Acceptance – Project Go White Hat Update, Part 9

“They’re gonna wire the money in a few days.”

“Hell yeah!” I said.

This series is about converting a site from Gray Hat to White Hat.

Be sure to check out the previous 8 posts if you haven’t read them yet.

Wow…that’s the kind of wire transfer that’s monitored and reported to the IRS.

Six figures.

Wait. Let me back up…
That was Rob telling me about the wire transfer…And I need go back even further.

A Little Update

The last time you heard about Project Go White Hat bad things were happening.

What are the latest stats for the site now…?

After the retail season, the site has been declining in traffic and earnings. Of course, you can take 35% off of what it was earning before due to the change to the Amazon Associates commission structure.

But the traffic was declining too.

Traffic

Here’s the data from Clicky from January 1 to May 31, 2017. The lighter line is the previous period covering the retail season.

So you can see traffic is down a lot, but not too much when you look back to the middle of 2016. It’d be better if the traffic was higher, but it’s not as terrible as it looks since that’s still over 1,200 visitors per day.

Why is the traffic lower?

I could make excuses about how the relevancy of the guest posts should make a difference, but who cares about excuses.

Well, it’s because we replaced the Gray Hat PBN links with White Hat guest posts. The PBN links were links from the home page of sites with high authority, passing lots of link juice.

The guest posts are generally on less authoritative sites and don’t have many backlinks to them, if any. They were relevant links in most cases. But overall the replacement links weren’t direct replacements.

I could make excuses about how the relevancy of the guest posts should make a difference, but who cares about excuses.

And I’m pretty sure this is what happened:

The PBN links were removed and the rankings dropped some, especially for the long tail keywords.

We aimed for a few extra guest posts for this reason, but the right ratio is probably closer to two guest posts per PBN link. We just had three extras.

Did the traffic impact earnings…?

Earnings

You bet it impacted earnings. Earnings are trending down.

Let’s go down memory lane and look at the earnings for December 2016, January, February, and March of 2017 so you can really feel the trend.

The decline seems insane if you just look at December to March. But if you think back and recall that the site:

  1. Was making about $10,000 per month for a lot of 2016.
  2. Amazon cut the commission by a lot (~35%), then these stats seem realistic.

It’s sad for sure, but hey, this is business! And we started this project with the goal of selling the site.

“For Sale!!”

We need to list the site with a broker. Empire Flippers is our choice, and there are pros and cons with working with them which is something to discuss in part 10.

We are nervous.

Earnings and profit are the main valuation drivers for any business and that applies even more for websites.

A brick and mortar business might have assets that can have value even if they have a negative cash flow or have debt.

For example: A brewery might not be profitable selling beer and could lose money every month. But they might own $500,000 of brewery equipment and have a large taproom. Those assets may be really valuable to someone.

A website, like this authority site, isn’t really that valuable if it isn’t earning money. Let’s look at the assets:

  1. A Hosting Plan that’s only worth about $10 per month because it’s a Virtual Private Server (VPS).
  2. The content is just bits and bytes, words that can be replaced for a couple thousand dollars.
  3. And I’m struggling to come up with other assets!

It’s amazing if you look back the growth since the project started. The earnings were great through December of 2016, essentially growing by 300%.

After the retail season, we expected a decline in revenue, but you never know how that will work out. You never know when the sales and earnings will taper off.

Traditionally, you’d see a strong January, and I say that’s because people are using their gift cards.

You can see the decline in the earnings, and luckily, they stabilize.

The Next Steps

Rob and I accepted the fact that we could have sold the site last year and probably could have made a lot more money.

Maybe up to $100,000 more which hurts to acknowledge. We can’t see the future, though, and we made the best decisions we could at each point in time.

We’re happy with that.

Acceptance.

And that means the next steps are:

  1. Start the process of listing the site with Empire Flippers.
  2. Accept and negotiate the value of the site with Empire Flippers. Rob and I feel so strongly about selling the site fast that we agreed that we’d considered LOWERING the sale price below the valuation.
  3. And the big thing that we’d learn about is whether or not a White Hat Site will have a better multiple than a Gray Hat Site.

That’s one of the biggest criticisms that I’ve gotten from people:

  • “Doug, if I were you, I would have sold that site in 2016 and reinvested in a brand new site.”
  • “You shouldn’t worry about Gray Hat links! You won’t get a higher multiple and you’re wasting your time.”

You know, stuff like that. Thoughts to make you question your sanity! But it goes with the territory. I’m glad people have opinions, even negative ones, about the project because then I know it’s interesting.

Coming in Part 10

  • REVEALED: The valuation of the site (and it was way more than we expected!)
  • Working with Empire Flippers
  • The site listing with full details
Check out my YouTube Channel for tutorials and demos.
Subscribe on YouTube here.
6 comments… add one
  • Accpetance is powerful in website investing, as in life!

  • Well, I am sure it will bring in more than if you hadn’t created the site at all, plus all the learned experience. I hear that Google is gunning for PBN’s anyway, so there is that part of it, too

  • Naveen Kulkarni

    That’s mammoth effort, and meticulous repoting Doug and Rob. And looks like you guys had quite a challenging year on this project. Can’t wait to hear more about EF valuation.

  • It’s a good decision, I would have done the same thing myself.

    Lower profit is still a profit nonetheless. It would also be good to have multiple exit points for the project.

    Six figure sale is something else indeed; even being halfway there is already a mind-blowing event for me.

  • Brad

    To what extent is an email list be considered an asset? Does having a good email list associated with your website increase its value?

    • Brad, good question. I don’t know first hand, but if you can demonstrate that it drives revenue (with affiliate offers) or can drive traffic, then it helps.

      I think it’s all revenue driven.

Leave a Comment