How my Website Made $100/month and Why I have to Start Over

03 May
May 3, 2013

Monetizing niche sites gone wrong How my Website Made $100/month and Why I have to Start OverAbout two months after I launched my niche website, I was completely psyched to be raking in over $100 per month through affiliate links. Things were looking good and the more traffic I attracted the more money I made. All signs pointed to more and more money. Unfortunately, everything was a bit too easy and now I have to start over with my monetization strategy. Why? Read on to learn from my experience and what I plan to do—there’s a lot of good and bad here that will help you with your internet marketing, so put on a pot of coffee and hang with me.

If you’re not familiar with my niche site, go check out this post I wrote about how I ranked #1 in Google in 1 month. This is the only place I disclose what the site domain and keywords are since I don’t like to draw people who may be searching for it to this website.  Same goes for just mentioning the site or linking to it from here, sorry.

Monetizing a niche site How my Website Made $100/month and Why I have to Start OverMy original plan for monetization was pretty awesome if I do say so myself. If you go to my niche site, you’ll notice that it focuses on video tutorials. Each tutorial shows visitors how to build something. My first thought was, “how do I add more value to these video tutorials?” Easy—I’ll provide part lists that show exactly what you’ll need to build the things you’re learning about.

This is when the money started rolling in. It seemed that I should take this one step farther. In addition to showing people what they need, why don’t I show them where to get it?

Enter affiliate marketing.

Affiliate marketing, in the simplest terms, is a referral based system in which I, the website owner, gets paid for driving sales for another website. In other words, I earn a commission if someone from my website goes to another site that I have recommended and purchases something. There are many different variations and models of affiliate marketing, but that’s more or less the core concept. This is all made possible through affiliate links. These special links are able to track when people come from my site to the site that is selling the product.

As an example, Joe lands on my tutorial site. He wants to build one of the fantastically awesome projects. He needs one of the parts in the part list, so he clicks the link that goes to the store where I’ve found the part for him. The link that I provided is a special affiliate link and it “drops” a cookie in Joe’s browser which tracks him as he goes from my site to the online retailer’s site. When Joe purchases the product (or any product at that time), the retailer is able to see that he came from my site and I get credit for the sale and receive a commission. That’s the standard affiliate marketing model. Got it?

Trials and Tribulations of My Affiliate Marketing

Now let’s get a bit more fancy. Enter Ebay.

Ebay Affiliate Program Review 300x108 How my Website Made $100/month and Why I have to Start OverIn an effort to provide my visitors value, I wanted to list spots that had the best prices on parts which 99% of the time was Ebay. Naturally, I signed up for Ebay’s affiliate program which is called Ebay Partner Network. It was the best of both worlds—my visitors got the best prices and I earned commission. Here’s where things get a little tricky. Remember how I said there are various models of affiliate marketing? Well, Ebay has a unique model.

The Ebay affiliate marketing model pays you a small amount per click which is actually pretty awesome. The catch is that your earning per click (EPC) is based on an algorithm that factors in how much people who come from your site are spending. If people from your site are spending a lot, your EPC goes up. If you drive a bunch of junk traffic, your EPC goes down. This is where I ran into trouble.

Strategic Marketing Ebay Affiliate Program How my Website Made $100/month and Why I have to Start Over

The problem is that the Ebay algorithm can change your EPC quite randomly and it’s difficult to predict when and how it’s going change. As you can see in the table above, I was floating along for quite some time with a respectable $0.13 per click. This isn’t a huge number compared to if I ran PPC ads like Google Adsense which can be $0.50 to $2.00, but the Ebay links on my site are EXTREMELY relevant to the content and I knew I could make up for the low EPC by getting a lot of clicks. So I started making as many parts in my part lists Ebay affiliate links.

Maybe a bad decision.

Yes, this worked at getting me a good amount of clicks, but now I was driving click throughs to products that people would probably never buy from Ebay. My mistake was thinking that my EPC would not drop below $0.13 per click, after all, that is a pretty low number, right? Wrong. As you can see in the graph above, Ebay dropped my EPC to $0.01–$0.02 per click and essentially killed my income stream. I went from $4+ per day to a measly $0.40 per day. I’m not upset, just disappointed to learn how low and suddenly the Ebay EPC could drop.

The other issue with my monetization model was that I was driving people to inexpensive products. The parts used in my tutorials are cheap. There’s not a lot of margin on them for Ebay to make money which is why it makes sense that Ebay doesn’t have much left over to share with me. So, the products that I actually was helping to sell weren’t helping my EPC much in the Ebay algorithm.

In hindsight, my strategy was fundamentally flawed. It seems obvious now, but like I said, it wasn’t obvious to know the floor of the EPC until I hit it. I just hope $0.01 is truly the floor.

The Lesson

The Ebay affiliate program is great because it pays you per click as opposed to per sale (or lead) like most other affiliate programs. It’s not really a secret how the Ebay affiliate algorithm works, I mean, they essentially tell you to not do what I did. The insight I’m providing you now is what the low point of the EPC can be. If you choose to use the EBay Partner Network, don’t get greedy at the beginning. Don’t think you’re starting out at the lowest EPC.

Plans for the Future

I don’t know if I’ll ever be able to repair the health of my Ebay EPC, so I have a few different plans for monetization:

  1. Optimize Ebay Links — I’ve already started removing the Ebay links that point to products that no one would ever buy. Yes, this will reduce the amount of clicks I receive, but hopefully it will improve the percentage of people that actually buy once clicking through. I don’t think I’ll be able to do anything about the price point of the products I recommend. It’s always going to be cheap parts.
  2. Strategic Marketing — Google Adsense 300x123 How my Website Made $100/month and Why I have to Start OverOptimize for Google Adsense — I’ve focused a bit more on using Google Adsense. With the higher EPC that Adsense can provide, I only need to attract a handful of clicks per day to match the earnings I was seeing from the Ebay affiliate links. The problem with Adsense is that my audience is fairly savvy and tend not to click the links. In addition, the income stream is unpredictable. So far, I’ve fluctuated pretty randomly between $0.05 to $3.00 per day with many more days on the low side. My other issue with Adsense is that it is seems kind of shady. The most successful techniques for monetizing via Adsense essentially include tricking people into clicking the links. I hate this. At least with affiliate links I have control of what they are and how they fit within my content. I was confidently recommending products I believed in.
  3. Try Other Affiliate Networks — I’m experimenting with other populate affiliate networks like Commission Junction who use a more traditional affiliate model of earnings per sale. I’ve seen some decent success with this, particularly on this site, but have yet to land a sale on my niche site. This model is even more annoying to someone who likes to see instand, steady and predictable income flow. Although the payout is better, sales happen much less frequently than clicks. The timeframe is for everything longer which makes it a much slower process to optimize your website.
  4. Create My Own Product — The plan would be to create a digital product—something that would be attractive to the niche website audience—and advertise it on the site. I’ve surveyed my subscribers and have identified a product that over 50% of them indicated they’d definitely be interested in. I always like to do the least amount of work before I know if something is going to pan out or not, so my next step is going to simply be a test. I’m going to create a coming soon sales page. Once it’s complete, I will test the success by advertising it on the niche site like the product already exists. This will allow me to test price points, sales strategies, etc. before ever putting in the blood, sweat and tears to actually create the product. The other side of the strategy is to collect email addresses while I collect insights. This is a beautiful thing, because once I’ve determined the optimal way to sell the new product and it has been created, I’ll have a list of hot leads to blast an announcement email to. This strategy deserves an article of its own. More later.

What do you think?

There’s a lot to think about here. A lot of variables. A lot of strategies. I know I have a lot more questions than answers, but this is why I love marketing. The more you learn the more you don’t know. What has worked for you? What do you suggest I should do? If you checked it out, what do you think of the niche site? I’d love to keep in touch— subscribe now to see how this saga continues.

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