How to Purchase a Website – From $10k Success to Failure in 30 Days

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This post is to share my story about purchasing a website privately and the incredible success I initially thought I had followed by a sizable blow!

I will write this post in chronological order and walk you through the stats as I saw them.

Also I will show you exactly what I did to get an increase in click through rate of 10x resulting in an affiliate click graph looking like this…

Website Purchase Story 13

3 Simple Steps Create 1,000% Increase in Purchased Websites CTR!

 

Writing this post has helped me think through a few questions I have reflecting back on my decisions to buy the site…

  • What should I have done differently?
  • Should I have sold the site?
  • Did I make a mistake?
  • If I had to go back would I still buy the site?

This post is a little longer and is broken down into the following sections…

  1. Finding and Negotiating the Sale
  2. How to Transfer a Website
  3. How I Increased the Sites CTR by 10x in 3 simple steps!
  4. How the Value of the Site Increased from $4k to $15k in 1 Month!
  5. The Impact of Penguin on my Purchased Site
  6. Second Month Earnings
  7. Good Decision or Bad Decision to Buy the Website?

 

Website Purchase Story.docx

Aug 20 I Found a Website Copying My Own – Reviewing the search results for my student loan site I notice another site built very similarly to my own. This wasn’t a surprise as I had seen many people build similar sites after I shared the success I had publicly with my site. What made this site unique is the amount of backlinks and traffic reported to the site.

Many aspects of the site were identical to my own including similar monetization methods and site layout. It was clear that this site was copying my own student loan site.

Aug 21 Contact and Call Out (friendly) Website Owner for Copying – I decide to email the owner of the site and make contact in the hopes of getting more data to help me and also to potentially work together to promote each other’s sites.

Website Purchase Story.docx

 

Aug 21-23 Offer Free Advice – For a few days we were emailing back and forth and I was providing advice on how he could improve the website.

Aug 23 Float the Idea of Purchasing Website – Realizing the site was making almost no money but had traffic which I knew could be mone.

Website Purchase Story 3

 

Aug 24-26 Discuss Potential Deal and Set Up for Google + Hangout – For a few days we discuss a potential deal and review statistics for the site.

The site was getting great traffic but just wasn’t making very much money. It was also showing signs of rapid growth on the way.

Website Purchase Story 4

 

Aug 27 Google Hangout to Discuss Site and Potential Sale – On Aug 27 we had a meet up and we discussed general internet marketing stuff along with the potential sale of the site.

After reviewing the analytics and comparing my sites earnings per visitor I thought about what a fair price would be and offered it.

     Valuing the Site:

The site had made a total of $0 up to this point but I knew he had put a lot of effort into it and wanted to see a fair return for that effort.

Based on the stable traffic ~7,000 visitors over past 30 days(removing the traffic spike) and the earning per visitor of similar traffic I had demonstrated on PayMyStudentLoans.com ($0.10-$0.25/visitor) I calculated the potential earnings from the site to be $700/month

  • Potential Monthly Income = $700
  • Value of Website (10x of “potential” not demonstrated income) = $7,000 +/- 30%

Aug 29 Agreement Made to Purchase the Website for $4k – After a few more emails back and forth and an agreement to help consult on his next project (which has been a lot of fun and successful) an agreement to purchase the website was made.

Website Purchase Story 5

 

At this point I have made an agreement to purchase a website that has made no money and has 30 days of stable traffic based on the projected (not demonstrated) income.

Good decision or bad decision – time would tell!

Website Purchase Story 6

The website sale went relatively smoothly, here is the 5 part process…

5 Steps to a Successful Website Sale

  1. Agreement
  2. Payment
  3. Website Transfer
  4. Name Server Change
  5. Domain Transfer

Step 1 – Agreement – Aug 29

We used a really really basic agreement that outlined the terms of the sale. Here is a nice clean contract template to use from John Saddington.

Step 2 – Payment – Aug 31

  1. Once the agreement was completed the seller initiated a payment request from Escrow.com
  2. After completing a couple simple steps in Escrow.com I printed and took the paperwork to my bank
  3. At my Bank I wired the money which only took 1.5 days to get through and into Escrow.com

Step 3 – Website Installed On My Server & Ready to Go Live – Aug 31

I thought this step would be more difficult but it was very very easy using the free duplicator plugin. (at least for me – my VA did all the work).

  1. Seller to install Duplicator Plugin
  2. Seller to provide Admin Access to website (sometimes people want to wait until payment has cleared)
  3. VA set up website on my server

Here is the best tutorial that I found on this process and the one my VA used to complete the process…Chad Warner from OptimWise.com “Copy and Migrate WordPress sites with the Duplicator Plugin”.

Website Purchase Story 7

 

Part 3 – Change WhoIs Information and NameServers – Aug 31

This is where we made a mistake and didn’t change the WhoIs information before initiating the transfer. It got resolved but took an extra couple of days.

  1. Seller to change NameServers
  2. Seller to change WhoIs data before the domain transfer begins

At the end of Aug 31 the website was live on my server and I was able to begin making the planned changes. Although the domain was not in my control and the money was still in Escrow.

Part 4 – Complete Domain Name Transfer & Money Released from Escrow – Sep 7

Because of the mistake we made above and not changing the name we were unable to retrieve the EPP code that was being sent once the domain name transfer started.

  1. Seller to unlock domain
  2. Buyer to send transfer request
  3. Seller to send buyer EPP code
  4. Buyer to enter EPP code and complete the transfer

If you are using NameCheap here is a quick step by step guide.

 

Website Purchase Story 8

 

From finding the site to owning the site was 18 days which could have been probably 4 days shorter had the domain transfer gone smoothly.

Overall it was a fair/transparent transaction that I think had everyone involved happy.

Website Purchase Story 9

Since the owner of the website had followed my guide on how to track affiliate clicks with Google Analytics it was easy to measure the success of the changes that I made.

Here was the number of affiliate clicks the website was generating before I made changes…

Website Purchase Story 10

 

180Affiliate Link Clicks with 9,296 Visitors (1.94% CTR)

3 Steps to Improve Monetization of a Website by as much as 10x!

Step 1 – Identify high traffic pages

From the analytics it was clear a few of the pages were getting the majority of the traffic.

Website Purchase Story 11

 

 

Step 2 – Review the Pages and Find a Focused Offer

The offer on the high traffic page was not as tightly aligned to the problem people were looking to have solved when they visited the page as I would like.

Ideally, I want to be able to offer an affiliate or CPA offer that is very tightly aligned with the main problem people have that has brought them to the page in the first place.

In order to do this I looked at some of the keywords people were using to find the page, looked at other similar pages around the web, thought about who these people were and the problem they wanted solved and then did some additional keyword research to see what were other popular search terms of the same problem. Once I understood their problem and desired outcome I searched for a CPA offers that answered their problem.

Website Purchase Story 12

 

Step 3 – Change Popular Pages to Focus on Promoting More Tightly Focused Offer

This step was easy I did the following things…

  1. Disabled general ads on the page
  2. Created a clear call to action to the affiliate offer that addressed the visitors problem
  3. Made the call to action stand out with a button

The 10x Results!

  • Pre Change CTR = 1.94%
  • Post Change CTR = 21.6%!

Traffic from Aug 1 – Sep 10

Website Purchase Story 12

Affiliate Clicks from Aug 1 – Sep 10

Website Purchase Story 13

 

Sep 10 Thinking I am Pretty Smart! – After only a few days and a few hours of work I had been able to make simple changes that resulted in a huge increase in affiliate clicks. But would all these clicks turn into money?

 

Website Purchase Story 14

Would all those clicks turn into money? Well after a full 30 days of running the site (basically Sep 1 – Sep 30) here are the results. Remember, this site had made a grand total of $0 up to the time when I purchased it on Sep 1…

Traffic First 30 Days = 6,260 Visitors

Traffic stayed steady and had a small decrease which correlated with my main student loan site and Google trends showing a seasonal downturn in search volume at the end of September.

Website Purchase Story 15

 

Income First 30 Days= $831

• CPA Offer #1 = $720 in September

• CPA Offer #2 = $111 in September

Website Purchase Story 16

 

Value of Website = $15,000!

The sale price of a website with demonstrated income is in the 15x to 20x monthly income range. So with this website generating $831/month (in a slow month) I am confident I would be able to sell it for $12,500 to $17,500.

So right now I am thinking damn what great value I created….

I purchased a website for $4k and after 30 days I have made $831 and have an asset worth around $15,000! Generating over $10k in my businesses net worth in 30 days with one deal!

Website Purchase Story 17

Starting in October I was thinking about how I could expand my website purchasing business picking up sites that are under monetized and in niches where I know the approximate income/visitor. Everything was going great until the Google Penguin 2.1 Update came out on Oct 4.

penguin

 October 4th I didn’t dig into my analytics when the first reports came out but on Oct 5th Tung from CloudLivingJourney and a couple other people were very curious if I had seen an impact on my main student loan case study site. I try to never react quickly to any update since there is little benefit to moving quickly and it takes awhile for the data to settle out.

Website Purchase Story 19

 

I first checked my main student loan case study site (paymystudentloans.com) and saw that there was no impact beyond the seasonal downturn. Then I went to have a look at my purchased website and oh crap I definitely got hit!

PayMyStudentLoans – No Impact

Website Purchase Story 20

Purchased Website – Big Impact

Website Purchase Story 21

 

The penguin 2.1 Google update hurt the traffic on my purchased website. Taking the traffic from 200 visitors per day to 80 visitors per day – 60% hit!

Why did Penguin hit my purchased website? Penguin is a spam filter which looks at spammy links, purchased links and over optimized anchor text.

I knew when I purchased the website there had been a few links purchased and that was the only difference in SEO strategy (other than the purchased site not using expired domains).

So my thinking (not conclusive) after reviewing the backlinks was 2 fold…

  1. Purchased links in the sidebar on un-related sites hurt the website
  2. Not having a stronger foundation of quality natural looking links (relevant expired domains or .edu from research/outreach posts) meant the few purchased domains stood out.

The Bad News – Any update hurts and one that has a very clear direct impact on income is especially painful!

The Good News – My SEO strategy stood up to another Google Update! The only site in my portfolio that got hit was the purchased site. Plus there are ways to recover – remove the bad links and adding in some new links should help this site recover.

My 3 Part Penguin 2.1 Recovery Plan

  1. Approach 5 webmasters to remove link – Complete
  2. Disavow Bad Links – In Progress
  3. Build Authoritative Links – In Progress
    • Relevant Expired Domains
    • Research/Epic Posts + Outreach

Website Purchase Story 22

Now that the second month has passed how has the site done? How did the drop in traffic impact earnings?

Well unfortunately the drop in traffic hurt the website (no surprise there).

Traffic Second Month = 2,672 Visitors

Website Purchase Story 23

 

Income Second Month = $261

• CPA Offer #1 = $192 in October

• CPA Offer #2 = $69 in October

Website Purchase Story 24

 

Value of Website After Penguin Update = $4,500

After the update and assuming my efforts to recover the site fail the value of the website is 15x-20x times $261 = $4,000-$5,000 plus the income earned to date ~$1000.

So overall I have not lost money but I have clearly gone from a huge potential win to just a solid earning site added to my portfolio with a 1-2 year payback period.

Final Thoughts

  • What should I have done differently? Nothing, I think it was a well thought out deal. Potentially controlled my emotions a little better.
  • Should I have sold the site? No, to get the 15x to 20x earnings I would need to be able to display 3-6 months of stable earnings.
  • Did I make a mistake? I don’t think so.
  • If I had to go back would I still buy the site? The answer is a definite yes, in the end I took a risk buying a site with no income for $4k, it looked like it would pay off huge but now looks like it will just be a solid earner. I am in this game for the long run so I don’t mind investing in assets with a 1-2year payback period.

My Key Learning

Are there other sites currently in my portfolio that if I gave the kind of deep analysis I did with the purchased student loan site I would see a 10x increase in click through rate.

The giant earnings increase I had when I purchased the site due to some simple changes had me me thinking about the story of INTELs CEO in the book Good to Great where Andy Grove’s was paraphrased as saying “what would someone (or ourselves) do if the current CEO(himself at the time) was fired? – we should consider doing that”. It was this insight that had them switch from building memory to mirco-processors and go on to make a giant impact.

So the question I am now asking myself and challenge you to ask yourself is –

What changes would I make to my websites if I purchased the site today?

Read my Ultimate Guide To Expired Domains for SEO! (8000+ words and 5 step by step how to videos! all FREE) click here

Comments

  1. Another great post job! I’m impress on how long and detail these posts are, wonder how you get time to do this :) About the site, still a good investment and you can definitely bring the site back. Nowadays is necessary when purchasing a site to do an in-depth back link analysis and more if the site is fairly new.

    • Thanks Miki – finding the time is definitely a challenge! I was aware of the backlinks but you are definitely right that an in-depth analysis of the backlinks is important to understand the sites exposure to a potential penalty.

  2. Even though you took a sizable decrease in income I think you made a good decision to buy the site. Also thanks for the tips on how to improve monetization I think that will really help my site.

  3. Great post, Jon. Thanks for yet another in depth and meaningful post.

    Looks as if you made the right decision, particularly because you will likely have success with your promotion strategy for this site. Very cool you now have a little bit larger piece of your niche’s market.

    • Thanks Curt – I am always glad when I can do a valuable post like this one! Yes chipping away at this giant niche is lots of fun – one bite of the elephant at a time.

  4. Protect yourself from penguin by diversifying your traffic sources. Where to find cheap, qualified traffic:
    1. Social networks (FB, G+, Pinterest)
    2. Niche-specific forums

    • HI Danny, you are right I am definitely exposed on my whole business to Google. Of course this isn’t ideal and I have some longer term plans (nothing immediate) to change that. Social for me hasn’t had a lot of success after a few attempts.

  5. Thanks for the post John! You’re one of the few people whose email lists I like being on, because your posts are always so in depth and instructive. That’s a bummer that the site “fell from grace” a little, but like you said I’m sure over time it will more than make up for it!

  6. Hey Jon, what do you think about running potential sites you’re thinking about buying through the Link Detox tool? It’s not a free service, but I think it’s only around $50 bucks. Maybe it’s one way of screening a website’s link risk.

    • Jon Haver says:

      Interesting service. I was aware of the bad links before the purchase and there were only a few. So, assuming it was the few bad purchased links that caused the problem (I will never know foresure) than it wasn’t a lack of information it was a lack of action on my part to remove the links pro-actively.
      For a larger site with a less transparent buyer it would definitely be wise to run a deep link analysis like the Link Detox tool or manually go through all the links form Majestic SEO or Moz.

      Good tip – thanks!

  7. According to this calculator, the site is generating $1500 pm :)

    http://www.worthofweb.com/website-value/

  8. Jon, great post. What I am most curious about is your “SEO Strategy”. Do you have a post that outlines it?

    • Jon Haver says:

      Hi Fred, I don’t have one post that boils it all down. Each income report I talked about exactly what I had done to build up the site… blog commenting, yahoo answers, guest posts, huge research posts plus outreach and leveraging expired domains. I have it on my list to create a detailed post putting all the pieces together but a few other priorities are above it.

  9. Google is like women, you can’t live with it but you can’t live without it ;-) hahaha!

    I was lucky this time; no hit on my side… however I didn’t gain anything!

  10. Jon,

    What a great post. Your whole approach in dealing with the person who copied your site was terrific. Way to take the initiative and create a win – win situation. I love how you analyze the facts and make decisions based on what is known and limit the impact of the emotions on your decisions.

    Question: Had you analyzed the links in the run up to the purchase would that have changed anything in your process? Would it have caused you to rethink the purchase? Would you have purchased and just changed out the links at the beginning? Hindsight is 20/20 but would love to hear your thoughts.

    Allen

    • Jon Haver says:

      Thanks Allen, I try and always use data whenever I can to help make the right decisions. Yes I had analyzed the links and was aware of the purchased links. Yes hindsight being 20/20 I should have disavowed the bad links right away.

  11. You’re the master of detailed case studies Jon, awesome post!

  12. I’m glad my tutorial on the Duplicator plugin was helpful, Jon!

  13. Jon, awesome detail as usual, especially the nitty gritty on website purchase. The same EPP code situations can arise transferring domain registration to Namecheap – especially from GoDaddy. Even though I’m on both ends, there seem to be problems. What I find interesting is that you not only purchased a site in the same niche you were already in, but one that was a near-clone – in essence competing with yourself. This is an interesting strategy; I’ve tried it on a smaller scale – niche sites going for the same keywords but different content – and it seemed to work. For the main keyword one site ranks #2, the other #5 and only seem to lessen traffic to the other site slightly. I’ll be curious to see your follow-ups on this situation. The 2.1 update was pretty harsh, taking down all kinds of paid links, even ones the SEO companies touted as Google-proof (probably no such thing). That the links you created yourself are surviving just fine is the best overall news, though.

    • Jon Haver says:

      Hi Don, I was transfering from BlueHost to NameCheap.

      I agree about nothing being google proof and the best news is my current SEO/promotion strategy withstood another update.

      Buying a site in the very same niche/basically a clone isn’t ideal but if it gave me the opporunity to dive deep into the analytics and see what keywords both sites were ranking for and the other wasn’t so by focusing articles on similar topics on the opposite site my theory is I should rank with that site as well. (before the update)

      Thanks for the comment.

  14. After sharing the post, couldn’t see the website

  15. Hi Jon,
    Thnx for sharing such an informative posts with us, I have 2 questions if you don’t mind.
    1- How is you site recovery right now? any improvement in your traffic?
    2- I had a site I build and it was making about 500$ a month after few months, I build a backlinks service I tried before and it worked but before 2 days my ranking doomed and the traffic decreased by 60-70 % although I still rank #1 for one of my keywords.
    My plan is to a) remove all the back links from that service, b) get several expired domains and c) build some good content to link back to my site and finally add more content to my site.
    What do you think? any suggestions?

    Thnx
    S.Saab

    • Hey Saab

      1. Recovery is slow – no progress yet but I haven’t worked my plan yet either

      2. Congrats on the site and sorry to hear about the dive. Regarding your plan I like the step a) remove the links b) get expired domain – this one I would hold off on and try to get some very real very legitimate links in your niche first then look at boosting the site with expired domains c) Adding more quality content is good.

      Overall its a good plan, but I would look to see if you can promote your site within its niche naturally after the penalty.

  16. typo
    My plan is to a) remove all the back links from that service, b) get several expired domains and build some good content to link back to my money site and finally c) add more high quality content to my money site.
    What do you think? any suggestions?

  17. Fascinating study Jon. Seems like both of you got a good deal. That’s interesting he copies your main site. What happened to originality?

    I think I should focus my site more into 5 topics max. My range of topics is a little too broad and I have too many categories. Any other suggestions for FS are welcome!

    Sam

    • Hey Sam, I think FS is obviously killing it and you are in a different league but I would say a few things would make a difference….
      1. Focus on a few specific problems and then optimize your offers around those problems (as you mentioned)
      2. I am not sure how well your list is working but if it is working I would look at getting more people onto it through a Feature Box, Welcome Gate, More clear Opt In call to action at the bottom of your post
      3. Determine you most frequently visited posts – you know the 5% of your posts that account for 60% of your traffic (we all have them) and look at removing the site wide monetization on them and installing some clear calls to action for more related offers. This is probably the easiest and lowest hanging fruit option.

      If you have any questions let me know, happy to help!

  18. The google penguin 2.1 did not only hit my niche blog, but it calmly took it out of google’s search.
    The problem i guess, is because of links from high pr blogs..

    I have removed all the links and am hoping that this website comes back… and Jon, am not too good at CTA, should i mail you for more discussion?

  19. Hi Jon,
    Just an update for my situation, I did not do any thing and decided to wait for some time and before 3 days my site back in the top of Google for most of my keywords. JUST like that :0 I’ll keep monitoring the situation and will add some good articles and review hopping this will not happen again but I think we need to diversify our traffic as depending on Google for about 80% of my traffic not a safe strategy.
    What about you any improvement from your side?

    Best
    S.Saab

  20. Great article Jon. The good thing is, it wasn’t a total loss. I was hit buy Penguin and Panda also. I have a site that was getting 1000 visitors per day and earning about $1000 per month. It was my best site and really my only real success. It really took the wind out of my sails for awhile. Today it’s getting about 130 visitors per day and earning about $100 per month.
    I have just begun trying to see if I can get some of my rankings back and increase the earnings again. I probably can’t get it to where it was but I did some analysis and think I can get it back to about $500 per month. Time will tell.
    In the meantime I’ll be building new sites and growing my portfolio.

    Quitters never win and winners never quit.

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