David Fiske A subtle blend of affiliate marketing and web development

I have purchased web hosting and a domain name. So how much potential is there for a sat nav website?

I created a spreadsheet with all the potential advertisers that I could use. The list is not comprehensive but is adequate for a quick analysis.

The image below shows a screenshot of the spreadsheet. I have blurred the commission as I am not sure whether there is a restriction on this information (I know Google Adsense do not allow their users to display particular financial information).
 


The variables in developing a profitable website are:

• Traffic
• Clicks
• Conversion

You need traffic to your site to have any chance at making money. Some of this traffic will be people looking for free information, some will be people looking to make a purchase and the remainder will be curious visitors.

Of these, we need a proportion to click on advertisements.

Click through rate = (clicks / visitors) * 100

Note: [/] is "divided by" and [*] is "multiplied by"

This is an important figure. It calculates a percentage of people who visit your advertiser. I usually work on a 10% click through rate. Some days it will be more, others it will be less. For satellite navigation, I expect it will be greater at Christmas and before the Summer Holidays. I expect it to be fairly steady for the rest of the year.

Conversion rate is the amount of people who have clicked on the advertisement and made a purchase. This figure is typically around 1%. This may be under-estimated but better safe than sorry!

So, if we have 1,000 visitors to our site, statistically 100 people will click on an advert and 1 will buy something.

The best thing about the spreadsheet above is that I can play around with the figures.

If I can get 10,000 visitors in a year with a 1% click through and an average purchase price of £100, I would make £850 per annum. Not really a liveable amount though better than nothing. If the average sale price is £200, the figure rises to £1,540 per annum.

If I can get 500,000 visitors in a year with a 1% click through and an average purchase price of £100, I would make £42,500 per annum.

What happens if we play with the click through rate and the average basket? If I have 25,000 visitors per annum, 2,500 should click on an advert and if 5% buy with an average basket of £200, that would net me £19,250 per annum. Suddenly that sound much better than the half a million visitors example!

However, if half a million visitors visited and I experienced a click through rate of 10% and an average basket of £200, I would be rich beyond my wildest dreams! £769,500 per annum! Remember, what we are doing here is developing a site that can work nearly completely on autopilot.

So what would need to earn a sensible living of £30,000 per annum? 354,360 visitors back at the 1% conversion with a basket of £100. That certainly seems workable though it might not happen overnight!

And just in case you wondered, 11,811,950 visitors at 1% click through and a basket of £100 would make me a millionaire.

Now, how do you get 11 million people to visit a site?!