Here’s How This Affiliate Site Owner Cashed in $116,257 After Selling Their Business
As a reader of the Her.CEO blog, you’re probably aware of the power of an affiliate business in starting off as an entrepreneur.
This post is an Empire Flippers case study from a seller who bought an Empire Flippers site and flipped it for a profit. The website buyer bought the site, optimized it, and then sold it for $136,773, getting to keep $116,257 in their pocket after transaction fees. In total, the seller made a total of $64,001 profit on the site from time of purchase to time of sale 18 months later.
This case study walks you through exactly how the seller successfully bought, grew and flipped their website profitably, and includes some great insights that will help serve as a roadmap for anyone interested in learning more about how to successfully flip sites.
Affiliate marketing is a great way to monetize a website and create a hands-off source of income. Further down the road, you might even think about selling your site for a huge sum of money.
But what if the hidden value of an affiliate business lies in your skillset instead of the site itself?
Flipping sites can become a profitable career, even more so than building a business from scratch! Flipping online businesses for a living is becoming a growing industry. In the Empire Flippers marketplace, we see many sellers return as buyers, and they sell their acquisition for a profit in a year or so.
Once you’ve planned your exit strategy, you could use the capital windfall to buy a house without a mortgage, put the money toward your children’s college funds, or even buy a smaller affiliate business with the intention of improving it and selling it for a profit.
That’s exactly what one seller did in our marketplace: they bought an affiliate business and sold it for over $120,000 in profit after 1.5 years of improvement.
They achieved this success by following two simple steps:
- Creating a due diligence checklist and sticking to it.
- Figuring out a sustainable growth strategy that can be applied again and again.
We’ll break down how this seller achieved that in this case study, and hopefully you’ll have a better idea of what flipping online businesses looks like.
- Niche: Advertising, hobbies, lifestyle
- Site Created: May 2014
- Site Acquired: April 2017 for $52,256
- Monetization: Amazon Associates
- Total earnings (April 2017–October 2018): $60,000
- Completed Empire Flippers Application: October 6, 2018
- Listed on marketplace: October 14, 2018 for $136,773
- Agreed sale price: October 25, 2018 for $136,773
- Transaction completed: November 11, 2018. Net payout after broker’s commission: $116,257
- Total site profit: $124,750
Over the course of 18 months, this seller optimized the site and increased its overall earnings. After being listed for sale in the marketplace for only 11 days, it sold for its listing price in an all-cash offer.
Let’s break down the earnings. The site was bought for $52,256, and sold for $136,773. After the commission fee, the seller received $116,257. The seller made a profit of $64,001 from the initial purchase.
Keep in mind that the profit isn’t just the sales price. The seller received a monthly profit generated by the business from Amazon Affiliate commissions, which totaled around $60,000 during this time. In sum, the seller walked away with over $120,000.
Now that we know the details of the sale, let’s look at the seller’s strategy in buying the right asset to flip.
Fine-Tuning Due Diligence to Streamline Your Search
The seller’s main purchase criteria involved the following four points:
- An evergreen niche: The site should be as evergreen as possible, focusing on topics in the niche that will be relevant.
- A great backlink profile: A spammy backlink profile could lead to a Google algorithm penalty. Some buyers also avoid PBNs and any blackhat SEO tactics. Look for high-quality backlinks from domains with high DR and in a relevant niche.
- A niche with a high potential ceiling: For this seller, potential was measured by how many keywords the site was already ranking for. In other words, they considered the search volume of the top keywords.
- Upward traffic trends: The seller focused on acquiring sites that had a positive traffic trend. Reading traffic was similar to reading stock charts.
These are some great starting points to consider when creating your own due diligence checklist. However, keep in mind that this seller has been flipping online businesses for a while, so their criteria will likely be very different from what you’d include. If you need help in deciding what criteria to use, download this free due diligence checklist to make your search easier.
Once you’ve decided on your checklist, this will help you eliminate unqualified businesses from your search, so you can spend more time focusing on the best available options.
In addition to the above criteria, you might consider the age of the business as a qualifying measure. While the site in the case study was created in May 2014, the seller acquired it nearly three years after it was started. This period of time is useful because it gives you enough time to grow a domain’s authority, which makes it easier to rank for keywords.
You might consider simplifying the criteria of positive trends to a minimum traffic measure, such as 10,000 monthly views. If you’re buying a site for the first time and you’re not confident about identifying trends, these types of stats can be easier to visualize to help you decide if a business might be a good acquisition.
The overall flow of the growth strategy in the case study was to identify the site’s strengths, improve them, and, once performance had improved, expand the business further.
The seller’s growth strategy can be broken down into three steps:
- Identify the top 5 to 10 highest earning pages.
- Optimize these top pages for on-page and off-page SEO.
- Create new content sections.
The first step included adding a unique affiliate link to each page so that they could monitor how much revenue each page brought in. From there, they could see the best-performing pages or articles and optimize the content. Another way you can check performance is by looking at your web analytics software. Google Analytics is a top choice for many bloggers, with Clicky being a popular alternative.
However, analytics aren’t as accurate as setting up unique affiliate IDs when measuring revenue performance. Check out this in-depth guide on how to create affiliate links if you want to follow the above strategy.
Once the seller identified the top-performing pages, they began optimizing them for on-page and off-page SEO to supercharge their potential.
On-page optimization ensures that you’re capturing all the relevant keywords from the parent keyword and placing them in appropriate places and with enough volume on each page. On the other hand, off-page SEO is more nuanced and requires a different approach, since this depends on a site’s backlink profile.
When considering manual outreach, many bloggers turn to guest posting for sites in shoulder niches or posting on forums while providing contextual links. These efforts require patience and steady output if you’re considering doing these on your own.
If you don’t have time for manual outreach, you could hire an agency to create guest posts for you so you can focus on securing opportunities and providing briefs.
The final step of the growth plan was to monitor the pages the seller improved. After seeing the site’s overall performance, new content sections were created in order to target new keywords.
Finding new keywords to start ranking doesn’t mean you need to go after all the competitive ones with high search volumes. From a search engine’s perspective, targeting low-competition keywords with a small search volume can build the site’s overall domain ranking and authority, especially if those articles appear in the first few search results for a specific keyword.
Once the site reached a certain level of performance, the seller decided that it was time to sell their investment. After 17 months of improvement and optimization, the seller listed the affiliate business in our marketplace.
It was listed at $136,773, and after 11 days, an all-cash offer was made. With low 6-figure deals, it’s more common to see offers with cash up-front, as buyers are able to raise the capital. Deal structuring can come into play to mitigate the buyer’s risk, but sellers can also use these earnouts in their favor to negotiate a higher overall sales price to compensate for receiving a delayed payout.
All deal structures are different, and although this case study didn’t involve one, it’s worth bearing in mind when you decide to exit your business.
Flipping – a Full Time Career?
We hope this step-by-step guide on how a seller managed to turn an initial $50,000 investment in an affiliate business into more than $120,000 profit has been useful to you.
If you have capital and skills, flipping online businesses could be a great career opportunity. Instead of sticking with one or a few businesses, you could put the skills and experience you’ve gathered into improving failing or immature businesses and selling them for a profit.
The types of assets you flip depend on your strategy. However, it’s recommended that when you begin, you stick with a single type of monetization in the same type of niche.
Once you’ve created a system for choosing businesses that are the right fit for you and a way to optimize them, you’ve got processes to trust every time. All that’s left to do is decide where you want to buy and sell your online businesses when it’s time to flip the assets.
Where to Buy or Sell Businesses
If you’re selling or buying an affiliate business for the first time, we recommend that you use a broker’s service instead of going with a private sale.
A private sale has no protection for either party, and you’re depending on the honesty of the other party. If you’re buying, there’s no real way to tell if a business actually performs as advertised, or if the traffic and revenue figures have been doctored just to make the business look great.
If you’re selling through a private sale, you’ve got no way to protect yourself from tire kickers who will constantly present low-ball offers without any serious buying intent. Not to mention, there’s little protection in the final step when the funds are wired to your account.
When you use a broker, there are well-established processes in the service that will ensure that the deal goes as smoothly as possible. A reputable broker will ensure impartial service for everyone involved, since it’s the broker’s reputation on the line if they allow a bad actor into the system.
Which broker you should choose is harder to say. Stacy gives her own account of what worked and what didn’t, so make sure you check it out here.
In the meantime, if you own an online business, think about your exit strategy. You could gain a large amount of money in a short amount of time, and you can use that money to accelerate the growth of another project you’ve been working on. You could even start your own journey of flipping digital assets for tens and hundreds of thousands of dollars. Start your own flipping journey by registering for free and start browsing today for the right deal that could be waiting for you.
This post is a case study documented by Vinnie Wong.
Vinnie Wong is a Content Specialist at Empire Flippers. Originally from the UK and now residing in Malaysia, he loves everything related to online businesses. When he’s not neck deep with work, he’s running after his toddler or trying to relive the glory days by injuring himself while playing soccer.