Today I want to talk about the importance of focusing on profits and not on website traffic. This is one of the most important business principles you should follow in my opinion.
One mistake that many new webmasters and online entrepreneurs make is to focus on generating website traffic. This is the logic they follow: build a website, work until it is getting a huge amount of traffic, figure out how to monetize that traffic. While this might actually work if you get lucky, it is definitely not the best route to follow. There are plenty of cases of websites and Web 2.0 companies that went bankrupt despite having millions of monthly unique visitors. How so? Simple: they couldn’t monetize the service efficiently, and sustaining the servers and the staff was consuming far too much money.
Traffic is certainly vital on the Internet, but it should be seen as a means to an end, and not the end itself. Just think about it: would you rather have a website that receives 10 million unique visitors monthly and that makes $5,000 in profits, or a website that receives only 20,000 unique visitors monthly but makes $50,000 in profits?
As soon as you start working on the idea for a new website or company, you need to figure out where the profits are going to come from. Here are some of the questions that you might wanna ask yourself: Who is going to gain value from my service or product? Who is going to pay for it? How is he going to pay? Will my costs be lower than my revenues?
This principle should also affect the type of website and business model you end up choosing. For instance, do you know why experienced online entrepreneurs prefer to sell their own products or to work with affiliate marketing instead of building advertising-based websites? Because the first two models need a lot less traffic to make decent money.
The takeaway message is: you are ultimately aiming for profits, not traffic.
Credit: Daniel Scocco http://www.dailyblogtips.com/
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