'm excited to welcome Richard Patey onto the Niche Pursuits podcast!
Richard is well-known in the buying and selling websites space and has a lot of experience. You can check out what he's been up to lately over at RichardPatey.com.
During today's episode we talk about Richard's background and how he got involved in building, buying, and selling websites.
We also dive into some “meaty” subjects like the best places to buy online businesses, what are some red flags when doing due diligence on deals, how long you should hold an asset for, and much more.
Mentioned in the episode:
- Pat Flynn
- 4 Hour Work Week
- Flipping Websites Facebook Group
- Flipping Websites Podcast
- Alpha Investors
- Aged Domains and Abandoned Blogs – https://odys.global/
- Expired Domains
- Travis Jamison of Smash Digital
- Empire Flippers
- Quiet Light Brokerage
- Motion Invest
Read the Transcript:
Spencer: Hey, before we jump in to today’s episode, I wanted to share with you a little SEO tip that’s been working really well on one of my sites. In fact, it’s owntheyard.com, my Niche Site Project 4 site. I’ve been building internal links with that site. One thing that I like to do is find all the orphaned pages on the site, so our articles that don’t have any links pointing to that. I’m using Link Whisper to just sort those pages by those that don’t have any internal links or very few internal links. It makes it very easy using Link Whisper and the reports to do that.
I went ahead and I went through a bunch of those that didn’t have any links. I added one or two internal links to those articles and I’m starting to see big movement in the rankings. I’d been keeping track and in fact, it’s been about 25 days since I built for most of these just one or two internal links and I wanted to share some of those results.
One of these keywords I was ranked number 32 in Google. I built one internal link. Now, it’s been (like I said) a little over three weeks later and I now rank number one in Google for that particular keyword. Another one of these keywords, I built just one internal link to that page. I was ranking over 100. I now rank number nine in Google. Another one, I was ranking number 21 in Google. I built just one internal link, and now I rank number 2 in Google. Again, this is all about 25 days later.
A couple of these others, I built five internal links for this particular keyword. I was ranking over 100 and now I rank number one. Another one of these, I was ranked number five in Google, and I built eight internal links and now I rank number one in Google for that particular keyword. I’m seeing huge impact without building external links to these particular pages. We do know that external links are important and can help a lot, but there’s a ton that can be left on the table sometimes with internal links.
I’ve been using my WordPress plugin, which is called Link Whisper to build internal links. It makes it really fast and easy to see a full report on your site, how many internal links each of your pages has, and then to build those internal links in a very fast, efficient, and effective manner. I’m seeing big results by doing this on my own site. I hope that you would consider checking out Link Whisper by going to linkwhisper.com. Thanks a lot.
Hey everyone, welcome back to the Niche Pursuits Podcast. . Today I've got a really good episode with Richard Patey from RichardPatey.com. What Richard has been doing a lot of is buying and selling websites. We’ll hear his journey of where he started building websites. He started with a drop shipping store and you'll learn why he transitioned away from that, but then he's gone through a lot of buying and selling websites. Now actually, he's kind of done it all. He’s taken in investor money. He’s invested his own money, tried to build a portfolio, sell those sites, and everything in between.
We're going to talk about the entire business model of buying and selling websites. We're going to hear his story, his successes, some of his hardships along the way as well, and also dive into a little bit to his website you may have heard of, flippingwebsites.co, and the Facebook group that's been associated with that. He built those up from scratch which have built a pretty significant following, but he recently sold that. He sold those assets and we'll hear the story of why he did that and what his involvement is there (which is very little to none at this point) but I’ll let him share that.
We’ll talk about where are the best places to buy online businesses, what are some red flags and some other ways to do due diligence on potential deals, how long you should hold your asset for, and other things that you may be thinking about when you're trying to buy or sell a website.
I hope you enjoy the interview and if you're interested in following along with Richard, you can still go to richardpatey.com and he does have a new newsletter which is pretty cool. A curated list of deals that he's finding off market deals or great deals that are found in other places. You can sign up for the newsletter weekly and get notified of that. It’s richardpatey.com/premium. Here is Richard and enjoy the interview.
Hey Richard, welcome to the Niche Pursuits Podcast.
Richard: Hey Spencer, great to be here.
Spencer: It is great to connect. We connected last week on a call to chat about business a little bit, but it's great to sit down with you and be able to share your story with the Niche Pursuits audience, so I'm really excited to have you for sure.
Richard: And myself, too. I've been listening for a long time many years and I'm excited to talk with you.
Spencer: Good, thank you. It's always good to know there's a few listeners out there still. I see the numbers on the podcast and it's great to know that people still listen.
Richard: I'm sure it is rising for you.
Spencer: Yeah, it does all right for sure and I will say (not to go too far on a tangent here), I blog and certainly the blog gets more traffic than my podcast does, but when I meet people in person they typically say, “Great podcast. I love listening to your podcast,” rather than, “Hey, I enjoyed your last blog post.”
Richard: Yes, you may not get as much attention in terms of the numbers if you look at downloads, but I think the impact is disproportionate in terms of audio versus written content.
Spencer: I agree. People get to connect with you a little bit better, get to know you, they spend more time listening to you and there's a lot, audio versus just reading the written words. Hopefully, through audio here on this podcast, people can get to know you really well and feel like they make a connection. I'd like to start with your story, your background a little bit. Tell us what you were doing before building online businesses. What was your business or work experience?
Richard: I had no business experience, I was actually working in charity, pretty much all of my 20s. I did a business degree university and it actually turned me anti-business for quite a long time.
Spencer: Oh really?
Richard: I didn't like anyone on my course (particularly) and the trajectory was to go into big business, into corporate positions, there was no talk of entrepreneurship or small business, and it really turned me off. So I thought, “Okay, well what's the alternative to this?” I got into the not-for-profit sector, and I was involved in bid writing, bringing in funding, writing bids for contracts, government contracts, grants, trusts, charitable ways of earning money, and I was pretty good at that. So, I think the consistent thing all the way through is the fact that I think I'm pretty good at writing and persuading people.
The charity did well in the sense of bringing in a lot of money, but it was so ineffective at spending it. There was so much waste and I got very disillusioned. I was turning 30 and I just thought, “Is this the right path for me? Is what I'm doing actually having an impact?” and I decided just soon after turning 30, I quit my job and set up a company, not knowing anything about what the hell I was doing. I set up the name of the company Profits Is Good Ltd. It’s kind of like a watershed moment, kind of declaring my charity days were over and I'm now going to be trying to make some money. That was the end of 2009 and that was the beginning of me trying to figure out how to make money on the internet.
Spencer: That is a bold move, to quit a job, start a business without any real solid plan in place.
Richard: Or any savings as well.
Spencer: That is a very bold move and were you single at the time, no family obligations?
Richard: Not exactly. I was single.
Spencer: Okay, you can kind of get away with that.
Richard: Yeah, just about. I was making a little bit of money from online poker, so I thought at the very least, maybe I can support myself through that. But that didn't work out, so I spent the first three years in business doing services because I didn't have the money and the time to build my own projects. I started doing services, websites, I taught myself SEO and and offered that as a service. That was my start. I needed to bring in money quickly, so that's what I started doing.
Spencer: What led you to offering those services? It sounded like you're playing online poker and had started a business, but what led you really to the online world for sure? Was it the online poker just knowing, “Hey, people are doing a lot of stuff here”?
Richard: Yeah. I was looking back, I read a blog post summarizing all the affiliate site challenges and I remember yours was 2013. I quit 2009 or 2010, so I think that was a Pat Flynn one, his first challenge. Around that time, I was slightly aware of this term niche sites or the fact that people are making money online, but I just thought there’s money to be made and I just got to figure it out.
Also actually, I was living with a web developer at the time, so I could see that he was making really good money. I had no idea what he was doing, but he said, “Okay, you need to get a hosting account and there's this thing called WordPress.” That was the introduction, otherwise, I was completely clueless.
I quit knowing that this existed, he was making really good money, and I just thought I can make money through poker, this guy’s making money through whatever he's doing. I'm sure I can figure something out. Actually, I couldn't just stand working in this charity job any longer, so I forced myself out.
Spencer: It was the dislike or the hate of the job that really was the motivating driver to have you look for something else.
Richard: For sure.
Spencer: It wasn't so much that you saw opportunity elsewhere, it’s just you didn't want to be doing what you are currently doing. It sounds like your first online business was providing services, helping people build websites, SEO, you mentioned a little bit for about three years. Tell us about the transition from freelance or contract work to owning your own websites and et cetera.
Richard: Like a lot of us guys, the turning point was reading The 4-Hour Work Week. That book was huge for me and I thought, “Okay, well, I'm going to follow this,” and writes out which interest do I have, which audience, which kind of groups do I belong to, and can I actually create an offer in an area that I know well?” One of those was poker, one was skiing or snowboarding, one was Apple Mac or something, so just really broad.
At the time, I think it was 2012, start of 2013, Apple with the iPhone had just released the new panorama feature in their iPhone, and I thought, “This is really cool, how are you going to be able to print these?” At the time, even back then they were really big files, they were very wide, (from memory) like 10,000 pixels wide. I was thinking, “Okay, I'm taking these, I have an iPhone, how am I going to print them?”
I did some Googling and there wasn't anything available, so I thought, “Okay, well, I think other people are going to be searching like myself. Why don’t I try and set up a service to get these things printed?”
I've known about Shopify for a little bit of time and I created a Shopify store, put on there the different sizes that I thought I could offer, found a local printer here where I live in the UK, and put the product pages up. At that time, I didn't know what I was doing. I had a very basic knowledge of SEO, and I put, “Print iPhone panorama,” in the title tag. That was the extent of it and it was, “Okay, this thing is now live. Now what do I do?”
About three months went by without any sale. Maybe I was like tweaking things and learning a little bit more about SEO, but I finally got my first sale. That was the first time that I actually made my own money online and that was a really big moment. It was a $50 sale (maybe), I made like a $20 profit, but that was the start of it.
I started reading more about SEO, speaking to people, learning, and realized how I could maximize with a small amount of keywords searches, but there wasn’t a time for that. I was making about $1000, maybe $1500 a month and about $300 or $400 profit, but I couldn't go any further. I maxed out in my skill set and I think I'm maxed out in terms of the keywords back then.
I actually remember saying to a friend that I was thinking about shutting it down, not knowing that actually this is potentially an asset. I didn't understand that you could build assets on the internet, that this store or website could be assets. The guy said I should check out Flipper. At the time, they had a valuation store. I entered the details and actually came back saying this business is worth nothing. I actually ended up closing it down, but then, from carrying on with my entrepreneurship journey, reading more, and listening to a lot more podcasts (including the Empire Flippers Podcast), I realized actually what I had created was valuable and actually could be sold.
Actually, the domain is up, the homepage is still indexed, I put the products back. It took a year to get the search traffic back, the revenue back, and then I sold it in 2016. That was my first exit. It was a very small one, it was about $6000, but that was the first time when I realized I should build something valuable on the Internet myself and it was of value to other people.
Spencer: Yeah, that's awesome. Very cool journey. I will point out a lot of ups and downs and I think that's quite common for people starting an online business is the first thing doesn't always work and it can take a few years before you figure out what your journey is, what the path is, and you stumbled on this model of, “Hey, I can build something that has value online and I can sell it.”
Richard: Yeah, and I realized what I didn't want to be doing going forward, so I didn't want to be doing drop shipping. I didn't like dealing with the customer support and the supplies in this case, the printers. I realized that I could rank sites, so I've moved into affiliate sites and content sites, still thinking a content is an area that I think I'm most strong in. I'm able to rank, it's a pretty simple business model, there's no other moving parts and from that experience, I realized what I didn't want to be doing and I ended up focusing on building and sending contents lights.
Spencer: It sounds like around 2016 is kind of when he started diving in head first into content sites, were you building them all from scratch or did you go and acquired some?
Richard: Yes, at that point it was still all from scratch and I transitioned, I was moving out of services and I transitioned to funnels, building service business into affiliate sites, and sold that in 2017 the first time. That's when I moved into thinking about just in terms of website investing. The investor that bought the site from me had the intention to retain me, so he struck a deal. I will get a percentage of cash flow and a percentage of the upside if I carried on building the site up.
That was the first time when I realized there’s people with money and there's people with expertise. There are ways that you can partner and generate bigger upsides than you can by starting new sites. I did that and we flipped it a year later, doubled the asset price. That was in 2018. From that experience, I realized that I had the potential of working with other investors and started exploring that.
Spencer: All right. Why don't you take us down that road a little bit? In terms of working with other investors, what does the model look like for you? What are some things that you've done there?
Richard: Like I was saying, at the time (to me) it made sense to work with money rather than to build from scratch. When you're building a site from scratch (on a brand new domain anyway), it can take a good amount of time, at least 12 months to really start making some traffic and some revenue. If you can work with money, you can buy an existing revenue-generating site. You can miss out on that period. That was my thinking.
After that exit, low six-figure exit, I started being more interested in the business of buying and selling websites. I created the Flipping Websites Facebook group, the podcast, and started connecting with other people in the nation, trying to learn as much as I could. Other people building, other people buying and selling, other website brokers.
From that, I realized I was building an audience. Investors were starting to naturally reach out to me and saying, “Okay, you sound like you’ve experience. I don’t have the expertise all the time. Would you like to partner up?” It was kind of an organic inbound process that started happening.
I started getting into deals as the operator and quickly realized that it wasn't the right business for me. It wasn't enjoyable. I didn't like the responsibility of managing someone else's assets. I wasn't able to particularly sleep well at night if you got several six-figured websites that you're managing. I realized that this was a valuable service, but I don't need to be the one doing it and I actually capped out the capacity that I had to actually do this myself .
I removed myself and actually opened up to seeing if there were other operators out there that wanted to work with investors, and started matching operators with investors for a little bit. That was about 2018 into 2019. In late summer 2019, Andrej from Alpha Investors reached out with an offer to acquire the Flipping Websites Facebook group, the domain, and the podcast. Working with operators myself stopped.
I've moved over to working with Alpha Investors for a few months, building an operation and an acquisition service there. A bit of experience myself. I realized I didn't want to be personally doing that.
Personally, I've come back to building sites from scratch on expiring domains. In particular, my favorite strategy now is acquiring existing blocks that have been abandoned. I've got a pretty good outreach process for doing that. I focus on software review sites.
I recently picked up sites last summer for just $2000, but I have an incredible backlink profile with 50-100 backlinks that would probably cost at least a couple of hundred dollars to get, and I was able to pick that up for a couple of thousand dollars because it wasn't making any revenue. Actually had 100 indexed pages as well.
That's my preferred strategy. I’m buying existing sites, their index that have traffic, that have a lot of potential, that are not being maximized. Also, I like playing around with expiring domains, also through and redirecting some expired domains as well and playing in that market. I don’t build from scratch, but I like to buy existing lower-priced domains and sites, and building on those now.
Spencer: The primary reason for that is just to skip the building, the getting out of the sandbox phase. You have an asset immediately that has authority, has a lot of links already, and it can rank content much quicker, right?
Richard: Yeah, that's right. You really don't need to add a lot of links if you buy the right domain that already has that authority. You can just focus on adding content.
Spencer: Where do you go to find these domains or abandoned blogs? What’s your process?
Richard: I just Google. You start with a seed keyword. For me, it’s software reviews. I would look at different keywords such as best SEO software, or the parameter review to it to the end as well. You can put that into Ahrefs, into Content Explorer, you can expand the results to get to 100. It can show the full 100 positions in the SERP. You can export that. You can import that back into the batch analysis tool in Ahrefs to get the domain rating and the search traffic of those, and then you can filter by whatever metrics you want.
Typically, if you do this long enough or if you look at enough deals, you have an understanding of how much revenue 1000 visits can generate in different niches. You can filter by monthly search traffic and you can get a good idea of how much the assets would be, you would need to spend to acquire it, and then you find the email address. You can use tools like Hunter and send an email saying that you like the site and you’d be interested to purchase.
Spencer: Yeah. Really just a lot of hunting for what you're looking for. Determine what niche you want to go into, what keywords are related to that particular niche, and then just reaching out, and making an offer. I won't say it's a complicated process per se, but it is a lot of work. What is your hit rate in terms of, you've got to contact a bunch of website owners. How many are actually responding semi-interested?
Richard: I would say 50% respond, but it's very, very targeted. I don’t just scrape a lot of the results, find the emails, and blast out. It's really targeted to sites that I will actually want to acquire. I would say 40%-50%, people respond from those. I would say again, 40%-50% are interested in the idea of selling. You're typically reaching people that have not thought about selling or have never sold a site before, especially if you're targeting people that have abandoned blogs. People are interested. People are very open to discussing and it's surprisingly effective.
Spencer: How are you determining that these blogs are abandoned? Are you just looking at the last post date that’s been two years?
Richard: Yeah. You can have a look at the search traffic graph in Ahrefs, the trajectory of that. You can look at the site maps and see when they last updated content. You can tell. Also, I guess it doesn't necessarily need to be abandoned. For me, the main thing is the site authority if you're looking for domain rating (although that can be manipulated). Does it index well? Is it getting traffic in rankings across a range of pages? Does it have a decent level of links more than whether they're actively working on it? It's more like trying to find sites that do not look like they're earning that much, but have a lot of potential.
Spencer: Awesome. You've explained how you started, a lot of things that you're involved with, building sites from scratch, selling, the investor model, et cetera, and what you're doing now. Can you give us an overall sort of snapshot (if you will) of your business today? I know there's a couple of other things you're involved with as well. Maybe just give us an idea of everything you're doing. Where your business is at right now.
Richard: The main focus right now is, I recently launched a paid newsletter for website investors. I've liked this idea of paid newsletters for a long time. There’s this guy called Chris. I'm sorry, I forgot your last name buddy, but he's created paid news that is in crypto, in business, in life, venture capital, and these are real assets that people actually want to acquire. Travis Jamison from Smash Digital acquired one of these newsletters that was targeting people interested in the VC industry. It's a really good model and I've seen these kinds of businesses being sold on marketplaces and brokerages such as Empire Flippers, and I really like it. It’s incredibly scalable.
For me, I like to leverage media rather than leveraging other people's capital in terms of partnering with investors and that wasn't the best place for me to operate in. For me, I like to be very lean and leverage media. Something like a paid news that just scales incredibly well. You can price it at a very low price point and you can add a huge amount of value. I really just started, people are now being rebuilt, it’s that second month, but I think churn is going to be incredibly low. With the newsletter, I find the best deals that I come across on market in terms of brokerages and marketplaces.
The major brokers and also flippers, as well as independent brokers. I have some off-market deal flow by connecting with people that are doing their own outreach and independent brokers before they put them on Flipper. From being known in this website investing space for a number of years, I have some private deal flow, connections, and people in my network that are always looking to sell sites within their portfolios. So I'm able to sell those in the newsletter. That's the main hook. That's the main part of the newsletter. There are other parts where I can add value.
That's my main focus right now, it’s increasing the amount of deal flow. There's a lot of people out there building their own sites to sell and also there's a lot of interesting stuff happening in terms of new marketplaces about to come online and a lot more independent brokers and people buying and selling websites than I thought. I'm really extending my reach and seeing a lot of deals.
Every day, I'm looking up and hunting down good deals and we can probably talk about what that looks like. That’s my main focus. I'm also continuing to build up software review sites and I've got a handful of other just legacy websites that I've not really done much with for a number of years. I've got some ideas, but I haven’t got the time currently. I'm currently still putting out software review sites, but this is a paid newsletter. That’s a way I can create the most value for the website investing space that I know possible. It’s going well and I'm happy. I really like the model. Recurring revenue is fun and it's cool.
Spencer: Yeah, absolutely. I have a couple of more questions related to the newsletter here. It looks like it's a weekly newsletter. Right now at least, it's $49 a month and you just launched it (like you said) a couple of months ago. You're really just building it up now. As far as the content that is in there, you mentioned it’s your curated list of what you would consider good deals. That's the main thing, but what else might people get in the newsletter, other perks?
Richard: Previously when I was hosting the Flipping Websites Podcast, I'm continuing to interview people and now that's for the paid subscribers. They get that content. Also, it’s something that I've been wanting to do for a while is—this came from me operating other people's content sites—I actually think that most of the work can be templated and you can actually turn into standard operating procedures.
I think there's very little expert knowledge that's required. The expertise comes in terms of the initial niche research, the keyword research, conversion rate. Obviously, you can pay for other companies to do that like you can with link building. There's a lot of companies that you can pay for their services. Likewise, you don't need to hire writers. You can pay for content services as well.
There's actually not a lot of expert knowledge required in terms of the overall level of work. In terms of maintaining content, on-page optimization, doing content audits, updating WordPress, all these aspects of running a site, maintaining it, and then also getting upside, I think you can actually create procedures for other people to follow that don't have expert knowledge.
I started to build out these process templates. Imagine using software called Process Street, which is really fun. My goal is to get to a point of having a complete website operation manual, full of individual processes, the ability for site owners, for investors to purchase website, then be able to give to a VA, to freelancers, to lower paid staff a list of activities that needs to happen every week, every month, and get the bulk of what's required to run a website. Actually, completed in that way.
Spencer: I think that's really valuable content that people on the newsletter can have. Not only the interviews and content that you're going to be providing as you talk to website builders, investors, et cetera, but the templates can be quite valuable. The processes and procedures for building websites or growing websites can be quite valuable as well.
Richard: Absolutely. Yeah, I think that's going to end up in a really interesting product, maybe I'll spin that out at some point, but right now, that's just for the subscribers here.
Spencer: I do want to back up a little bit and ask about flippingwebsites.co and the Facebook group. Obviously, you were pretty well-known for those entities and then you sold that to Alpha Investors like you've mentioned. Why did you sell it?
Richard: Andrej reached out with an offer that made sense to me, but the real reason was I didn't have a clear way of monetizing it. I think Facebook groups and audiences are fantastic if you're already offering services and you have product ranges that you can sell to the audience.
At the time, the only way that I was monetizing it really was from sponsorship of the podcast, partnering out with brokers, and earning transaction fees, referral fees from people that I refer to them. It was tricky to see a clear way of really monetizing that going forward. The offer to actually have those assets purchased from me and then also to carry on and play a role in the wider strategy going forward was appealing.
Spencer: It gives you the ability to focus on what you want to focus on, right? If somebody comes, makes an offer, and the offer makes sense, money helps. It's not a bad thing.
Richard: Exactly. It made sense. We were doing similar things at that time as well. With […] there was an operator service. I had an operator service on flippingwebsites.co/acquisitions. I had the same thing, where there is a form for investors to fill out that either they work with or help match websites to their criteria, so we're doing very similar things. It made sense to not compete with each other in that way, to partner up, and the acquisition made a lot of sense. I think there's always a price for everything.
Spencer: Exactly. Let's dive into a little bit of strategy of how to find a good deal. You're going to be curating a list every week, so you're looking at lots and lots of listings, private deals, et cetera. You spend a lot of time looking at websites that might make a good acquisition, what do you use these criteria to determine what is a good deal and how does a deal make it on your curated list?
Richard: Really, it just goes through a series of filters. The first one for me was a site that has been hit by recent algorithm updates and his traffic continues to trend down. I won't recommend a site where the traffic is still declining, because you don't know where it's going to end up.
If you've taken average of the last three months revenue, the last six months revenue, it's just not an accurate representation of what the site, what the asset currently is worth, because the site was averaging $2000 a month over the last six months, but the last month it made $400 and it's still going down. You don't want to say the average, you want to say what it currently is and you don't know where it's going to end up. You see a lot of these sites everywhere, on brokerages, on Flippa, but I'm not going to recommend a deal where it's still going down.
I just don't think that the people that are subscribing are looking for some additional support. You've got to be a real expert and know exactly what you're doing to be able to acquire a site, know how to stop it from falling and turn it around. It's a really hard thing to do and that's the first thing.
Actually, that will eliminate a lot. You'll see a lot of sites that got hit by recent Google updates, then out declining, and people are looking to sell. That's the first thing. If the traffic is steady or trending up, then it's the case of looking at how that traffic is spread, so a wide number of pages that are getting traffic. No single page is getting more than 20%, 30% of the search traffic, because you don't want to be dependent on just having one page ranking. If that page falls off page one, then your revenue is going to have a really big hit.
It's looking at keywords. I like to define as keyword dependency and page-level dependency are the major keywords that on near the bottom of page one that could fall off. If the top 10 keywords, top 10 pages look fine, then that passes that filter. And then, it's the case of looking at the back think profile does. Are there some decent links? Are there a lot of spammy links or low quality links? Does the anchor text profile look natural? Just eliminating and passing through all these filters until you find sites that you think would be a good purchase and then also the other part is that, identifiable upside available.
I give notes on every deal that I recommend in terms of, “Here's the upside that I see and this is what I would do if I was purchasing.” I like to mitigate the risk and then say that, “Here's the site that passes my filter and this is the upside available. This is why I think it's a good purchase.” Then it's absolutely the investor to then really value that themselves.
There's obviously always an asking price, but it's not for me to question that asking price or trying to get a low in multiple. I want to educate investors to be able to best value that for themselves. Likewise, I like to include the average revenue amount rather than average profits, because some investors may. The current site owner may reinvest a lot of money into contents and links, from the cashflow and the next site owner may not want to do that.
It's much easier to compare revenue, that when you look at revenue rather than profit between sites. I leave it up to the investors to value, but I'm not going to recommend a site where people are asking for insane multiples. They're the main filters.
Spencer: I think that's good. I mean that's a huge time saver for people. There are hundreds of listings across, lots of brokerage sites that people could be looking at every day. To be able to have a curated list, where somebody has gone through those filters like you mentioned, can be helpful for sure. Is there a particular size of deal that you include or is it just any good deal?
Richard: Yes. I like to have a good range. I actually thought that the audience that was subscribing would be capped out to the around $250,000 in terms of a purchase, but in the first email, which was actually just last week, I was asking if this assumption is accurate, “If you would like larger deals? Email, reply, and let me know.” Some people are saying, “Yes, we're interested in large deals like up to half a million.”
Right now, I'm listing anything from decent expiring domains, right down from the domain level through micro-acquisitions, $10,000 slides, went $20,000-$30,000 slides. I'd say the average or the typical price range is $30,000-$300,000. That's the vast majority of where the interest is. I want to try and get a complete range from non-revenue generating sites with potential, right up to individual investors that are looking for half a million purchases. It's that area. It's not seven figures. It's a smaller side of the markets.
Spencer: That's the side of the market that I love as well. There's a lot of great deals in that range that you just mentioned. People can buy sites that are making a couple of thousand of dollars a month. Often, these are sites that haven't been fully optimized or that there's a lot of meat left on the bone, things that you can do to leverage and perhaps, even double or more the site relatively quickly. I think that is a range that is really attractive to a lot of people.
Richard: Definitely and myself, that’s the range that interests me. I don't have the risk profile of getting involved in seven figure deals. Personally, I like to look for myself for these micro-acquisitions, that's what I personally like to do, but that takes a lot more focus and effort. You need to obviously have a strategy and create a lot of content for cascading those.
If you're looking to be more of an investor, then have the assets maintained, and if you’re using the process templates by other people, then you want to purchase existing websites that are already generating decent revenue. It's a lot easier to scale existing sites that are making money where you see upside, but my personal preference is to purchase the smallest sites and be a lot more active myself. It's fun. I would be doing this anyway. It's a very good fit.
Spencer: Yeah. Definitely, whether or not people are getting your newsletter, a lot of people are always asking, “Where are the best places to go and buy a website?” There's Flippa, there's Empire Flippers, FE international, Quiet Light Brokerage. We could name a dozen other brokerages that are out there, where do you recommend that people go to buy online business?
Richard: There's a huge number of places where people can go. I'm a big fan of Empire Flippers. I've been following those guys for a long time, I sold a site through them, two sites, the drop ship store and then the software review site. I’m a big fan of Empire Flippers and I have a good relationship with those guys.
That's the issue. How many do you look at and how much time do you spend trying to find these deals? It is time intensive. I'm starting to create processes now for looking through listings more efficiently. Especially on Flipper, for coming out with search parameters and getting other VAs involved in finding deals for me. It's very time-intensive to find good deals. There's all the big brokerages available. There's also the big marketplace Flippa, there's all of independent brokers that are also listed on Flippa that you can sell your site through or content those to see whether they have deals. It's a lot of work.
I think you need quite a bit of support the first time you purchase, in order to know that what you're acquiring is a decent acquisition and not to get burned. I've seen a lot of people get burned, including myself. I've had bad experience from purchasing through a brokerage, not because of the brokerage but in terms of the seller that was doing something shady and then went dark on me. This is when I was partnering up with the investor that bought my site. We were acquiring additional sites and the second one that we did together, we got burnt. I'm not sure. It could be pretty wild out there.
Spencer: Right. So, the bottom line is there's not one definitive place to go. Any particular brokerage might have a good deal, you just have to do the due diligence. You mentioned a lot of the filters that you use that other people can use wherever they are looking to determine what is a good deal and what's not.
I will just mention and I know we talked about this. Motion Invest is a business that John Haber and I launched not too long ago, where we are selling assets in the micro acquisition range. These are deals that we've looked at and actually acquired ourselves, and then we are selling out of our own portfolio sites there. We do our best to do our due diligence and make sure that we have good deals listed on Motion Invest. That is another place people can go as well.
Richard: Yeah, definitely. I'm going to be featuring some of your deals and in the newsletter, I hope.
Spencer: That would be excellent for sure.
Richard: Yeah, and I really like the approach you have where it's actually your own sites that you are selling, that you've acquired or that you've grown yourselves. I see a lot more of these. I think this is a new direction for the industry. I think this type of offering and service is going to grow so you don't necessarily need to go through a broker in the future. I think it's going to be more choice available and people. I think it is far easier for people to sell their own sites now than previously. A lot more opportunities to be able to sell directly to investors as well.
Spencer: Right, definitely. There's certainly some gaps in the marketplace that we felt like there were for both selling your site, perhaps a little bit quicker, and then just being able to have a little bit more due diligence, a little bit more of a curated list or websites. At least we as industry experts (John and I) feel like we have, and we are willing to buy and then sell these sites.
Richard: Exactly. You are using your own money. You are actually acquiring them so that's amazing validation there. I think that's very credible and the site has value rather than if you are dealing with some lesser-known broker. It's going to be much easier to trust that you guys actually have something of good value rather than someone who is only making money by selling a website for someone else.
Spencer: My final topic here is you mentioned a number of times that you are looking for and buying expired domains or that you'll feature some on the newsletter (perhaps). How would you recommend people go and find premium domains or expired domains that have value?
Richard: This is something that I have been looking into over the last week and having more conversations with people about. Previously, my strategy was buying these existing small sites but I've heard a lot more people building out on expiring domains, auctioned domains, and doing that really effectively. I got a buddy named Ron who I've known for quite a while and happened to be a subscriber. On Wednesday, I was listing one of his sites, that was the first one from his portfolio. His strategy is building out on expiring domains. He actually has a guy full time looking for them. Searching GoDaddy Auctions and other ways he's finding that I'm not aware of. But I've recently come across other people who are building on expiring domains and having conversations with them.
Recently, I spoke to a guy called Hector from hekkup.com and this is his approach. He's buying expired domains, adding content, and then selling to the marketplace to his list and I'll be featuring some of his sites in the newsletter. He's put me onto this service called Odys which is Odys.global and it's a private marketplace for domains. You have to get an invite. I'm sure we can get one for you, Spencer. I was fortunate enough to get an invite.
Having connected with the guy behind it, it's a marketplace where they've already acquired domains. They've acquired the auction domains and they've thrown up a static page, a home page in order to get it indexed. These are really top quality domains with real reasonable prices. The average looks around $1000. They're already indexed, ready to go, and ready to be transferred. I'm going to be looking at these in more detail.
I've also connected with some other independent domain registrars that are able to drop cached domains as well. There's this whole new site that I'm now exploring and I'm going to be using these expiring domains and testing building out on them in addition to buying these small existing sites. It's a whole new industry. It's a whole other area. This is not going to be the main focus of what I am doing with the newsletter, but I'm really interested behind it.
The guy Hector from Hekkup.com has got at least 30 sites in his portfolio that's all from expiring domains that he then adds a lot of content to. He's actually got a blog post where he talks about publishing three million words a month, which is crazy. He's recruited at least 40 freelance writers all working for his domain. It's not a content agency, it's just for his expiring domains so this is really cool for me.
I'm learning from these people so expiring domains is a new area for me that I'm going to be experimenting with myself, but you are able to get really fast results because they are already indexed, already got great domain, great links to them, that's the whole point. They just need some decent content and good keyword research. There's no real downside with that which I really like as well. There are places where you can find them, people aggregating, and people acquiring to then resell.
Spencer: I might have to check out a couple of those people that you mentioned there for sure and resources, but overall what I love is just there's so many different models and approaches that people can take whether that's building out a website on an expired domain that's already got a really strong backlink profile, building something from scratch on their own, buying an existing website, or even being an operator working with investors.
We've talked about four or five different business models that people can take all in the content affiliate website space. There's just really a lot of different approaches and maybe that's one takeaway from this podcast. For people is to just open their eyes a little bit, to thinking creatively, and thinking about different ways that you can get started or expand your online business is taking advantage of just these different approaches.
Richard: Yeah, it's a huge market. It's a huge business opportunity. Content size is the only thing that I now do, that I focus on, and there really is a huge opportunity here. A lot of money continues to come in from new investors. Obviously, we have the reason why we are recording this second week of January but over Christmas and start January […] and with the fallout from that. That had some ripple effects going forward, but there's a lot of money looking for attractive yields and if you could match that with expertise, then there's a lot of opportunity in this space.
Spencer: I agree. Richard, I appreciate you coming out on the Niche Pursuits Podcast. It's been a pleasure talking with you, going over your business, and hearing some of your words of wisdom. If people want to follow along with you or check out your newsletter, where should they go?
Richard: Thanks, Spencer. It's richardpatey.com and then the newsletter is richardpatey.com/premium. I call it Patey Premium, which was a working title, but it just seemed to stick. I couldn't think of a better one. That's the place to go.
Spencer: All right, very good. People can go to richardpatey.com to stay in touch with you or check out the newsletter. Overall, I just really, really appreciate you coming onto the Niche Pursuits Podcast, so thank you.
Richard: Thanks, man. Like I said, I've been listening for a long time and this is slightly surreal to be on it. I can remember all the different places that I was listening to different episodes overseas and while going on long drives. It's great to be on and to get to the point where hopefully, I've gotten some knowledge and value to share. This has been a 10-year journey, that's the thing. I am 40. I started at 30 and now I'm 40, so it's been a long journey and it was great to be on with you.
Spencer: Yeah, thanks again for coming on and it's great that you were a listener or are a listener for so long. It's been great to have you on. Thanks again.
Richard: Thanks, Spencer.
Spencer: Thank you once again for listening to the Niche Pursuits Podcast. As a reminder, this episode has been sponsored by Ezoic. Ezoic is a Google award-winning technology that everyone from niche website owners to major brands use to grow and monetize their websites. Ezoic is a Google-certified publishing partner. It’s a platform that leverages artificial intelligence to help you optimize revenue and monetization on a per visitor basis and so much more. If you want to check out Ezoic, go to nichepursuits.com/ezoic. Thanks a lot.