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Buying Internet Sites. 3 small sites vs. 1 large site. Feedback Needed.

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mojorisin

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Oct 6, 2019
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This forum has inspired me to invest into my side hustle of buying Internet sites. Been doing my DD for previous 3 months. Researching like crazy, talking to brokers, dabbling in Wordpress development, affiliate marketing, etc. I have a very busy professional job so I can spend nights / weekends on my sites. Maybe 10 hours per week max.

I will be investing $150k into web business over next 18 months.

My goals -

1. Passive Income - doing this to make money :)
2. Retire to do this full time in 5 years - As I wind down my day job and closing in on retirement savings completed - if I can hit $150k annual on my sites it will cover my expenses.
3. Learn the business - learn how to manage sites, make money online. I can do this into retirement for income.

I'm looking at multiple content or FBA sites around $30 to $50k, 2.5x purchase price vs. a single content site at $100k 2.5x purchase price.

Growth potential - the FBA sites have simple products that are kinda boring - 2 year consistent earnings. Selling widgets. The $100k content site is much more interesting to create content, affiliate marketing, etc - but with the unknown if I will be successful in creating new affiliate links to profit like the current seller has done.

So the question - do you buy multiple sites to diversify, reduce risk at the expense of more time? Or go "all eggs in single basket" with a bigger site.

TIA.
 

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AppMan

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May 25, 2019
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This forum has inspired me to invest into my side hustle of buying Internet sites. Been doing my DD for previous 3 months. Researching like crazy, talking to brokers, dabbling in Wordpress development, affiliate marketing, etc. I have a very busy professional job so I can spend nights / weekends on my sites. Maybe 10 hours per week max.

I will be investing $150k into web business over next 18 months.

My goals -

1. Passive Income - doing this to make money :)
2. Retire to do this full time in 5 years - As I wind down my day job and closing in on retirement savings completed - if I can hit $150k annual on my sites it will cover my expenses.
3. Learn the business - learn how to manage sites, make money online. I can do this into retirement for income.

I'm looking at multiple content or FBA sites around $30 to $50k, 2.5x purchase price vs. a single content site at $100k 2.5x purchase price.

So the question - do you buy multiple sites to diversify, reduce risk at the expense of more time? Or go "all eggs in single basket" with a bigger site.

TIA.
buying e-commerces , FBA is very tricky, most of sellers sell them because for some reason they know they products no longer profitable like before, and it could be because too many factors, I would buy at first site that is under 10K because most likely you will fall into one of the sellers traps and you over see some red flag. so this will be a training for you.
As for passive income, not sure selling products online is passive model , you will need to put hours marketing , wiring , updating listing , etc
 

Mike Partee

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"It Depends."

IMO It's not a matter of how much you're paying or how diversified you are, but...
1: What's the best deal?
2: How you can add the most value?

On the topic of "Diversification," maybe read this post by @snowbank.

Also read this thread from another forum member on operating a portfolio to see what it's like.

But say you buy multiple sites. Let's also assume you'll be limited to 10hrs/wk to operate and grow those businesses. Is it feasible that you can do so with those limitations? Are you going to have enough time to write content? Will you still be profitable if you hire out content / growth?

There's a lot of questions only you can answer for yourself. Some people are able to get sites profitable enough to put a business manager / additional staff in place from the get-go.

Others, not so much.
 
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mojorisin

Contributor
Oct 6, 2019
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As for passive income, not sure selling products online is passive model , you will need to put hours marketing , wiring , updating listing , etc
Good point, you are correct. By "passive" I meant not working 9-5, however, yes I expect to invest time and $$$ into the sites.
 
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mojorisin

Contributor
Oct 6, 2019
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"It Depends."

IMO It's not a matter of how much you're paying or how diversified you are, but...
1: What's the best deal?
2: How you can add the most value?

On the topic of "Diversification," maybe read this post by @snowbank.

Also read this thread from another forum member on operating a portfolio to see what it's like.

But say you buy multiple sites. Let's also assume you'll be limited to 10hrs/wk to operate and grow those businesses. Is it feasible that you can do so with those limitations? Are you going to have enough time to write content? Will you still be profitable if you hire out content / growth?

There's a lot of questions only you can answer for yourself. Some people are able to get sites profitable enough to put a business manager / additional staff in place from the get-go.

Others, not so much.
You nailed it, this was a great read.

“What if I do a bunch of small websites instead of one big website, so it won’t be as risky. I shouldn’t do that?”

Even after I posted this question on the forum today, I think I knew the answer. Be a little more patient, find a quality content site that I can focus 100% of my energy on - then build up and out.

Validate my thinking - yay or nay - I buy a content site that has a solid fundamental business / revenue stream for a core product. I can simply add on / grow new content that is related to the core content. For example: if I have a working niche site for car insurance reviews - I can add / grow motorcycle insurance reviews. Then add boat insurance, homeowners, etc. So take a core strength then add complementary growth to it. I lean towards content since I can outsource it for cheap vs. FBA where I need to go outsource products, shipping, inventory, etc.

With my limited time, I do plan to outsource any work that 1. I'm not good at 2. I dont like to do 3. I can get done for cheap. I am the CEO not operations guy, leading strategy and new revenue models. I've done this many times over my life with positive results. Many successful sites I'm considering already have a VA or content outsourcing that will continue to work with me if I take over.
 

Sebastya

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Sebastya, what type of sites do you feel offer "more control" and why?
Anything where you own the customers information + delivery of product e.g. software, membership, courses etc. to name a few.

FBA is still a great revenue stream, just not my cup of tea.
 
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mojorisin

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Oct 6, 2019
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Anything where you own the customers information + delivery of product e.g. software, membership, courses etc. to name a few.

FBA is still a great revenue stream, just not my cup of tea.
Sebastya, I'm assuming that an Affiliate model, you would not consider "in control"? I seem to prefer content sites where I can expand quality content vs. creating / managing physical product.

Since affiliate is usually a 1 time commission on a purchase. How about ad revenue such as mediavine?
 

Sebastya

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Sebastya, I'm assuming that an Affiliate model, you would not consider "in control"? I seem to prefer content sites where I can expand quality content vs. creating / managing physical product.

Since affiliate is usually a 1 time commission on a purchase. How about ad revenue such as mediavine?
Whatever you're comfortable with. There's probably less risk with affiliate sites since you can utilize multiple affiliate programs on a variety of sites, but I'm not an expert on it.
 

biophase

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FBA sites around $30 to $50k, 2.5x purchase price vs. a single content site at $100k 2.5x purchase price.
What kind of FBA site are you going to get for $30-$50k? Look at the numbers, you used 2.5x, so a $30k site would be making $12k a year. That's a small small FBA business. An FBA business doing $1k a month after 2 years is going to get crushed. How can it maintain rankings?

You need to look at FBA sites that are asking at least $100k to be anything that is established.
 

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mojorisin

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Oct 6, 2019
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What kind of FBA site are you going to get for $30-$50k? Look at the numbers, you used 2.5x, so a $30k site would be making $12k a year. That's a small small FBA business. An FBA business doing $1k a month after 2 years is going to get crushed. How can it maintain rankings?

You need to look at FBA sites that are asking at least $100k to be anything that is established.
Biophase: thanks for chiming in. Part of my reason for buying this first site is to fund an R8 purchase similar to your Mclaren purchase (buy a biz vs. paying cash for luxury item) :) so you have inspired me.

I sent you a PM with the FBA site details, PnL etc for the primary site I'm looking at for your opinion.
 

roguehillbilly

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Killer, acquisition entrepreneurship doesn't seem like a bad angle. I'm interested in the same but it's a lot of work to vet and find businesses where everything checks out.

If you haven't already checked it out Ryan Kulp's Microacquisitions course is dead on for this strategy. He goes over acquiring small internet-based businesses and everything that goes along with it (due diligence, cash flow analyzation, etc )

Affiliate Link

Non-Affiliate Link
 
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mojorisin

Contributor
Oct 6, 2019
26
23
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@UnrealCreative: Thanks for the tip.

I have been following RichardG's portfolio strategy. This is the genesis of my thinking behind 3 sites. Buy the most solid sites I come across, invest time, build and grow. Downside: I will lack the focus on 3 vs. 1 single site. And I do have a full time job where RichardG does not :) so I need to be careful on my time commitment. This is the single, maybe a double.

I consumed all of the content on foreverjobless.com including multiple podcast's during a flight. Wow amazing stuff. I got the impression his view would be to go all in on a single business, start from scratch to "solve a problem". MUCH higher ceiling, this is the home run swing or strike out. However I can apply these principles to ANY business.

My core takeaway - regardless if I buy or acquire -

1. What problem am I solving
2. Why will someone pay me to solve that problem
3. How will I differentiate vs. the competition
4. How will I monetize

I know these 4 points will sound obvious to the experienced folks around here. However there is so much information out there this weekend of research provided some needed grounding for me.

At this point, I'm going to continue seeking to acquire a business but applying these principles. Do my best to focus on a legit business vs. a "me too" site that will get crushed with minimal competition.
 

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