If you want make money online, one of the most important things to understand is not all revenue is created equal. It is not just important for a business to focus on increasing their overall revenue, it is also important to consider the source and quality of that revenue.
Revenue is not the same as profit. Say you have a website and spend 500$ a month running it with all your software subscriptions including plugins etc. Then you spend another 500$ for email marketing software. Every month you spend a few 100$ on Fiverr to get help on various ad hoc tasks. Then you spend some more on SEO and few thousand more on running paid ads. Add more money for your team or web developer. You end up losing money, even though you generate revenue by selling goods, showing ads or even having some affiliate arrangements.
But rather than having to spend money on multiple subscriptions and email marketing, not needing to spend money on a team or on a web developer and with no need to run ads, you run your website using an AI system like Konigle and get organic traffic to your website. You actually make real money or profits rather than unprofitable revenue.
GMV is often used by an e-commerce business as a measure of revenue but GMV is not a great measure to track business growth by itself. We have created a free tool to estimate profitability of over 2 million websites. This estimate is based on various parameters, let's look into them in detail :
CAC or Customer Acquisition Cost is roughly the cost you pay as marketing for each customer you acquire. If you have a website and you pay money to search engines by running keyword ads , every visitor you get costs you money. But if you invest in publishing helpful content and resources on your website that your ideal customer profile would find useful, over time you would get free organic traffic that scales well without the need for paying money for each visitor.
SEO software like Ahrefs usually provide an estimate of how much money you would need to pay for acquiring the traffic your website gets, if you had to pay for keywords. Here's an example for konigle.com built using our AI website builder, where we would have to pay almost $44.3K for the free organic traffic we get, if we had not invested in creating the helpful content on our website.
Customer Life time value is a measure of how much revenue a customer brings to a business in all time. For a website or online business this is important as highlighted by a study we did on repeat purchases on e-commerce websites where less than 20% of visitors actually ever visit a website again and only 0.2% of visitors come back for a 10th time. In fact we also found that if a visitor visits your website again their value to you increases by 4 times.
Some useful ways to improve your website's chances to bring back people is to collect emails and then send frequent newsletters with useful information that brings back visitors to your website. Using Konigle you can write content, collect emails and send email campaigns without needing any additional software or web development skills.
Here's how you can do it
ZIRP an acronym for Zero Interest-Rate Policy pioneered by the Bank of Japan to combat deflation and slow growth by keeping short term interest rates near 0, was used by the United States following the 2008 economic crisis as a way to stimulate the American economy.
With low interest rates a lot of money from pension funds, university bourses and sovereign wealth funds amongst others found its way into Venture Capital that proliferated throughout the world and made many startups viable. As a lot of money started chasing companies and founders, Silicon Valley startups made losing money fashionable in ZIRP times for short. Here's a fun clip from the famous Silicon Valley TV series that depicts all that is wrong with this mindset
On Revenue pic.twitter.com/9SlY7TaQLK
— Ric Burton (@ricburton) May 27, 2024
Over time ZIRP inspired funding turned into a sham, with fundraising becoming the default way to fund a business and fundraising being a skill touted by entrepreneurs. All of which had a big reset in the year 2022, when the Fed in the US started raising interest rates and ushering the post ZIRP era.
Now, generating profitable revenue is cool again.
Having the ability to sell products at a profit margin is what makes a business sustainable in the long run. If you are using a website to make money online and want to generate profitable revenue, the two most important things to do are :
1. Invest in getting organic traffic.
2. Nurture an email list.
If you are struggling to get organic traffic to your website or are unable to consistently run email marketing newsletters , you may want to chat with our website builder powered by TimBL 1 : our AI web developer with digital marketing skills.
