How much can one make?

How much can be made on ecommerce site anyways?

[wantfieldh]

I am not talking about the amazons, but say a small to medium website run by one or two individuals.

Of course, the answer depends on a wide varity of variables, such as the product being sold, margin, advertising cost, ect ect.

But to be simple, how much do you guys think a small to medium size website selling nich products make on average per month?

[mr2828]

Derek, can you say in general are you buying existing fully developed sites, or just buying domains and building a site?

Also are you buying packages of sites/domains or picking these up one by one?

[derekwong28]

I buy mainly fully developed sites that are already making money. The average going rate at the moment is around 10X monthly income. Sites such as forums that have good potential for long term income will cost more. However, I am having a lot of problems with forums at the moment because of persistent attacks by hackers and spammers.

[sgg24]

My off-the-shelf ecommerce sites wholesale at £167 (~US$ 250) and sales of all the company's products are at $1 billion in 40 countries.

It depends, as I keep saying, on how much traffic you can bring to the site. Only this will determine how profitable you are.

Free from all non-commercial worries, such as logistics, delivery, packing, makes a website owner much more likely to profit from ecommerce.

[vite_rts]

Hi sgg24

Can you tell me what Network you're with?

Cheers

[mr2828]

Derek, in your previous post you talk about 350 under development - so are you branching out into building your own?

It's amazing you got 130 already bought in 18 months - that's like buying one site every 3 days! Are these like mostly microsites I've seen being sold on Ebay, or more established stuff that's been around for years?

[derekwong28]

I am building sites now as well as buying sites.

Some of the purchases were for networks of sites. The biggest one was 55 sites, and there was another one for 25 sites.

I have to admit it has not been all smooth sailing. I have been scammed quite a few times, and have also bought sites whose traffic collapsed some afterwards.

[mr2828]

Traffic collapse is one of the main worries I thought of when considering this. What do you think is the best way to protect against it? Demand at least 3 or 4 months worth of trailing traffic/revenue stats from the site owner? Even at that length of time, most of the traffic still might be coming from their own network of sites, which they could cut you out of after you buy the site. I guess perhaps it would take at least a full breakdown of the referring sites, and checking the major referrers to see that the seller doesn't appear to own them?

[derekwong28]

Virtually all traffic collapses have resulted from changes in Google's algorithm. This is not that predictable and can happen to any site. Obbviously, a site with a lot unique content would be less suceptible e.g. forums, blogs, and sites constructed entirely with unique content.

Buying sites is a high risk, high reward investment, the sellers of the sites understand this as well. Therefore, you must expect that a proportion of the purchases will not turn out well.

[vincevincevince]

Important - does 'make' include or exclude your reasonable salary?

If you are a one or two person show you may finish the year having virtually no profit in the company, but be quite happy having paid yourselves a reasonable salary all year.

Assuming you don't have shareholders then how much the company makes may not actually matter, so long as it's not making a loss.

[wantfieldh]

That is a little disappointing to hear - that web publishing makes more than ecommerce. I wont' be suprised if we are talking about big web publishing site like cnet, but generally speaking, for a start-up, is pure physical goods ecommerce site a bad place to start for the internet world?

If I were just stepping in this world, should I concentrate on web publishing more?

[andye]

how do you prevent your products from being commoditized and squeezing your margins dry?

Conventional business strategy says you have three options:

1) Focus on a narrow segment of the market, i.e. a niche. This way you service a small (but could-be quite profitable) market that no-one else cares about.

2) Concentrate on lowering your costs, so you can sell at a low price while still making a profit. You'd usually need to sell a high volume to do this effectively, unless you have some other cost advantage over your competitors. This way you can win on price.

3) Differentiate your product/service - make it different from your competitors. This difference doesn't have to be in the product/service itself, it could be in the other things you provide, e.g. could be simple things like payment terms or delivery options. Basically you want to be the 'best choice' for some particular aspect of your product/service. This way you can win on features.

For more detailed info on this, search "Michael Porter generic strategies". There's also a ton of books you can buy.

hth, a.