I have a problem with niche sites.
My problem is that niches sites lend themselves to what I call “small thinking”.
It’s inherent in their very nature – even the name, “niche” connotes something very small.
And I often find that this affects niche site builders, too.
While it’s certainly not true for everyone, I think most niche site builders go in with the following mentality.
I’m going to build a niche site that will hopefully make me a few hundred dollars a month, or maybe even a thousand dollars. Once I’ve done that, I will either let it sit and passively earn money, or try to sell it for 10-15x the value. Then, I’m going to do it again and again.
I understand the appeal for passive income. I also understand the appeal for diversity/not holding on to a risky asset.
But can we do better?
Consider an Amazon site that earns $6k a year for its owner. I don’t think too many people would complain with an extra $6k per year, considering that it is mostly passive, and that it could probably be flipped for around $10k. Most likely, it’s a good return on your investment. Sweet.
But it’s important to consider that a site like that is also earning about $100k a year through Amazon – 95% of which is going to amazon, and the product sellers.
So the true value of the site, is at least $100k, and you are only getting $6k from it.
Kind of sucks – doesn’t it?
If we start thinking that our sites are worth $100k, and not just $6k, we can start to think about how we can get more value out of them.
There are two ways, logically.
- Increase your commissions
- Increase the overall value of the site
Here are some ideas:
How To Increase Your Commissions
Cut Out Amazon And Go Direct To Manufacturers And Related Businesses
Amazon restricts its commissions to around 6%. There’s nothing we can do there – except to cut them out altogether.
So who else has a stake in this product?
Related businesses and manufacturers.
For example, let’s say you have a survival knife site that is ranking for “best survival knife”. That’s a pretty valuable term for anyone who owns a survival knife business.
If you’re site is making $100k a year in survival knife sales on Amazon, and you have proof, that could easily be worth tens of thousands of dollars to them to feature their own products without the help of Amazon.
Collect the contact info of some businesses and start making some calls (or sending emails).
A few approaches for negotiation would be:
- Seek out a custom affiliate program – If there is currently no affiliate program for the products, maybe they could make one in exchange for you featuring their products and making them a preferred seller. Offer to put their products at the top of the page, or to replace competitor products with theirs. This could be worth a much higher commission than what you are getting on Amazon, and it benefits the business and manufacturers, who also lose a commission on Amazon.
- Create an ecommerce site – Change your site from just featuring only Amazon products to a dropshipping business, and work with the manufacturers directly to get the products at wholesale prices. You can increase your selection, and sell products at potentially a lower price.
- Other advertising (display) – Your audience loves survival knives. Ask some shops if they are interested in advertising on your site for additional monthly recurring revenue.
Understand that businesses and manufacturers are also losing out by having Amazon as a middleman, and that there may be opportunities for partnerships. It’s not hard to find contact information for most businesses, and with the help of a virtual assistant you can easily get those emails out. Any additional revenue factors exponentially into the sale price.
Add Higher Commission Items
Now that you’ve established a market and are getting solid traffic that converts, perhaps you can double back and look if there are any relevant offers through sites like ClickBank or ShareASale, where the commissions are often 50%+.
This may not have been your strategy from the start but it doesn’t mean it isn’t worth looking into. If you’re selling knives maybe there is a high end survival course, or other knife memorabilia. Think about your audience and their interests and find ways to build a brand around that.
How To Increase The Overall Value Of The Site
A lot of people get complacent after they hit number one in the rankings. They assume that because there is nowhere to climb in the SERPs, their value is maxed out.
Not necessarily true.
Here’s how you can increase the overall value of your website
Build An Authority Site
There’s no reason a niche site can’t transition into an authority site. Depending on the niche, there might be an opportunity to build an authority site with an engaged audience behind it. Consider How To Grow A Mustache, which started as a small niche site and has now grown into a massive authority site for all things manly.
From there, there are a zillion ways to monetize, such as:
- Create a paid forum/membership site – if your site appeals to hobbyists they might be interested in building a community. In money terms this could be a paid forum or membership site.
- Create a product – Is it possible to create your own product like an ebook, or a physical product that you could then sell on your site? On How To Grow A Mustache, Doug created his own brand of shaving cream, as well as a book.
- Start A Newsletter – By building a newsletter you are creating an addition channel through which you can market to your customers. It also increases the sale value.
Pursue Additional Traffic
Organic traffic is important but it is not the only source of traffic that is available. While building out your authority site you can try any number of content marketing techniques to build an audience.
Why not even consider paid traffic/advertising?
Just do the math on what it costs to advertise and how it converts.
Check Your Conversion Rates
Even if you may be hitting your limits for traffic, that doesn’t mean there aren’t opportunities to improve your conversion rates. It’s tough to bench mark these metrics and know if you are leaving a lot on the table, but that’s what testing is for.
For most of us, building a site that reliably produces $500-$1k in profit every month is not an easy thing to do. A site like that might come around once or twice a year.
Before putting it in your archives, or selling it, why not try to grow it through the above methods to get more value out of the site?
Have fun with it and try a few things. What’s $10 in paid traffic or a few emails to see if there is interest?
It’s a heck of a lot easier to grow a business than start an entirely new one. If you’re not comfortable with holding onto your site long term, you don’t have to, you can still sell it, but potentially for even more.
A great time to try some additional methods are after the site has established itself, but maybe hasn’t been around long enough and built up several months of historic earnings.
If it doesn’t work out, you’re not any worse off, because none of this requires you to change your strategy. If you’re concerned about time, most of this is simply a bit of research and sending a few emails.
Stop underselling yourself and start thinking big.