“This time, like all times, is a very good one, if we but know
what to do with it.”

Ralph Waldo Emerson quotes (American Poet, Lecturer and Essayist, 1803-1882)

There are good times and there are bad times. Bad times don’t last
long; bad news is that neither do good times last very long. Five
years ago nobody had imagined the web would be such a boom. Remember
everything with a dot com was perceived a losing proposition, the
great dotcom crash and ’school boys can’t run businesses’ etcetera.
Just two years before that everything with a web address seemed like a
road to a gold mine. Back to the present, what we are now witnessing
is a boom phase. A boom time that is based on pure fundamentals having
inherent growth and profitability strength. This boom is
different from the previous bubble and will last long enough. This is
the growth phase and you can benefit from it.

The Doctom Bubble of late 90’s

Internet economy is booming like never before. Revenues are soaring
and websites have so much to offer. This time there is a distinct
difference from the dotcom hype of late 90’s. The bells and whistles
are missing and the web economy is based on strong fundamentals.
Another interesting fact this time is that the economy is based on the
current earnings of the web businesses unlike the late 90’s when the
economy was based on anticipated future earnings.

So what kind of revenues should an entrepreneur expect?

In bullish times like these any web business with a good
service/product offer and traffic should be able to make a good
return. Looking at some figures.

Revenue from product and service sales

Suppose your website gets around 5,000 unique visitors daily (that’s
1,50,000 a month) and you have a focused site with a good product
offer, a 1% to 1.5% sales conversion is achievable. In our case let’s
consider a conservative figure of 1%. Let’s say your average sale is
$20. You can easily expect a daily revenue of $1000, which works out
to around $30,000 in a month.

Now the assumptions. How tough is it to achieve 5,000 visitors
daily?

Well, that’s same as asking how tough is it to lose 5kgs. Both are
easily attainable. A little effort, a little expert guidance and
patience and 5,000 visitors daily is easily attainable.

The 2nd assumption. 1% conversion. How tough is that?

Well let me say, if you have a good website and your product offer is
less than $10 1% is not very tough. This does vary for some business.
Some products are easy to sell over the web examples of which are
books, CDs, DVDs. Products by relatively smaller companies or
products that require “touch and feel” or newly launched don’t get as
high conversion ratios.

Conversions depend a lot on upon your website content, aesthetics,
usability, sales copy, the convincing power of your website and the
product per se. For example even a 5% conversion for an e-product
would mean a high profitability whereas for a physical product to get
the same profitability it would mean achieving atleast 20% conversion.

$30,000 a month. That sounds good. If it was that simple why
isn’t everyone making it?

Maintaining your weight is simple too. Why is half the word obese
then? Being happy is simple too. Yet unhappiness prevails and
psychiatry is a booming industry. A relationship is simple too. Yet
see how complicated things are, if you read any of the Agony Aunt
columns.

There are companies who have developed such networks on the web which
would perhaps have been unthinkable in the offline world in those
budgets. The fact is web has changed the way business works. Many
companies refuse to believe that. The choice is yours; you either
believe those old companies or see and experience the radical changes
happening in the ebusiness world.

Revenue from Advertising

If content is king, then traffic is gold. Now if your website is
getting 5000 visitors a day which is around 1,50,000 visitors a month
don’t expect any wonders from advertising. Perhaps a $1500 to $2000
per month should be good enough.

But if you wish to be one of those suckers like me who survive on
advertising and nothing but advertising then read on.

Your first aim should be to get atleast 20,000 visitors to your website daily.

How tough is 20,000 visitors daily?

Not tough. But not easy too. Sustained effort, expert guidance,
patience and voila!

Once you manage getting 20,000 visitors a day then your revenues could
work out to be somewhat like this:

You add contextual advertising to your site. Chisel and fine tune your
way to achieve atleast a 5% CTR (click thru ratio). It’s not easy but
not difficult too. It took me around 2.5 months to get it right. I get
a CTR between 5% to 10%.

If you achieve a 5% CTR and you get an average PPC (pay per click) of
$0.50 (which is very conservative) your daily income could range
around $500 that’s $15,000 a month from contextual advertising alone.
CPM advertising would rake in a couple of hundreds more.

If PPC (pay per click) of $0.50 sounds high to you, consider the
average PPC I get is around $1.5. And yes let me add, one of my sites
has a PPC of $100! Yes that’s $100 per click. Probably the highest on
the Internet so far.

The boom times have just begun. I am no pundit but mark my words, the
Internet Economy is likely to go beyond most us anticipate. There is a
strong reason behind this. Strong fundamentals combined with sound
revenue models. The analysts forecast online sales to continue
experiencing double-digit increases primarily due to the growing
number of online buyers.

If the late 90’s was the flirtation phase, this is the happy marriage
phase. In the flirtation phase entrepreneurs were
exploring for revenue models and
anticipating future earnings. In this date
and time entrepreneurs are implementing
revenue models and relying upon current
earnings. The distinct point of difference is current
earnings as different from anticipated earnings.

Puneet Mehrotra is a web strategist at www.Cyberzest.com You can
email him on puneet@cyberzest.com