How I Flipped A Site for $16k – Domain Magnate

How I Flipped A Site for $16k

      22 Comments on How I Flipped A Site for $16k ,    

Here is a story about one of my web adventures that might be  interesting to my readers. Along with domains I also buy/sell and maintain many websites, some of these are adsense sites with unique content, seo traffic and stable history. I purchased many of these over the years and almost all turned out to be great investments. However they are very hard to find. What you see nowdays for sale at the main marketplaces, such as flippa, DP and DNF is pure garbage: new sites, inflated and fake stats, purchased traffic, all sorts of fly by night ideas and projects that stop bringing revenue to unsuspecting buyers within a few weeks, as well as.. well things like this.

Quality sites at bargain prices can still be found, but the task would be quite time consuming due to the large volumes of websites for sale these days. This is also a task that can’t be easily outsourced. The buyers are so hungry for quality that real good established websites can sometimes sell for ridiculously high revenue multiples like 5-8 years, while the market average is around 1-2 years max.

Two years ago I spotted a site on one of the mentioned above marketplaces and within a few seconds I knew this is a quality site and one I need to buy. After a lot of checking, verifying stats and data and all the due diligence and a short negotiation I purchased the site for around $5k. The site was making around $400/month on adsense and it was a very old and well established site in a high competition heath related niche. The strange thing about it was that the adsense clicks were very high, averaging around $2 per click, which is very uncommon. But having seen stable revenue over the recent 6-12 months I was convinced that it’s a good deal.

I rearranged adsense ads for higher ctr, but even with my best efforts it was still only around 2%, and also added more content and backlinks to the site. At first the revenue jumped up to about $600-800 per month, but then dropped to just $200-300 per month. However the drop was mostly temporary due to the specific time of the year when that niche was less active and as I found it’s common with Google to see a short term drop in traffic at first when you start to promote a well established site that hasn’t been touched for a while.

I had big plans for the site, had it transferred to wordpress with a new custom template made for it in order to get considerably higher ctr and had more content prepared to put there. Then right in the middle of those plans, about a year ago, I got an email asking if I’d like to sell the site. It was sent from a gmail address so I didn’t pay much attention to it at first, thinking that  it’s most likely one of those spammers sending mass emails to purchase cheap domains/sites. So I replied with a regular message, along the lines of “we have no plans to sell, but will consider offers”.

Shortly after that a reply came in with a very respectable offer of $10k. I was very surprised at first, since the initial  inquiry didn’t look serious, so I started digging and found out that the buyer had a well established business in the niche. So he can likely earn much more from the site in business leads than I ever can from adsense. I could’ve accepted it right away and made a handsome profit on the site, but I decided not to, for two reasons: first I thought the buyer is very interested and could pay considerably more and second I liked the site and thought I could increase the revenue to over $1k per month so it wasn’t worth selling at that time.

I decided that I should try to get around $20k for it to sell. So I basically had a choice to either counter with a higher offer or accept his. I took the third option and simply rejected his offer. It was a bit of a risk, but I estimated that he had high interest in the site so he would likely offer more. As a wise man said once: “the biggest power in negotiation is the power to say no”.

The bet payed off and the negotiation continued, after a few more emails and after having reviewed the stats the buyer raised his offer to $15k and $16k, then we finally agreed on $17k and the deal went into escrow.com. The whole negotiation process took close to a month.

serious_bizIn the end it was a good deal for me: considering both the sale price and the revenue the site made during the 1 year I owned it and minus the link building, content and design expenses – my profit was around $16k. And I think it was an even better deal for the buyer. I’ve done quite a bit of link building prior to selling it and the results of those efforts started showing short time after the sale, so traffic was up and with his business an average lead could pay over $1k, so it shouldn’t have taken long to make that money back.

I did get a little lucky here, however just like with domains if you have good sites the buyers will come. But I even got luckier in the fact that prior to me buying the site it was offered for sale several times within a period of several weeks and no one was interested.. Usually you don’t need to be the first and quickest to grab the best deals, but rather know your market well to recognize a good deal when you see it.

22 Replies to “How I Flipped A Site for $16k”

  1. Always great to read a sales domain story.

    You did it perfectly. I wish other domainers would read this because Rick keeps going off on them..hard on the ears.

  2. Hi mate congrats and also a very nice post, Also i liked the bit were you said As a wise man said once: “the biggest power in negotiation is the power to say no”. lol i might try this on my next offer ha ha.

  3. I have been going blog to blog, reading these stories. Often, I chalk them under ‘anecdotes’, they make great stories. However, these successes have one thing in common, they largely depend on the vicissitudes of life. The buyer could have easily accepted your “Not for sale”, and moved on, and they quite often do. I understand the principle of “no guts, no glory”, but that is no way to run a business. The Pros in this industry have as much to learn from Newbies as they teach them. Your average Domainer is constantly looking back to the glorious days, which was nothing more than an accidental era. What needs to be done now, is to figure a way to have this industry structured. At present, there’s no framework. After all, there’s nothing new under the sun. The few challenges that must be tackled are: how do we bring in the mainstream businesses into the market? What do we do about Google and other monopolists? What do we do about transparency in the natural partnerships? Amongst many others.

    When Henry Ford built the model-T, his strategy was to make it cheap enough to allow many to be able to afford it. It was a numbers game. He wanted it to be a mainstream product. Ebay charges nothing to open an account. Paypal charges nothing to open an account. The list goes on and on. Their main reason being to attract the masses, increase the numbers, and then make a killing in profits. I do noy suggest that we give away our domains for nothing, I am suggesting that we should be bringing in the mainstream business to purchase our domains, not selling this thing to one another. Google, Ad sense, Sedo, Godaddy, Domaining.com Frank Carrillo, Parkers, etc, are no friends of the Domainer. These guys are making money on our behest, and have absolutely none of our interest in mind. The Domainer wants his product to be for the gang alone. The average Domainer is cruder than oil! We can’t rely mostly on luck or the whims of Google to base our businesses. So, don’t get mad at me for raining on your parade, I’m only giving you a reality check. By “you”, I mean all of us, Domainers.

  4. Thanks for sharing that story. Can you tell us what sort of house keeping did you needed to do prior to transferring the ownership of the site? For example, did you have to remove the ad sense links? Since you have been both a buyer and a seller of a website…can you share with us the mechanic and contract involved.

  5. Is it possible to share the name of the website? It would be really helpful as a reference to see what a $16K website look like. You can just email me if can’t disclose to public. Thank you very much!

  6. thanks everyone for the comments, glad you liked the post.

    Actually I didn’t plan to flip this one, I never do that with sites. I only ever buy sites when I consider them a good investment.

    @Uzoma: while I agree with what you say, I think you missed the point of the post. I never intended to sell that site, my plan is to buy good sites, to keep them and generate consistent cashflow.

    Any business involves taking certain risks and the way to manage those risks is by evaluating them as well as the alternative costs. I would’ve been happy to keep the site if it didn’t sell for 10k in that case.

    I think what you say about domainers going mainstream will happen eventually, but it is going to take time.

    @PoorUncle: No special contracts here, when buying I simply paid with paypal and had the seller transfer the domain and send me the site files. When selling we used escrow with split fees and I also transferred the domain and site file to the new owner. The site was relatively small, only about 40 pages, but had good rankings in google.

    Stay tuned I’ll post about some of my least successful business ventures soon as well.

  7. @Michael

    If no contract then how do you get the assurance that the seller won’t create another site with the exact content? You don’t care about your intellectual property rights? I am a newbie. So, if you can give some detail I’d be very grateful.

  8. @Poor Uncle, the seller can usually create a _similar_ site (unless it was specifically forbidden by the terms of the sale, which is not uncommon in higher value sales), but if he uses the exact same content for his site it’ll be just like stealing content from any other site – since you do own the exclusive rights on the content after you purchase the sites, it’s not usually specifically discussed, but it’s a given. So, what if someone steals your content? That’s another question, there are ways to fight it, e.g. report to google to have their site removed from their indexes and there are also legal ways to fight it.

  9. I had a similar story with an expiring domain in dynadots auction. It was an academics blog, pr3 and with plenty of edu links. Given the link authority I purchased. I had it parked on whypark and a few years later got an email from goodaddy auctions requesting to sell. I sold it for $750. It turns out that the original owner was the buyer.

  10. Thanks for the story. Any flips on cheaper domains? I flipped a $1 .info in 10 days for $320. I also flipped 6 newly registered .com to a company in 2 weeks for a $1000. And another 3 newly registered .com in 2 weeks for $500. These are all names that are related the business.

    I don’t have access to the kind of money you invested in the website. In addition, I have no clue how to develop a domain other than what is offered at Why Park. I do find the good names because I think like a business. Many domainers do overprice their new domains, however, I know how to work with a buyer to close a deal.

    I have to be persistent to close deals, as these companies are busy, and they tend to wait after agreeing to a deal. I recently sold a .us job site through an offer made at Sedo. The profit was 80 times more than the cost. I owned the site for 6 months..

    Your $5K and time involved is more for domain investors that can take a risk. If I was offered $10K for that domain, I would have sold it tight away. Of course, we’re in two different situations. You probably can afford to wait, while I’m not making a decent living based on the high tuition and the high cost of living on Sourhern Cal.

    I don’t have much experience with link building. I know how to find the best names at the cost of registration. Maybe I will have a success story like yours. The domains Ive sold have helped the businesses increase their traffic.

    Keep up the good work. You’re definitely doing well in developing quality aged domains.

  11. great work on this, very inspiring to hear someone domain flipping for such high roi

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