Expanding Your Internet Business
In my previous posting, I talked about how it is hard for many websites to take things to the next level, in terms of increasing sales and profits. Most websites, assuming they are able to stay in business for a few years, reach a plateau where they are making money, but it is just enough to make it worth it for the owner to keep the business running. Nobody is getting rich from it. Most of the time, I have not been able to figure out any good way make websites grow past this point.
But, one solution is to not worry about that problem, and instead focus on creating or buying new websites. For example, years ago my mother started a clothing directory website. She put a huge amount of work into creating the content for it, and I helped with the technical end of it. Soon after its launch she launched a related directory, and ever since, they have been making a profit of around $300/month combined . This was actually much higher than I expected, but it is still is not a lot considering the many hours each month she spends on it. Despite various changes she has made to the 2 sites over the years, income has not increased any. Realistically, I don’t think there is anything she can do to take it to the next level.
But, somebody with more time, energy, and ambition might look at her directories just as a successful starting point, and decide that if they built 20 directories like her initial ones, they would then be making $3000/month instead of only $300/month. Once you are running 2 directories, it might not be that much harder to run 20 of them. My mother would say this would be impossible for her, as she barely has enough time to run the ones she has now, and that to run 20 of them the quality of their content would have to suffer drastically. But, I would argue that after her initial work to create her 2 sites, they might make just as much money if she did the bare minimum amount of work on them. I have not always found that putting a lot of work into maintaining and improving a site leads to making more money from the site.
She could instead focus on creating 18 more sites like the ones she already has, and then pay somebody else to run them for her. For $250/month, a team of programmers and customer service reps in India would be happy to handle everything for her. I know this because I have had them do this for some of my sites. So, she would initially cut her income in half (from $300/month to $50/month after the site management fee), but she would have the potential to to have the income increase to $3000/month (actually $2750/month after the management fee) which would be life changing for her.
I actually did try to do something like this back in the early 2000s with ecommerce sites. I was making around $2000/month from GetVitamins.com, which was good but not enough to change my company much, so I decided to open 15-20 new online stores (candy, cookies, fish, jewelry, and more). With all these sites, including GetVitamins.com, the products were drop shipped to the customer (my supplier mailed them directly), so I didn’t have to deal with having a warehouse or inventory or any of those hassles. But, I did have to deal with all the customer service, all the suppliers, all the messed up shipments, all the website errors and problems, all the different credit card merchant accounts, and everything else like that. Each of the sites made a small profit ($100 – $1000/month), and I could have opened more of them, but at the time I was doing everything myself, and after a year or two I began to look at all these extra sites as a burden and eventually shut them all down. Looking back, I should have just hired somebody to run them all for me, but even so I would have had to spend a significant amount of time on them, and that would have left me less time to focus on my domain names and Bored.com, which were the main part of my business.
In the mid 2000s I tried something like this again by buying around 100 non-ecommerce sites over a 2 year period, but none of them ever made any significant amount of money for me. Each deal involved a lot of time and effort on my end: negotiating with the seller, taking the site over, moving it to my server, changing the ads to my own accounts, fixing problems on the site, taking over support for the site, and many other small tasks. This was not something I could easily delegate to somebody in India, and I did not have anybody who worked for me directly who knew how to do that kind of stuff. Once each site settled into my network of sites, it was not a huge amount of work to run them, but I also never made enough from any of these sites to make it worth the initial cost (the purchase price) and work involved. If my company had been setup ahead of time so I could have had somebody handle most of this for me, then maybe things would have gone a lot better. Yes, it all added to my income, but had I focused my efforts on other things I may have made a lot more money. Or, maybe I should have bough one big website instead of 100 small ones.
In the end, I am still glad I tried starting the online stores and buying all those sites. Had other areas of my business not done so well, I could have focused on these sites instead. And, I learned a lot from doing all of it. Mainly, I think the lesson to take away from all of this is that you should not feel stuck if you have a website that won’t grow any bigger. There always other related things you can do online to make more money, even if this deviates from your initial plan.