Hey all,
While I've replied to Enrico privately via email, I thought I'd also respond here publicly to clear a few things up.
We typically sell (or allow others to sell) their websites based on a multiple of net monthly earnings. While we're explicit about making no guarantees or assurances on future performance after purchase, many of the buyers have a reasonable expectation that the earnings/traffic will continue. (And that's typically the case)
Niche Sites From Scratch was different.
As the price of the sites we sell continued to climb many were left without an opportunity to purchase. To cater to this market, we offered to build out 5, 10, or 20 niche starter sites (or turnkey sites as Kay's put it) that we would typically build for ourselves. We'd tested this before privately on a larger scale with individual buyers. (100 sites each for two separate customers with one of them coming back for another purchase)
As everything was working with private buyers we decided to test an offer with smaller packages across a larger range of buyers publicly.
These put more of the risk/reward on the buyer and we stated that. A few "winners" in terms of traffic/earnings could make it completely worth it. A group of "losers" may not.
We stated this pretty clearly in the write-up...here's an excerpt:
We weren't completely sure whether we'd role this out full scale, so we put a cap on it at 200 sites and wanted to wait 3-5 months to ensure the buyers were happy before opening the doors again."This is an opportunity to put our team to work for you.
We’ll be creating niche sites for you in categories you’ve pre-selected. Unlike our marketplace, the pricing is not based on a multiple of revenue.
You could end up with a few “winners” that would effectively put your price at only 5x monthly revenue.
Or…you could end up with lemons that put you at 40x monthly revenue.
Note: You will need your own hosting + AdSense account for the niche sites. No claims or guarantees are being made as to the potential earnings on these sites."
Along the way we solicited feedback from the Niche Sites From Scratch buyers that ranged from cautiously optimistic to negative, but the overall feedback leaned towards negative.
Here were some of the concerns:
- Not happy with 3 month delivery
- Disagreement regarding the KW research and KW's selected
- Frustration with the content quality
- Limited traffic/earnings
While we were planning to roll this out again in January or February, we took this feedback into account and decided to scrap the project. Simply put, turnkey sites were putting too much of the risk on the buyer. (Not to mention they're built for customers that don't fit the profile of our longer-term vision)
Sites with a history of earnings/traffic continue to be our focus in 2014.
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