Content Sites vs. ECommerce sites

[ASP-Hosting.ca]

Hi guys,

I would like to start a discussion comparing Content sites and ECommerce sites and their respective revenues.

Which one do you prefer? Which one is more profitable? Which one is easier to promote? Which one involves more work than the other?

[Mike]

For me content sites are better. That's only because of the time involved in an ecommerce site though, they are much more profitable imho...

[incka]

Depends, a content site such as dictionary.com or bartleby.com can make far more than ecommerce sites, but ecommerce sites can make far more. It depends on promotion.

Also would you class a site like SavvyShopping.net as content, and a AWS or datafeed site as content or would you class them as ecommerce.

[ASP-Hosting.ca]

Also would you class a site like SavvyShopping.net as content, and a AWS or datafeed site as content or would you class them as ecommerce.

I tend to think of those types of sites as ecommerce, although they are somewhere in between.

[Kyle]

For this post, ecommerce sites are when you stock products in your office/home, and sell them with a website.

It's not fair to compare the two, content and ecommerce. Generally speaking, content sites need much more traffic to generate as much revenue as a given ecommerce site. Ecommerce sites require a lot more work and money put into the business from the start, plus time for shipping. Again, I'm not talking about specific cases.. just general content vs. ecommerce sites.

There's a lot more costs and risks associated with an ecommece site. You need to stock products, purchase more expensive hosting and security certifacte, bank accounts, merchant accounts... you basically start at a loss. There are more laws to consider, as well as more tax issues.

I prefer content sites. My site SurviveOutdoors.com once had its own store with products that we shipped out. I'm not a big fan... but it can be very profitable.

[chromate]

Depends what the products are. If you have an information product you can sell, then this can probably be the most profitable. People pay good money for good information and of course, there are no shipping costs involved.

[incka]

Chromate - A good example of this is High Beam Research, LLC. They make quite alot of money from people paying for access to their eLibrary.com & Encyclopedia.com sites.

[Peter T Davis]

The best way to approach this isn't to compare the two, but to combine the two. Have a content site that can drive traffic to your ecommerce site.

[Mike]

Or for some people, a content site that can drive traffic to an affiliate site.

[Chris]

Ecommerce is a gold mine. It is more work but the potential is so much greater.

With content sites you can make good money, enough to live comfortably. But it is really difficult to make enough money to make you really rich. Some affiliate sites can do it, but with just advertising its hard with a content site.

An ecommerce site though , the sky is literally the limit. You can start out small, and then keep expanding. In a decade you could end up running a publicly traded company worth millions.

[Mike]

But at the moment with google in its current state, wouldn't it be hard to get some traffic into the ecommerce site? I know it's the same for content sites, but you haven't invested much in them apart from time.

[r2d2]

Google arent doing too bad themselves, for what is essentially a content site.

Making it big though would be more possible with an ecommerce site - you just need the time and money to invest... :rolleyes:

[incka]

Mike, alot of ecommerce sites buy adwords or buy links to them on PR9 sites such as newscientist.com.

[Mike]

That's more money to spend.

[ASP-Hosting.ca]

Ecommerce is a gold mine. It is more work but the potential is so much greater.

With content sites you can make good money, enough to live comfortably. But it is really difficult to make enough money to make you really rich. Some affiliate sites can do it, but with just advertising its hard with a content site.

An ecommerce site though , the sky is literally the limit. You can start out small, and then keep expanding. In a decade you could end up running a publicly traded company worth millions.

Chris,

Did you start with purely content sites in the beginning?
How do you promote your ecommerce sites?
Do you write content sites related to the ecommerce sites and link to them?
Do you try to embed some content into the ecommerce sites?

I'm trying to get a general idea of how to promote an ecommerce site?


Thanks

[r2d2]

I guess the answer to the first one is yes, and there are tutorials for the rest in the main section of the site.

[Nick]

I agree that ecommerce sites have the most potential, especially if you have a user base that pays are recurring fee.

[Chris]

Originally posted by ASP-Hosting.ca
Chris,

Did you start with purely content sites in the beginning?
How do you promote your ecommerce sites?
Do you write content sites related to the ecommerce sites and link to them?
Do you try to embed some content into the ecommerce sites?

I'm trying to get a general idea of how to promote an ecommerce site?


Thanks

I had over 10 content sites before I made an ecommerce site.

I use mostly naturaly SEO for promotion, but I also buy advertising. I spend $200 a month on adwords, and during the christmas season I spent $200 a month on theonering.net

Ecommerce sites can afford to pay for advertising.

[Mike]

Do most of your sales come from search engine results or adwords Chris? Or are they just return customers?

[Chris]

A mix. I'd say most from natural search results.

[ASP-Hosting.ca]

I had over 10 content sites before I made an ecommerce site.

Were you making a living from those sites?

[Chris]

Oh ya. I was doing pretty good. That money allowed me to have the necessary capital to start up the ecommerce site.

[normaldude]

Depends on your goals & personality.

What I like about content sites is that you're not tied down. You can travel whenever you want. You can spend a few months in Europe/Asia/Alaska/Hawaii, and it's no big deal. You just update your content site remotely with your laptop. You don't have to worry about getting things shipped.

Edit: Another scenario might be if you suddenly got sick/injured. Like a car accident, and you ended up in the hospital for 2-3 weeks. A content website might get a little stale, but no big deal. However, an ecommerce website might build up a lot of legal problems, complaints to the FBI/fraud center, complaints to your webhost, etc.

[Mike]

Yea, what do you do if you go out for a week or so Chris?

[ASP-Hosting.ca]

Oh ya. I was doing pretty good. That money allowed me to have the necessary capital to start up the ecommerce site.

Thanks Chris,

As far as I remeber you were planning to show in google top 10 for "web hosting". Are you still working on this?

[Chris]

Originally posted by Mike
Yea, what do you do if you go out for a week or so Chris?

I don't.

[Chris]

Originally posted by ASP-Hosting.ca
Thanks Chris,

As far as I remeber you were planning to show in google top 10 for "web hosting". Are you still working on this?

No. I dropped the whole web hosting thing. Such poor margins, lots of work with customers, not worth it.

[chromate]

Yeah, would I want to handle hundreds of hosting customers? Not on your life! That would be like, my worst nightmare! There're much easier ways to make comparable money. :)

Affiliate money's good though but the competition's ridiculous.

[incka]

Originally posted by Chris
I don't.

So you are never going to go on holiday again in your life? You are never going to do something that would possible result in being hospitalised?

[Chris]

Originally posted by incka
So you are never going to go on holiday again in your life? You are never going to do something that would possible result in being hospitalised?

My wife knows how to do things if I'm hospitalized. I could also explain it to someone over the phone without issue.

I have some family whom I can trust moving into town soon. I will train some of them to handle things so that I can go on vacations.

Eventually I'll have employees and a warehouse/office. So it won't be an issue.

[pas]

There's nothing negative about running an ecommerce site? No Customers From Hell (TM)?

I've sold scripts and services before, and support is a huge PITA. But I imagine it'd require far less with other products.

[incka]

Why don't you get employees now, you have the money, they can manage your current sites while you make new ones. If I was earning as much as you that would be what I would do.

[ASP-Hosting.ca]

If I was earning as much as you that would be what I would do.

You don't have ANY idea how much does he earn, all you can do is guess :)

[chromate]

Incka, good staff are expensive. More than that, managing staff well is EXTREMELY expensive in terms of time and effort. One of the most attractive aspects of running an "e-businesses" is the lack of overheads. There'll be a time for expansion like that but, as I'm sure Chris will agree, that will be a carefully considered, tentative step to take.

[Chris]

Originally posted by incka
Why don't you get employees now, you have the money, they can manage your current sites while you make new ones. If I was earning as much as you that would be what I would do.

If. Wait until you're in the position before you speak of it. Saying that you will make so much, or if you did make so much, is a far cry from actually making it.

If I were to hire employees I'd need to get a building. Rent would probably be atleast $1000 a month, or I could purchase it and need a downpayment of $30k and then maybe $1000 a month.

Add in utilities for the new building, say $500 a month. Insurance, $100 a month.

Then employees. One person full time is going to cost $400 a week + benefits (say $200 a month). Perhaps more, thats only paying them $10 an hour, and I need skilled labor.

So now we're up to $1600 for the building, $1800 for the employee, and thats just one employee. At the least I'd want 2 right, in case one is sick, so now I'm at $3600 for employees, $1600 for the building. $5200 a month now. Now I also have to do payroll accounting, complicated stuff, so say $100 a month for an accountant.

So now I'm at $5300 a month.

Do you know where that $5300 a month comes from? Me. My money, my profits.

So, if you were in my position (which you're not even close to) you'd rather pay $5300 of your money, per month? For the purpose of freeing yourself up to build a new site and allowing yourself to take a vacation?

That is over $60k a year. That is one expensive vacation.

Myself I'd rather have the money. I'd take that $5300 a month and invest it, then maybe in a couple years when I have enough capital I would expand, get a building, and hire people.

That $5300 is a lowball estimate too, I didn't even include taxes, office equipment, warehouse equipment, or anything like that in it.

[incka]

No, not for taking a vacation, so your business can expand. They can update SavvyShopping for you and send out the swords, and make designs for your future website, while you do the coding for the websites and make the money. I'm 100% sure it would be worth while, because all the free time from updating your current sites could be spent on making new ones. You can make an datafeed site in a few hours, if you have a few more days free a month that means quite a few more datafeed sites, each which will make you $1000. Think about it - It's basic business.

[Kyle]

lol

[chromate]

Since when does a datafeed site make $1k a month? Did you read Chris's post Incka? It's very expensive! You think taking on more staff would free up time? Dream on! Managing staff is extremely time consuming.

Here's some "basic business" for you... Premature expansion destroys businesses every day, often leaving huge debts in their wake.

[incka]

I didn't say $1000 a month, I said $1000. If you could make 10 more of them a month, thats $10000, even if it is $7500 for the premises and employee it's still at $2500 profit. It would save time - Chris must spend 40 hours a month doing cbswords orders, and also how much time updating all the coupons on savvy shopping, etc. He could get an employee to do that, design new sites, he does the coding, then they add the content while he moves onto the next one. He could launch 20 new sites a month - The only think is he must have a very co-operative friendly web designing employee, which I'm not sure how hard to find they are in the US.

I know alot of companies go bust because of premature expansion, but Chris has the money that if it fails does not loose anything, he is earning around $30k a month, $5k is alot, yes, but if it doesnt work just make the employee redundent, sell of the warehouse if you bought it, or if its on Short term lease just let it go, you haven't got into any debts at all.

Now I'm not suggesting he should expand to having more than one member of staff, that would be premature expansion, but I feel one member of staff is needed if he is to expand much. The member of staff can handle all the boring stuff like packing and customer support, while he does all the interesting stuff which requires his skill.

[Chris]

I have plenty of extra time to make AWS sites. Except I'd rather spend it outside working on my yard. They also don't make $1000 a month each. They each make a couple hundred a month, which isn't bad for how easy they are.

Also part of my success is due to the PageRank I have. The more sites I make the more diluted it gets.

[incka]

Then pay someone to help you make more sites with high categories on DMOZ like your artist biography, wilderness survival, fitness training & orienteering ones.

[Chris]

So they can compete with me? Think about it. If I explained what to do then paid someone to do it there would be nothing stopping them from turning around and doing it themselves -- perhaps not even finishing my site. Unless they were really stupid, in which case their work wouldn't be good anyway.

[paul]

This is a entertaining discussion to watch from the side lines. Maybe there should be a contest and whoever can convince Incka that employees are generally a really bad idea gets the "Effective Copywriter of the Year" award:)

There is an interesting book called "The Perfect Business" that has a really good chapter called "Read this before you hire any employees."

Of course, most people would rather take a $100,000 "seminar" to learn it the hard way.

[incka]

Originally posted by Chris
So they can compete with me? Think about it. If I explained what to do then paid someone to do it there would be nothing stopping them from turning around and doing it themselves -- perhaps not even finishing my site. Unless they were really stupid, in which case their work wouldn't be good anyway.


I used to think that, but then I asked a few people and most of them said they would rather have the security of a job that going it on their own. I thought them as mad, but alot of people don't like risks and work best with people telling them what to do.

[chromate]

That's a good point Incka, but then again, how do you find those people? If they need training, they may change their minds once they see how it's done and how much money can be made.

There are points for and against. However, I think overall it's best not to take on staff unless you really REALLY have a need to.

[willow_rd]

With my day time job (Engineering), when we need something done and don't have the time or expertise to do it ourselves, we get a contractor. You find a contractor with the right stuff (qualifications) and develop an agreement (contract) to deliver what you want at a specified price not to exceed X $'s while ensuring that you own the final product.

You save on all the overhead items and don't have to worry about any of that employer stuff. They deliver the project and you can then tweek it to your hearts content, reuse it over and over, etc..

One could also get more than one spouse to work in the family biz I guess, but there would probably be alot of overhead with that too.