I had several conversations with webmasters and clients recently about how much traffic is required for a website to be profitable.
Several webmasters, who have around 200 unique visitors per day, complained that they were making nothing from their sites. The commonly held view of traffic and profitability is that you need thousands or tens of thousands of visitors to make money online.
Here is a short list of some of the factors that go into making a website profitable.
1. Product price. If you are selling a service for $3000 – $5000 and you are a one person business, then you will need less traffic and fewer sales. If you are selling a CD for $10, then you are going to need a lot of traffic and sales.
2. Not all traffic is equal. The value of traffic depends on where it comes from and what the browsers expectations are. Generally search engine traffic is better than traffic from links, though there are exceptions. Browsers following highly targeted links from micro-niche sites can produce a very high conversions and sales.
Of the search engines, Google is generally seen as the most valuable, but it all depends on your product. A high ranking on Yahoo is very valuable as well. My experience with MSN is the browsers tend to want free stuff, rather than buying right away. Which is by no means a wasted effort — a specific marketing plan can be designed to capitalize on MSN traffic and free give-aways.
In some subject areas, especially technical and web related, syndicated articles drive a small amount of traffic which converts like crazy. In other areas, the results are very poor.
3. Conversion Rate This is the really big one which will boost your business day in and day out. Given 100 people that visit your website, how many browsers, convert in to customers? If you can increase the conversion rate, even by a small amount, it is money in your pocket everyday.
Recommended places to learn about Increasing your Conversion Rate:
101 Ways to increase conversion — This is a great primer for getting started.