Update: Although PBNs still work, they now have a history of being targeted by Google and therefore may not be the safest option. This is why we now focus on creating online businesses that are independent of SEO traffic. Click here to see what we are currently up to.
The topic of building and flipping sites for upfront cash has gathered pace in the IM space over the past 12-18 months.
Bloggers such as Doug Cunnington and Tung Tran have successfully sold sites for $10k, Tung recently posted about Hieu Nguyens $17k site sale.
Spencer from NichePursuits.com is looking at offloading a site he recently purchased as he is focussed on other projects. Within our Internships, we have a number of Interns that have sold sites in the $5-$20k range and one contact that sold a site for $200,000.
The guys at Empire Flippers have taken the bold step of completely re-branding their business to a website marketplace and are quickly becoming significant players in the site flipping space. I love what they are doing! It seems like there is a limited window of opportunity right now where there are more buyers in the marketplace than sellers (the EF guys are certainly saying that).
That’s something we want to get a piece of.
But how viable is site flipping as a business model?
In December 2013 and January 2014 Hayden and I had launched our second wave of sites in partnership, following our relatively successful first batch together.
This time, rather than looking to make money from those sites, we set out to specifically build sites, rank them as quickly as possible, and flip them at the 6 month mark for 20x. We wanted to test the feasibility of it as a business model.
Specifically, we wanted to identify our Minimum Viable Product (MVP).
- Would people buy websites that were link built purely with PBN links?
- Does the look of the site matter? (we usually use out-of-the-box themes)
- Is 100% of the traffic coming from Google an issue?
- Would we need to setup social media profiles to round out the sites for sale?
- How many months of earnings would be required to satisfy buyers?
- What earnings multiple could we sell on? (we figured 16-18x would be about the mark)
- How quickly do sites sell once listed?
If the answers were favorable, we figured we’re able to scale the process of building out sites and flipping some of them for upfront cash. Our process is built around solid KW research and on-page SEO, building simple sites, outsourcing content and link building from a PBN. We tweak our processes and test new SEO tactics, but don’t waver too much from that.
As we went through the process of launching new sites early this year, we soon found that the Google sandbox was going to be an initial hurdle to get over as it is now taking 3, more like 4-6 months for new sites to rank. So perhaps flipping in 6 months was going to be out of the question in most instances.
However, one of our sites that we launched in January got out the gates very quickly. This thing just kept climbing to position 2 in about 6 weeks, position 1 in under 90 days. It made $s in it’s first month (off long-tail KWs).
Site revenue
- Jan – $92.52
- Feb – $619.69
- Mar – $1117.66
- Apr – $713.27
- May – $1005.31
- June 1st-15th – $584.72
Empire Flippers price their sites at the average monthly earnings over the past 90 days, less expenses x 20. What you list for and what you get will probably differ, which we expected.
Expenses for this site were very low at $25 per month.
We had the site listed initially for $16,580 and it increased to $17,767.66 whilst on the market to cater for revenue growth.
Sale Process & Timeline:
- April 24th: Commenced the listing process with Empire Flippers
- April 28th: EF completed their site vetting process and suggested to list that day at a price I was not keen on (I thought the price was based on last 30 days revenue, not average 30 days revenue over 90 days). Decided to sit on it for a couple more weeks until the valuation came up a bit
- May 12th: Listing went live on EF marketplace
- May 16th: First depositor – A quick sale on the cards? Nope. Potential buyer asked a ton of questions and then decided there was not enough growth left in the site… A misguided soul, but that’s just my opinion.
- May 26th: Second depositor. Maybe this time? Nope.
- June 5th: Third depositor: Third time lucky?
- June 10th: First offer came in (not sure it it was the third depositor or not). Offer was $15k.
- June 11th: I counter-offered at $17.5k
- June 11th: Buyer came back with $16k. We decided to take it.
Overall, I feel it was probably $2k unders for what is fair value for the site based on the last 30 days of earnings, but when you have $16k on the table and EF take 15% of any increase anyway, and Hayden and I then split 50%/50% – what’s the point haggling for a few hundred bucks extra.
So $16k it was. SOLD!
Overall, we made +$20k of earnings from the site between the sale and Adsense revenue. The site was 17 pages of content in total. Factoring costs of the EF 15% fee, first-time listing fee of $297, cost of content and links (we did some PBN links for content trades, but it’d amount to $300-$400 normally), that site was offloaded in under 7 months for about $17k profit, which is $1k of profit per piece of content. Not bad!
Verdict:
- Sites link built with PBN links = no problem
- 100% traffic coming from Google not a barrier for buyers = tick
- Sites can sell at a decent multiple (approx 16x in this instance) = tick
- Basic theme ok and social media profiles not required = tick
- Months of decent earnings required – I suspect 6 at a minimum, but you need 90 days solid to get fair value for your site. We think selling at 9-12 months will optimize earnings = Seems to work fine
- Time on the market, 30 days = tick
So on a single site flip case study, we’re encouraged enough by it to incorporate it into out operating model moving forward. We’re now partnering with our high-performing Internship graduates on partnership authority sites. These Intern graduates receive the upfront training during their Internship and then unlimited access to our PBN to link build the sites built in partnership after the Internship. Selling some of these sites to help our Intern partners generate some upfront cash is now very much within our planning.
Josh Shogren says:
This is very good news for me as I could be looking to sell some of my sites in the future. My sites look like they are similar to yours so it is good to know that they are relatively easy to sell and get some good money from them. Thanks for sharing!
GregNunan says:
Thanks Josh. Ours is a single site case study, but we have Interns that have had very similar experiences so no reason why you won’t be able to get a similar result. Good luck!
Joe Magnotti says:
Greg, glad we were able to get a deal done for you. Looking forward to the next sale, hopefully we can get full price.
I hope the transaction was smooth and easy. As a seller, I think you are going to love the redesign coming, it will make things look aos much better.
Thanks for the write up!
GregNunan says:
Thanks Joe, full price would be nice. The buyer was open to paying more, subject to approx 30-45 more days of the increased earnings. We could have hung on, but it was a fair deal for everyone and that’s why we took the offer. True win-win.
And yes, very smooth process.
Justin says:
Hey Greg,
Thanks for the detailed write-up on your experience with us at Empire Flippers! I’m glad we were able to help you find a buyer and give your website a good home, hehe.
Just a quick point of clarification – the buyer ultimately ended up being the first depositor too in this case.
Negotiations are interesting. Depending on the site’s age, buyer interest, etc. we try to help advise sellers as to what we feel is their best course of action. I think this was a good deal for both parties, overall.
Interesting note – you’d be surprised that many of buyers don’t actually haggle the price. (at least not very much) I think this has to do with an understanding that someone else can come along and purchase while they’re in the process of negotiation, so it benefits them to get a quick close rather than negotiate a few hundred (or even a few thousand) dollars.
GregNunan says:
Thanks Justin. Interesting that it was depositor number 1! I retract my “misguided soul” comment haha. Have done a bit of back and forth over email with the buyer since and he’s a cool guy (!) with an interesting business model.
Love what you guys are doing. Bold move to pivot and go the marketplace route with your business and looks like you’re getting some traction.
Tung Tran says:
Congrats on the sale guys! And thanks for mentioning me too (I was quite surprised)
This is actually a good and profitable business model but due to recent google updates, I agree with you that we need at least 9 months to sell a site at optimized price.
PS: I’m looking forward to joining the PTC course :D
GregNunan says:
Yeah a sale at a reasonable price in 7 months is definitely and exceptional circumstance. 9 months might still be aggressive, we’ll see.
Congrats on your Teespring revenue!
PTC course will be starting in about 4 weeks! Email coming out soon. Look forward to working with you on it.
Anthony Kerr says:
I thought you were running your own course Tung. What happened with those guys when they heard of you joining PTC
Alistair Cochrane says:
Whoever bought that site is taking a huge gamble. The only reason the site is earning is due to your PBN links. Less scrupulous sellers could simply switch those backlinks to a new money site. Of course Greg and Hayden wouldn’t do that but I’m sure there are others that would.
GregNunan says:
Correct, we wouldn’t as that is a dog act. Surprised I wasn’t asked to keep them in place though. I think there’s a fairly high degree of trust in the EF guys doing the site vetting to the right standard, which is a big benefit to buyers. Certainly less risk than buying through Flippa etc IMO.
Michael Bely says:
Alistair, I totally agree with you.
Moreover, even if all the PBN links stay in place, there is a big risk of loosing top positions in SERPs for other reasons (competition in SERP, PBN sites loose their strength, or even PBN deindexing) and therefore its income level is also under a risk.
Once a person contacted me asking to sell him one of my websites that was in top local search results. I found out that he did not have a clear idea why my website was on top and how to maintain it there.
So I decided to explain him really in short what risks there were with my web site to see if he can go with it. And the person changed his mind.
Surprisingly, I did even not hear ‘thanks’ from the person for saving his money :)
Anton says:
He was extermely lucky. Usually it takes some good failed investment to learn on own mistakes :)
Alzufri says:
Yeah, you are right. Michael was too kind, and not even say “Thanks” at all. Experiences is the most valuable thing in IM world.
Rohit says:
This is a good case study. I have followed EF for a long time and have learned from their methods and transparency. I have also purchased sites from them back when EMD sites were a rage and a few sites are still performing.
A word of caution here for first time buyers – A site will require work to maintain rankings in the long run. Some buyers only buy a site to see it drop in rankings as they fail to add new-relevant-high quality content.
GregNunan says:
Yeah adding content but also adding links is important. Got a couple screen shots to share in an upcoming post to show the impact of ceasing link building.
Mike says:
Interesting post, a few months back I had a very similar site that I also sold. My serp pattern was almost identical to this site. As of late the sandbox seems to be a big player in slowing the ranking process down. Just wondering what you guys have noticed in relation to the sandbox and length of time to rank and if there is anyways to speed up the process? Have you been posting up most backlinks right off the hop and then dripping a few weekly?
GregNunan says:
Nice work on the sale Mike. Doing a post on ranking patterns and sandbox soon!
KP says:
Cool! I didn’t know that anyone could list their site for sale with Empire Flippers. I thought they only sold their own sites. How did you guys go about initiating using their platform for the sale?
Also, could you provide some additional details about the content on the site? What was the average word count per article? Also, did you outsource the content?
GregNunan says:
Here is where you go to list. Site had 4 main articles each approx 1000-1500 words, then about 10 supplementary articles targeting some brand/model type terms which where more there to roundout the site, but actually brought in some ok longatil traffic. Content was predominantly written by Australian and US writers.
Aaron says:
Great stuff Greg! good to see site flipping is still a viable business model. You guys always came up with great content to read, keep it up!
Seth says:
Do any of these quick flip sites actually pay off for the buyer?
Most of the ones I check a few months after being purchased are not ranking any longer.
A good example is Tung Tran’s site…I mean the buyer got screwed with all the clones popping up and his site is not even on page one.
Hayden says:
With the new method of site build-outs (genuinely good content, safe PBN links), I would think that they would. Part of me regrets selling this site as it had a lot more potential and was profitable on long-tail, but I really wanted to prove it was possible.
Josh says:
Congrats on the sell! Hopefully will be doing this in a few more months!
Doug says:
Hey Greg – Great review of your experience. Thank you so much for the mention.
I found the whole experience with EF, Justin, Joe, and the whole crew to be a pleasure. They do a great job.
Keep it up guys!
GregNunan says:
No problems Doug! Yes, the EF guys are doing it nicely. Will be interesting to follow the maturation of their business over the next 12 months.
Moon says:
Hi Greg–
Interesting post there. I do have a few ?s, if you have time :)
1. How many niche sites did you build?
2. Was this the only one to succeed? (Sometimes folks think they will ‘hit it big’ with their first attempt :/ )
3. What kind of PBN links did you give the site? (sidebar? a page? blog posts?)
4. Will you be leaving these links alone?
THanks and Congrats, of course!
GregNunan says:
Answers to 1 through 3 can be found by checking through post archives. But as for Q4, of course.
Joe Mama says:
Guy is going to be bummed when the next update rolls around and his site tanks. If you are selling these sites be sure to use an escrow service as buyers can file complaints with PP when the bubble bursts…
Best of luck gents!
GregNunan says:
Guy might also be pumped when it doesn’t get a penalty and the earnings keep climbing. Buyer is experienced at buying sites, obviously trusts his judgement and has a plan for the site. Like us, probably sees quite a bit of time left in the PBN link building game.
Tami says:
Hello Greg!
How many PBN links have you build to that particular site? Did you build all links to home page or inner pages too and how did you drip feed links during these 5-6 months? I tried to look in your post but there wasn’t any info for this. Also which PBN service have you used? Could you recommend me some?
GregNunan says:
We use our own PBN, which is basically equivalent to RankHero.co. I’ll pop link building tips on our list of future post topics. But in short, yes we spread plenty of links to internal pages and actually very rarely target KWs on home pages now so it’s more than 50% of links going to inner pages. Consistency is key with link building > both at the rate you start and at the rate you stop, so you don’t want to over-do the link building early because a sudden drop off in links can hurt.
Raweewan says:
This is also a great case study. I have plans for selling one of my niche sites too. But I need more time to build more niche site, so I still have some cash flow every month.
GregNunan says:
Good luck with is Raweewan. Come back and let us know on this thread how your sale went!