Perry Rosenbloom Shares an Example of How He Buys Websites For Long Term Revenue Generation

Jul 04 2012

The great part about writing this blog is the great stories and interesting people that introduce themselves to me through email.  Perry Rosenbloom is one of those people. Buying and selling domains can be great income but we all would like some cash flow and steady income to make sure that our fixed costs are covered.  One  great way is through building out websites.  In the past I’ve posted weekly articles on websites listed on Flippa that I thought may provide an opportunity to bring in some monthly income.  Perry has a different way.  He hunts down sites in keywords he likes and buys them privately.  He was nice enough to share one of his latest purchases and the results.  I think it gives a nice real life example that could have been done by anyone.

Perry Rosenbloom is a website developer by day, SEO consultant by night, and domain flipper in between. He teaches people how to make enough money online so they can quit their day job at SEOSherpas.com. I’ve been building websites from scratch for over 4 years. It can be very lucrative, even with a shitty domain name. But it wasn’t until recently that I started mining for gold in pre-existing websites. Just like some domain owners don’t realize the asset they have, many website owners don’t realize how valuable their site is. Shane’s been doing a great job covering Flippa auctions, which seem to sell for anywhere from 1-3x the yearly earnings. And while buying a site for 1x the yearly revenue is a steal, I want to share with you how I bought a website for 1,200X the yearly earnings and why it was a better deal than anything that’s been on Flippa for the last year.

How I Found My New Cash Cow

I’ve been domaining for about a year now and have had mixed success with it. I sold $5,650 worth of domains in 2011 but spent $5,654.95 ($1,200 went to a single domain that I’m developing and have already made the investment back). So, all in all, a wash (this year’s been much better with $891.99 spent on domains and sales of $4,100). But in 2011 my developed websites generated $69,635.03. Clearly my time is better spent in developing. But how can I apply what I’ve learned in domaining to buying profitable websites that will make me money long after a sale is completed? A few months back, I saw a domain dropping that was in the biking niche. It was a solid domain and I thought I could flip it. After digging around on Google for prospective buyers, I found a website that was made in the 90s. It had the most atrocious design with animated GIFs of bikers going up and down hills. It also ranked #2 for ‘touring bike reviews’ and on the front page for Touring Bicycle. I have a lot of experience building websites in the outdoor niche and I knew I could make a lot of money with this one.

The Sale

I contacted the owner on April 15th saying my wife and I were looking to document our journey across the country on our bikes and wanted to know if we could buy his site to do it on (it wasn’t 100% fabricated). Here’s my original email:

Hello, I love your bicycle touring guide site! I am a big road cyclist myself and my wife and I are planning a big trip for 2 years down the line. I was wondering if you’d be willing to sell your site? We would love to start off on a great website to document our experience. Thanks, Perry

Here’s how it went down from there: Him: How much are you offering? Me: I’m not sure… What do you think is a fair price? Him: Just make me an offer. Me: How do people arrive to the site? Him: There is a lot of links from other sites. It always ranks high on search engines. Me: What would you let the site go for? Him: Last fall a guy offered $1200 for the domain name and site Booya! I would have paid up to $5,000 for the site and instead he named $1,200. I tried talking him down but he stood at that price. We handled the transaction through Escrow. On April 27th, 12 days after I initially contacted him, I was the proud owner of a hideous website that was getting 300-500 visitors/day from Google.

Where It Is Now

I bought the site on April 27th. I immediately transferred it to WordPress and redesigned it a little bit. That took me about 5-6 hours of work. My assistant added affiliate links on the pages with the highest traffic. Those affiliate links went live on May 17th. Here’s the income to date:

  • May – $643.12 (big sale at our largest merchant)
  • June – $204.56
  • July (As of July 2nd) – $24.99

Total return – $872.67.

Where It Is Going

I plan to continue redesigning the site and making it much more aesthetically pleasing. We’ve just finished keyword research and have a content plan in place for the site. We will be doing a content push of 7-10 articles per month to maintain its current position, plus grow it for long-tail keywords. The website is currently very top heavy with one page getting most of the traffic. Because of this, we experienced a traffic drop of 30-40% when it went from position 2 to position 8 for a few big keywords. Since then, traffic has mostly recovered just from those keywords moving back into the top 3. Overall, I’m very pleased with my investment. By the end of August, the site will be completely paid for. Everything else is just profit. I hope that this story helps you realize the power of buying developed websites. Domains are great, and I will continue investing in domains and flipping them, but there’s a lot of ways to make money online.

 

I didn’t pay Perry to write this and he didn’t pay me so the links you see above are a thank you for sharing his story.  If you have an informative/interesting/entertaining story you’d like to share I’d like to offer the same.  Email me.  I’d love to hear your experiences.

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Outsmarting the Dumb, Outworking the Smart

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9 comments

  1. Perry

    Thanks for your kind words, and for sharing the story, Shane!

    I’ll gladly answer any questions in the comments.

    Happy 4th to your American audience!

  2. Jeff

    Great story! Couple of questions: how much of the original content did you keep and did you make sure to replicate all of the former owner’s URLs?

  3. Aaron

    Good stuff —- I enjoyed the article.

    Shane – the link to the site isn’t working for me. (3rd word should be ‘guide’ and not ‘touring’?)

    Perry – Are you monetizing only through CPA, vs any type of CPC?


    1. Post author
      ShaneCultra

      Thanks Aaron,

      Links should be fixed. You guys are lucking I am up late watching fireworks. Normally I’m asleep an hour ago 🙂 Thanks for your help

  4. Perry

    @Jeff –

    Yes, I kept all the original content. All the pages originally had .HTML in the link structure. After transferring the site, I 301’d the .HTML URLs to the new permalink structure.

    @Aaron

    Primarily through CPA. I have one Google ad at the bottom of all the posts, but it makes pennies. I could add a Google ad above the fold to make more, but it’s not worth it right now to me.

    The next move is developing content around popular bike touring locations and selling leads to touring companies.

  5. Jeff

    One more question: did you ever get any firm traffic numbers from him prior to purchase? Thanks again.

  6. Perry

    @Jeff

    Yes, I did. Initially he didn’t have Google Analytics installed on the site. Instead he sent me screenshots of traffic recorded by his server logs.

    Those numbers were inflated by about 100-200 visits (not malicious on his part… the server logs just weren’t accurate).

    I wanted to see the keyword referring data. He refused to add Google Analytics to every page because of the time it would take him. I convinced him to send me the HTML files, I did a mass find and replace via Dreamweaver and got the code in.

    After a day’s worth of Analytics data, I decided to move forward on the purchase.

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