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For the last few months i have been working on a new, non affiliate website. DizzyFrinks.com. The idea for the site came from my love of soft drinks, and from trying various colas from around the world. When i wanted to find out more information about said drinks, unless they were a big brand, there wasnt much written about them on the web. So i decided to create Dizzy Frinks.

The site is based on WordPress and uses BuddyPress to allow the community element to the site. People are able to submit drinks, review, rate, add photos, add videos and tell people where they can source the drinks online. The site was designed by a friend and i used Elance.com to get the programming implemented. The name comes from a play on Fizzy Drinks, as i didnt want to pay the £5000 asking price for FizzyDrinks.com.

Normally when i start an affiliate site, i have a clear aim in mind in terms of traffic and earnings, but with Dizzy Frinks it is all a bit of guess work. Over the next few weeks i am planning to fill the site up with all the drinks i have sampled from around the world, and hopefully start attracting users to the site.

What’s new?

The major change is that you now need to pass 2 exams to get your qualification. The Google Advertising Fundamentals Exam and then one of either; Search Advertising Advanced Exam, Display Advertising Advanced Exam or Reporting & Analysis Advanced Exam. As i was given a coupon to take 2 exams for free, and my current qualification was due to expire (after 2 years) i thought i would give the new system a go.

Revision

First off, the revision material provided is of a much higher standard than last time around. The chapters are layed out in a clearer manner, there are interactive quizes and tasks to complete and useful videos scattered around. During my couple of hours of revision i actually learnt some minor but really helpful changes that i wouldnt have spotted on my own.

Taking the exams

Another change with the new system is that you now need 85% or higher to pass, and there are 120 questions in each exam. (with 2 hours to complete). When you take the exam it now goes full screen, so no looking up the answers unless you have a second PC handy. The fundamentals exam is still fairly straight forward, but the Search Advertising Exam has definately stepped up a level. I am pleased to say that i managed to pass both first time and you can see much qualification here.

AdWords Individual Qualification Achieved

Wisdom of Fans: http://wisdom-of-fans.com

The site aims to predict the outcome of events (starting with the World Cup) based on the input of many. Wisdom of Fans collects peoples tweets about various events and then converts them into one “mass” prediction. The idea is that the many can be more accurate that the one (i.e. football pundits).

1) Networking does work. See my last blog post here and a  slightly more impressive post from Ray on the same topic here.

2) The agenda looks pretty nice once again. A lot of the sessions you can take away a list of actionable tasks that can make a real difference to your sites. I also find that a lot of the sessions just get me thinking about new ways to market my sites or new niches to enter.

3) A bit of a lazy one this. I am actually Berlin based at the moment, so this is almost on home turf for me.

4) Meeting great people. Working as a lone affiliate can be uninspiring at times in terms of one not getting to bounce ideas off colleagues so i find it really important to get out and about and meet like minded people. My greatest worry before attending my first expo was that i wouldn’t know anyone or have anything interesting to contribute. However there are loads of parties and networking opportunities running throughout the day and by the end of my first night i had already met loads of interesting new people who i still keep in touch with today.

5) I get to try out my new German. I have been taking an intensive German course since January so this might be the perfect opportunity to try out my three new words.

Conferences can be expensive. Once you factor in the price of the ticket, transport, hotels etc then it can be easy to question whether this is really the best use of your hard earned cash. I recently pulled some numbers from my Mothers Day campaign for 2010 and was pleasantly surprised to see that my last attempt at networking has paid some pretty nice dividends.

Last October i attended the A4uexpo in London. The ticket cost me £171.35 plus flights, hotel etc. At the conference i got to meet with the affiliate manager of a program i was producing some decent results for. After a short but productive chat we agreed to run several promotions across my sites which included banner placement, increased exposure, newsletter placement etc in exchange for a unique promotional offer that i could give my readers.

So here are the numbers for the 14 day period running up to Mothers Day.

2009:

Sales: 175
Commission: £253.07

2010 (after the networking):

Sales: 725
Commission: £1076.48

So who will be joining me at the A4uexpo in Munich this May?

So firstly, the site is still mine. Offers have come in, but nothing I would be willing to accept. If you missed the post about the sale then you read it here.

Is price set too high?

I have been in touch with 10 “serious” people about the site so far. Sure a number of them claim the site is over-priced (I guess all buyers do). The reasons vary from “websites rarely sell for more than 15X monthly profit” to “if I can’t determine where your sales come from (ppc/seo) then I can’t pay your asking price”. I am in the fortunate situation of not needing to sell the site, so people looking to push down the price are out of luck. Let’s take a look at a few of those arguments and I’ll give my two cents on them..

1) A Site is worth a max 15X monthly profit.
At the beginning of 2009, before I left for 9 months of travelling I considered selling the site. I wasn’t sure how much time I would have to update the site, and how much it would therefore suffer in terms of earnings. If I had taken 15X the monthly profit of 2008 then I would have sold the site for £83k. In the end profits for 2009 were roughly £85k, so it would have been a poor decision to sell. Sure that might not happen next time there’s such a decision to make, but I have faith in the site I’ve built and in my mind anything less than 24X monthly earnings is selling the site unnecessarily cheaply.

2) How much profit comes from PPC and how much comes from Organic.
Since I’ve provided a full revenue breakdown including ad spend, I don’t get how not knowing this information lowers the value of the site. Sure you can stop the ads, but my figure of 85k is profit not revenue, it’s after ad spend. If the new owner didn’t want to spend a % of the revenue on ads then that’s fine. However I am providing the buyer with my full adwords campaign, and the seo traffic has been consistent throughout the life of the site. Surely it is better to have 2 or 3 sources of traffic than one? I know the PPC annual spend sounds scary, but as the site is very profitable then it makes sense to keep running it and putting some of that revenue to work, and if not then the buyer could make their money back faster by improving/stopping the ad campaigns. This will be my next project should I keep the site, to get a better idea how much revenue comes from PPC and Organic traffic.

Why hasn’t the site sold yet?

Kieron sold ukoffer in 2 days. Spendlessonline is still available after 1 month. What is the difference? I reckon it is mainly down to 2 (maybe 3) factors.

1) Kieron has a huge network. He is well known and trusted within the industry. Aspiring affiliates look up to him, so if he is selling one of his former projects then there is bound to be a lot of interest. On the other hand I am relatively unknown, and whilst the blog post about the sale of the site was popular, I don’t think it got in front of enough eyeballs.

2) Spendless is over the magic 100k price barrier. I think this means that is it too small for any big investment companies to be interested in, yet too much money for most individuals to afford. I did have 2 people very close to buying the site but both couldn’t get the loans approved from the banks. Maybe pre credit crunch those sales would have happened..

3) UKoffer has been around since the dawn of time. Spendless is just comfortably middle aged.

What next?

The good thing is that I still have a fair number of options open. I have had a broker in touch who would work on a commission only basis to try and sell the site. This might be next best approach if i am still looking to sell.

But is selling the best option?

I have had loads of brilliant emails from people offering advice. A lot of people have been questioning if it a good idea to sell. One of the best bits of advice came from the awesome John Lamerton who has been there and done that. John raised the interesting point that it is great to have the money in the bank but then it can be quite a struggle to find new revenue streams. See blog post here.

The other major issue is tax. I live and pay taxes in Germany. And as is the way in Germany, they like to tax you on EVERYTHING! Having spoken to my tax advisor it turns out that i would have to pay 45% of the sale price in taxes. Ouch. Not ideal.

So the other option is to keep the site and just scale up the outsourcing. Chatting with potential buyers is a great way of honing where the site needs to be improved. If the day to day running of the site was taken off my hands then I have several exciting projects to help take the site to the next level.

Wow, long post. Anyone still reading? Any feedback/comments would be appreciated.