Last Updated: December 2020
See how we are investing $50k to scale a portfolio of sites to a 7 figure valuation
Follow our progress as we build out a few brand new affiliate sites and rejuvenate a few acquired content sites.
by Mark Whitman
Over the years I've thought a lot about the pros and cons of building vs buying websites.
I've had successes and failures with both approaches, but have always favoured building over buying.
I guess it's the tinkerer in me that wants to get my hands dirty (or feet ).
My rationale for preferring the build approach is as follows:
- I could buy a site making $1.5k-$2k a month for $50k. This is great to get out the gates quickly but comes with obvious downside risk if the site tanks for whatever reason and income + valuation drops.
- Of course, there is upside potential if I can grow the site, but in my experience, it is usually more difficult than one thinks to increase income at a rate that is exciting (i.e. 2x or more).
- Alternatively, I could build 5-10 websites for around $5k-$10k a piece, giving a total investment of $50k. This would diversify my risk and, as a worst case scenario, I could sell each site as a starter website and recover most, if not all my investment.
- If one or more of these starter sites showed promise I could double down to scale out as an authority.
With this rationale in mind, I set out (like Frodo) to test the theory.
The Build vs Buy Site Challenge
In June 2020 I put aside $50k for a Build vs. Buy Website Challenge.
My thinking was I would split this budget 50:50.
Here's what this got me.
The Build Portfolio
For the build portfolio I partnered up with a mate. We began work on niche selection in June and have built 4 sites.
Site 1: Hermes (Automotive) - Read case study
This site is in the automotive niche and built on an aged domain. Our goal is to take earnings from $0 to $10k a month in under 24 months. The site is already performing well. In November 2020 we broke 10,000 organic sessions and generated over $700 of affiliate income. Looks like we are onto a winner.
Site 2: Plutus (Finance) - case study coming soon...
This site is in the finance niche and built on an aged domain. Despite launching in June 2020, the site has been slow to get traction. In November we bought another aged domain and redirected it to this site. The result has been promising but it's too early to tell whether things will pick up.
Site 3: Aphrodite (Dating) - case study coming soon...
This site is in the dating niche and built on an aged domain. We launched in July 2020, but by November the site still wasn't indexed. Initially we thought it may be in the sandbox but on reflection we decided the domain must for some reason be tainted. We decided to buy another aged domain and migrated all content across to it. As we got a good result from the aged domain redirect we did on Site 2, we decided to try the same thing here.
Site 4: Athena (Technology) - case study coming soon...
This site is in the technology niche and built on an aged domain. Launched in November 2020, it's still early doors!
The Buy Portfolio
The buy portfolio consists of 3 sites that I acquired in Nov / Dec 2020.
Site 5: Dionysus (Sports) - case study coming soon...
This site is in the sports niche. I acquired it for $20,000 in a private deal from a Facebook group.
The site has had a single owner since launching in 2015. It's in a seasonal niche that does well in the Summer. At it's peak it was doing $3000 a month but has in recent years trended downwards and is now averaging $500-$800 a month. I paid a 32x multiple.
The site was owned by a passionate hobbyist, so the content is pretty good and the site metrics are decent.
The site received a manual penalty in May 2018, but subsequently passed a reconsideration request. Traffic has been in a decline since mid 2020.
My focus is going to be on improving on-page SEO, tightening content, silos and interlinking, and investing in linking building. I also plan to diversify revenue streams with more affiliate partners, adding advertising and potentially bolting on drop-shipping.
Site 6: Poseidon (Outdoors) - case study coming soon...
This site is in the outdoors niche. I acquired the site in November 2020 for $5250. Like Site 6, this niche is also seasonal and does well over the Summer months. The site does about $200-$300 a month, but has had some larger months in the Summer ($600-$700). I paid a 26x multiple on the last 12 months average.
I plan to improve the content, build links and diversify affiliate partners as the site is almost exclusively Amazon focused.
Site 7: Hestia (Real Estate) - case study coming soon...
The final site in our Buy Portfolio is in the Real Estate niche. This site is a bit of a punt for me as it's a lead generation play (as opposed to pure affiliate). The site sells leads to a property investor and earns $20 per lead and $1500 per conversion.
At it's peak the site was generating around 20-30 leads a month, and getting one conversion every 150 leads.
In the past 18 months the site has lost traction and is only doing 2-4 leads a month now.
I paid $2000 for the site, which I think is a bargain. My gut says this site needs a serious off-page boost so I plan to invest heavily in links!
Below is a summary of the portfolio's income and expenses to date, including the acquisition costs for the three sites we bought.
- Portfolio Launched: June 2020
- Investment to date: $42,553.43
- Income to date: $1,786.96
- Estimated portfolio value: $42,553.43 (if I was to sell I believe I would at least recover my invested capital)
- ROI to date: 4.2%