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Monetising Your Domain Portfolio

Discussion in 'Guest Articles' started by chris, Jun 4, 2013.

  1. chris

    chris Administrator

    Mar 7, 2010
    Likes Received:
    auDA Member:
    You have probably seen already that we've recently been in touch with Justin Gilchrist from FlipFilter who kindly shared some generous special offers with our DNTrade members (see below).

    Many of you have probably come across Justin’s articles already on sites like Flippa where he's a guest author. To say Justin knows his stuff, is an under statement. If you don't already know, FlipFilter have a great range of tools to buy and sell websites, domains and mobile apps. It’s a handy resource to help you to find established sites or aged domains for sale across various sites and forums. Well worth checking out.

    We asked Justin if he had any specific advice he could share with Aussie domainers when it comes to domain monetisation and he kindly allowed us to share some of the handy tips from his eBook (available with FlipFilter Pro).

    Initially, Justin set out to write this eBook to provide advice about the importance of choosing the right strategy and getting the basics right to increase chances of a profitable and sellable asset.

    Justin’s advice comes from studying what repeat sellers have in common to help increase the odds of success. Justin also emphasises the importance of having a different strategy for monetisation of a new versus an established site.

    For New Sites

    Any domain in your portfolio could be a potential starter site (.au or a TLD). A starter site is typically defined as one with no revenue, traffic or inherent value to the domain (age/links). All you need is a littlework to build the domain out. You could end up seeing a return on a domain you potentially even wrote off.

    Justin has found that profiting from starter sites largely relies being able to sell by volume, so if you only have a few domains, this might not be the best idea for you (given the average selling price of a starter site is around $230).

    So why would you want to sell a starter site?
    • It’s quick return for little time/financial input
    • If you don't have in house design or SEO expertise
    • If the domain is not as valuable as the site (great opportunity for a spring clean)
    • Less risk (just a few hours of your time + listing fees)

    Why you may not want to do this?
    • Starter sites make rarely over $300, so not great for domains you've paid a premium for
    • Chance of sale is less than for a more established site

    What has Justin found sells?

    • Any domain extension (although .com, .org and .net typically higher price)
    • Something original. The type of site has a big influence on selling price. Typically auto blogs and simple content sites achieve less than something original.
    • Sites that sell products or services. Higher average prices went to sites that sold products or resold services (e.g. SEO, Clickbank product mini sites selling video course or eBooks, single product sites (often in health niche), niche didn't seem to matter except 'Make money online' doeswell.)
    • Short listings. The most successful listings were 1 day listings (although now it's 3 day) with no reserve, $1 starting bid and an average buy it now price of $242
    • Successful listings focused on a format that:
      - Builds Trust – e.g. “I have 10 years experience in SEO and building sites”
      - Provides a solution to the buyer’s biggest fears – e.g. “I’ll throw in 3 months of link building free of charge”
      - Provides Social Validation – e.g. “Latest feedback from my last auctions...”
      - Faux Scarcity – e.g. “This auction is likely to go fast as many people have read the news about XYZ and will be searching for this product”
      - Added bonuses – everything from free hosting to PLR content

    Justin also provides a word of caution – to be honest in your listing. This may seem like an obvious one, but it's important to avoid overstating a sites potential. Otherwise, you risk drawing criticism from the community,which can affect your reputation.

    Established sites

    What are the benefits of selling an established site?
    • Bigger return. Potentially far in excess of work you put in.
    • You can get paid from the site’s earnings first, then the sale.
    • Completing or outsourcing development of a site that makes a difference and becomes an asset is less soul destroying than building five identical directory sites for example.

    Why you may not want to do this?

    • Time and money. Requires some investment.
    • Even with outsourcing, project management can take time away from other projects
    • You need to be prepared to wait longer for a payback

    In Justin’s eBook, he simplifies 3 main things potential buyers look for:

    1. Traffic - todetermine the potential value to buyer based on number of visitors they can target their product to. Justin advises, "If you choose to build a site and your primary selling proposition is traffic (i.e. no or little revenue) try to diversify your traffic sources as this will reduce the risk for potential buyers. Sites that sell for the highest multiples always have a good mix of organic search traffic, referrals and direct traffic (social media, email marketing etc.) to provide a fallback should one method fail (...Panda anyone?)."

    2. Revenue - Buyers will pay more for site that demonstrates consistent sustainable revenue (e.g. least 6 months steady revenue from bank statement or PayPal merchant record). Justin discusses that on average, established sites on Flippa sell for approximately 6.4 times their claimed monthly gross revenue. Certain types of sites are also easier to monetise the visitor once they reach the site. Buyers also pay for premium scalable sites. If your site generates revenue just from organic traffic it's not as scalable as a site that generates a portion from pay per click or display advertising. Justin advises to experiment with PPC and Adbuys early on to see what works.

    3. Exclusivity / Ranking - One of main motivations for people to buy, is fear. What if my competitor buys this site? Will they have the competitive advantage? Justin discusses that "‘Civilian’ buyers will usually pay a premium for a developed site over that of just a domain especially when they can see how it would integrate into their existing marketing without them having to do any work."

    Justin signs off with some great advice, "There’s no guarantee that you’ll sell for the price you want, but by following other sellers who frequently achieve the highest value for their online properties, you’ll increase your chances and the value of your portfolio with it."

    Thanks Justin for allowing us to share these insights with our DNTrade members and for providing the tailored discounts. If any of the DNTrade members would like to thank Justin, provide some feedback or have any questions, please post below.

    About Justin Gilchrist

    Justin Gilchrist is a tech startup junkie with a love for creating data driven applications. He's also one of the founders of CenturicaDD.com, an agency that offers professional due diligence for investors and buyers of internet businesses. Find him on Twitter: FlipFilter or Google Plus.
    4 people like this.
  2. petermeadit

    petermeadit Membership: VIP

    Jul 13, 2012
    Likes Received:
    auDA Member:
    This is awesome Chris, really great knowledge and an insight into some kinda really flexible niches.

    Thanks for this Chris.
  3. chris

    chris Administrator

    Mar 7, 2010
    Likes Received:
    auDA Member:
    A reminder to those that missed it a while back, if you're interested in taking a look at FlipFilter, Community and Trader members can get a one month trial of FlipFilter Pro for only $3.95 (which is 75% off). This offer can be used any time before 26 June 2013.


    Ongoing offer for VIP members with a trial of FlipFilter Pro for 2 months for only 99c and VIP members can then decide whether to continue at a special discounted rate of only $14 per month.


    If you're interested in buying and selling websites/domains/apps I definitely recommend checking FlipFilter out.