Seeking Advise on Revenue Generating Methods!
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Seeking Advise on Revenue Generating Methods!
I am particularly interested in revenue generating methods for Internet Services (anything that don't sell physical objects).
1) Monthly Subscription based would turn away majority of the users because computer users has the mentality that internet services should be free. Unless ofcourse such a service has no free alternative and are considered useful. This method would also incure a sometime hefty Variable Cost due to 3rd Party Payment Processing fee.
More importantly, is how to generate revenue when a service is free.
2) Advertising is the general norm as to how majority of the free online service such as this prestige forum. Getting advertising by yourself or partnering with Google AdSense or similar programs are all considered into this category.
3) Adding premium services to existing free services is another method which business has considered but historically this does not work. Consider the case where Hotmail and Yahoo provides paid service for extra storage and now it is free due to new competition.
Beside these methods, what revenue generating methods are there?
Internet is a tricky arena because it has such a low financial barrier of entry and Open Source software lowered the development barrier of entry. Customer service and good support are the only way i can see that is still a significant barrier in Internet Services business. Partly because it cost real money to maintain a workforce, offshoring is slowly lowering this barrier.
So something that can be consider for charging users would need to be able to change constantly, such as customer service. Something intangible and difficult to replace.
Anyway what are your thoughts are to how to make a few pennies on the WWW.
Thank you for taking the time and would love to have a great discussion going.
Regards
Mian
1) Monthly Subscription based would turn away majority of the users because computer users has the mentality that internet services should be free. Unless ofcourse such a service has no free alternative and are considered useful. This method would also incure a sometime hefty Variable Cost due to 3rd Party Payment Processing fee.
More importantly, is how to generate revenue when a service is free.
2) Advertising is the general norm as to how majority of the free online service such as this prestige forum. Getting advertising by yourself or partnering with Google AdSense or similar programs are all considered into this category.
3) Adding premium services to existing free services is another method which business has considered but historically this does not work. Consider the case where Hotmail and Yahoo provides paid service for extra storage and now it is free due to new competition.
Beside these methods, what revenue generating methods are there?
Internet is a tricky arena because it has such a low financial barrier of entry and Open Source software lowered the development barrier of entry. Customer service and good support are the only way i can see that is still a significant barrier in Internet Services business. Partly because it cost real money to maintain a workforce, offshoring is slowly lowering this barrier.
So something that can be consider for charging users would need to be able to change constantly, such as customer service. Something intangible and difficult to replace.
Anyway what are your thoughts are to how to make a few pennies on the WWW.
Thank you for taking the time and would love to have a great discussion going.
Regards
Mian
- John Cartwright
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Might want to check out How to make money from my site
I'd say it totally depends on just what your site is all about, and how popular it gets. Any one of the 3 methods you mentioned are perfectly fine revenue "gathering" methods, but I wouldn't call them revenue "generating" methods. They are simply the means by which you collect the income, but how you make it--generating--is based on something else. I'll explain...
Real revenue generating methods are how (and how extensive) you market your service, how you design your site, and how useful/interesting/enjoyable the site is to the target market. A good combination of those three is the formula for success on the web.
So if you have a great design, develop a great service/community/product, and then market your site right (and as much as you can), your site will be successful. It's a for sure thing.
Along the way to to building up that success, you'll need to select the right revenue gathering method for your particular venture.
If your site has a lot of functionality, maybe lock down some of the best features for Premium users only. If your site offers a service to users, and it's a long-term thing, then charge a monthly fee. And if your site doesn't have a lot of "lockable" features, and it doesn't offer a long-term chargable service, then AdSense ads (or another type) are your best bet.
With all that said, I'd still say the best way to make pure $$ on the web is infact selling physical goods. What I am thinking about getting into is wholesale product reselling on eBay/Yahoo/Amazon/etc. In particular, signing up for a service very similar to http://www.gegy.com (I'd say that one, but it currently doesn't let anyone but Americans sign up). What it let's you do is list any one of their thousands of products on those auction-type sites before you buy them. And then once you make the sale, you purchase it and the site then it delivers it to the person who bought it from you. You get a 15-20% discount on the retail cost of the product so you can markup the cost quite a bit to make a good product per product, while still offering a great competitive price.
What the average good seller makes online is much more than what the average good webmaster makes off his site, so that's why I'd say selling is better than putting time/effort/resources into a site. But don't let that discourage you if you have a great idea for a site. Who knows, it might be the next Yahoo (buying out companies every other week and all...).
Real revenue generating methods are how (and how extensive) you market your service, how you design your site, and how useful/interesting/enjoyable the site is to the target market. A good combination of those three is the formula for success on the web.
So if you have a great design, develop a great service/community/product, and then market your site right (and as much as you can), your site will be successful. It's a for sure thing.
Along the way to to building up that success, you'll need to select the right revenue gathering method for your particular venture.
If your site has a lot of functionality, maybe lock down some of the best features for Premium users only. If your site offers a service to users, and it's a long-term thing, then charge a monthly fee. And if your site doesn't have a lot of "lockable" features, and it doesn't offer a long-term chargable service, then AdSense ads (or another type) are your best bet.
With all that said, I'd still say the best way to make pure $$ on the web is infact selling physical goods. What I am thinking about getting into is wholesale product reselling on eBay/Yahoo/Amazon/etc. In particular, signing up for a service very similar to http://www.gegy.com (I'd say that one, but it currently doesn't let anyone but Americans sign up). What it let's you do is list any one of their thousands of products on those auction-type sites before you buy them. And then once you make the sale, you purchase it and the site then it delivers it to the person who bought it from you. You get a 15-20% discount on the retail cost of the product so you can markup the cost quite a bit to make a good product per product, while still offering a great competitive price.
What the average good seller makes online is much more than what the average good webmaster makes off his site, so that's why I'd say selling is better than putting time/effort/resources into a site. But don't let that discourage you if you have a great idea for a site. Who knows, it might be the next Yahoo (buying out companies every other week and all...).
That thread talks entirely on Google AdSense....
Well i notice alot of website just try to drive as much traffic as possible to their site and then think of how to make money. Seems to be the common theme of things but preparing a Business Plan in conjuction of service development does not allow this because you can't calculate revenue to sustain your business. The business doesn't look financially healthy either because there aren't any credible financial outlook, i am not talking about 5 year hockey stick type graph either (those are pretty much as accurate as a child's drawing).
I like AdSense because it is contextual advertising and it actually increases User Experience instead of those annoying ads. Hit the monkey and you win $1000, though some times i click on it to help the webmaster out.
I will also take a look at gegy.com. Notice that the first thing is excluding physical material since that is a traditional way of making money, online services should be the future but immature in how to make a living off it on the Net.
Well i notice alot of website just try to drive as much traffic as possible to their site and then think of how to make money. Seems to be the common theme of things but preparing a Business Plan in conjuction of service development does not allow this because you can't calculate revenue to sustain your business. The business doesn't look financially healthy either because there aren't any credible financial outlook, i am not talking about 5 year hockey stick type graph either (those are pretty much as accurate as a child's drawing).
I like AdSense because it is contextual advertising and it actually increases User Experience instead of those annoying ads. Hit the monkey and you win $1000, though some times i click on it to help the webmaster out.
I will also take a look at gegy.com. Notice that the first thing is excluding physical material since that is a traditional way of making money, online services should be the future but immature in how to make a living off it on the Net.
Yeah if you do give Gegy a try, let me know how it goes.
From the sounds of it, it's not that complicated, or challenging to make a few bucks using their service. Not sure if it's something that can easily make you a decent yearly income, but it definately has the good potential.
Oh and regarding the handling of physical materials, The drop-shipping they offer (like many others also) is great because you don't handle any goods. Plus you don't have to do much marketing since eBay, Amazon, and Yahoo! Auctions are the top shopping destinations on the web. It's just a matter of having a popular product, and then having a competitive price and then the if the theory is correct, the sales will come.
I can't wait to try it out and see if it lives up to the hype. Hopefully it does.
From the sounds of it, it's not that complicated, or challenging to make a few bucks using their service. Not sure if it's something that can easily make you a decent yearly income, but it definately has the good potential.
Oh and regarding the handling of physical materials, The drop-shipping they offer (like many others also) is great because you don't handle any goods. Plus you don't have to do much marketing since eBay, Amazon, and Yahoo! Auctions are the top shopping destinations on the web. It's just a matter of having a popular product, and then having a competitive price and then the if the theory is correct, the sales will come.
I can't wait to try it out and see if it lives up to the hype. Hopefully it does.
The problem with Gegy with auction sites is that you have to bear the differences if it is sold for less than the fix price that you have to pay. You are also subjected to backorder if Gegy runs out of stock, which is not a good thing if your auction ended.
If you sell through auction, you are responsible for managing customer service and item returns (they allow that). I don't like the return policy if you have to manage it yourself.
If you sell through auction, you are responsible for managing customer service and item returns (they allow that). I don't like the return policy if you have to manage it yourself.
Well that's why if you use eBay with Gegy, you need to set a fixed price. But that costs a fee so that isn't the best place to sell the items for a profit.
Amazon is where I think anyone who uses Gegy should sell. If you sell on the marketplace, there isn't a listing fee, and it isn't an auction system so whatever price you set that is what it will sell at. And if you sign up as a power seller at Amazon (recommended if you list more than 30 per month), the end commission is reduced a lot so you can earn more.
To calculate your profits on Amazon though, you must subtract the markup % you added to the Gegy price, and then minus the 6% or so Amazon commission and then you get your earnings per sale.
So if you markup the price 15%, you earn 9% on the sale. So if/when I try this, I'm not using eBay at all to avoid their high commission, I'll be just stickin' to Amazon.
Amazon is where I think anyone who uses Gegy should sell. If you sell on the marketplace, there isn't a listing fee, and it isn't an auction system so whatever price you set that is what it will sell at. And if you sign up as a power seller at Amazon (recommended if you list more than 30 per month), the end commission is reduced a lot so you can earn more.
To calculate your profits on Amazon though, you must subtract the markup % you added to the Gegy price, and then minus the 6% or so Amazon commission and then you get your earnings per sale.
So if you markup the price 15%, you earn 9% on the sale. So if/when I try this, I'm not using eBay at all to avoid their high commission, I'll be just stickin' to Amazon.