It has been a while since I gave you all an update on how the website that my parents and I bought for $6,000 back in August of 2015 and I figured it was time for a new update! There have been 3 previous updates before this one so if you are reading this article and have not read the previous updates then I would suggest you read them first.
The 3 previous updates are below:
Reading those updates first will get you acquainted with the deal I have with my parents, why I bought this site, what I have done to grow it and a lot more. Once you have read them, or if you have already read them, then feel free to move onto this update.
We Decided not to Sell
In the last update I mentioned that my parents and I were debating on whether or not to sell the site.
My parents buy houses, fix them up and sell them and they were looking to purchase a new house and they wanted the money from selling this site. If we decided to sell the site at that point, which was 4 months ago, the site would have sold for around $15,500.
However, they ended up not needing the money from this site as much as they thought and we decided to keep the site for now. After talking with my parents I told them that I thought that we could get this site up to the $1,000/month mark in profit and once we do that then we should reconsider selling the site.
My (awesome) parents believed in me and we decided that we would continue to hold the site and see where I could take it. That was 4 months ago, let’s now see if holding the site was a good decision!
What I have I Done Since the Last Update?
The last update was way back in in February and it has been 4 months since then. Below are the things I have done with the site since then.
Started Adding New Content
One of the areas where I thought the site had potential to grow was by adding new content that targeted long tail traffic. Around the middle of March I went over to Upwork and hired someone to start writing content for the site.
Since then I have added (only) 3 new articles. Ideally, I would have liked to add one new article per week and I have been slacking in this area. I have done a ton of keyword research and have a lot of possible article ideas, but I just haven’t translated those keywords into an article outline for my writer. I really don’t enjoy making these article outlines and I will probably hire someone in the near future to do all of my article outlines.
I have a handful of other sites that need article outlines as well so hiring someone would free up a lot of my time so I could work on more important jobs. I REALLY want to pick up the content production starting in June to 4 articles per month and it will be a major focus for me. I think there is still a ton of potential to grow this site’s organic traffic.
Created a Shopify Store
Another area that I told my parents that I thought possibly had some potential was to start selling our own products via a Shopify store. So I started researching Etsy and other stores that sold products related to this website’s niche and learned what was selling well.
After doing some research I headed over to Alibaba and bought two products. These two products are very similar products, but they have different designs. I bought 10 of each product for a total of 20 items. Doing this cost me a total of $49.23 which included the products + shipping fees. This worked out to cost $2.46 per product, not bad!
My plan was to start small and see what sold. If one of the products started to sell well then I would order a larger quantity from Alibaba.
How did this go?
Not very well!
I posted these products to the Shopify store around the beginning of April and didn’t make a sale all month. I figured this wasn’t worth my time and took down the “Store” link from my main website that linked to the Shopify store.
However, in the last week of May I added more products to the store and was going to try again. This time around instead of buying physical products from Alibaba I decided to take a little bit different approach.
I found a cool site called Printful, which allows you to upload custom designs to a wide variety of products such as shirts, pillows, coffee mugs, tote bags, etc and then allows you to sell them. Printful handles all of the printing, fulfillment and shipping of your sold items so I don’t have to worry about any of that.
They obviously get a cut of each sale, but selling items this way is 100% hands off for me. Also, there is no upfront costs which means that I can add 100 different products to my store and it wouldn’t cost me a dime. I only pay when I make a sale.
Prinful also integrates with Shopify so I was able to add all of my new products into the same store where I was selling my physical products that I bought from Alibaba. Pretty sweet.
As I mentioned, I started this in the last week of May and I have yet to make a sale with Printful, but it is still too early to tell. However, when I added the items from Prinful to my Shopify store I started promoting the store again on my main site, Pinterest, and Facebook. This led to around 20 visitors per day to visit the store and I ended up selling one of the physical products I bought from Alibaba.
I want to quickly show you the profit that I make for each sale of my physical products:
Sale Price: $19.99
Shipping Fee (to customer): $7.99
Total Paid to Me: $27.98
Product Cost: $2.46
Shopify Fee: $1.11
Shipping Costs: $5.08
Total Costs: $8.65
TOTAL PROFIT: $19.33
I actually make around $19 in profit per sale, which is very good! This comes out to a profit margin of 69%. This sale could have just been a fluke, but it is still cool nonetheless.This one sale has given me enough reason to keep promoting the store and see what happens.
Shopify Store Traffic
Below is the Google Analytics of my Shopify store:
You can quickly see the times when I was promoting the store and the times when I stopped. When I am actively promoting the store it gets around 20-30 visitors per day. It will be interesting to see the results over a longer period of time and to see if this one sale was a fluke or not.
Spoiler: I made another sale on June 1st 🙂
Started Taking Facebook Seriously
As you will see in a minute, Facebook was a major driver of traffic due to one of my posts going viral. This made me realize that Facebook could be a major driver of traffic for my site. I started getting serious and posting multiple times per day around the beginning of May. Before this, I was very inconsistent with posts.
Thanks to Buffer, I am able to schedule posts in advance and it makes posting on FB very easy. I haven’t seen anything amazing yet in terms of results, but I think that long term it will pay off.
I also experimented with running FB ads, mainly for page likes. I set a budget of $1 per day just to test things.
Below you can see how many likes I got per day:
As you can see, paying $1 per day really boosted the number of both paid and organic likes. However, it doesn’t really seem like having more likes translated over to more traffic. The next thing I will test is boosting posts. This should translate better to increasing traffic back to my site.
Got More Consistent with Pinterest
As you are all aware, Pinterest is the major driver of traffic for this site. In the past I have posted to Pinterest as much as possible and I even hired someone to do it for me at one point. However, it was never truly consistent and I decided to make this something I was going to change.
I purchased Tailwind, which is tool that helps schedule pins and keeps track of everything for your Pinterest account. I started using Tailwind on May 12th and since then I have seen a large increase in just about every statistical category due to my posting 8-10 new pins every day.
Take a look at the referral traffic from Pinterest in my Google Analytics account from May 12th to May compared to the previous time period:
I saw an increase of 4,235 visitors, which is over a 22% percent increase. I am hoping that I will continue to see this kind of growth over the coming months.
Traffic Stats from the Last 4 Months
Now let’s get into the good stuff!
Let’s take a look at all of the traffic stats since the last update. I will also be comparing the stats from the past 4 months (Feb – May) to the 4 months before that (Oct – Jan) so that we can compare the changes over that time period.
The large surge of traffic in March was due to the Facebook post that went viral, which I mentioned earlier. Aside from that, the traffic was fairly steady except for 3 days in April when my Google Analytics tracking messed up and didn’t record any data during that time. So the stats from April are actually a little bit higher than what is shown here.
Last 4 Months (Feb – May) vs. Previous 4 Months (Oct – Jan)
There was a very solid 39.80% growth in the total amount of unique visitors to the site in the last 4 months compared to the 4 months prior to that. A large chunk of this growth is due to the month of March, but it is still a good sign to see this kind of growth.
April’s traffic took a decline (partly due to GA not working), but May looks like it heading back in the right direction.
Let’s see how these 4 months compare to the previous 4 months:
Last 4 Months (Feb – May) vs. Previous 4 Months (Oct – Jan)
A solid 10.42% increase in growth in these last 4 months! This is nice to see and I have feeling it will continue to grow now that I am aggressively posting on Pinterest.
Before the month of March, Facebook was driving around 500 visitors a month back to the site. Then in March it drove around 32,000(!!) visitors, so you can see that when I said it went viral, it truly did!
Last 4 Months (Feb – May) vs. Previous 4 Months (Oct – Jan)
You are probably thinking it is pointless to compare these time periods since March had such a high traffic count. However, the main thing that I am interested in is that the previous 4 months only drove around 2,000 visitors back to the site and then in April and May FB drove over 2,300 visitors.
The screenshot above shows the amount of traffic that FB drove in the last two months, April and May. As you can there was more traffic in these two months than all of the 4 previous months. This is a good sign and it shows that it is continuing to grow without taking into account the viral post in March.
Organic traffic was fairly steady in these 4 months, however, I would like to see more growth during this time period. I am hoping that when I start to add more content that it will have an affect on the growth in the upcoming months.
Last 4 Months (Feb – May) vs. Previous 4 Months (Oct – Jan)
Even though the last 4 months of organic traffic has been steady, we can see that it actually grew by over 13% when compared to the previous 4 months. We will see if this can continue!
I like to keep track of my keyword rankings with Semrush and track the new keywords I have started to rank for as well as the keywords that I have stopped ranking for. Overall, Semrush provides a great look at the health of your organic search.
The first thing we will look at is the overall traffic growth:
According to Semrush, the site has seen a lot of organic traffic growth in the past few months. We know that our organic traffic actually hasn’t grown this much because we have already looked at the organic traffic from Google Analytics, but it is still a good sign to see more keywords ranking in Google even if that doesn’t currently translate to more traffic.
Now, let’s dig a little deeper in these stats by looking at the actual keyword rankings. The screenshot below shows all of the keyword rankings in January 2015, which was 4 months ago:
Looking at the keyword positions you can see that the site had a total of 5,959 keywords ranking in the top 100 of Google. 29 of those keywords were ranking in the top 3 and then another 212 keywords were ranking between the 4th and 10th position. This brings us to a total of 241 keywords ranking in the top 10 of Google.
Let’s now check out the how many keywords the site is ranking for in the month of May:
Right off the bat you can see that the site is now ranking for a lot more keywords, which is now sitting at 6,869 total keywords ranking in the top 100 of Google. More importantly the site now has 42 keywords ranking in the top 3, which is 13 more than 4 months ago. Also, there are 244 keywords ranking in the 4-10th position which is higher than the 212 keywords 4 months ago.
Overall, it is a good sign to see keyword and rankings growth and I will be doubling down in my effort to grow the organic traffic in the upcoming months.
Diversification is the name if the game when it comes to website investing. Whether we are talking about traffic, revenue or your whole website portfolio, diversification is super important.
One of the main goals I had for this site when I first bought it was to diversify the traffic sources because such a large chunk of the traffic came from Pinterest. The more diverse your traffic sources are the safer it will be and the more attractive it will be to future buyers, which in turn will increase the value of the site.
I now want to take a look at the different traffic sources the site currently has and if it has become more diversified since I took over ownership.
Below is the diversity of the different traffic channels when I took over the site in August 2015:
In terms of traffic sources, this looks fairly diversified and it is actually more diversified than a lot of my other websites that I run. However, with 55% of the traffic coming via social it is a little scary just because you never know when the traffic could stop. I would prefer organic search traffic over any other source of traffic because I feel as if it is more consistent and will be sustainable.
However, with that being said, Pinterest is actually a LOT more reliable and sustainable than other social media sites. The reason why is because people use Pinterest as a search engine which means your pin from 9 months ago will continue to drive traffic if it ranks well in Pinterest. This means that Pinterest will continue to drive traffic even without new pins.
Nonetheless, I would still like to increase the organic traffic to the site and make the site less reliant on one source of traffic.
Now look at how the traffic diversity has changed in 10 months since then:
Well, the site has actually become less diversified since August with social traffic now making up over 66% of the total traffic. The organic traffic has stayed relatively steady in terms of the percentage, but I will be trying my best to get organic traffic to the 25% mark.
The reason why social is now up to 66% is due to a couple of reasons:
- I have started to use Facebook more which has resulted in more traffic
- My Pinterest account has grown very quickly
10 months ago when I bought this site the Pinterest account only had 2,700 followers and now it has just surpassed 14,000 followers, with a large amount of those followers coming in the last few months.
Thoughts on the Traffic in the Last 4 Months
Overall, traffic has steadily increased and that is good to see. However, I think that it could be growing at a much higher rate and I will be doing everything in my power to make this happen over the next months. With more content, consistent FB posting and aggressive Pinterest posting I think the next few months will be great months for traffic growth!
Financial Stats from the Last 4 Months
Now we get to the most important stat for any business, the financials. The first thing we will look at are the earnings.
Below are the earnings(not profit) for the past 4 months:
Monthly Average: $924.17
Below is a chart of these numbers if you would rather interpret the numbers that way:
Thanks to the spike in traffic in March, there was also a spike in earnings as well. March was actually the highest earning month this site has ever had. Other than March, the earnings were around the $800/month mark, which is fantastic.
Let’s now compare these numbers to the prior 4 months to see how they stack up!
Earnings from the 4 Previous Months (Oct – Jan)
Monthly Average: $736.65
When you compare the average monthly earnings from the last 4 months (Feb – May) vs. the 4 months prior (Oct – Jan) you can see there has been some awesome growth! The average monthly earnings went from $736.65 all the way up to $924.17, which is an increase of 20.3%.
A major reason for this growth was because of the large amount of earnings in March, but the other 3 months still did very good as well.
Revenue Source Diversity
Similar to what we did earlier with our traffic sources, we will now look at how diversified the revenue sources are. We will be comparing the revenue sources from the first month that the site was under my control to the most recent month, which was May.
First off, below is the revenue sources from the first month:
Yup, it was bad.
Almost all of the site’s revenue was from Adsense. Matter of fact, before I took over ownership of the site there was NO other revenue sources besides Adsense. I added Etsy affiliate program to the site the first month I had the site, but as you can see it didn’t do a whole lot.
However, let’s now compare that to the revenue sources in May:
Adsense still dominates the majority of the revenue, but I am making solid progress in terms of diversifying. Not only have I lowered the percentage of Adsense revenue from 97% to 81%, but I have also added 3 more sources of revenue.
I am hoping the shopify store I just started will bring in some more money in the upcoming months and hopefully it will become a solid revenue source.
What about the Profits?
A lot of people seem to forget that the revenue is often a very misleading metric. Profit, on the other hand, tells the complete story of a business because it accounts for all of the expenses.
That is what we will take a look at now, the profit the site has made in the last 4 months. In the screenshot below you can also see the different sources of revenue and how much each source made.
As you can see from the screenshot above, the bulk of my expenses came in March due to the purchase physical products from Alibaba as well as paying for content.
In the last 4 months this site earned, on average, $858.48 in profit per month
This is a very respectable monthly average, but as I mentioned earlier, I am confident that I can get this number to $1,000. That is going to the goal over these next few months!
How Much is the Site Worth Now?
With 10 months of earnings now under this sites belt we can get a good idea of how much it is currently worth if I were to sell it today. Obviously, I have no plans to sell the site at this point in time, but it is good to know how much your asset is worth at all times.
The first step in determining the value of a website is to find the average profit per month for the last 3 months. Often times, the 6 and 12 month averages are used as well, but most of the time the 3 month average is used.
Average Profit for the Past 3 Months = $882.08
Now that we have that number, we have to determine the multiple we want to use. The bulk of the sites sold are valued by using a multiple between 20x – 30x monthly profit.
Check out the spreadsheet I put together below to see the value of this site at various multiples:
Right now, this site could be sold from anywhere from $17,641 to all the way up to $26,462 depending on which multiple is used. This is a pretty wide range!
What multiple will be used for this site?
In my last update, Joe from Empire Flippers left a comment on my Reddit post and said that he would estimate that this site would be valued using a 24-28x multiple. See below:
So, let’s assume that my site would get a 25x multiple which would bring the current value of the site to around $22,000! Considering I bought the site for $6,000 and now 10 months later it’s worth $22k, that is pretty awesome 🙂
It is also worth noting that in the last update I had estimated the site was worth around $15,500. As you can see, the site has grown in value since then.
Now that we have determined the current value of the site as well as how much money the site has made since I bought it, we can now take a look at the types of returns my parents and I have been able to get.
The Return on Investment, so Far
This is the most important section of the whole article. If my investors (my parents) aren’t seeing a solid return on their investment then this is all just a waste of time.
If you have forgotten, or you haven’t read the previous updates, this is what the deal that my parents and I have:
- My parents purchased the site for $6,000
- We split the monthly profits 50/50
- When the site is sold, my parents get their initial investment of $6,000 back and then we split the rest of the profits 50/50
Keep those details in mind as we work through calculating the returns!
How Much Money has the Site Made?
In the 10 months that I have owned this site it has made a total of $6,736.45 in PROFIT
Do you know what that means?
It has officially made more money in profit than it was purchased for!
However, we have to remember that my parents split the monthly profits 50/50 which means my parents have not made their initial investment back yet. My parents have made a total profit of $3,366.73 on their initial $6,000 investment in 10 months.
This calculates out to be a 56% return on my parents investment of $6,000
This is an incredible ROI, but the true power of website investing comes when you factor in that you are building up a sellable asset that is worth 25x your monthly profits. That is what we are going to look at next.
What if we Sold the Site?
Even though we are not planning on selling the site as of right now, it is always fun to see what kind of ROI we would get if we did.
Let’s assume that the site would be sold at $22,052 based on the 25x multiple we discussed earlier. Let’s also assume that we sold it via Empire Flippers where they take 15% of the final sale price.
Now, let’s run some numbers!
If we sold the site right now we would make a total profit of $25,480.65 which would come out to be a ROI of 425%. Not too shabby in a 10 month period.
I have made some decent progress in terms of growing this site so far, but I feel like there is plenty of room to still improve. Below are some areas in which I will be focusing on in the upcoming months
Add More Products to the Shopify Store
I will continue to add more products to the shopify store since I have started to see a small amount of success. It looks like it might be worth the time to see what I can make of this store. I mean, even an extra 100-200$ per month from this store would be nice and it will help diversify my revenue sources instead of relying on one or two revenue sources.
Add 4 New Articles a Month
My goal will be to add 4 new articles per month to the site in hopes to grow the organic traffic. I think a rate of one new article per week is solid and will be sufficient. The thing to remember with adding new content is that you will probably not notice any results for a few months due to it having to rank in Google, which takes time.
Stay Consistent with Pinterest
I have been using Tailwind the last few weeks to help schedule pins and I will be continuing to utilize that tool. I have already seen some really good growth in my Pinterest account since using this tool because it has allowed me to consistently post new pins every single day. Over the next few months I think it will pay off big time.
Experiment with Boosting FB Posts
I am really interested in seeing what kind of results I can get from spending a few bucks a day to boost the more popular posts on my Facebook page. I think boosting popular posts will translate over to more referral traffic compared to paying for likes, which I have been doing the past 3 weeks.
Bringing this to an End
I am happy with the overall progress of this site in the 10 months that I have had it under my control. I am also happy that this site has been a great investment for my parents and that I have increased the value of the site to $22k.
I hope you have enjoyed this case study thus far and if you have I would love it if you would give this a share.
Until the next update, thanks for reading and make sure to check out my new website investing case study that I have just started!