Can someone explain how this business model works?

[bobactuallyismyuncle]

I was looking at recent closed sales on flippa. This one was interesting to me...but in all honesty I don't get it -- it seems like nothing more than a collection mechanism for other content, with the idea of getting people to click through to make Amazon purchases, and some fancy footwork to get to a good spot on google search results.

http://flippa.com/auctions/93469

The seller seems to have a formula in place for creating websites like this and selling them. Personally I couldn't see myself paying $5500 for this -- so in the interest of being better educated did I miss something where this really is a viable business model and worth the selling price?

-Chuck

[Clinton]

I tried to check this auction for you but the multi-coloured text was enough reason for me to click away from the page. Sorry, I can't bear that!

On the grounds of coloured text alone I would have given this one a miss (and wouldn't normally have gotten to that "autoblog" bit).

[Michelle]

Lol, even the test article for UAW is published. http://www.latestcarnews.net/2010/05...rticle-wizard/

This is not the first site I've seen ranking and earning well even though it's auto posting from Amazon etc. Might have been a good buy actually although I'd be nervous about the spike in traffic still being reasonably recent.

[Michelle]

Another post in moderation....I'm starting to get paranoid I'm on Clinton's watch list.

[Clinton]

You post a example of rubbish ... and the forum software agrees with you!

C'mon, you can't complain this time

[bobactuallyismyuncle]

OK I think I get it: Throw together a website with a bunch of automated feeds that create content. Get several of your friends to post "reviews" and other comments.

What I don't get is the $900 from Amazon affiliate income for one month -- isn't that at a 9% commission rate, so it means enough people had to click through and purchase $10,000 worth of merchandise?

Or maybe same group of friends makes $10,000 worth of purchases -- and later takes advantage of Amazon's return policy to send the stuff back for a refund (?)

Something just doesn't add up.

-Chuck

[HUM]

I am sure clones like this are already in the manufacturing factory..it could be very portable across various sectors, but still don't understand it from profit generation perspective.

[Clinton]

It's not too difficult to demonstrate profit over the short term. You can buy traffic, do some PPC advertising to get visitors, do heavy social bookmarking and blog commenting, do all kinds of things. Of course, sellers like these don't necessarily tell the buyers how they generated the traffic that made the profit. In some cases they could have spent $200 in advertising for every $100 in "profit" they generated.

But one reason why I prefer to go for established sites is that's you can't sustain such artificial profits for long. As a short term strategy to convince some gullible buyer, it works. Over the long term it doesn't pay to spend $200 in cash (or time) for every $100 generated.

I'm not saying that's what happened in the above case. Mine's more of a general comment.