Flippa Profile Interview: DomainMagnate with Michael Bereslavsky

Published: September 25, 2017

I’m joined here by Michael Bereslavsky, a web entrepreneur, investor and Flippa Super Seller with $282,810 over 38 transactions and a 100% positive rating. Michael and I discuss his experience with buying and selling websites, his recent $165k sale via Flippa, advanced tips for buyers and sellers on Flippa, and his other businesses.

Tell us about your background as web entrepreneur.

Even early in life I knew that I wanted to be an entrepreneur, I loved numbers and finances, and was always fascinated with businesses and wanted to learn how they operated, what made them successful and how they could be improved and optimized. I studied Computer Science at the Technion – Israel Institute of Technology, where I had a few student jobs, but was fortunate to discover the potential of the internet for entrepreneurship early on.

Around 2004-2005 I first learned that you could start a business online with minimal investment and I was hooked! I read everything I could find online and quickly started building websites, learning about SEO and organic traffic, and experimenting with adsense and affiliate marketing. After some initial successes, I decided to reinvest the extra income into buying some more established websites that I could improve and grow further. Later on, I was able to sell some of these websites for a profit.

As the business grew I decided to turn it into a career and founded Domain Magnate in 2008 to focus full time on buying and selling established websites and premium domain names. We’ve since completed hundreds of deals with millions of dollars in value.

You’re one of the biggest users on Flippa, with a 100% positive feedback rating from 38 transaction and $282,000 TTV. What brought you to Flippa originally and why do you still use Flippa?

I was using The SitePoint marketplace since 2005, before it was rebranded as Flippa, and was fortunate to be among the first Flippa users when it was launched.

Most of our sales and purchases are currently done privately, through the network of buyers and sellers I’ve built over the years, but I also still use Flippa often for both buying and selling, as there are no other websites and domain names marketplaces that can rival Flippa’s scale and reach

You just completed your largest sale yet, $165,000, by selling the site 420beginner.com. Can you tell us about the website, the sale, and what you did to achieve such a high sale price?

420beginner.com and bigbudsguide.com (which was included in the flippa sale) are two amazon affiliate websites that focus on selling various products one would need to grow cannabis at home. Most sales are for specialized led lights that are used for growing. The sites feature review articles and in-depth guides that drive organic traffic from Google. Due to superb content and carefully planned on page SEO, as well as a few quality links, they are able to rank very well in google for highly competitive keywords, and drive targeted traffic which translates to sales.

I acquired the website in February 2017. The previous owner was interested in selling, but he didn’t have good stats. In the previous months the revenue ranged between around $1K and $5K per month as he was trying different monetization methods and the google analytics data was missing.

That didn’t deter my interest in it, because it had high quality content and good backlink profile in a profitable niche. I expected that I’d be able to increase revenue by improving monetization, and updating the site further with more content. Upon carrying out my due diligence, verifying the data, and interviewing the seller I was able to confirm my initial assessment that led to us agreeing on a deal in a short space of time.

After about 5 months I managed to increase the revenue to $8K per month, but I didn’t have as much interest in it as before, so the website wasn’t growing and started to get neglected due to other projects. I decided it would be best to sell it to someone who can take it to the next level, to allow me to reinvest in other properties.

I first offered it through our list to some of our frequent buyers, but the offers were lower than expected due to the niche. Flippa was the obvious choice for the sale due to its unprecedented reach and a large number of buyers from different industries. I was able to find a good buyer, who took a serious interest in the website and I’m confident that he’ll be able to grow it further.

We agreed on a price, processed the deal via Flippa escrow, signed a contract and handled the transfer. All went smoothly. After the sale I provided some training for the buyer and his employee to learn how to manage it successfully and grow further. I also always make it a point to follow up with my buyers to see how they are doing with the website, and if they have any questions or issues. We’ve had multiple skype calls and email exchanges after to make sure the websites are being properly monetized and maintained.

How many current sites do you maintain in your portfolio?

I have over 100 websites, but most are passive and do not require much input. We also have a small team to help update them.

What type of sites have you managed? Do you have a certain niche or business model you prefer?

I prefer websites that are more passive and easier to maintain. Mostly content websites with organic Google traffic, as they are easier to manage and easier to sell due to high interest among buyers. However, lately also focusing on SaaS and e-commerce websites as well.

In addition to websites, you have also sold quite a few domains on Flippa. As a seller, what’s the difference between domains and websites? Do you prefer one or the other?

I’ve been active in domaining since about 2007, mostly focusing on the more liquid short and 1 word .com domain names. In past years my focus shifted more towards websites, but I’m still active in the community, maintain a portfolio of premium domains, visit industry events and sometimes speak at conferences.

I bought and sold a few domains and portfolios via Flippa. These transactions are generally faster, simpler and less time consuming, however with reselling domain names the profit margins are usually a lot lower than with websites. I think Flippa is a great place for listing your domain portfolio, or for finding a specific domain name for your next venture.

You’ve had some experience working alongside our account management team. Can you tell me what that’s like and if they were helpful throughout the sale process?

I had a lot of help from my account manager, [Colton Moffitt], on this sale. He was instrumental in providing assistance, upgrades, speeding up the regular listing process, reaching out to potential buyers and helping carry out the transaction. It was definitely very beneficial and I would highly recommend the Flippa’s management services.

For sellers out there who are interested in selling their websites, what advice would you give them?

This is what I generally recommend to anyone interested in selling their online business:

Start preparing upfront, at least 3 full months ahead before you plan to sell. Make sure to setup google analytics and other tracking software. Set up unique channels and tracking ids for your website in the affiliate and advertiser accounts. Get your finances in order and optimize profit, reduce unnecessary expenses, so you can show comprehensive data to potential buyers.
If you know some website buyers, or your competitors who might be interested in purchasing your business, it’s always worthwhile to contact them first to check if you might be able to sell directly, or just see what they can offer.
Always use a reputable escrow service, like Flippa escrow, or Escrow.com, unless you’ve done business before, or trust the other party.
Prepare a very detailed Flippa listing. Be sure to explain the business operation, finances, include all the screenshots, try to have visual proofs for all your numbers. Use Flippa tools to verify GA and Adsense, and make a video for showing your revenues. For a higher revenue website utilize Flippa’s managed listing services or account managers.
If your website makes substantial revenue buy Flippa upgrades for more visibility. The more people see your auction, the more bids you have, the higher price you can usually get.
Promptly answer all comments and questions, and update your listing with new screenshots.
If a bidder has no activity on Flippa yet and no feedbacks, no connected social profiles, you can contact them to ask for some extra information, to make sure they are a serious buyer. Sometimes new buyers change their mind, or simply do not have the funds available, so it’s best to check before approving a potentially winning bid.
Provide good after sale support, keep up with the buyer to help grow the website further.

In addition to selling websites, you’re also a pretty prolific buyer. Tell us about your buying process (due diligence, payments, etc) and any tips you can give others looking to buy an online business.

At domainmagnate.com we focus on providing quick business liquidation service for online businesses. Most of our purchases generally take just 1-3 days. We save people time, as most other venues have lengthy listing and waiting periods.

My due diligence relies a lot on experience and also involves verifying stats, interviewing and researching the seller and site’s history, and evaluating risks.

My main advice to new website investors would be to

Start small, do not risk most of your money on your first purchase. Set a budget range and stick to it.
Learn and understand the risks associated with the type of website you plan to buy, and how to maintain it.
Look for an advantage. Go after the type of deals that help you utilize your experience, expertise, interests, connections, analytical skills, or other areas where you excel, in order to increase your chances for success.
Do your due diligence, verify everything you can, but also trust your gut!
Instead of negotiating over price, it’s often more prudent to get better sale terms and after sale support

What other projects are you working on at the moment?

Lately I’m also focusing more on investing in and advising startups, as I believe that’s where my skills can be best applied to have the maximum effect.

I strongly believe in the blockchain technology and smart contracts, and expect they will play a much more significant role in the near future. We are already seeing major financial institutions, technology companies and even governments investing more in research and development of decentralized blockchain based systems. They provide substantial benefits and optimizations compared to the current centralized systems in many industries.

I am also passionate about internet privacy and security, and recently joined the Privatix.io team as an adviser and early investor. It’s a new startup by an established VPN company that aims to build a P2P decentralized VPN network on the Ethereum blockchain. Privatix will enable Internet users to sell their unused bandwidth and get paid in cryptocurrency, while helping bring much higher degree of security and anonymity for its users.

Why did you decide to join Privatix and what are they currently working on?

The Privatix team have a proven record of achieving fantastic results, testament to their many years working together. The team have built a popular VPN network and other profitable applications. It completed its pre-ICO round of contributions in just 3 minutes with a $500K cap and is currently raising funds via an Initial Coin Offering by selling its tokens that will later be used for services in its network.

There is strong interest among investors, and a community of fans backing and contributing to the project. I believe the company is in a great position to implement the peer to peer VPN service, which will greatly improve online privacy, security and reduce Internet censorship.