Why This Website Sold on Flippa for 64% Above its Reserve
Brett from Niche Laboratory here. In this article I’ll reveal a Flippa auction I was watching, plus why I believe the site sold for 64% above its reserve price, netting the owner a nice little bit of cash.
So if you’re not familiar with Flippa, it’s one of the leading places to buy and sell websites. If you’re at all interested in building or indeed buying niche sites then it’s an essential visit.
Because it’s somewhere you can find niche websites that are actually making money. Now.
Incidentally, when you’re looking at Flippa’s listings, it’s best to set up search filters and ignore any site less than a year old and making less than $100 a month. Ignore the trash and look at sites that are actually doing quite well.
Anyway, so while browsing Flippa I came upon a listing for a site called Studying Law. The site was set up by a guy in the UK who was studying for a law degree and wanted to help others who were also studying for a law degree, or were thinking about going into the legal field.
This site claimed to have income of around $150 a month on AdSense. It eventually sold at auction for $5725, which was well above the reserve price of $3500.
So what attracted me to this site, and why did somebody else want to pay 64% more than the reserve price? The price they paid was actually a multiple of 38 times current claimed monthly income, which is well above the average 22 – 24x monthly income that established sites normally sell for on Flippa.
Somebody really wanted that site!
This Site Screams Potential
I love the potential of this site for many reasons. It’s a great niche site because:
- Sites with content written by people who are new to a niche are always interesting for other people looking for information in that niche. Indeed it’s how I got started in my current top income generating niche. In 2009 I knew absolutely nothing about my favourite niche. Now I have several established authority blogs and a membership site in that niche.
- The site could respond very well to a makeover. Making it responsive/mobile friendly could also pay dividends. I once made one of my own sites responsive and traffic increased by 30% soon after.
- Untapped monetization alert! This site has huge potential for increasing its earnings. It’s not generally well known but many (most?) UK Universities do have affiliate/referral schemes and will pay good money for leads that convert into paying students. How do I know this? Because I spent 8 years working at one! I also once had a job interview at one of their main advertisers (The University of Law). All you would have to do is do a bit of phoning around Universities to get some relationships established.
- Untapped content alert! The main addition I would make to this site would be to add a forum. Forums are great because IF you can persuade users to sign up and post content then your site effectively writes itself. Another great thing about forums is that forum users tend to be passionate about their niche, so they’re very likely to buy goods and services you showcase in the forum. Finally a forum would be particularly good for this site as it could be a rich source of volunteers or paid contributors who could write content for the main site itself.
- Education is generally a good, evergreen niche. There are a wealth of monetisation options and it’s not too hard to get traffic either.
Devils’s Advocate – Why I Did Not Buy This Site
So given the potential of this site, why did I choose not to buy it?
The reasons I passed up this opportunity are:
- Having spent 14 years of my life either studying or working at various Universities I am a big fan of the education sector. However, law is a very specialised niche. To maintain its authority status it would need content from lawyers or trainee lawyers. I could easily expand the Universities part of the site, but writing about law would be an uphill struggle for me. I know I could outsource content generation, but that would cost money and I generally hate outsourcing anything (or spending money!).
- Law doesn’t tend to travel well, i.e. this site is very UK-centric and there would be limited scope to expand the site to gain overseas income and visitors.
- That purchase price. It’s priced for perfection. Even established sites can get bounced out of the Google index, and if that happened the site’s value would plummet. This site could tank if Google decides that only .ac.uk sites should rank for education related queries. We’ve seen a similar thing in the finance niche where it’s really hard to get any traffic at all if you’re a small website owner writing about credit cards, mortgages or other finance topics.
- The site’s income seemed quite low. Is there a skeleton in the closet with this niche? Are the majority of the visitors indebted students that have no money?
- Finally I’ve noticed that a couple of my own sites have had a recent traffic surge. I also have a couple of sites that currently get little traffic, but I have a good road map for how to make them a success. I would much rather build up my own sites, than continue developing somebody else’s.
Anyway, I hope you found this case study useful. I wish the new owner of the site the best of luck.
If you had the cash would you have spent $5725 on StudyingLaw.co.uk? Add your thoughts below.