Would you do this?

Change your site?

[dickbaker]

Right now my website is my sole source of income. I make a decent middle-class income, but I've made more in a previous line of business.

Anyway, there are three sources of revenue from my site. One is an ad agency that places banner ads for their clients. They pay CPM on a yearly contract, and the income from them is roughly 25% of the toal.

The second source of income is from widget stores that pay for a full-page ad on my site. Their subscriptions constitute another 25% or so of the income.

The third source is the online store. I started it early last year as an experiment, and it currently has about 150 items on it (various models of roughly a dozen different products). The profits from the online store make up 50% or so of the income, although sometimes it's better.

As I look at the widget stores, I realize that my "hourly wage" is lower, since it takes a lot of time to contact the store owners, get them on the site, and then finally to get them to pay.

The online store doesn't involve all of that.

I already have very, very good traffic, and I'm considering dropping the widget stores and selling 1000+ widgets myself. I cannot sell the widgets and ask the stores to advertise, as I would be very much their competitor.

I've tried to think of a way to somehow keep the traffic, but keep the two sites separate. I don't think there's a way.

I feel confident that the online store will do well, but there's always a risk. Once I go 100% ecommerce, there would be no going back to the widget stores.

Would you take this risk?

[lorax]

I'd review and tweak the current model before I'd make such a change. For instance, how well do you rank for the widget store names in the SEs, do they draw in traffic on other keywords and if so, how much? Do you have any stats that correlate their presence on your website with dollars? If you do, that's leverage for them to keep working with you or to bump up their rate of pay.

[onlineleben]

Why not become a widget-store yourself?
If the concept works - and your income is proof for that - you could go into direct competition with the widget-stores listed on your site. Set up a second business (dicks-widgets) and link to it from your main website. This way you are not in a superior position to your clients that have their site listed on yours, but compete on (more or less) equal terms and also make money from selling direct. Just make sure that you get a premium listing n your category.

[gpilling]

I agree with @onlineleben make up a bunch of your own widget stores and advertise on your own site. You can have your cake and eat it too. If it works, then you can drop the other widgetstores. If it doesnt, then you can just remove your own stores and maintain the old way of doing things.

[dickbaker]

What I'm considering is becoming a widget store myself.

Right now I'm getting about 25,000 to 30,000 page views a day, and that will increase to 45,000+ by the holidays. I have a link to my online store, and that page gets 600 page views daily right now. It will increase to 800 by the holidays. Still, that's not enough.

I've already had one widget store owner call to ask for a refund on his ad because he thinks I'm in competition with him (I wanted to ask him if he's also dropped his Yellow Pages ad because the other advertisers in the book are competitors).

The more I promote the online store portion of the site, the more widget store advertisers will leave. I'm certain of that.

The traffic doesn't come from people searching for the widget stores. It comes from them searching for the brands and models of various widgets. I'm first-page for hundreds or even thousands of different phrases. Once the visitors get to the site, they find the ads for the widget stores.

So, the visitors are primarily interested in the widgets, not the stores. If I have the widgets to sell, I think I'd get much more in sales than I do now.

If I make the online store an offshoot of the main site, it won't get the traffic.

It just seems that I have to choose between continuing the widget store advertising or competing with them.

[bwnbwn]

dickbaker if you give them as much exposure as you do yourself I can't see why they would leave. What I mean is set your advertisment up just as you do them and I can't see an issue.

If you push them below the fold and hog the fold then yes I would leave but set up correctly you could keep them and grow your store at the same time.

Wish ya the best.

[Mike McKnight]

I like the diversity of your current scenario.

what would happen if the widgets fall out of favor in the marketplace?
all the best, mike mc

[dickbaker]

Mike McKnight, the problem with the diversity is that I really can't expand my income very much. The number of widget store owners stays really pretty constant: as I add more, almost an equal number go out of business for some reason or another (retirement, sold business, etc).

The widgets and items related to them are part of our culture. As long as there's people there will be a market for them.

If I expand the online store much beyond what it already is, I risk losing more store owners who feel that I'm competing with them.

To see what sort of sales volume is possible, I placed an order with an online store that I'm certain I can compete with. I cancelled the order an hour later, but got the sale number. Exactly one week later I placed and cancelled another order, just to get the sale number. Assuming they consecutively number each order, they did a bit over 800 sales in one week.

My average profit per item is $25. I'd be happy with even a quarter of what they're doing.