What’s up, guys – this month’s income report is going to be short and sweet.
Last month, I spent my time working on a joint venture project, redesigning Flexibility Is Freedom (built on GeneratePress instead of Elementor now), and shifting towards a portfolio approach for my next stage of growth.
Let’s dive in!
- Revenue: $200.23 (-23% MoM, -68% YoY)
- Sessions: 2,330 (-4% MoM)
- Revenue per 1,000 Sessions: $85.94 (-20% MoM)
- Amazon Risk: 64% (up from 56% last month)
Revenue hasn’t changed much in the last 3 months, down ~80% from $1,000+ levels in October and November 2020.
In January, I invested a bit into additional guest posts from SEOButler (and considered a further campaign with LinkGraph), however, in February I decided to pause all content and link building initiatives to focus on new projects.
While I haven’t given up on this project (I’ll elaborate on my thoughts further into this post), I recognize that I’ve been working on it for 2+ years now (since November 2018) and it’s time to expand my portfolio and breadth of experience.
For example, I did a bit of work on a joint venture project this month in a different industry, and it was very interesting and refreshing to not see Healthline.com in the #1 spot of every search query 😆.
(seriously, that’s essentially my keyword research process: if Healthline ain’t there, it’s golden! 👍)
Niche Research: Back to Basics
I spent the last two weeks of February on the most important part of building an affiliate website: niche selection.
Back in mid-2018, after I left my job, I followed the niche selection process outlined by Authority Hacker in their beginner course, The Authority Site System.
However, this time around, I am far more experienced and aware of industry trends, including Google Updates such as the 2018 Medic Update which had a massive impact on low-to-medium size health-related websites.
Here are some of the ways that I’ve used to kickstart my research and brainstorming process:
- Keyword + Competitor Research: I start with a “seed keyword” of the broad topic (e.g. real estate) and browse different types of SERPs using Ahrefs’ Keyword Explorer: informational (questions) and commercial (buyer intent). I check to see what types of websites are ranking consistently across the high-volume and low-volume queries. I also check if there’s any low DR competitors that rank well for good keywords. Then I switch over to Site Explorer and check out the traffic trends and backlink profiles of these websites – I’m looking to see if/when they were impacted by Google Updates and whether they’ve managed to consistently grow traffic over the past years. Overall, this initial analysis should answer the question: “Can I get traffic from Google in this niche, i) as a new entrant, ii) with consistent traffic growth, and iii) what is the risk of losing traffic to a Google Update, based on historical data for the incumbents?”
- Comparable Transactions: When you want to valuate an asset, gathering a list of comparable transactions (“comps”) or trading multiples (for publicly traded assets like stocks) is the most common and effective method. For this exercise, I looked at recent sales on the popular marketplaces for digital assets like Flippa and Empire Flippers. In particular, I read through the Seller’s Notes to understand a bit more about their business model, monetization methods, and potential risks. What’s nice is that sellers must provide their traffic and revenue figures from the last year (Flippa) or several years (Empire Flippers), allowing me to analyze the recent trends in their business and calculate profitability (RPM or revenue per thousand). Overall, the point of this analysis is to check if real businesses in this niche have been successfully sold on marketplaces and calculate the average multiple (for me, I look at sale price divided by average monthly revenue or last month revenue).
- Affiliate Networks: Finally, another option is to browse affiliate programs on the major affiliate networks like ShareASale. This is particularly helpful for building a diversified revenue stream that does not depend on Amazon Associates, given their negative historical actions towards their affiliates. Here, I look at what the merchant sells, the average order value, the commission rate and structure (including any special rules), the conversion rate, and network EPC. In my experience, finding a quality affiliate program from an established merchant will make your life so much easier as you’ll be able to monetize effectively with even a small bit of traffic.
Next month, I’m going to go through The Authority Site Sytem 3.0’s new niche selection process, which I saw includes more advanced techniques like reverse-engineering what websites are linking to a particular affiliate program using Ahrefs, and then filtering that list down into low DR competitors that you can look at for inspiration.
Portfolio Approach: Building The Next Batch
Looking back on my last few years, every year had a particular “theme”, whether it was starting out (2018), ramping up (2019), or growing revenue (2020). For this year, the theme is going to be all about portfolio management.
As I said earlier, I’ve learned a lot from building my first website and I understand the “recipe” required to attract traffic and monetize that traffic in an effective manner. The next step is to replicate this process for a batch of 5-10 websites.
I have realized (and discussed at length on this blog) the importance of asset diversification. To create a stable revenue stream, you must have diversified sources of income – both within digital assets (different niches, monetization methods) and outside of them (with assets like real estate, stocks, services, etc.). The portfolio provides the requisite buffer against downside risks that may permanently impair the value of any single asset (Amazon Associates policy, Google Updates, etc.)
To support my next batch of websites, I’ve made additional investments in my technology stack, including lifetime licences for a variety of application software. The objective is to build simple yet beautiful websites in a cost-efficient manner.
Here’s what I’m planning to use:
- Cloudways & Breeze: my current hosting plan at Cloudways is $10/month for unlimited sites (1GB RAM, 25GB Storage) and will work nicely for my new portfolio. I still have 2+ years of hosting time at SiteGround but I don’t want to go through the hassle of migrating to Cloudways. I’ll be using the free Breeze performance plugin instead of WP Rocket and Perfmatters.
- Oxygen Builder: an all-in-one design solution that replaces a traditional WordPress theme and does the heavy-lifting of a page builder like Elementor or Beaver Builder. While I typically don’t like page builders (they are filled with code bloat), Oxygen is extremely lightweight and doesn’t add unnecessary HTML code. At $169 for a lifetime licence for unlimited sites, Oxygen Builder will save me money for years compared to Elementor at $199/year for unlimited sites. 🤩
- BiQ: this is an emerging full-suite SEO tool with basic keyword research, on-page optimization, and rank tracking features. The company plans to add backlink analysis in 2022 (they are collecting backlink data, which takes a long time). I bought an unlimited usage licence for $245 from AppSumo as I think this will be a good investment compared to $99/month for Ahrefs. For now, I’ll still use Ahrefs for keyword research and backlinks but deactivate my account when I don’t need it.
- Nichesss & GPT-3: I came across a very interesting software tool on AppSumo called Nichesss (or Niches$$) that uses GPT-3 artificial intelligence technology from OpenAI’s private beta API. I learned that GPT-3 is capable of producing high-quality natural language text that can even fool a human being (whether it passes the Turing test, I’m not 100% sure). I see a lot of potential for automating and enriching my future content processes with a GPT-3 enabled software program as it only not provides a faster way to produce content ideas and outlines, but does so at a consistent quality (which a human writer would struggle with, requiring manual oversight and “feedback” to improve). I also tested CopySmith, WriteSonic, and Copy.ai.
- Optinly: a lifetime licence for pop-ups. An excellent long-term investment at $245 compared to $29/month for OptinMonster and similar SaaS competitors.
- Webtotem: a lifetime licence for a firewall and security plugin. It’s a good replacement for WordFence Free as new updates are only received 30 days after the Premium version is updated. The Premium version costs $99/year for one website.
- ManageWP: a free plugin to help manage multiple WordPress websites in one dashboard.
- AhoyTeam: a business process management tool for documenting my SOPs and communicating with team members.
There’s a few more software solutions, but you get the general idea. My focus has shifted from building features for one site to building “only what I really need” for multiple sites as cost-efficiently as possible.
Next month, I plan to build a starter site template with Oxygen that looks and feels like a medium-quality website (better than a generic template website but not customized to the extent of a real production website). I will also narrow down my list of required plugins to install on every portfolio site.
That’s it for this month. My main objective is to launch my next batch of websites in the next few months. Niche selection is the most difficult stage (in some sense, there’s not really a “right answer”) and I don’t mind spending a little longer to make sure I understand the industry and niche dynamics. Part of the reason for a portfolio approach is to mitigate the risk of getting the niche selection wrong as well – in case there’s any unexpected problems (and there always will be) at the macro-level, I will have other active projects to fall back on.