💸 Leather Site Selling for $18k - How to Turn It Into $160K+

Nano Thought

Multiples have been going up for years. Everyone always asks me, "James isn't that a bad thing?"

The answer is NO. We WANT higher multiples!

If you flip a website, the higher multiple means more gain when you sell! Also, we want this industry to mature. It brings in more buyers, and sellers, and makes the ecosystem better for all of us. Stop thinking there is too much competition. There are billions of websites and infinite opportunity.

Here's a good thought about competition:

Higher multiples are usually a sign of more investment dollars flowing into the space. More demand from investors for an asset class is good for anyone involved in the space.

So even if you're paying more for a website because multiples are higher, you'll be able to sell it for much more.

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This Week’s Nano Flip Opportunity

Found a great deal a few days ago on Flippa.

I've looked at thousands of listings for websites, and some are stronger than others. This one jumps out as a good opportunity because the website is already performing well, and there's some clear changes I could make right away to boost revenue and the re-sale value of the site.

Check out the listing:

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​Link to the listing​

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This site is doing $453 a month and selling for $13,100 (but it's an auction, so the price will end higher).

I would say the site should sell for a 36-40x multiple, which would be $16,000-18,000, based on my experience. I'm NOT recommending this, but at this size you could finance the purchase with a loan and $5k or less of your own cash. Amex offered me a personal loan recently at 0%, and there are all sorts of other lenders out there. This deal would likely be too small for an SBA loan, but that's an option for larger deals. Again, I would not take out a loan to finance this.

With some small changes, one could possibly 2x the revenue in the short term, and 3x it in the long term.

For the short term I'd recommend:

1. Updating the roughly 33% of “out of stock” products from the site!!
2. Adding multiple monetization channels such as Ezoic​
3. Finding alternative private affiliates in the leather niche that pay better commissions than Amazon Associates
4. Creating an emailing list/newsletter
5. Building more social channels to drive traffic
6. Making design more user friendly
7. Link building and authoritative links
8. Improving the contextual relevance of the content
9. Keyword analysis for better ranking

Changing the ad network and making the above improvements might 2x the revenue in the first month or so.

That's cool but not even the most exciting part.

If we double the $453 revenue of the site to $906 and the site is worth 40x monthly net, the site is now worth $36,240

But this site is also doing 9k unique visitors a month or so. If we get 3% of them onto a newsletter about the niche, that's an extra 270 subs a month, or 3,240 at the end of a year.

Lets say 3k end of the year, as some will unsubscribe. If you built a good info product or added affiliate products to the newsletter, you should be able to pull $1 a month per subscriber.

So after a year, let's say you've just doubled the monthly revenue from the site and created a new income stream from a newsletter.

You're now earning $906 from the website and $3,000 a month from the email newsletter (minus some costs, so let's say the net is $2,500 on the newsletter). That's $3,406 in net income a month, making the site worth....

$136,240.

So in the first year, you've made:

$10,872 from the website

$14,000 from the newsletter (You had to build this up over the year, so you made $250 the first month, $500 the second month, etc)

That's $24,872 in income, plus your asset is now worth $136k..

...All from a $18,000 investment.

That's a 794% return.

Of course, this is just one scenario that may or may not play out. But it illustrates how flipping websites lets you "double dip" into the profits. First, you pocket the money that the website makes. Next, you can sell the website for a lot more because of the increased profits.

Not bad for a part time hustle

With a little work this could all be possible. As always, do your own due diligence and research! You should look at hundreds of deals before actually doing one. Looking at tons of deals helps you understand the market and narrow down your investment criteria.

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​Nano Tips

This week my partners and I did an entire breakdown of our favorite plugins for Wordpress on our podcast Builders Build.

We normally talk about how we build our business, and I think you will enjoy every other episode. We talk about a variety of industries and types of businesses, so if nothing else, you'll get some ideas about how we've created and scaled businesses.

90% of the sites we buy, build, and flip are built on Wordpress, so we've figured out a good system for which plugins to use.

Take our combined 30+ years of experience with building websites and businesses using Wordpress as the backbone, to help you jump right into having a fast, secure, SEO friendly website.

Check it out:

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​Listen here​

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Thanks for reading! I'll hit your inbox next week with another breakdown of a website flip.
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Thanks from the Nano Flips team

(James)

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P.S.

Give my new podcast with my friends Oren and Colin a listen! We’ve made a podcast about building businesses, products and interesting lives. Listen below

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​https://builders.build/​

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All investment strategies and investments involve risk of loss. Nothing contained in this newsletter should be construed as investment advice. Any reference to an investment's past or potential performance is not, and should not be construed as, a recommendation or as a guarantee of any specific outcome or profit.

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