The Entrepreneur Forum | Financial Freedom | Starting a Business | Motivation | Money | Success

The secret that was left out of The Millionaire Fast Lane Book

Learn how to build wealth and win financial freedom the Fastlane way!

Say "NO" to mediocre living rife with jobs, ascetic frugality, and suffocating savings rituals— learn how to build a Fastlane business that pays both freedom and lifestyle affluence. Join more than 70,000 entrepreneurs who are making it happen.
Join for FREE Today
Get the books
Remove ads? Join Fastlane INSIDERS
(Registration removes this block)
A detailed account of a Fastlane process...
Status
Not open for further replies.

Disruptive

Contributor
May 23, 2012
35
23
In The Millionaire Fast Lane book, MJ talks about his stats from his internet business:

He said that:

- at any given day, he had an average of 12.000 visitors to his website
- his "conversion rate" was around 12%
- his "unit price" was around $4

This means that for every 12.000 visitors, about 1440 would "convert" at $4 each, and MJ made around $5760 per day, or around 170k a month.


Now, 12.000 visitors a day is a lot of traffic...

The question is, how do you get 12.000 visitors a day?


You can't "blog/seo your way" to 12.000 visitors a day... The only keywords that have such volume of traffic are highly competitive and the people that rank on top have deep pockets and full-time teams working on SEO...

If you go with "long tail keywords", your chance of ranking on top are higher, but the volume is simply not there to get your 12.000 visitors a day, even if you make like 10 blogs/sites.


The answer is: To get that volume you need to buy traffic.

The problem is, when you look at PPC prices from networks like Google Adwords, specially for keys with significant volume, you realize that most clicks cost from $0.50 - $1.

If you find a keyword that costs less than that, chances are, it has insignificant volume or it doesn't convert at all.

And even if you think about buying ads directly from websites, you end up with $15-25 CPM's, which lead to click prices over $0.50 in most cases.


Having this in mind... let's run the math again on MJ's stats:

- at any given day, he had an average of 12.000 visitors to his website
- his "conversion rate" was around 12%
- his "unit price" was around $4

If you had to pay for those 12.000 daily visitors, at a PPC of $0.50 each, you would have to pay $6000.

Remember that MJ made around $5760 per day from the leads he sold... which means that if he had to pay for ALL his traffic, he was in fact operating at a LOSS of -$240 a day. Not so great...


Now... we know that MJ had a great domain... which by itself got decent "direct traffic" which obviously he didn't have to pay for... and maybe he was #1 for some relevant keywords but still... most of his traffic had to come from paid sources.


Maybe PPC was way cheaper back then... maybe CPM's were way cheaper back then... but nowadays the price of ads has just skyrocketed, making it almost impossible to operate a lead generation business via paid advertising, which limits scaling and expanding hugely.


I think this was left out of MJ's book.
 
Don't like ads? Remove them while supporting the forum: Subscribe to Fastlane Insiders.

The-J

Dog Dad
FASTLANE INSIDER
EPIC CONTRIBUTOR
Read Fastlane!
Read Unscripted!
Summit Attendee
Speedway Pass
Aug 28, 2011
3,913
9,797
Ontario
It might have been left out of the book but it sure wasn't left out on this forum.

Buying ads is a game of numbers. It's also one of the biggest barriers to entry to online businesses. It's best to do the math BEFORE pursuing a business.
 

Disruptive

Contributor
May 23, 2012
35
23
The-J,

My point is that, from all the major sources of traffic that can provide the 12.000 visitors a day, their average PPC range is from $0.50 to $1.

I'm not saying that you can't find one or another keyword that has a PPC of $0.20... but if you find one, chances are, it only has 30-40 visitors per day... the volume is just not there.

The current price of advertising makes almost impossible to operate any business on a large scale that relies on lead generation / advertising as its revenue source.

When you can't pay for advertising, you can't scale and you are limited to your website's traffic.
 

Rain

Contributor
Read Fastlane!
Apr 5, 2011
213
84
I think the book's overall purpose was to highlight the Fastlane Millionaire philosophy, rather than dissect the author's own business down to the atomic detail.

Edit: I also don't recall MJ ever telling anyone that his business model could be easily replicated. I'm not necessarily saying that you're wrong here, but we all have our own paths. The Internet is great because of the leverage it provides, but it's still not a free lunch.
 
Don't like ads? Remove them while supporting the forum: Subscribe to Fastlane Insiders.

kwerner

Bronze Contributor
Read Fastlane!
Speedway Pass
Oct 4, 2007
1,388
266
Interesting observation on how to get massive traffic to your site, regardless of whether the dollar amounts and stats mentioned are accurate or not.
 

MJ DeMarco

Administrator
Staff member
FASTLANE INSIDER
EPIC CONTRIBUTOR
Read Rat-Race Escape!
Read Fastlane!
Read Unscripted!
Summit Attendee
Speedway Pass
Jul 23, 2007
33,474
128,816
Alpine, UT
The question is, how do you get 12.000 visitors a day?

Hard work.

The only keywords that have such volume of traffic are highly competitive and the people that rank on top have deep pockets and full-time teams working on SEO...

I was a one man SEO team.

To get that volume you need to buy traffic.

Wrong.

While I don't remember the exact numbers, paid advertising (PPC) was probably around 25%. The rest came from SEO and affiliate relationships. I was on PAGE 1 for all long tail, targeted keywords. I also was on page 1 for some generics as well.

Do you see this forum has A LOT of traffic? As I write this, it has 313 people online and nearly 10,000 visited today.

Do you know how much of that I PAID FOR?

None.

Zero.

But I guess, to get traffic, I need to pay for it.

The problem is, when you look at PPC prices from networks like Google Adwords, specially for keys with significant volume, you realize that most clicks cost from $0.50 - $1.

I remember my PPC costs being around 50 to 60 cents per user, hardly cheap. There were some keywords I bidded low dollars. (1.08, etc.) In general though, my ROI on PPC was steadily declining due to increased acquisition costs and it was probably the lowest ROI, and unpredictable. I paid affiliates 20-45% - this was an acquisition cost I could project.

we know that MJ had a great domain

I remember being quickly disappointed (within months of purchasing it) that "type in" traffic was virtually nothing. The only thing the domain did was juice my SEO rankings and strengthen brand image.

making it almost impossible to operate a lead generation business via paid advertising, which limits scaling and expanding hugely.

Did I advocate starting a lead generation business recently? I don't recall doing so. I think its sad that all these people are rushing out and examining the "lead gen" business simply because it was something I did. There were reasons why I exited the business, one of which, was my perspective of its viability ongoing in the future. Additionally, what works today is far different than what worked yesterday. Nowadays, most traffic is social in nature.

The secret that was left out of The Millionaire Fast Lane Book

Sorry bro, there is no secret unless years of hard work is somehow a secret.

In closing, here is something to consider: Most of your premises are false and therefore, your conclusions will also be false.
 
Don't like ads? Remove them while supporting the forum: Subscribe to Fastlane Insiders.

Disruptive

Contributor
May 23, 2012
35
23
If you think about this problem long enough, you realize it's bigger than it seems at first sight...

It's not only the business models that rely on leads and advertising as their revenue source that are ruled out, it's basically every business that is basically a broker/intermediary/drop-shipper.

Just think about it... can you really make more than $0.50 per EACH visitor that comes into your website, when you only get a percentage of a sale?

If your conversion rate is 1%, which is typical for most products... it means that you would have 1 sale per each 100 visitors.

100 visitors, at $0.50 each would cost you $50...

Can you REALLY make $50 on commissions per each 100 visitors?

Well... if you got 10% commission, to get $50 in commissions, you would have to sell a total of $500.

Is there really a product that sells for $500 and has 10.000+ searches a day?

And this is just to break even... you are not making any profit yet...

Even if you had 50% commission......to get $50 in commissions, you would have to sell a total of $100.


Do you see the problem here?

Basically EVERY business that relies on being an intermediary can't afford to pay advertising... Which means, it can't scale! (unless the product in expensive enough to award a above average commission).


The only solution I see is to develop your own products... and get full margin, not just a commission.
 

kwerner

Bronze Contributor
Read Fastlane!
Speedway Pass
Oct 4, 2007
1,388
266
Thanks for the clarifications MJ!


Basically EVERY business that relies on being an intermediary can't afford to pay advertising... Which means, it can't scale!

I'd respectfully disagree with this statement.
 
Don't like ads? Remove them while supporting the forum: Subscribe to Fastlane Insiders.

Disruptive

Contributor
May 23, 2012
35
23
MJ DeMarco,

Don't get me wrong. Your book is probably the best book I've ever read.

It's the only book I've ordered 3 copies of. I gave one to my brother and kept 2, and I've recommended it to a lot of people.

I think it's very good and you have a lot of merit.


I'm trying to use it as much as I can to improve my life, and there are certain things I need to understand, so that's why I'm here.

In your book, under "Potent Fastlane #1: The Internet" you suggest 7 models:

1) Subscription Based
2) Content Based
3) Lead Generation
4) Social Networks
5) Brokerage Systems
6) Advertising
7) E-commerce

I'm not saying you can't build profitable businesses on any of those categories. Sure, you can rank for a couple of keywords with SEO and get some traffic and make some money...

I'm talking about scaling... getting 10.000+ visitors a day.

Can you do it TODAY without paid traffic? Probably not...

What I'm saying is that, with the current advertising prices, you can't run most of the models you suggest in the book profitably if you are buying traffic.

And if you don't buy traffic, it's almost impossible to get to that volume today with SEO alone, with the established players already there dominating most keywords and paying a lot for SEO, and all the SEO work that has been done for years.

Only 1) and 7) can afford to pay for traffic, and 7) can only do it if it's selling it's own product, not drop-shipping/sell other people's products.

So, if all the other models can't afford to pay for traffic because they rely on intermediation, they can't scale... and if they can't scale, they aren't fast lane.

To have scale, you can't rely on commissions (unless the product is expensive enough to award a big comission, like cars or expensive websites, etc..) ... you need full margin on what you sell... you need to sell your own products. All other models that you suggest there are not fastlane with the current advertising prices.

I can't see it any other way. If you think I'm missing something, please let me know.

I really would like to clarify this.
 

Vigilante

Legendary Contributor
Staff member
FASTLANE INSIDER
EPIC CONTRIBUTOR
Read Fastlane!
Read Unscripted!
Summit Attendee
Speedway Pass
Oct 31, 2011
10,902
64,363
Gulf Coast
Basically EVERY business that relies on being an intermediary can't afford to pay advertising... Which means, it can't scale! (unless the product in expensive enough to award a above average commission).

The last business I built and sold was entirely an "intermediary." It was a services business that aggregated and organized services, and had no owned assets of it's own. We didn't own a single screwdriver, ladder, delivery van or W2 technician. The business quickly scaled beyond our capability to provide infrastructure... we sold it in to a larger organization, and today it's the second largest installation provider in the country and serves the world's largest retailer as it's largest customer.

Take words like CAN'T out of your vocabulary. In the one post above this one, you used the word "can't" five times. You used the words "probably not," "impossible," and other limiting words just in your most recent post. Words create artificial ceilings where none need exist. If I followed your thought process above (and we had thin margins and the entire business model was structured on thin commissions) we never would have been able to do what we did. If I had the mentality of what couldn't possibly happen (I can't pay advertising, I can't scale, I can't bid on a contract with the world's largest retailer) the biggest accomplishment of my life to date never would have happened.

When you begin your thought process with all of your misconceptions about what "can't" happen, you miss what CAN happen if you have the guts and stamina to build a business based on a value proposition that fills a need. You're missing the forest for the trees.

"Every great dream begins with a dreamer. Always remember, you have within you the strength, the patience, and the passion to reach for the stars to change the world." - Harriet Tubman

"Jump into the middle of things, get your hands dirty, fall flat on your face, and then reach for the stars." - Ben Stein
 

Disruptive

Contributor
May 23, 2012
35
23
Hey Vigilante,

Thanks for dropping by.

Can you share a bit more about your business? - average visitors per day / average "service" price / conversion rate ?

It seems to me that you might have been operating in an above average "unit price"... maybe the average "service" was >$100, and you got a nice percentage of that... so it was enough to cover the advertising costs and leave you with a profit.

Advertising is getting very expensive, and to pay for it you have to make enough money... I can only see 2 ways to accomplish that:

1) Sell your own product and have 100% margin, enough to pay for advertising and leave you with a profit

2) Sell other people's products/services that are in demand and are expensive enough that the commission if generous enough to cover the ads and leave you with a profit (which is not possible with most "intermediary" businesses - either the commission is not enough or the product/service doesn't convert enough to be profitable).


Of course, the more expensive the products/services are, the narrower your addressable market is, so it's really a double edged sword... can you get 10.000+ visitors a day for a $1000 service?


In the way I see things, advertising is essential to scale... if you can't afford it, you are limited to the people that reach your site alone... and there's no leverage in that.
 
Don't like ads? Remove them while supporting the forum: Subscribe to Fastlane Insiders.

Disruptive

Contributor
May 23, 2012
35
23
AwkwardPublic,

You don't get it.

If MJ was relying only on that sort of "advertising", his book wouldn't sell nearly as much, if at all.

I'm an isolated case, or one of the minority. Most people don't do that, and most people represent the other 99,999% of MJ's customers.

In fact, I discovered the MJ's book by myself, no one recommended it to me or gave me any copy.
 

Vigilante

Legendary Contributor
Staff member
FASTLANE INSIDER
EPIC CONTRIBUTOR
Read Fastlane!
Read Unscripted!
Summit Attendee
Speedway Pass
Oct 31, 2011
10,902
64,363
Gulf Coast
That's because you are still living inside the box of your own creation. There are a million ways around the mountain you have created. Read that sentence again, as you have created the mountain you stand before. In your post above, you still used the word can't. Until you can see past that, you are right... you essentially "can't."

In my case, I found one of the million ways around the mountain. In my case, none of the variables in your post above mattered. Why? Because we got the world's largest retailer to advertise our services for us, and for that we paid... nothing.

We didn't fit any of the single assumptions in your post above. We didn't sell our own product, we didn't have fat margins, and our average ticket was <$100.

Until you drop phrases from your vocabulary such as "you are limited to..." you are never going to think outside of the box enough to achieve scale. In my current business (unrelated to the business I sold as above)... I am not "limited to" anything. 99% of the people that would stand before my business would point out all of it's limitations. Meanwhile, my cash deposits continue to come in daily. If I listened to people who told me what couldn't be done, my deposits would be zero. What other people might see as barriers, we have learned to see as nothing more than diversions. Every bend in the road creates opportunities for people that can see past them to the finish line. Losers stop at the bend and assume they've reached the end of the road.

You have to want it bad enough to find your way around the mountain. If it were easy, everyone would do it. There's not a turnkey business model you can follow. The Millionaire Fastlane book didn't propose any replicable business model to follow. It proposed a mindset of rule breaking that enables you to tunnel through the mountain, forge new paths around the mountain, or climb over the mountain. The 99% will stand in front of the mountain, like you are doing, and propose it's too big for you to move. You've outlined a lot of reasons why things can't happen. How about investing energy in what can?
 
Don't like ads? Remove them while supporting the forum: Subscribe to Fastlane Insiders.

Vigilante

Legendary Contributor
Staff member
FASTLANE INSIDER
EPIC CONTRIBUTOR
Read Fastlane!
Read Unscripted!
Summit Attendee
Speedway Pass
Oct 31, 2011
10,902
64,363
Gulf Coast
What if I had listened to everyone who told me I was too small to do business with the world's largest retailer? What if I let my own fear about what "can't" happen decide my future? What if I didn't have the balls to break the rules?

You have an understandable blinder. You have the perspective that the world gives you about your own limitations. You will find 99% of the people you talk with agree with your viewpoint. That 99% has never broken the mold.

The 1% that don't agree with you are the people that I gravitate towards. MJ and dozens of other posters on this forum are in that 1%.

Your quest is noble. Your questions will lead you to a positive gain for yourself. You are intrigued enough to know there's something wrong with the limitations you have discovered (not realizing for the most part they are self imposed). Hang in there, keep asking questions, and keep challenging assumptions until you find your way over, around or through the mountain.
 

darkjediii

Contributor
Read Fastlane!
Jun 8, 2010
168
48
Washington, DC area
The 'secret' you missed was in the book all along - stop looking at the event and work on the process. While folks like you are listing the reasons why you can't do it, the few of us are doing it anyway and finding a way to make it work. so that in a few years, the people that had too many "can'ts" and "impossibles" in their vocabularies are scratching their heads wondering how we got so "lucky" in getting in at the right time when SEO was so easy or great domain names were still available.

How do you eat an elephant? The answer is not its impossible...

One bite at a time..
 

Disruptive

Contributor
May 23, 2012
35
23
Vigilante,

You had a website that aggregated and organized services like small electrical repairs/installations, right?

Why would the world's largest retailer advertise your services for free? What was in it for them?


Every bend in the road creates opportunities for people that can see past them to the finish line.

I can see "past them"... as I said... it's absolutely possible to do SEO and rank for a couple keywords, or buy some keywords on the cheap... and make some money... but the volume is just not there, not the 10.000+ visitors a day... the real potential is out of reach if you go this way...

It's like people selling things on ebay... I did $10.000 in 1 day on ebay sending 3 emails, without any inventory 5 years ago.

Did I make a lot of money? Yes! Was it scalable? No, it was once-in-a-life-time thing... no leverage...
 
Don't like ads? Remove them while supporting the forum: Subscribe to Fastlane Insiders.

Vigilante

Legendary Contributor
Staff member
FASTLANE INSIDER
EPIC CONTRIBUTOR
Read Fastlane!
Read Unscripted!
Summit Attendee
Speedway Pass
Oct 31, 2011
10,902
64,363
Gulf Coast
So don't go that way. Find a new way. We did.

The world's largest retailer continues to advertise that business for free. Why? Because we filled a need for them. We solved a problem, and filled a services related void in their universe. We added value. We have something under wraps that will recreate a similar metric, and it is about to happen all over again. Lightning is about to strike twice, and now I know how to manufacture lightning. It all comes back to creating something of value that solves a problem and/or fills a need.

If you can't get scale, it might be mores a problem of your value proposition vs. your ability to PPC. The best businesses grow organically and don't rely on the most expensive methods to generate publicity.

Good luck to you. It CAN be done.
 

Disruptive

Contributor
May 23, 2012
35
23
AwkwardPublic,

I don't want to spend time on a road that leads nowhere, I want to go for exponential growth from the start - remember "shuma" ?

It's actually quite strange no one raised these questions before.

I know this stuff because I've been an affiliate for the last 5 years, moving a lot of advertising inventory, from adwords to facebook and site wide media buys.

I know how it works, and I can see that most models that MJ suggests are seriously compromised by the current advertising prices.

I understand that most people here are probably "happy" if they can build a website and SEO it to #1 of a medium-competition keyword.

For me, the big potential is in the exponential growth of an advertising rollout. That's where the big money is made and the valuation of the company explodes.

And if you can't afford advertising... you are out of it.

That's why I'm here for.

Maybe someone has experienced this problem before and point me in the right direction.
 

Vigilante

Legendary Contributor
Staff member
FASTLANE INSIDER
EPIC CONTRIBUTOR
Read Fastlane!
Read Unscripted!
Summit Attendee
Speedway Pass
Oct 31, 2011
10,902
64,363
Gulf Coast
It's not that nobody has raised these questions before. Quite the opposite. They're raised weekly.

Some have found their way around them.

Others have stopped in front of them.

Hang around this forum for a while and you will see the revolving door of some. Some people stop at the inquiry. Some see the difficulty and decide to pick up another get rich quick book.

Your post wasn't revolutionary or unique. Your hypothesis has stopped many people dead in their tracks.

Without knowing the specifics of your challenge nor the nuances of your industry, I can tell you there are a myriad of ways to generate traffic to a web site that don't include PPC advertising.

I think you hit the nail on the head with regard to the experience from your perspective within the affiliate world. As an affiliate, you own nothing and are vulnerable to the whims of your owners. Traffic is your crack cocaine. You have an in depth knowledge of a corner of a singular focused way to harness traffic to make money.

The world is much larger than that. I am learning from you why people here have railed against relying on affiliate scalability for sustainability.

I hope you find what you are looking for, and I likely don't have any additional expertise I can lend to your quest. Best of luck to you! Keep pressing!
 
Don't like ads? Remove them while supporting the forum: Subscribe to Fastlane Insiders.

Disruptive

Contributor
May 23, 2012
35
23
Vigilante,

Thank you for your words.

Maybe I didn't make myself clear. I know there are a myriad of ways to generate traffic to a website that don't include CPM/PPC/CPA advertising.

But how many of them can deliver 10.000+ visitors a day on a consistent basis?

Not many...
 

Likwid24

Legendary Contributor
FASTLANE INSIDER
EPIC CONTRIBUTOR
Read Fastlane!
Summit Attendee
Speedway Pass
Mar 26, 2011
2,052
5,716
44
Staten Island, NY
Create a great product or service that fills a need and customers will come to you. Word of mouth is the best advertising and I can think of a ton of other ways to advertise for nothing or next to nothing. If your creative you'll figure it out. Just like vigilante said, you need to take the word "can't" out of your vocabulary or you will never acomplish anything.

And if your so convinced that you can't create a profitable lead Gen site then start looking for other ways to get things done. Create a product, buy real estate, etc...
 
D

Deleted5250X

Guest
I worked in sales for reply.com in their replyrealestate.com division. There goal was to be one of the largest aggregator of leads, they did construction, car, and real estate leads. They had $30 million in revenue when I was there in 2010 but were not profitable. My division selling real estate leads they would bid on the large generic key words that individual realtors couldn't afford to bid on because they were to broad, there conversion rate was 14% and my guess was they were paying between .25 cents to .50 cents per click and no more. Once you landed on their landing page based on the zip code entered they directed you to their lead capture page but they also sold redirects to major real estate brokerages who had their own lead capture systems.

These leads we captured were being sold for $55 per lead with 7 leads being automatically delivered per month. That's a pretty fat margin but I'm not sure how long it will be viable as the cost of acquiring real estate agents to buy these leads was extremely expensive using mostly inside sales.

It's not that hard to drive traffic Via SEO, especially if you target long tail high converting keywords. Age matters for SEO but google also realizes that people often search for viral content and it will rank this content even if it has been recently created. Google incorporates momentum into its SEO which is why breaking stories will show up at the top of the results.

As you know there are different ways of advertising, keep using all the advertisement portals that return a positive ROI, and if advertising cost more to generate leads raise the price as the people who are buying the leads won't be as good as you at generating them themselves or use PPC or PPV advertising. Most people who buy leads are buying leads for big ticket items.


I don't remember the specific section of the book where MJ talks about his unit price, but the industry standard for online lead gen companies is to sell that individual lead to 4 different companies, and have them all bid on the job which dramatically increases your revenue.

Different Fast Lane Models
1) Subscription Based - Evernote, or Spotify, or Hulu Plus, or Netflix
2) Content Based - ehow.com, Wiki Answers, lynda.com, YouTube, Justin.tv
3) Lead Generation reply.com, ziprealty.com which essentially combines lead generation for its agents, care.com
4) Social Networks - You can buy traffic but you also must get word of mouth, What comes to mind is cougartown.com which is an online dating website that did a lot of radio advertising in my area when it launched, not sure if it counts a social network though.
5) Brokerage Systems - reply.com has a brokerage system for leads and I know they pay for traffic, All these new crowd funding startups are essentially brokerage systems, they all pay for traffic, Groupon pays for traffic up to $26 per acquired customer and they essentially broker coupons. These sites calculate lifetime value of a customer, if a person books a limo through your lead gen and it works out well, odds are they will return and their lifetime value is greater than that one time cost.
6) Advertising - Not sure the difference between advertising and content based but ehow.com and this forum make money from advertising, hulu.com makes money from advertising and it paid for all of its traffic with the ads it aired during the Super Bowl, talk about expensive.
7) E-Commerce I'm not really experienced in this but zappos.com pays for conversions, JCPenny Hired an SEO firm to rank for every single top key word and boosted profits 2 holiday seasons ago. Read about the commandment of control for controlling margins, if you create enough value you can charge high enough prices.

It is well known that Pay Per Click Advertising is the most expensive advertising tool available, its concentrated and attracts motivated consumers, with low barriers to entry as you can spend as low as $5 a day, explore other advertising forms to get a higher ROI.
 
Don't like ads? Remove them while supporting the forum: Subscribe to Fastlane Insiders.

Disruptive

Contributor
May 23, 2012
35
23
@JamItFast

Thank you for your reply. I appreciate the time you took and the information you shared was very insightful for me, specially selling the same lead to 4 operators. I can see how that would give some margin for paid advertising.

For me, the exponential growth is directly linked to advertising rollout.



I'll give an example:

Suppose you build a website where you sell your widget and you SEO it to #1 on your keyword

Your website gets 100 visitors per day.

You sell 2 widgets per day to those 100 visitors @ $10 each / gross profit per day = $20

You buy the widgets @ $5 each, so net profit per day = $10



Now, you have a nice little store... but it just nets $300 per month because you are solely relying on SEO, not only that, you reached #1 so your growth is limited.

You are making $10 per each 100 visitors... or $0.10 per visitor.

Can you afford to pay $0.50 per click on advertising? Of course not... that's 5x what you are making just to break even!

You are stuck... your growth is basically stagnant.



Now, lets see what could happen if we had a different store, selling a more expensive widget...



Suppose you build a website where you sell your widget and you SEO it to #1 on your keyword

Your website gets 100 visitors per day.

You sell 2 widgets per day to those 100 visitors @ $100 each / gross profit per day = $200

You buy the widgets @ $50 each, so net profit per day = $100... or $3000 a month


So now, you are making $100 per each 100 visitors, or $1 per visitor.

Can you afford to pay $0.50 per click on advertising? Absolutely... You can do it profitably.


What would happen if you run ads on 10 other keywords/sites? Your revenue would explode, probably 5x-10x, just by rolling out the ads.


I truly believe that the real money, the real growth comes with rolling out with ads... it's exponential... you leap from making $3000 a month to making $15,000 a month or $30,000 a month in a question of days.

And this, of course, explodes your company valuation. This is what I'm after.


I know It's not that hard to drive traffic Via SEO, especially if you target long tail high converting keywords... but if you don't make enough money to afford paid advertising roll out, your growth is linear or stagnant...

You make money, but you don't make the big money.


Am I the only one that realizes that certain niches / business models are just dead ends without exponential growth potential?
 

LamboMP

Bronze Contributor
Aug 13, 2007
334
192
Toronto
Create a great product or service that fills a need and customers will come to you. Word of mouth is the best advertising and I can think of a ton of other ways to advertise for nothing or next to nothing. If your creative you'll figure it out. Just like vigilante said, you need to take the word "can't" out of your vocabulary or you will never acomplish anything.

And if your so convinced that you can't create a profitable lead Gen site then start looking for other ways to get things done. Create a product, buy real estate, etc...

Thank you.
 

Vigilante

Legendary Contributor
Staff member
FASTLANE INSIDER
EPIC CONTRIBUTOR
Read Fastlane!
Read Unscripted!
Summit Attendee
Speedway Pass
Oct 31, 2011
10,902
64,363
Gulf Coast
"Of all the skills of leadership, listening is the most valuable—and one of the least understood. Most captains of industry listen only sometimes, and they remain ordinary leaders. But a few, the great ones, never stop listening. That's how they get word before anyone else of unseen problems and opportunities."

— Peter Nulty, Fortune Magazine
 

Disruptive

Contributor
May 23, 2012
35
23
A lot of products have 1000% margins or higher.

Like what, toothpicks?



Guys, I'm talking about a real issue here.

Maybe you can't see it right now, but you will find yourself in the same situation if you try to grow a business beyond SEO.

I would really appreciate if someone that had the actual experience could share some advice.
 
Status
Not open for further replies.

Post New Topic

Please SEARCH before posting.
Please select the BEST category.

Post new topic

New Topics

Fastlane Insiders

View the forum AD FREE.
Private, unindexed content
Detailed process/execution threads
Ideas needing execution, more!

Join Fastlane Insiders.

Must Read Books...

Explore books recommended by MJ DeMarco and other members of the Fastlane entrepreneurial community.
Fastlane Bookstore
Top