business plan, starting out an ecommerce site

need to make a reasonable guess about how much income I can generate

[treehugger]

I'm trying to make a forecast of how much income I can generate from a website selling 'bells and whistles'-type HTML services that non-technical website owners can use to jazz up their websites.

After spending a fair while wading through all sorts of internet marketing waffle from dozens of self-appointed gurus, I have decided that I can probably turn about 2% to 5% of my website visitors into customers, all things being equal (and my sales copy being up to scratch :) ).

From reading the much-acclaimed post on SEO Successful Site in 12 Months with Google Alone [webmasterworld.com], it seems I should be able to generate traffic in the range of 500 - 2000 referrals per day by the end of my first year, all things again being equal.

Taking the conservative end of those estimates, with a price of 10 euros per sale, I should be looking at an income of 500 x 2% x 10 = 100 euros a day.

Should my business plan be based on such a simple calculation?

Have I missed anything glaringly obvious?

Thanks!

[derekwong28]

Welcome to WebmasterWorld! Unfortunately things are not so simple. Your conversion rate will go down as your traffic increases from Search Engine Optimization.

The reason is this in the beginning, you will get a few hits with surfers searching for highly specific search terms. As your site ranking increases, you will get more traffic from more general and less specific search terms. Therefore your conversion rate will decrease even though the overall no. of conversions increase.

In my experience, conversion rates as high as 3-5% can only be achieved by pay per click engines using highly targeted keywords.

[treehugger]

Thanks for the tip.

What do you think about all the talk about google? Judging from the number of posts from people reporting that their traffic from google has been hit really hard after the recent algo changes at google, it seems that there is always going to be a risk if one just relies on google.

Do you / people think that the campaign plan outlined in Brett Tabke's article (above) is still mostly relevant? Even when applied to other SEs that might grab google's marketshare?

[derekwong28]

We have been through so many changes and shocks with Google that we don't worry about it much anymore. The changes usually only affects the common search terms whose conversion rates are not very high anyway. Our highly targeted and highly converted search terms are not usually affected by these changes. We now derive more than half our sales through PPC engines, but we found banner advertising and pop-ups were a complete waste of money.

What some SEO thinks is that the more ads there are for a particular search term, the more likely Google is going to downgrade highly optimized pages and return junk in the SERPS results, so as to force people to click on the ads. At the same time, the relevancy for adwords has decreased because of their expanded broad match policy which allows high spending bidders on very general terms to be listed higher than those bidding less on highly targeted terms. Of course this is just pure greed by Google.

If you are selling soft downloadable products, it may be much easier to build up traffic through affiliate marketing instead. For a start you would be able to offer a much better incentives to your affiliates in terms of payout rate e.g. 30-50%. Whereas with stores such as us which sells physical goods, it is difficult to offer anything more than 10%.

You may get much more ideas for marketing soft products from the "warrior forum", just search for it on Google.

Good luck

Derek