Welcome to the first day of the first case study, in the first week of the first month of 2016.
Whew! We have some pretty awesome records.
Today we are going to start by looking at business goals with the majority of the focus being on revenue and how you validate whether a niche can sustainably achieve your revenue goal for the niche website.
If you haven’t already, you can check out the structure of this case study right here.
OK, so let’s get started – I’ve spent a lot of months (this has been in the planning for over a year) on how to structure this case study and how to structure each day and yet here I am still not convinced the approach I will take to trying to put across the information and teach those who are reading will be the most effective. However, it’s got to the point where I need to simply start and I can tailor the layout and structure as we go along and as I receive feedback.
This case study is going to follow along from Spencer, Perrin and Jake’s Niche Site Project 3, there are thousands of people who are following NSP3 and I think it’s perfect timing for me to begin my own case study. For those who are following NSP3 will have come to realise they all have their own style and their own experience and well my style is also different – there are several ways to do each step of the journey and everyone has their preference, it’s up to you to trial them out and find out which you think is most effective and efficient for you.
Just to explain, this case study is the first part in a 3-part series:
- 30 days to make a sale with Amazon Associates
- 6 months to make $xxx with Amazon Associates
- 12 months to make a full-time income with Amazon Associates
Once the initial 30 days has been completed, we will move on to the 6 month case study. I’ve broken it down this way for a couple of reasons, but mainly because I want to help those who have yet to feel the amazing sensation of making your first dollar online. Secondly, I think it’s easier to comprehend and to take on board when it’s focused around 3 particular goals at different stages of the journey.
Before you begin conducting Market Research (day 2)…
It’s incredibly important to get some things clear before you kickoff and these are your goals.
Whether this is your first niche affiliate website or your tenth, it doesn’t matter – you will still need to have specific goals in mind.
So, ask yourself a couple of questions:
- Am I trying to build a brand or simply make some monies?
There is absolutely no issue with simply trying to make money from the website and giving little regard to building a brand, we’re not all trying to build the next Google, at least not yet. I think this first point comes down to where you are in life from an IM experience perspective as well as financially, career-wise and so on.
Think long and hard about this initial question, build a brand with long-term goals compared to simply trying to hit a certain monthly revenue figure so you have additional revenue streams, or to help you move away from full-time employment, to fund backpacking, what ever it might be get this clear from the get go.
- Niche or Authority?
This can be quite confusing, especially since everyone talks about (including myself) building an Amazon affiliate site as generally being a niche website. Yet, a niche website can also be an authority within it’s niche…so yeah, a stupid choice of words I think.
To simplify this let’s just say the following:
Niche site = maximum 100 pages of content
Authority site = maximum (unlimited) generally 500+ pages
The reason I am splitting them by the number of pages, is more based on the size of the market and the amount of pages you can publish on a website should have a pretty direct correlation with the size of the market.
Example: creating a niche website around weight lifting gloves would probably be extremely difficult to expand above 100 pages of content. Where as, building a website around weight lifting could easily surpass 500 pages of content.
- How much revenue do I want to make from this website?
I know it might sound like a silly question. But, I am being serious. This is a really, really, really important question to ask your self and it will also be a question you need to recall upon when you are doing the market research.
Experience has taught me that not every niche website is built equally, definitely from a revenue point of view. Therefore, you need to think about how much you want to make from the website per month at 6 months, 12 months and when it’s fully built or at least to the point where it’s established.
Our aim is:
- To make at least one sale within the first 30 days (30 days from today).
- To make at least $500 per month consistently by month 6.
- To make at least $2,000 per month by month 12.
It’s important to consider the above, because if we go back to our example of our niche website about weight lifting gloves compared to our authority website about weight lifting. It could be quite difficult to generate $2,000 per month from a niche website which solely focuses it’s attention towards weight lifting gloves only.
You need to do the math.
Note: I have a couple of Excel templates I’ve used in the past to help with the calculations below, you can check one of them out right here.
How to use the Amazon keyword revenue planner
Product AOV * Amazon Commission Rate = Commission Per Sale
Target Monthly Revenue / Commission Per Sale = Target Number of Sales
Target Number of Sales / 30 (days in the month) = Target Daily Sales
Target Daily Sales * 10% (forecasted conversion rate) = Target Daily Amazon Clicks
Target Daily Amazon Clicks / 30% (forecasted website to Amazon CTR) * 100 = Target Daily Traffic
At this point you need to forecast what the the conversion rate from amazon click to conversion will be – I usually predict between 5% – 10% for this let’s use 10%. Then, once you have the number of daily Amazon clicks you will then need to use a forecasted website to Amazon Click Through Rate (CTR) let’s use 30% (I usually predict between 20% – 40%)
- AOV: $20
- ACR: 7.5%
- C: $1.50
- TMR: $2,000
- TNS: 1,333
- TDS: 44.4
- TDAC: 444
- TDT: 1,480
By doing this calculation you can quickly see whether or not a niche will be lucrative to the point of what you are aiming for. For the example above we will need 1,480 unique visitors per day to hit $2,000 per month in revenue and this is based on 30% of these unique visitors clicking through to Amazon and 10% of those users actually purchasing a pair of weight lifting gloves for $20.
Now, when you come to do the keyword research you might look at 1,480 unique visitors per day and think it’s nothing, however I’ve done some extremely quick analysis in to the example niche and on an initial basis I highly doubt by targeting just ‘weight lifting glove’ related keywords only and focusing a website solely on this topic you would be able to achieve this revenue per month.
Note: I said achieve this revenue, not this amount of daily visitors. I don’t want to make this more complex than it already is, but the type of keyword we are discussing for the example above are ‘buyer relayed keywords’ these are keywords where the users intent is to purchase.
For example: ‘best weight lifting gloves’, ‘weight lifting glove reviews’, ‘best lifting gloves’ e.t.c
The reason I say it will be unlikely is because the market demand for this product doesn’t look large enough to support the 1,480 unique visitors per day (44,000 unique visitors per month).
To conclude our first day of the 30 days to make a sale case study: Be sure the market you are looking at is validated based on the your goals and answers to the three questions above. Brand or Non-Brand, Niche or Authority & Revenue Target.
So before you go on to the next step of researching a market, have a think about what type of website you are looking to build. Whether you are looking to build a website that simply generates revenue or if you are looking to build a website which has the potential to grow in to a reputable, authoritative brand. More importantly, take in to consideration the revenue you would be looking to generate from the website and use this information when you continue on to market research which will help in validating whether or not that niche will be sustainable for hitting your revenue goals.
Ready for day 2? Proceed right here!