RMRB 20: Earning Passive Income from a Content Site

Jake Davis

November 22, 2018

 

For this week’s episode, Jake spoke with Soeren about his Amazon Associates business. The WordPress site earns affiliate revenue comes from Amazon US, UK, and CA. In two years, the business has grown to be making over $20k/month in profit on average. The business has been growing quickly over the last few months and is maintained without much effort on Soeren’s part!

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Speaker 1:           What if you could cut through the noise in the online business world and learn from someone who has built a real business? We verified the numbers and combed through the PNL. This is not only a real business but a real asset that people want to buy. We’re going to pull the curtain back and give you the insights this entrepreneur has discovered, that you can use the level up your knowledge, whether you’re looking to buy a business or looking for inspiration to take your current business to the next level.

                                Hey listeners, welcome back to the Real Money, Real Business podcast. This week I’m going to be looking at an Amazon associate’s business that was created over two years ago, that is making nearly $20,000 every single month very passively for its owner.

                                Soren, thank you for coming on here today and explaining this business with me today. How are you doing?

Soren:                   Good, good. Thank you.

Speaker 1:           Soren, can you tell us a little bit about your background in building and running online businesses?

Soren:                   Yeah, well I actually was working, or I am working full-time. And I always had the idea of doing at least part-time business on the side. That was when I decided like in 2016 that Amazon Associates model would be perfect to have kind of a passive income. At first it was an idea to have a small blog or site. So I started small and it quickly grew bigger. And then I saw the potential, actually, and from, well just wanted to make any beer money. The idea became bigger, to actually grew it to a site which would provide full income, kind of. So I didn’t stop working on the site, added articles and so on, and it grew. And right now I think it’s got kind of a really good reputation on Google. It grew bigger than I initially thought. Before, I never had any experience with affiliate site.

Speaker 1:           Speaking of affiliate sites, affiliate model in general, why did you settle upon the Amazon Associates business model and that program, rather than looking at different affiliate programs? What was attractive about the Amazon program?

Soren:                   Yeah. I think the most attractive fact is that if you refer a user to Amazon, I think Amazon does the best job to actually get that user into a buyer. So I think it’s more attractive than any other bigger associates possibilities than …

Speaker 1:           Another attractive thing that you haven’t mentioned yet of affiliate sites in general, is the general lack of time commitment it takes to run them, correct?

Soren:                   That’s correct. That’s correct. That was one of the main things that such a site should provide or should offer. Because I had a full-time job the last six years, I couldn’t spend too much time on it. So I really looked into having a site which is really passive.

Speaker 1:           I guess that makes me think then if it is truly passive for you, then why have you decided to sell it today rather than just sit on it and keep making that passive income yourself?

Soren:                   Yeah. Well, I was working full-time the last six years on my PhD, and I didn’t have a lot of time. And together with two friends, we started the startup like one year ago. It’s actually in the local hardware business, so including production, manufacturing, and everything like that in Germany, well it grew from a little idea to something big and now so time consuming that I only work on that business, or on the startup. And it’s a time consuming, and we need quite some cash to get our business running Germany wide. So yeah, that’s why I’m actually looking into selling the site right now and not having it another five years, because yeah, we need some cash to get our business going.

Speaker 1:           Looking at this business, sitting on it in five years you could be making a lot more money than it currently is. I mean, the site has been valued using a six-month average. If you were to go back eight months ago, the business is still going to make $5,000 in net profit, very consistent levels, very strong levels. But then in the last six months, it has grown significantly to where the last couple of months have been about $25,000 in profit. And that’s been over three months now. So what has led to that increase in revenue despite such a low time commitment from you?

Soren:                   Yeah. I think there are two factors. Actually, I added two or three articles to the site last July. They are in a big sub-niche and really big competitors. And it took more time than usual to get any traction and get the keywords up on page one. But finally that happened. And I think factor two is, that in March there was a bigger Google update, I think on the eighth or ninth of March. And we really got a huge increase in traffic the next one or two months. So I think it’s these two factors. But it actually showed me that the site has really a lot of potential, more than I actually thought, making these big sums of like $25,000 per month. I think that’s something where we could even get it, even earning more money, because there’s also a big niche in that area, or big sub-niche, which a potential buyer could expand. And then I haven’t put in the effort the last year, because I was pretty busy with the PhD and with that new startup. But that would be a big opportunity, I think.

Speaker 1:           And we’ll touch a little bit more on the opportunities in a little bit, but I want to talk about what’s going on now with the business. So as it currently stands, you’re making about $20,000 every single month in net profit, barely putting any time in. So when you do put in time, what do you have to do for the business?

Soren:                   Yes. So actually I check daily the stats on Amazon just to see if there’s any irregularities. Yeah, that something’s not working or that traffic is declining. But that’s more a thing I do. I think the potential buyer wouldn’t have to do that. But I think it’s pretty good if you do it. On a weekly basis, I check the rankings, mainly the rankings and also the traffic. But I really have to say it’s really, it’s just like one hour or so per week on. I really don’t spend enough time on the site. I should spend more actually, and that would grow the site, I think, even more.

                                On a monthly basis, I just comment on some comments which people write on at the end of each article. And actually there are people commenting. I think that’s also a good sign to just have people commenting on articles, which also shows me kind of that they are not like thinking, I have the typical just associate site or whatever, which just has 100 links to Amazon. I think they believe in the brand and the genuine site.

Speaker 1:           And then with the social media accounts set up on the business, seeing as you don’t do much time on them, do they get a lot of traffic?

Soren:                   Yeah, I have a Pinterest page, also really small Facebook page, but that can be neglected. The Pinterest page I think has about 70,000 monthly views. That only provides like 1% of the traffic. That is because when I started, I had the page and grew some followers. But I really never used it to monetize it. So that would be all the possibility, I think, to grow it more, and maybe monetize the social media accounts like that Pinterest page then. I haven’t put any time into it. I have to admit.

Speaker 1:           Hey listeners, do you want to find a business that is just right for you? Head on over to Empire Flippers and have a look at our marketplace, where you can see you real businesses making real money, just like the one we’re looking at today. In fact, don’t miss out. Head over now. Share your email address and we’ll send you hot, fresh, new listings of successful businesses every week to your inbox. Now back to the interview.

                                So then looking towards the future, if someone wanted to take this and grow the business even more, where are the big opportunities for growth?

Soren:                   Yeah, I think the biggest opportunity would be really to go into that niche, which I would discuss with the buyer, because it’s really a big one. And I have seen that the main ranks really easy for any new articles. And I think it would be a huge opportunity to go into those. I haven’t put the time on it. That would be certainly possible.

                                The second one would be to go and expand to ClickBank products on the site. I also have barely any blog articles on that domain, on that website. And I have also no AdSense on the pages, which would be a third possibility, I think. What I actually thought about was also adding a shop to it. Because the brand of the website, I think that people have spent quite some time on the site. I think they trust the brand. I also thought about going into, for example, Amazon FBA or something like that, and have my own product or see which products are successful and which product users actually buy, coming from the site, and then building a product on Amazon.

                                I think that would be also a huge opportunity. But I don’t have any experience with Amazon FBA or building my own product, and also no time. So I haven’t done that. I think that would be a huge opportunity there. And of course, I think there could be also some improvements on the articles, like adding tables to all articles. I have to say, I think the articles are quite well written. I have a good writer, which I could also recommend later then, to the potential buyer. I think we found a good structure where people or users could come on the site, actually trust what we write, and quite honest reviews, and not like just a bunch of features written down, but really pros and cons. I think we have some trust, and a potential buyer could build on that trust that people have, I think, in that site.

Speaker 1:           When talking about opportunities, you also need to talk about risks. When I look at this business, I see one question when talking about risks and that is the PBN. So PBNs are historically seen as a bit of a risk by, but you told me before our call that you have minimized that risk as much as possible. Can you talk about that a little bit?

Soren:                   Yes. I built a PBN on my own. I actually bought domains from auctions. I check them all if they haven’t served as a PBN before. And yeah, so that’s all in my … Or they are only owned by me, so there’s no second person or third person associated with that. I also don’t link to any, or sold any links to any other people. I think they are looking good, the sites and the PBN. And also I think with Google showing about 300 domains coming to my websites, I think these 40 links coming from the PBN are a kind of a part of it, but I don’t think that it’s a big risk, especially because they are all owned by myself. Also, I did buy two times links from people, but I also know these people. And both of them I know them longer, and so I didn’t want to buy any link package or whatever from dubious sites or from dubious sellers, only from people which I actually know and which I actually have trust in them that they don’t do any bad stuff or have like a good looking PBN.

Speaker 1:           And then your site was also hit with a penalty from Google a couple of months ago. Correct? What happened then?

Soren:                   Yeah, that’s correct. That was, I think, end of June. We had a revenue blocking on the site, which displays a star rating in the SERPs. I actually fought it. It’s in the [inaudible 00:13:44] with Google, but they put a manual penalty on the site, because of violation of the rich snippet. On the same day, I then removed the blocking entirely. So there isn’t any more star rating on it, or in the SERPs, and wrote Google or answered Google, and did a reconsideration request.

                                And Google then, two weeks later I think, lifted the penalty entirely. I think that there was no penalty in traffic then, just a really slight decrease, I think, in the click-through rate, but really small, the decrease. Because I think users would click, maybe are tempted to click more on a, in the SERPs, on a entry which has some stars on it. So the click-through rate sank just a little bit, but not considerably.

Speaker 1:           There is something to be said about the affiliate model, in that people love it because it is so low maintenance. Yet you have the potential, as we’re seeing today, to make a lot of money. So Soren, if someone wanted to start their own affiliate site, what would be the biggest piece of advice that you wish you had known when you got started with this business?

Soren:                   That’s a good question. I think hit many different sub-niches which you maybe don’t think of. That’s the same with my website, where actually quite some money is generated from products which I had never known before, or never even heard about. And then you get way easier onto some page one rankings on Google for these products. The big one, like the wire cutters, though, they don’t, I think spend the time on writing a best of article for these products that they’re really profitable. I really have to say some product, I’ve never even heard about them before, and then I’d check them and yeah, it’s amazing how much money you can make from just some side niches or really small niches.

Speaker 1:           Would you commit to a noncompete?

Soren:                   Yes, I would absolutely commit to a noncompete.

Speaker 1:           And how much support are you willing to offer a new owner during the transition period?

Soren:                   I think I would do the usual 30-day support with email support and also support while Skype. I’m also open to answer any questions or give any support regarding the SEO or whatever the buyer wants to know and has to know to run the site then. But I think it, and that’s the good thing, I think there is not too much, because I think the site, the really strong points are the articles and the good articles, and also the standing in Google that it … Yeah, I think it has quite some domain authority on Google.

Speaker 1:           Are you open to discussing something like an earn out?

Soren:                   Yes. I’m definitely open to discussing earn out, because I believe in the site and that it will continue to earn good money. So yeah, I’m open to negotiation like that, earn out.

Speaker 1:           Awesome, Soren. Thank you so much for taking the time. I do have another question for you, but before we get to that, I want to go ahead and run through that quick summary of the business Again. The business was built in March of 2016, has a monthly revenue of $18,052, expenses of $174, to make for a net profit of $17,878, which is generated on a six month average. Included in the sale of this business are the primary domain and all site content and files, social media accounts, and the PBN.

                                Soren, if you could please place yourself in the objective shoes of a buyer and then looking at this business, why do you feel like it’s one worth buying?

Soren:                   I think it’s verifying because on the one hand side you have the articles, which I really put quite some time on them to have a good structure and to not copy the usual associate sites, which there are many hundreds in that niche. I really wanted to improve on the structure and what we are writing together with the writer that I have. He’s a freelancer. We put a lot of effort into generating better content for the site. I think that’s a big plus, and nobody can take that.

                                I think another big part is that it’s not that easy, I think to build nowadays, a site which has quite some, I would call it domain authority, however you want to call it, on Google. So it ranks pretty quickly for new articles. I think there’s a big opportunity to grow it even more. And they are affordable to buy.

                                I can discuss several sub-niches, I think where the site could even expand on. So there is quite some room for growth for the site. But I really have a lot on my mind with the new startup and growing debt with the two partners, because we are all putting in like I dunno, 12 to 16 hours a day. And they are demanding also time from me. I can’t put, right now, time into it. I just don’t have any of it. But I’m really confident that site will continue to grow and will also be successful in the future.

Speaker 1:           Soren, thank you so much for taking the time today. I really appreciate it.

Soren:                   Thank you very much for a great interview.

Speaker 1:           You’ve just learned how this business works. And I want to give you the opportunity to learn more about what you can do to buy real online businesses just like this one. If you want to find out more about businesses making real money, head over to empireflippers.com and sign up for our mailing list. There is an entire world of people quietly investing their money into online businesses and seeing great returns. Now we want to help you do the same thing.

 


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Discussion
Leave a comment
  1. zander says:

    I’m very motivated to build my passive income stream by Niche content sites. I just wanted to ask that is your book ‘Build your Niche empire’ still valid and if i follow the steps, i can make profitable websites?

    • Greg Elfrink says:

      Hey Zander!

      That book is pretty outdated nowadays, so I wouldn’t recommend it for content sites. Some of the strategies in there are still valid though. I would recommend instead checking out the blogs Authority Hacker and Cloud Living instead to learn more about creating income producing content sites.

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