I’m currently writing this article while both my wife and baby are sleeping since they are burnt (one is getting his teeth and the other one hasn’t slept much and I’m not telling you which one is which 😉 ). My little girl is having fun on the iPad and my older one is playing with his Legos. This is a perfect moment of calm to open up my laptop and start writing :-D. I don’t know exactly where I will be going with this post but follow-me, we might end-up finding something good! I’m looking to make more money in 2013 and I’ll shoot all the random thoughts that come into my mind as I write. Let me know what you think!
Given the success of Dividend Growth, I’m definitely thinking of writing another book for 2013. Publishing a book on Amazon was a great way to make money and attract new readers. I’m already going to publish a small book for 2013 best stock picks but I am thinking of moving onto a bigger project after that.
We bought the rights on a book that works with a membership website and this project has been sitting on our table for a year now. The deal was relatively cheap and we thought it was a good idea to start the project aside. But we ran out of time and decided to postpone it. It was a good idea since we learned a lot from our previous books.
A new book at $9.99 on Amazon that would run 9 months (let’s assume that I take 3 months to setup everything) would probably generate a few thousand. If I was able to sell over 300 copies in 3 months with my first one, I can certainly expect to sell 500 copies over 9 months for another book. This could be a great way to diversify our income.
The limitation of this strategy is that it requires a lot of focus on the promotion and distribution of the book. It takes time and energy and it’s not really passive income at first. It becomes passive (I’m not doing much about my book right now and it’s still selling) but the income reduces significantly along the way.
Now I have to work on the membership site. The idea is there and the platform is working but it is missing a lot of content. The book we bought is directly linked to the membership platform and one cannot really work without the other. This is the perfect example of a great upsell.
We would probably sell the book for very cheap and hope to convert readers into members. The main advantage of membership websites is that it creates recurrent revenues. Imagine you sell a membership at $89 per year and you have 100 members. That’s $8,900/year of revenues and you can increase your number of members years after years. If you have a very strong product and you can increase the net numbers (you will have people unsubscribing from time to time) of members by 50 each year, you will earn $31,150 per year with the same product with only small variations! Now this math is very conservative; imagine if you can grow your number of subscribers by 100 or 200 per year… man, this is a gold mine!
But in order to create such success, you must add tons of value. Technically, you must offer more than $89 per year worth of stuff. How can you make money out of it? It’s simple; if your cost to provide the information is $5,000 per year but people pay only $89, you will grow your subscribers through the roof in a heartbeat. The secret is that your cost of operation is likely to be the same if you have 1 subscriber or 5,000. Therefore, when you have only 1 member, your cost per member is $5,000. But when you have 5,000, you cost becomes $1… and you are still making $89 per client. Your profit margin becomes ridiculously high and this is when you start making real money. The problem is to be able to build the system at a high cost and support it when you reach your breakeven level.
Maybe I should sell some of my properties? I don’t know. Some of them are not super important in our overall network and we could sell them without hurting our business. The key here is more about having more time and energy to concentrate on more profitable projects than generating an inflow of capital.
For example, if I use financial resources and time to work on a site that is not growing anymore, I could probably spend the same resources on my membership website or book where I know I will be making money. In other words, I’m considering reallocating my resources to make them even more profitable. As our business is more mature, I don’t see the exponential growth anymore. On the other hand, I don’t think that our business model should be at maturity already. I think that we have reached a plateau and that we can look for more exponential growth if we rethink our business. Maybe we have too many websites and should concentrate on a fewer number… I’m not quite sure yet, I’m just throwing the question out there and see what happens.
It’s been a little bit more than a year that I have been working on various projects called niche sites. Most of them are profitable in a sense that they have been earning more money than the time and money spent on them. The other thing I like from them is that they have been purely passive. But I know that I’m not getting the maximum out of them. When I look at the conversion rate or the money made per visitor, I see that there is only one metric missing: number of visitors! The conversion rate is great and the money made per visitor is impressive. If I could drive more traffic towards them, I could definitely make a lot more money.
In January, I’ll be starting a link building strategy for one site to see how it goes. As for the others, I’ll include them in my newsletter funnel to improve direct traffic stats. Then, I’ll write more content to get guest posts out with links back. By adding fresh content, I might even be able to participate in carnivals! I’m also giving some thoughts about exchanging links with other website owners. Since I own several properties, I can swap links from my other sites as I receive tons of them towards the same ones.
The good side of the story is that my niche sites have been around for 12-18 months on average. They are now mature enough to receive more backlinks without having Google thinking they are not natural! If only one site can become an authority, it wouldn’t be surprising to make $1000-$2000 per month from my niche sites!
I’m curious to see what you guys are thinking of doing for 2013? Do you have any projects that you want to start? What has worked for you in 2012?
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