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Category: Domain
Purchase Price: $100
Cost: $250
Revenue: $250
Final Sales Price: $600
Profit: $500
Time Invested: 10-12 hours (2 months)


Recently I had a fairly successful flip and thought I would share the processes I took to achieve the modest results.
The Buy

I went through a phase of buying domains with pagerank. I made quite a few fundamental errors, which I am not proud of (but have learnt from) but amongst these mistakes I picked up a nice PR4 domain for $100. I found the site on digitalpoint, which has a useful although at times problematic (because of scam) marketplace. The key components were:

• A usable domain name
• High Pagerank
• Solid quality incoming links that were unlikely to be removed
• Pagerank not faked

Renovation

So I have a usable domain name with strong pagerank. I knew essentially all I had was pagerank to leverage and the obvious use for pagerank is to sell links. I noticed a recent trend of bidding directories being sold (for decent amounts) amongst the various marketplaces and this became the obvious direction for my new domain name.

Initially I tried to use a free bidding directory script but it had lots of bugs and I soon realized this would not be the best path to take. I bought a single license from PHPLinkBid for $30 and installed the script. The default design was poor at best but one of the benefits of the paid script was there was a few templates to choose from.

I chose a simple template and begin to customize it to my needs. Firstly I did quite a lot of on-page optimization targeting the keywords “Bidding Directory”. Using meta tags, header tags, alt tags, strong tags, and plenty of keywords the site was built to rank well for that particular related term.
But a nice pagerank and design will not improve your sales price like the big two; revenue and traffic. I had a very simple plan to build both up particularly revenue as a bidding directory doesn’t usually get a whole lot of traffic anyway. The plan was to:

• Advertise the site on other bidding directories (targeted advertising). There were 4 benefits of doing this; the bidding directory owner might possibly advertise on my site, the site will receive some valuable link juice with my keywords from high PR directories, the site is advertised where I know potential customers visit, and the site will get a little bit of traffic.
• Added links to all my signatures on various forums
• Started participating (in a meaningful way) on the phpbidlinks forums
• Searched for link sale opportunities in the digitalpoint marketplace

Initially I set my minimum bid to $1 in the thought of attracting more customers. I realized quickly that this would lead to poor returns and that my methods of advertising required a more premium appearance, so when I contacted potential customers I emphasized value rather than price. This gave a better return on my marketing efforts and had the side effect of people seeing it as quality because of the price.

Firstly I advertised the site on other bidding directories. This is where I spent the bulk of my budget. I looked for bidding directories with high PR, strong alexa ranking and directories that ranked well in google. I also made sure the price was not excessive and that I could purchase a strong position on the directory (minimum home page). This turned out to be of great benefit in terms of SEO and PR Rank.

Unfortunately a family health issue occurred and I left the site unattended for about a month. Obviously there would be no need to do this normally but one of the great things about website flipping is that you can make it work around you. Anyway after the hiatus I began directly approaching possible customers through the link sales forums and promoting my site in various forums. Straight away I had some good success with this, with quite a few $5 sales and some higher bids began coming in.
For the next 2 weeks I would make an effort every few days to continue to a little bit of direct promotion in forums and by the end of it the site had earned back all the funds I had put into it for advertising and scripts from selling links. Once it hit the $200 mark for the month it was time to sell. As a nice bonus during this time a PR update had occurred and many inner pages got a nice PR2 which made the sales opportunity all the more sweeter.

The Sale

Now most websites will sell for 6-10 months income as a general guide. But directories (particularly bidding directories) are a different story. Generally you are lucky to get 2-3 months income, which is also the case for other sites like proxies.

This being the first directory I have sold I thought I would test the water by listing it free on digitalpoint. It also had a nice cycle to it as well because I bought the domain from digitalpoint and most of my sales came from there as well. Also it would be a good guide of how well I did “flipping it” by selling it there also.

So when selling the site I gave all the info I could provide as well as proof on any claim that I made where proof could be provided. You know you have provided an informed and detailed listing when you do not get many questions about obvious elements of a website. Don’t forget a website you are selling is valued partly on your ability to create a quality website so if you write a poor sales copy, with glaring omissions buyers will be asking what hope is there of you creating a valuable website asset for them to buy?

In my copy I spoke at length of the SEO work I have put into the site, the potential, the marketing I used, the revenue and the traffic. I also complimented this with screenshots of the admin area where it displays revenue as well as an accompanying screenshot of the paypal payments received. In addition I posted screenshots of visitor stats including numbers, country of origin and also source of traffic (high percentage was from search engines).

Bidding was slow but interest was high. Many of the bidders were not familiar with bidding directories which was definitely a hindrance so I decided to post as much information as I could about bidding directories, how they work, their benefits as well as providing a link to the sites FAQ.

At the end of the auction the bidding had stopped with 2 bidders at $480 and $500. I was not really prepared to let the site go under $550 but I contacted them directly via private message and explained they were the highest bidders. The two bidders then had a private auction with the winner taking it for $600 and paying via paypal immediately.

Conclusion

So in the end I made a nice $500 profit. In terms of time between buying and selling it took a fair bit of time but the actual amount of work put into it was minimal so it was a very nice return. The bulk of the work was in setting up the design and SEO of the site.

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