Today I’m sharing a guest post from my friend Dan Thompson.
Dan is a niche site builder & local SEO consultant.
I’ve known Dan for a few years now, and he’s a gifted SEO and digital marketer.
In his article he takes a stab at answering the burning question:
How many niche sites do you need to quit your job?
- about the identity crisis that most niche site builders go through
- the fact that it’s damn hard to make “passive” income like Pat Flynn
- how to calculate your Earnings Per Thousand (RPM)
- about the realities of going full time with niche sites
If you’re interested in starting your own niche site using a proven and repeatable process, then check out NSPVideo.com. Sign up for the wait list to get notified when enrollment opens.
Before I kick it over to Dan, I want to mention a few things…
There are 2 main factors to consider when you answer the question:
How many Amazon Affiliate Niche Sites do you need to quit your job?
You must think about:
- Your expenses
- Your savings
Here’s the deal…
If you found the question intriguing, then you may have a similar outlook on jobs as Jim. (Jim quit his job in Dec and is on a quest to get to $2,000 per month from an Amazon Affiliate site.)
Jim said this:
I’ve always hated having a boss, even at my first job as a supermarket bagger when I was 14 I remember having a visceral reaction to having someone tell me what to do and when.
So, a lot of people want to quit their job…and I get it.
You have to be able to pay for your expenses either from your cash flow (i.e. niche site earnings) or from your savings.
Your expenses can vary greatly compared to other people since you may live in a big, expensive city. Or you may be in a cheaper place like Southeast Asia or live with a roommate or your parents.
The bottom line is you have to know the bare minimum income that you can handle. You should also know how long you can last with zero income. Maybe you can pick up freelance work or a part time job at the same time to help cover your expenses.
A Portfolio of Sites
A lot of people will say you have to have a portfolio of sites to spread the risk or something to that effect.
The Problem With a Portfolio of Sites
Here is the problem with a portfolio of sites. People that hear that advice may not have one single profitable niche site yet.
Then they get it in their heads that they need to start a few more sites because someone else that’s making $20k/month has 6 sites.
Next thing you know, you have 6 niche sites that aren’t making any money but you now have expenses.
You’ve invested time and money into the:
- And the list goes on…
The end result is that you’re frustrated and seem to have too much work on each of the sites.
Can a portfolio of sites work? Yes, definitely.
Do you have to have a portfolio of sites? Nope.
You Only Need One Site
Yep. You only need one site.
Let me give you an example – and a sneak peek at a success story update.
You may remember Rob Atkinson who was making about $2,000 per month, and he got there fast. It wasn’t his first site so this wasn’t his first rodeo.
I started coaching Rob last year because I could see he needed to scale up, but he was getting in his own way. (Check out all the coaching sessions here.)
Rob has one site that earned over $8,000 in February 2016.
(The rest of Rob’s portfolio is making about another $8,000 – And, I’m proud that Rob had this to say, “I owe a great deal of my success to the coaching calls that I did with Doug around a year ago. One of my biggest setbacks at the time was not being able to create niche sites with any sort of system.” If you want to learn more about the system, sign up here.)
The big punchline is that you need ONE good, profitable site. And, that’s it.
Most people in the world can live pretty well on $8,000 a month.
Can you create more sites to make more? Sure. But you don’t have to and it’s dangerous to spread yourself too thin by working on too many sites.
When I first got started, I thought, “Hey I can create, like, 3 sites and if each of them make $75 per month, it would be AWESOME.” I actually bought a few domains and most of them sat there – empty. I just wasted my time and thought chasing too many ideas.
Rob buckled down and executed exactly what he needed to. He focused like a laser on the tasks that were absolutely required – and did nothing else.
Alright, Dan takes a data driven approach to determining how many sites you need to quit your job. My answer of one niche site is simplified and based solely on being focus on one basket of eggs. Dan dives a deeper & provides you with actionable metrics to start from.
Enter Dan Thompson…
When I’m asked what I do for a living I usually say I’m an internet marketer – sometimes I’ll call myself an SEO and occasionally I’ll just say “I work online”.
The truth is, I don’t know what I do yet.
I build niche sites, I help clients with local SEO, I help others build private networks, I sell domains [editor’s note: Dan isn’t selling domains anymore…], I own real estate, and I’m working on an Amazon product.
Six months ago I was having a great conversation with a freelance writer. We got on this topic and I gave the most candid answer I had ever given.
“I am trying to find a way to make enough money to avoid going back downtown.”
Everyone has got their own agenda, but chances are you’re building niche sites to avoid having to get a real job or you want to quit your job.
Pat Flynn And The Truth About How Difficult It Is To Make Money
A large number of you reading this probably initially found inspiration from Pat Flynn over at Smart Passive Income.
The first thing you’re greeted with when you visit SmartPassiveIncome is a huge income tracker in the top right corner. Right now it’s sitting at $107,999. It’s easy to be tantalized by the fact that Pat Flynn is making well over half a million dollars a year, but the reality is, it’s a grind – even for Pat Flynn.
If you follow Pat Flynn you know how much time and effort has gone into his latest niche site – foodtruckr.com. According to his post he’s making $80-$150/month. He’s since launched a book which no doubt will make a good chunk of money but he’s (his team) has been grinding on that project.
Most of us will be chewed up and spat out.
There are currently 1,103 members in Alex Becker’s Source ROI group. The ROI Course runs a cool $500 and I would wager from the chatter in the community at least 50% of them haven’t made a dime online.
If you get past step one I believe you have a real good shot at earning a living on the web.
If I was playing the jelly bean guessing jar game I would aim closer to 80-95% of them have yet to receive a cheque.
That’s not a knock, it’s just an honest assessment of how difficult it is to make $1 online let alone $100,000.
My aim isn’t to discourage or dissuade you from taking action.
Quite the opposite, if you’re thinking that the market is saturated I would argue that it’s saturated with complete beginners who’re at step 1. If you get past step one I believe you have a real good shot at earning a living on the web.
Just Take The First Step
If you’re wondering, I consider building links to an existing site step one. For most people, writing content is going to be the easy part, diving into a monotonous link building campaign without a budget and very little experience will be one of the toughest parts.
Once you establish your first niche site you may be wondering what’s next?
It’s time to build a portfolio.
How Many Sites Do I Need: Setting Up The Parameters
Obviously I need to set up some parameters. First off, how much do I need to make a living online is too broad.
If you move to Bali, you could live comfortably off of one niche site (it’s crossed my mind before).
However, that’s probably not a realistic choice for a large portion of the readers. I’m going to assume you’re able to live off of $4,000/month.
If you can’t live off of $4,000/month you either have too posh of a lifestyle (you buy a lot of shit) or you’ve over extended yourself (you’ve taken on way too much debt).
If you have kids and a wife who doesn’t work you get a free pass. This article isn’t about saving or cutting back on expenses – there are lots of good resources on that.
And remember $4,000/month isn’t permanent! Look at someone like Jon Haver who has turned a side gig (by the way, the dude is insanely dedicated and organized – I have a ton of respect for him) into an extra five figures per month.
Niche Site Earnings – Looking At Four Actual Sites
These are all real numbers from niche sites I own, again I do a wide variety of work online but niche sites are still a huge focus of mine.
If you have active niche sites, take a minute and calculate your Earnings Per Thousand (RPM). In my opinion RPM is the Holy Grail, it’s the most difficult metric to move and ultimately it determines how profitable a site could be.
To calculate your RPM either look at the past month or the past several months. Try to do these calculations with as large of a sample size as possible without skewing the numbers.
If you’ve had approximately 100 unique visits/day for the past 6 months use 6 months. If you’ve recently had a spike and the last two months your unique visitors are up 150% use the past two months.
As your unique visitors go up your RPM will go down. Generally, the only exception is when you have fewer than 50 visits per day or when you rank for a new substantial keyword that has a high RPM.
The following formula can be used to calculate RPM
Earnings / (Unique Visits/1000)
Earnings Per 1000
Site #1 – RPM: $84
Site #2 – RPM: $48
Site #3 – RPM: $64
Site #4 – RPM: $212
Traffic (Unique Visits)
Site #1: 7250/month
Site #2: 3800/month
Site #3: 1500/month
Site #4: 1200/month
I have one other site that receives virtually no traffic that I have spent a considerable amount of time on. It’s also important to note that #2 & #4 are seasonal niches and will fluctuate depending on the time of year.
As you can see #4 has an incredible RPM. #4 had several months of significantly more traffic (130 visits/day) then the numbers I posted but recently it tanked.
** Update: It’s rebounded but it’s now out of season! **
Doing the math, from niche sites alone I make approximately $1200/month or approximately $300/site. (In August I made $1450)
I’ve been building niche sites for less then a year, so all things told I’m OK with that number. Is it where I want it to be? Absolutely not – when I wrote down my goals I wanted $1700/month from niche sites by August.
Based on these numbers if I were only earning income from niche sites I would need 14 successful sites.
I haven’t had too many duds. To date I’ve only had one site that I put significant work into that hasn’t worked out, although it is a larger site and I plan to continue to work on it.
Let’s assume for every 4 sites I build one that doesn’t generate any income. In that case I need to build 12 more sites before I hit $4,000/month.
Note on backlinks
When I first started out I didn’t track backlinks as effectively as I should have.
I would bet my first site (my best site) has 40 PBN backlinks pointing to it. Now if you get creative you’re not going to need 40 PBNs to get 40 quality links. However, for the sake of this article let’s assume we’ll need 30 PBN links per site.
Obviously you don’t need 300+ expired domains, each domain can be used several times. Let’s assume you can get 8 money site links out of each PBN.
Many of you are probably wondering why I don’t get a link to every money site from each PBN. Sometimes it can be damn hard to link inject for certain sites without it sounding bat shit crazy.
Not only that, but you don’t want to have all of your PBN sites linking to all of your money sites – there’s a footprint in there somewhere. It’s as simple as that, if you want to be more aggressive you’re more then welcome to assume you can get 10-12 links per PBN.
Niche Site Expenses
Your network needs to have approximately 60 domains to fill the quota for each site. If you use cheap hosting and find a registrar that doesn’t jack the rates up after the first year you’re looking at $3/month/domain. $1 for registration and $2 for hosting. That works out to $180/month.
After you include hosting all of your money sites (assuming you’re not using $2 hosts for those!) you’ll be running $250+/month for hosting and registration.
Each domain will cost you $80. I know you can find them cheaper (ours start at $60 for DA 20s) but as you earn more money you’ll want to improve the quality of your network. There is virtually no way to buy a quality DA 30 domain without spending money.
Let’s assume on average, an expired domain lasts you three years – de-indexation is the biggest problem here. To continue to maintain a network of 60 domains will cost $150/month.
Other expenses will start to crop up as well, you’ll end up spending money for some premium link tools such as majestic, you’ll need tracking software, you might buy premium keyword analysis tools – all of these tools will add another $100/month (this number is conservative, I would be willing to wager if you polled every SEO making more then $4k/month you’d quickly find out that they spend closer to $200-$500/month on tools).
In total your expenses will be $500/month which would net you $3500.
At the end of the day, that’s a substantial amount of money. Spencer Haws never tells us the exact figure he makes from niche sites but he has openly stated it’s in excess of $10k/month.
As you earn more you’re able to spend more on things like content and PBN’s which allows you to scale like crazy.
A note about PBNs and link building in general. There is a distinct possibility that sometime in the future PBNs will stop being effective. However, as long as there is a Google and Google uses links to determine their algorithm there will ALWAYS be a way to use grey/black hat tactics to rank sites.
What does it all mean?
The point of this post was to lay out some realities for you.
When you’re just starting, or just seeing some signs of first success, it’s so hard to think about the medium or long term angles. The goal is to “make some money online” for the most part.
However, if you don’t have this kind of information presented to you, you’re putting yourself at a disadvantage. If you’re sitting on an Adsense site making you $100/month, thinking that maybe next month you’ll get twice the visitors and twice the income, and then the month after that, the same thing, and eventually you will just be an online millionaire, you’ve got to take a step back.
You can live on the avails of affiliate and advertising niche sites, but you have to run things like a proper business, with proper tracking, and proper planning. It can be done, and it’s a hell of a fun ride, but the sooner you start keeping proper records, planning, and getting processes into the place, the sooner you will find success.
If you’re thinking or dreaming about going full time, you definitely need to consider the real bottom line income after expenses.
One other aspect to think about is taxes. I am in the U.S. and taxes take up a significant portion of the revenue. I know some other countries have much higher or much lower tax rates. For example, selling a site for $10k USD will require a tax payment of over $3k…So, if you’re having a good month, don’t spend all that income before you pay the taxes! You will be in store for a surprise when you file your taxes.
If you have any questions on why, just ask below.
I want you to let me know where you are it in the comments below.