This is a guest post by Roger. Roger is one of the most successful online gambling affiliates in the world and it’s an absolute pleasure to read some of his insights here. Thanks for taking the time to write this post Roger!
I asked to write a guest post for Nick so that I could reference Online Betting on this site, which I recently started to develop. Coming up with topics to write isn’t my strong point so he thought a good topic for his readers would be moving from an average affiliate whom likely gets by day by day, to someone who is more successful aka a super affiliate or just owns a top gambling website.
Instead of classifying myself as a super affiliate anymore, I’m more like a super lazy affiliate. As I wrote on another site earlier, I don’t have the passion anymore. Either way I still know what it takes to rise to the top and make the 7 figures a year. Personally I did it by exploiting high profile niches before they were saturated, and am always seeking these opportunities because I’m lazy, and it’s easy money but not something you generally talk about or it will be saturated before you start so let’s look at another way to move up a tier or two in your business.
From what I’ve learned in the past 7ish years of this gambling stuff is that to go from average, to what one would consider “successful” is proper re-investment of your funds… and work ethic. Due to the so-called “risk” of owning a gambling site you can pick up a website for around 18-20 multiplied by the number of real money qualifiers the site averages per month. So for example a site generates 50 money gamblers per month, the selling Webmaster would probably want (50×20) or 1,000 players worth.
Let’s assume you’re the average gambling affiliate and hopefully have been putting money away and not blowing it on useless garbage. Great investments are websites and domain names. Where else can you buy an investment and make 100% ROI in 2 years, or probably less? The “less” part comes in analyzing the potential website and owner you will be buying from.
First you will have to agree on a CPA per player. Because you should be buying from a smaller affiliate, the CPA they ask will likely be lower than the value you already get. Assume they ask for $150 per player or ($150×1, 000) = $150,000 for the site. This means you should feel comfortable that you will make back that investment in less than two years they are wanting. Why less? Well it’s very simple for a couple reasons.
One, its common to purchase sites that you are competing with. If you know you earn a higher CPA or revenue share than him or her it’s a no brainer. You not only will lower your “price paid” by reducing competition prices such as advertising etc, but also you hopefully have done your research on this affiliate and assume that they don’t make as big of a commission as you. They may only get 25% at a certain gambling site or $150 CPA, but you earn $200+. You just technically lowered your price paid by $50,000.
If you’re looking at revenue share models you can also lower the price paid assuming you have solid revenue shares. If you’re getting 40% and this affiliate is only getting 25%, you just instantly reduced the price of the site by 37.5%, or $56,250. It’s not as beneficial buying sites where you know you’re going to be on revenue share because it takes longer to regain your investment thus increases your risk.
Combine the ~$50,000 earned from your higher commissions with the drop in ad/link dollars, lets say $10K per year, $20k total, you reduced the price again down to only $80,000. Now you’re looking at only a ~ year of risk on owning this site and making back your investment! On top of that you don’t have to worry about this person creeping up on you and you can dominate this market with little to no effort.
So in summary, analyze what sites might be future competition to you that are close, but not close enough to know the value of #1 in the SERPS, see if they are a “big player” or a “general webmaster”, and begin negotiations. Some things to look out for are inflated monthly earnings or inflated CPA amounts. Also I wouldn’t advise purchasing a site that is relatively new, they may only be ranking in the SERPS temporarily.
Very basic, just make sure it’s a solid site that doesn’t really have a reason to take a dive in the near future. Lastly, don’t forget to sign a no-compete!
Source: onlinebetting.com
{ 3 comments… read them below or add one }
Nice read, thanks for posting it.
The figure about 25% vs. 40% Rev. Share is wrong. If you get 40% instead of 25%, you get 60% more which means you lower the price of the site by 37.5%, not 15%.
Thanks strider, something didnt seem right when I wrote it.
Nick, can you change it to 37.5% and $56,250 in reduction.
gracias
Roger
Hey Roger,
That was super informative. Thank you so much for that. I had always thought you base purchase price over a year of revenue and not two years. Very nice read.
Also thanks Nick for posting this.
Steve(aka GFPC on PAL)