Bit of an update

I know the blog’s been neglected, not a great deal happening recently on my end. A few good deals worth low to mid 5 figures have fallen through for various reasons over the last few months, it’s clear a lot of companies and individuals have cash flow problems and for some that may get worse.

From what I can see there will not be a great many high value deals done this year in the domaining world and the low/reseller market has dried up a great deal, thankfully that doesn’t really affect me as I have for the most part bought domains for developing and long term investment in.

2 lease deals have fallen through due to the companies actually shelving plans to open new websites they had been developing, again another sign of tightening their belts and reducing risk but you can’t blame businesses wanting to reduce their costs & exposure.

So with all that in mind I will be raising capital and buying up some existing websites, they offer the best return. Getting a 33% yield is no mean feat in any business, while there is risk, there is no better way to spend time & money than researching and buying older sites even if they are already monetised. There are often little changes you can make to turn a website bought on 3 years income pay itself back in 2 years. If you do feel anything over 12-24 months net income is too generous for zero maintenance websites that are established with good stable stats then get in touch because I am buying 🙂

One site has been bought for the best part of 20k, another for £5750 agreed to be purchased within the next 2 weeks which I am quite excited about. Moving on from there I spoke to my bank this morning and they are happy to give me £50k based on my home equity with no references all sorted and agreed in principal within literally a 10 minute phone call so it’s not all doom and gloom, it can take 2 to 4 weeks to arrange but pleasantly suprised by the efficiency of C&G, borrowing against my home equity is a cheap way to raise funds for me to acquire faster than I can naturally, I already have another website or 2 in my sights with rough numbers done on them which again would likely be looking at paying 3 years income to buy them, as they are not start-ups it means I won’t share the url’s here I am afraid.

That’s the basic strategy for me, there will be deals this year so having funds ready to buy is what I am sorting out. With that in mind I plan to have a larger variety of established sites in the next couple of years, along with the domain leasing and a good potfolio of valuable generics which will spread my risk & potential, it’s not the time to have all your eggs in one basket. For info generally speaking any sites I would purchase would not be for sale, more a case of me contacting website owners out of the blue, which brings it’s own problems and challenges and of course rewards but you can get a better quality of site by going looking for it rather than waiting for them to be listed for sale.

Remember, old leads are worth chasing up this year, people who refused offers for domains and sites in the past may not be so bullish or on the same financial footing today as they were over the last few years so going through any old leads making fresh contact offering hard cash can give you a favourable outcome at a cheaper price.

About Scott Jones

Scott hails from the north east of Scotland and started earning online at the end of 2000 building websites for local businesses during which time he won an award from Lord Alan Sugar for Excellence in Enterprise. After having quite a bit of success with domaining Scott mainly runs educational evergreen websites which generate over 3 million visitors per month but is always on the lookout for a fresh thinking out of the box way to turn a buck. Follow on Twitter.

Comments

  1. Thank you for giving us an update Scott. I was hoping that my comment would get you to post 😉

    I think you have a great point in wanting to buy domains now that money is tight. I’ve been doing the same with real estate and there are some truly awesome deals out there if you go look for them and I’m sure it is the same in domain country 🙂

  2. And BTW… are you still talking to Al? If so please let him know that we would love to get an update from him as well.

    Thanks,
    Mikael

    Mikael Rieck’s last blog post..How to Make Money Online When You Know Nothing

  3. There is certainly deals to be had at the moment if you have the cash. That is for sure.

    These uncertain economic times are ideal for finding opportunities I think. I guess the times of getting rich quickly may be almost over, but almost anyone can get rich slowly. Now is a great time to sit back, and plan ahead for the future. There are deals to be done both online and offline that will pay great dividends in the future!

    Good to see another post Scott, and well played Mikael for the nudge 😉

  4. Thanks for the update. I too am seeing a strange shift in my client portfolio. I’m getting a sudden influx of companies coming to me to have websites developed for a few grand, as it’s the most cost-effect marketing they can maintain during a recession.

    So for me, it’s a good thing really!

    Justin Cook’s last blog post..When digital theft is a good thing!

    • I definitely concur that there has been a decided swing towards internet based endeavours, with clients throttling back on other marketing expenditures though.

  5. @ Justin – You have to market harder in a recession…a lot of companies slash the headcount first and the marketing budget second. In the online entrepeneur world, there rarely are heads to chop and a lot of people are making the mistake of slashing the ad budgets. I have seen a significant performance increase in my main commerce site on adwords as most of my competitors are reigning in the spend. Therefore, I just stay where I am and I appear at the top. Any company NOT on the web by the end of this recession will not make it to the other side…

    Good post Scott..cash really is king…and about time!! Did you sell that insurancequotes.co.uk in the end?

  6. Good to see an update. I’ve missed the more frequent posting.

    Do you find that you have been able to snag up some sites for bargain prices? given the state of the world economy, are people looking to unload their site for less than usual just to get some extra cash in their pocket for the short term?

    Food Delivery In Chicago’s last blog post..Late Night Food Delivery In Chicago

    • I wouldn’t say bargain prices… as yet, more site’s that may not have been for sale before now are, the owners are now more open to raising quick capital.

  7. I’ve been chasing a few sites lately, but it’s getting harder and harder to find anything half decent. All I see all over is proxies, directories and auto-bullsh*t crap that adds no value to any business.
    I’ve decided to spend 50% of my time researching new businesses and maybe developing a few unused domains I have.
    I just wish Micro$oft allows us Europeans to get into their contextual advertising program.

    Cheers!

    History of Things’s last blog post..History of Computers

  8. Cool stuff, I have been keeping track of what you’ve been doing, I might have some sites for offer, let me know if you are interested in any sites or I can shoot over sites of interest.

    max’s last blog post..Godaddy Coupon $7.49 Domain Names!

  9. I think there’s still a few people holding out for the big bucks on their domain names, but I think you’re right about recontacting people you tried to buy from last year or so. Also some people have a very skewed view of how much their domain is worth, I actually bought a .com domain for £800 a couple of weeks ago when the guy who owned the same .co.uk wanted £12000 for it!

    Another good reason to approach website owners directly is because there’s more chance they aren’t business sharks like some of the people on SP and DP etc, and in fact are quite surprised that you’d want to buy their site in the first place. I some cases they haven’t touched their site in years and it’s more of a forgotten hobby than a means of making money, these are my favourites because the content is often more interesting and honest and you know they haven’t tried a load of dodgy techniques regarding search engines etc.

    • Totally agree Jonathan, when you approach them it reduces the likelihood of theft & lies a great deal and give the buyer more confidence.

    • You raise a good point, Johnathan. You neglected to mention that one is more likely to get a bargain direct from the owner, rather than going through a broker or other “professional” intermediary.

  10. Been looking forward to an update. I bought shedloads of domains (exact matches) that need developing to re-coup.

    I need some ideas for cheap marketing…

  11. Thanks for the update, I was wondering how things were going!

    That’s something I’d not really thought about – investing in buying existing websites. If you get a 33% return then that certainly beats what you get in the bank or stock market!

    My only concerns would be (a) correctly ascertaining the earnings the site you were buying was actually making, and (b) how confident I would be that they would continue earning at that rate. 3 years is a long time on the web and a site doing well from a good ranking could suddenly drop out of the serps or be overtaken by competitors.

    Having said that, if you are able to research the sites you’re buying properly, buy a number so as to spread the risk, and squeeze extra earnings out of them then it sounds a very good strategy.

    E.g. if you could improve the SEO so you get more visitors and also improve the earnings per visitor then they could be paid off in half the time and after that it’s just profit.

    • I agree with you on this one Ian. Making sure that the earnings stated by the seller can often be a real challenge. I tried to find some sites to buy from Sitepoint’s marketplace and most of the sites being sold has nice traffic but when looking into who and what was providing the incoming links most of them were from their own sites hosted in different places.

      And having to do the additional SEO work in case they removed those links (which they probably would) would most of the time make the purchase price less interesting.

      Mikael Rieck’s last blog post..How to Make Money with Adsense Placement

    • This was exactly the concern I faced a year ago. I bought a site which would take 2 years to break even. 8 months into it Google dropped it an earnings went to virtually nothing.

      However, I’m happy to say that since then I was able to get it re-included, and earnings are somewhat accelerated!

      Justin Cook’s last blog post..When digital theft is a good thing!

  12. Ian, regarding being overtaken by your competitors, for me it’s my competitors whose sites I try to buy. 🙂

  13. What is the general consensus on SEM Rush for judging traffic value?
    I have found a few floors – my site is about Spanish mortgages and it says I rank 5 for the that term – which I dont!
    Some of the other terms are also not what my site is about at all…
    I suppose judging the value of traffic and hence a site comes with experience but is their any good software or sites that give moderately accurate results?

    • Personally I would NEVER take any automated tools value to be worth anything. It can be fun to see that your site is valued a $1 million but unless you can find someone that is willing to pay that price it is just “fun”.

      I think at better estimate would be the one you can come up with yourself when looking deeper into the site statistics and earnings history.

      Mikael Rieck’s last blog post..How to Make Money with Adsense Placement

  14. I remember once you said you were a self made millionaire.

    I didn’t believe it then and I certainly don’t now.

  15. “I remember once you said you were a self made millionaire.”

    If I can do half as well as Scott is doing and if it takes me twice the time I will be very pleased. Given the amount of crap I read on other blogs in this sector the amount of info that is available for free here is incredible – no bolloxy sign ups or “landing pages” so don´t knock it unless you are providing something equally good or better.

    On another matter – how would you lot go about valuing forums? Are they too much hard work for too little return?
    Do any of you do well out of forums? These seem like good sites to buy rather than try and build from scratch.
    I want to buy one but not sure how to go about valuing it…

    • I’d sidestep forums Andy, really, they can be so time consuming unless you had a good user base with mods and could be totally hands off, I have the budgie forum with Al that’s got 250k posts and every now and again it just explodes with hassle/fighting for no justifiable reason, too many people act up online behind computers so it can take too much time for the return at times imo.

      • I do a lot of marketing on them and am quite prominent on one. Yes – the amount of infighting is laughable! As is the number of sly pm´s that fly around between the little cliques that develop.

        I do quite nicely out of lead development though.
        Would be worried about high maintenance and how to effectively monetise though – will avoid for now, cheers.

  16. I have a few forums too, they’re very hard to make money from but most of mine are just for fun really, things I’m interested in anyway – plus they all have appointed mods on them, apart from one business forum that is full of spam and bogus business deals that I totally ignore now and can’t decide what I should do with it.

    One of my favourite ‘fun sites’ is an online game where people can join clans and attack each other’s castles, you wouldn’t believe the types of people it has created – despots and fascists dictators demanding gold and loyalty through PMs – it’s hilarious. 🙂

  17. Scott,

    Cash is king at the moment..if you are finding that there is a domain fore sale and people are more open to offers, this like the “real” property market, would suggest that in general the online property market should be retracting too. Do you agree with this and are you worried about the price of your whole portfolio?

    • I am very happy with my portfolio, most of the domain buying I have done in the last 2 years has been for the long term, possibly even for my kids – so not for flipping or re-selling. What I do want to do now is buy more existing sites, online property has no definitive measurement of value, the better sites especially low maintenance are not getting cheaper but they may become available for sale where in the past they were not. Owners may now be attracted by the lump sum of 3 years earnings, I have sent around 25 emails and agreed 3 website purchases in principle which I hope to complete on.

      • Are you now only looking at sites that earn over a specific value every month? Do you still try and get sites that will earn you a steady $20 /month?

        • Ideally looking for sites I can monetise better than they are at present, I would mostly only be looking for one’s that could do $500+ per month.

        • Shoot, I’ve only got one site that makes close to that. Perhaps I should be putting some more thought into purchasing better sites!

          Justin Cook’s last blog post..When digital theft is a good thing!

        • I am looking for sites making $50 to $100 but the income stats tend to fluctuate a lot more so they would need to have good history and .com, .net, .co.uk or something equally strong – steering clear of the .info et al I think.

          The due diligence part is hard work! Lots of opportunity for lying/faking stats etc!

  18. Like others have said, good to hear an update from you Scott pleased to hear that you’re doing well in the current climate and expanding.

    Aside from the guidelines you’ve set out for the types of websites you’re looking to buy (low to zero maintenance), are you still only interested in UK sites (like with your domaining) or are scouring the globe so to speak?

    Zath’s last blog post..New Blackberry Details Leaked! (Rumours?)

    • All across the globe now Simon for sites, even then a lot of people I am contacting have been offered money before so looking for luck & timing 🙂

  19. You are doing some serious investments there. I suggest to take a good look on the opportunities and competitors before investing large amount. During crisis time, it is easy to get loan. But, it is hard to repay it.

    Atniz’s last blog post..Subscribe To Atniz RSS

  20. I’ve got 2 questions, by disclosing that you want to buy sites so openly, do you find prices go up? Also the same would work if you contact an existing site owner, since you’re making the initial contact..the value must already have gone up?

    Giles Dawe’s last blog post..Commission Junction Affiliate Program

    • Not really, most sites I am interested in are not for sale publicly, more me contacting owners and asking if they would consider selling – sometimes I say it’s for my wife so as to not make it look a business purchase.

  21. It never ceases to amaze me just how much money you invest. I applaud your technique and aims, I just get a little jealous!

    Daniel Harrison’s last blog post..Free UK Tax Advice Workshops

    • Scott – linking on from Dan’s comment, is there ONE deal that did it for you? Was there any element of luck to it? Everyone has some good fortune in their times…did you? Is this story on an earlier blog post? If so, please show me the way!

  22. Hey David, nothing that has come to fruition, I had luck & determination to pick up tvs & pcs domains but they haven’t made me any money yet, just good investments for the future, hence the re-mortgage to up my immediate income through buying sites. I haven’t ‘made it’ mate, but I do live happily on what I earn – I just want to secure that by widening the current crop of sites that bring in money. So far it’s not one deal, it’s persistence plugging away and re-investing where I can, where I can’t it’s taking a risk and borrowing.

    • It’s really reassuring when you believe you haven’t “made it”, and still rely on hard work to pay off.

      I think where most people fail is when they don’t have vision to expand on what they’ve done, or they lack the effort to continue through the transistion phase (i.e. from so-so earnings to good earnings).

      Having started and sold a number of sites now, I seem to have a talent for creating sites to get them to a well-used basis. I’m still working on pushing it further than that.

      Daniel Harrison’s last blog post..Guest Blogging – Green Blogs that Want Eco-Friendly Guest Posts

  23. I just reread your post and realized that you are paying for 36 months income. What’s your take on the value of a dropshipped ecommerce site with good organics? I’ve been looking at purchasing a few more. People seem to be asking 5X earnings which I feel is way too much.

    • I don’t think I could justify spending 5 years earnings on any site. Especially if it has good organic rankings already. That means that the main area of growth will be through PPC, which will cost you. I would only spend that much if I could see very obvious ways for me to improve the site and income.

      Justin Cook’s last blog post..When digital theft is a good thing!

      • I disagree, you can move into adding affiliates (or improving conversions). You can also add tools and content to expand the reach of a website. No need to venture into PPC.

        Daniel Harrison’s last blog post..Guest Blogging – Green Blogs that Want Eco-Friendly Guest Posts

      • Justin, a 5 years earning equals a 20% ROI. From most peoples perspective that would be a great return.

        Mikael Rieck’s last blog post..Does it require instinct to make money?

        • A typical reasonable purchase price for any established business is 5-10 times annual net operating profit. Buying an established dropshipping site for 5 times seems cheap to me…but the web is more fickle and unstable than the high street….for now…

        • I would gladly sell a site making $25k a year for $125k. 🙂

      • That is a very different way to look at it. Most online stores when being sold always talk about how great their organic rankings are. You’re saying that it would be better to buy a store that needs SEO so you can improve upon it.

        • You dont want it to be too good unless they will want too much for it – if you can see simple errors, things you know you can quickly fix/improve etc rather than buying off a super duper monetiser who has already got the site to 100% of its potential.

          That way – you put the work in and you get a pay off. I´m looking for cheap sites that have been neglected for a year or two that I can maybe pick up but I only really know how to use wordpress for sites – has anyone converted an existing static to wordpress? Is it easy/hard/impossible?

        • I’d be interested to know the same Andy, I am buying an old site 400 odd pages and would need it put into a CMS/Wordpress.

        • I’ve converted a Joomla site into WordPress before. Took more time to develop the new template than move the content. The content is fairly easy to script.

          Daniel Harrison’s last blog post..Guest Blogging – Green Blogs that Want Eco-Friendly Guest Posts

        • Would be a nice piece of software that could semi automate this. Content could be cut-n-paste but would need to think about re-writing seo friendly URL´s – don´t want to instantly blow all your traffic.
          I think I´ll need to do a fair bit of research into the pro´s and cons before I start down this road. If anyone has successfully managed this – some feedback would be much appreciated!

        • I think it’d be difficult to find/create a tool to generally convert a website. That’s because websites vary so wildly.

          If you want to ensure URLs are fine, you need to run a sitemap tool to crawl your website. If the content is relatively well formed, you can use perl to convert hard coded content into text ready for importing into a database.

          My advice would be to do the process gradually, leaving the main website live, and developing the newer version in a subfolder. Then keep checking that both sites match until the conversion is complete.

          Dan Harrison’s last blog post..Guest Blogging – Green Blogs that Want Eco-Friendly Guest Posts

  24. I think you’re right – everyone seems to be stuck for money just now. I think you’re better looking up old leads rather than trying to find new ones. You seem to be on top of your money making schemes, but I’m still struggling personally – time to put in some more hours I think

  25. I’ve got some cracking names. One I though would be an adsense cash cow and amazingly really low ctr where I’ve had other sites with the same placement get 5x the clicks.

    I’ll have to try affiliate offers.

    • I have a few sites with great CTR and then some with CTR around .5%. They have the same layouts. I guess some niches have better adsense ad writers than others.

      • Ken, it doesn’t have to be the layout that makes the difference. If one site has great content (in the eyes of Google) then you’ll get more relevant ads. A quick test is to see what ads are being shown on your sites and if they are not relevant then try to adjust your articles/posts.

  26. i Totally agree Jonathan, when you approach them it reduces the likelihood of theft & lies a great deal and give the buyer more confidence.really nice post .

  27. Sometimes site migration to cms is not good as it creates a lot of problems like URL rewriting, category problems etc. Better it is handled same way through custom code.

  28. I don’t agree with Gairy at all, if you choose the right CMS and SEO plugin you can get the exact same URLs you have now, plus having it all on a database is far less cumbersome than messing around with hundreds of individual HTML files.

    You could probably do some jiggery pokery in Dreamweaver to Find and Replace the tags so you change them to INSERT INTO bla bla etc that you can eventually fashion into a usable SQL command.

    Or, far easier, would be to bight the bullet and wade through them all and copy the HTML pages into your favourite CMS (mine is Joomla) a few pages each day som it doesn’t get too tedious. You’ll feel much better for it afterwards, and once it’s in a database it’s pretty easy to do whatever you like with it, even converting it to a different CMS if something new comes along in the future that you prefer.

  29. Would be worth taking a look at Adobe Contribute for this type
    of project. The latest couple of versions allow you to publish straight from the browser.

    We added it to a site with around 30k pages. Just select your editable regions in Dreamweaver, add Contribute and hey presto! Okay it,s not quite as simple but it did the job nicely.

    Strip the content from the site. Create Dw templates. Add Contribute. Put content in.

    Think it was only about $80 or something.

  30. Having some success finding sites but everything takes soo long, waiting to complete 2 purchases, hopefully in a few weeks I can do a recap and explain the process, I am finding sites for sale with 1000 visitors per day that have never been approached before.

  31. Thanks for the update. I’ve been following for some time now and you have quite a great story! Good luck with your acquisitions!

  32. I’ve never been fond of resale myself. It’s pretty amazing what you’ve been doing with this website so far I see. Also takes a pretty bold man to see the fish going down the rapids and throwing his hand in to catch em. Really interested to hear how your deals turn out. Don’t suppose you’ll show us what you’ve been up to would you?

  33. I think the URL of the website is very important as that will bring the people to your site, of course being active on new postings with great key words should be able to help too.

    Chicago Realtor’s last blog post..Nice rental building Shoreham at the Lake Shore East

  34. You raise a good point, Johnathan. You neglected to mention that one is more likely to get a bargain direct from the owner, rather than going through a broker or other “professional” intermediary.

  35. I can’t believe that you do this for a living. It’s so cool. Where did you get the money to start doing this website buying thing originally?

  36. Wow! That’s amazing. I’m pretty excited about this whole thing. Maybe in a couple years I can get somewhere.

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