Website Investing Weekly ⏬ Downside

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👍 Protecting The Digital Asset Downside

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The more I expand my focus into other digital assets, the more I’m aware of the risks of holding websites (outside of trademark scams and image copyright fines as discussed on the latest Tropical MBA podcast with Sarah Kornblet).

If you buy domains at a good price then there is almost no downside (other than caused by macro-economic events), as:

  • Domains hold their price (and some categories appreciate over the years)

  • You can liquidate to other domain investors at the wholesale price you paid (or higher if bought really well)

  • You have the chance to sell for 10x or more to an end-user

Drew Rosener from Media Options summed this up brilliantly on the latest Domain Sherpa podcast:

A good name purchase is a great usable asset with a lottery ticket attached, supplemental to the utility value

Whereas a website could be said to be similar to a reverse lottery where the current holder pays for any downside from being negatively hit by a Google core update!

This is why I’ve always looked to flip a site in the shortest timeframe, and why I’ve started building my own domain portfolio. So far I’ve bought 19 domains for $1,277 in total which Estibot values at $3,823 wholesale and $64,810 retail. What this means is that, in theory, I can liquidate my portfolio immediately to other investors for 3x what I paid. With the upside of being able to achieve 10x-50x when the right offers come in from companies wanting to build out on the domains.

So how do you limit your downside with website investing? You build out on aged domains (the lead story in last week’s newsletter), or you acquire a portfolio of sites so that you are protected against individual sites getting whacked by Google.

You also limit your downside by generating upside, which I discuss in my latest article in the series on how to invest in websites on Flippa. [RP]


🖱️ Do Ad Clicks Lower Your Affiliate Revenue?

If you're using display advertising on your website - or looking at one of the available options - you might want to consider how this could impact your affiliate revenue. In the past, most affiliate sites steered away from using display ads. But the lure of a juicy ad check, for little effort, is too good for many to turn down.

To avoid losing affiliate commissions on your money pages, the safe option is to place display ads only on your information pages. The question is, "do display ads affect your affiliate earnings?" Dom Wells asked this question in an article on Flippa and the answers may surprise you. He tested a few dozen sites by placing ads on the money pages. After the experiment he said:

We tracked how much money a page made without ads, then put the ads on for the same number of pageviews, and all that happened was we made money from the ads. Affiliate commissions actually stayed the same.

The interesting takeaway from this article is that there are many on-page factors that have the potential to impact your conversions and site revenue. Don't underestimate the value of testing elements like your CTA buttons, sign up forms, images, and even font styles. The best advice is to take a holistic approach to your site and A/B testing. [JL]


💪 Top Performing SEO Domains & DFY Sites

ODYS is the place for best-performing aftermarket SEO domains to build money sites out on. They also offer DFY Affiliate Sites from $2,700 for 50K words, which include keyword research, redirecting any old URLs that they can’t rebuild, and one year’s hosting. And they are about to launch Ready Made Sites, immediately available to purchase. Sign up and receive a $100 credit to go towards your first purchase.


🏢 Real Estate Investors Buying Digital Assets

Empire Flippers recently interviewed an expert in commercial real estate (CRE), to discover why bricks and mortar investors are moving into our space. While there is still opportunity in the CRE market, buyers and sellers are clashing in the current pandemic environment. Buyers see the chance to place lower bids and sellers want to maintain last year's values. Add to this the fact that buyers who need finance are required to come up with higher deposits, and you have the impetus for CRE investors to look at other opportunities.

There are similarities between investing in websites and CRE investment. That's because diversifying income and realizing a return on investment are strong components of both business models. Even factors such as the buyer persona are relevant to either industry. As Rainier Nanquil notes:

If you go to our website, you see the six types of investor profiles: Newbie Norm, Do-it-Yourself Dave, Flipper Fred, Strategic Sally, Portfolio Paul, and Investor Ivan. Virtually the same investor profiles exist in real estate, such as the flippers, syndicators, general contractors, private equity, and so on.

The chance for a quicker ROI is a major driving force for acquiring digital assets. Real estate returns are based on capitalization rates of around 4-5% per annum, whereas websites go for 33% to 50% cap rates, meaning you can make your money back potentially within two to three years. CRE investors recognize that the demand for digital assets will increase as the younger generation - who grew up with the internet - make their plays. That generation will likely invest more in online business. [JL]


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Ezoic also offers access to Big Data Analytics where you can break down revenue at a page level to learn how valuable different blog categories (and even authors) are, and to be able to effectively measure the ROI from SEO. You can start a free trial of the Ezoic platform today.


🆘 Agent To The Rescue

Investors Club launched a new ‘Request agent assistance’ button inside their platform so you can get help with a website acquisition whenever you need it. And they have now integrated with the Google Analytics API so you can see weekly traffic trends without having to be added to the GA account (last I checked mine had over 50). You can now see the top organic landing pages, countries, devices and even demographics directly from the listing pages, and breakdown the traffic via source / channels. [RP]


This week’s Website Investing Weekly was written by Richard Patey & Juliet Lyall