How a Website Makes Money
More specifically, how THIS website makes money
When I tell people how popular my websites are (the one you're on and this one as well, I always hear some variation of the same question:"Sure, but you don't make money, do you?"
Well, actually, I do. I couldn't afford the time I put into my sites if I wasn't making money!
Ever wonder how homemade websites
(like this one) bring in the bucks?
Take the quiz!
People can see how Amazon makes money, but not Best Children's Books. Well, let me lift up the curtain a little to show you how a regular person (like me!) can make money online.Internet Money Making 101
Google offers one of the most popular monetization models on the internet. All around this site you'll see boxes and columns of ads, usually a green box wrapped around a white background featuring black text and dark blue links.
Meet Google AdSense.
(On other sites, the ads will feature different color combinations. And sometimes you'll see image ads rather than text ads. Look for the tell-tale words, "Ads by Google.")
You see, every website owner wants traffic. The ones who are willing to pay for that traffic place these ads with Google, and Google places them on my site. The ads are targeted to each webpage's content.
When a surfer clicks on an ad, Google and I share in the revenue.
AdSense revenues are a function of
a) my traffic, and
b) how much money the advertiser is paying per click to be on my page.
I earn anywhere from a penny to a couple bucks per click.Amazon
This is a children's books site. Amazon sells children's books.
When someone clicks from my site to Amazon and then proceeds to buy a book (or anything else Amazon sells!), I share in the revenue.
Consider my children's book reviews section. Every review features at least two Amazon links. Amazon pays me about 6.5% of a book's price for referring them business. And if that purchaser then goes on to buy a wide screen TV...
Well, that's a good day!
I happened upon this amazing company. They specialize in book closeouts, i.e. if an edition of a book will no longer be printed, bookcloseouts.com takes the excess inventory and sells it at an absurd discount.
Despite the absurd discount, they still pay me a 13% commission. Now that's how a website makes money!
You can't find every book on bookcloseouts.com, but you'll find enough to keep you reading until the end of time. My visitors are so blown away by the prices that some have been known to buy a few hundred dollars worth of books at a time.
So I end up making a good deal of money from this little search box!
Selling my own ebooks
The whole reason I started this site was because I'd penned a few children's stories myself. Now I have an audience to sell them to!
I call the books Child Behavior Books. Because I sell them electronically for download, they're sold without cost (except for payment processing). Nearly every dollar ends up in my pocket, which enables me to keep the price low.
Magazines are a high profit item, and I sell them. Commissions average around 30-35% of the subscription price.
Lots of other monetization models
This site has some other income producers, but there are ways for any well-trafficked site to make money. Here are just a few:
- Some accept donations.
- Some attract customers for the owner's professional services.
- Some make paid referrals.
- Some build awareness of an offline business.
What all websites have in common is the need to attract traffic. What most of them don't have is a method for doing so.
Are you interested in how a website makes money because you're thinking about trying it yourself?
Great! I'll keep writing. You keep reading.
Let's look at two kinds of people:
- The first kind of people put up a website to sell a book or product they've created, and they think sales will just happen.
- The second kind of people don't put up websites because they can't figure out how to turn the sharing of free information into money.
The first group thinks it's too easy. The second group thinks it's too hard. Well, it turns out there's a "Goldilocks" solution - an approach that's just right.
(I had to work a children's book into the conversation somehow!)
The "just right" solution requires taking into account how the internet works.
Start with the search engines
The search engines drive traffic. Chances are if you found a new site or good information, you have Yahoo or Google to thank.
But think about this: did that search engine send you to a website...or a webpage?
A: A webPAGE. That page appeared atop the rankings because the search engine had good reason to believe it had the information you wanted!
So a popular site is made up of lots of popular pages that win searches!
That's pretty important, so I'll say it again.
A popular site is made up of lots of popular pages that WIN searches!
So let's dispel the first myth of the web: that you can just slap up a few pages, call it a site, sit back and make a lot of money. This site has hundreds of pages...and if it didn't, you wouldn't have found it!
Creating "content" for the search engines to find
Creating a successful site starts with creating pages that the search engines will rank highly for particular searches. This means writing. Lots of it.
That's right. A successful website has little to do with how it looks. The search engines didn't major in graphic design.
Creating a VERY successful site also means knowing what search terms searchers use. You could easily rank #1 for rainy day things to do on a Tuesday afternoon in Poughkeepsie
simply by putting that phrase on a webpage, but no one will ever search for it. I'd much rather be #1 for fun family activities.
3600 people per month search "fun family activities" on Google.
Moral of the story: don't create content people won't look for!
So...content leads to traffic
Anyone who puts selling ahead of traffic puts the cart ahead of the horse. 99% of visitors to your site won't buy anything! If it takes 100 sales to make you happy, you need 10,000 visitors.
Putting the horse ahead of the cart means creating content and attracting traffic BEFORE you try to sell anything. But that doesn't mean you don't think about selling as you create your content. After all...
You could create a great site on breeding racehorses, but your visitors won't be your customers if what you have to sell is your services as a commercial real estate agent.
There's an actual method I use to build my websites that helps me keep the horse in front of the cart. (You might want to write it down!) It's called C-T-P-M.
Create -> Target -> Promote -> Make profitor
Content -> Traffic -> Pre-sell -> Monetize
A company called SiteBuildIt coined the term. SiteBuildIt offers a suite of services for do-it-yourself website creation. The SiteBuildIt way of doing things works like magic!
Some of you may have read what I said earlier about how I monetize with Google AdSense and made the logical leap:
Wouldn't it be simpler to simply build a tiny site and BUY traffic!
Yes, it'd be easier to get traffic but almost impossible to make money. Remember what I said about 1% of your customers (a very rough approximation that depends on what you're selling) making a purchase?
Let's say you pay Google 50 cents per visitor they send your way. You'd better have a product that has a 50 dollar profit margin (and you'd better be very good at selling it) if you don't want to lose a fortune.
Back to How A Website Makes Money
I think of my website as a huge store where people come window-shopping. Most people don't buy anything, but a few see something they can't imagine being without and actually make a purchase.
The window-shoppers get something for free, and that's fine with me. They can tell other people about my store, and maybe some of those people will buy.
In traditional retail, they say what matters is, "Location, location, location!" Because location leads to traffic.
In the virtual world, the only location worth being in is at the top of the search engine rankings for your subject matter. That's the location that brings traffic. What you do with that traffic is up to you.
So how do you get to the top of the search engine rankings?
Take a look at this page. Scroll down if you like - there's some good stuff there - but I recommend clicking on the text links at the top of the page.
I did. Before I clicked, I thought building a successful website was beyond my skill set.
After clicking, I realized sitebuilding was a perfect match for my skill set.
If any of what you read tickles your fancy, write me back with your questions, and don't worry that you're bothering me. Do you know why?
Because selling this terrific service to other web entrepreneurs is just one more way I make money online!
More on how a website makes money.