NevBlog

Neville's Digital Surrogate Brain

Have Sales Gone Down In the Poor Economy?

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Here’s a question I’ve been getting more and more geared towards my business House Of Rave:

Have your sales gone down in the poor economy?

It’s actually a fantastic question and relatively interesting to hear different answers from different business owners.

So, have your sales gone down in the poor economy?

MY ANSWER:
YES…..but not in the traditional sense. Let me explain:

Most people expect that sales simply stopped coming in after the economic downturn, this hasn’t been true even though House Of Rave sells things people buy only on disposable income.  In fact, if you never told me there was a “recession” going on, I probably wouldn’t have noticed too much….people still order all the time (although I’ve seen a very significant drop in big orders from large corporations).

The MAIN problem I’ve had which takes a DIRECT shot at lowering my sales is all the cool products are out of stock.  Almost all of my previous best sellers are no longer being manufactured.

HouseOfRave sells “hard to find” and “unique” products….which often means “they don’t sell it in big stores”.  This has been great so far, but a problem I’m seeing now is manufacturers are on tight budgets and don’t have the capital required to mass produce slower selling items.  I may be able to sell 10 per day of an item, but a manufacturer might need to sell 10,000 of them per day to keep cash flow moving.

….so unless an item can move HUGE quantities quick, the product might be discontinued.

This has been the predominate way that my business has been affected.  The cool part is, with more marketing and more effort I’ve been able to maintain and grow both the profit and sales of the business, but it’s required more effort than in the past (keep in mind I used to put NO effort into it at all).  Before, I would just slap products on the site and they sold….it doesn’t seem to be quite as easy anymore.

Many smaller manufacturers and product patent holders are going out of business now.  Think about it, to manufacture just ONE simple product you must spend hundreds of thousands of dollars for materials and labor, store them, then find people to buy them.  Before you make even one CENT from the product, you could blow through a half-million dollars on credit.  If the product is a flop (note the importance of beforehand PRODUCT RESEARCH) you’re screwed…..and I’m just using the example of small-scale manufacturing of novelty products.

While my business doesn’t have the extreme overhead of these manufacturers, I feel their pain indirectly when a cool product of theirs goes out of stock.

Weird Alexa Rankings

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Do you ever use Alexa to quickly judge a website’s traffic?  I do…all the time.

On Google Chrome tab I use an SEO extension that quickly grabs all sorts of info on a website, including Alexa traffic rankings:

In case you don’t know:
The lower the number, the higher your traffic (kind of like golf).

Google is the #1 most visited site in the world, so its Alexa rank is 1.  Got it?  Good…

NevBlog is currently ranked: 170,476 (at one point I was #75,000)!
…and my business HouseOfRave is ranked: 492,856

The funny thing is, House Of Rave gets a lot more visits per day than NevBlog (it used to be the reverse a few years ago).

So here is a monthly Google Analytics snapshot of NevBlog traffic (keep in mind the number is usually higher as I don’t have Google Analytics installed on all my visitor pages):

Here is a monthly Google Analytics snapshot of House Of Rave:

You’ll notice that House of Rave gets something like TWICE the traffic NevBlog gets every day, yet NevBlog’s Alexa rank is nearly THREE times lower!  Whhaaa!?

Theoretically the Alexa rankings should be switched, but they’re not. It’s not hard to figure out why:

NevBlog draws a lot more people who might be web designers or tech people….this means they’ll be more likely to have the Alexa Toolbar installed (or some variation of it), which is how Alexa gets their rankings.  I’m also presuming the larger the site, the better stat accuracy you’ll get.  Compete.com seems to have a more accurate view:

They got the traffic wrong (although they can’t ever TRULY know without you telling them), but they got the comparison estimates pretty close.

For January 2010, Compete.com says:

  • NevBlog got 10,386 visits
  • House Of Rave got 15,202 visits

In reality, according to Google Analytics:

  • NevBlog got 14,259 visits
  • HouseOfRave 34,970 visits

    It seems the webmaster tool bar effect also applies to Compete.com…but their results seem far more accurate.

    I’m curious, do your website and Alexa/Compete rankings add up??

    I’ve moved…

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    …from Blogger to WordPress. It’s hard to believe I stuck with Blogger so long!  I loved Blogger, but they kicked all FTP users off.  I’m happy for that because it finally forced me to make the move and it’s great for Bloggers’ business (why use so many resources to support such a small sub-section of their clientele)?

    It actually feels kind of like a real life move.

    THE GOOD:

    • Updating WordPress is WAY easier.  I used the self-hosted FTP version of Blogger, which means anytime I want to update anything on the main template, my ENTIRE site is erased from my server then re-uploaded via FTP…EVERY SINGLE TIME.
    • Customization and Plugins: There’s a plugin for pretty much anything on WordPress.
    • Migration was easy with the newly improved Blogger to WordPress tool (included with WordPress).  There was also great 301 re-direct method I used (Shout out to Adam for notifying me of this helpful BlogBloke post).  It’s not perfect, but it worked about 75% of the time to re-direct old posts to new posts (like this).

    THE BAD:

    • Adsense revenue went down from roughly $12/day to $3/day (probably because I currently have one ad instead of three).
    • I can spot a WordPress blog from a mile away.  They all have a relatively generic feel to them, even the cool looking and highly personalized themes.  The Blogger template felt old, clunky and ugly…but it was unbelievably easy to navigate the site I felt.  I’ll try to add some of the user friendliness back in.
    • Traffic dropped just slightly since people across the internet were getting to my site via broken links….but this is just a personal blog so who cares.  You can always access the old NevBlog by taking any URL and adding /old right after the nevblog.com.

    I purposely got a template that maintains a relatively narrow reading area because I like reading like that.  The old Blogger template let me have images:

    The new WordPress template can handle images only slightly bigger:

    Anyways, enough blog talk.  If you see any weird issues, please notify via comments.  I’ll be continuously updating the template for the next week, but feedback is greatly appreciated!

    -Neville


    —UPDATE—
    Small interesting side note, while trying to quickly finish up this post, the library closed and I got locked in.   Me and a homeless guy had to break out of the library!

    HOLY FREAKIN CRAP What Happened??

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    Don’t worry, I’m just migrating from Blogger to WordPress, so this weekend you most likely will see a bunch of wonky formatting, dead links and other weird things going down on NevBlog.

    Cheers :-)
    -Nev

    My Affiliate Marketing Experiment – Part 7

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    Part 1
    Part 2
    Part 3
    Part 4
    Part 5
    Part 6
    Part 7:

    ….so eventually I pulled the plug on this little experiment (it ran for roughly 5 weeks) even though I was still making some money.

    One of the negative parts about affiliate marketing I mentioned was the price of Pay-Per-Click varies wildly, especially when people are bidding up keywords.  This can be the difference between a profit and loss if you don’t watch out. This happened several times and the cost I had to pay shot up too much to be as profitable.

    Basically I got these campaigns running for the experiment, but when I stopped paying attention, most of the good keywords stopped running because they exceeded my set budget.  Eventually most traffic died down, a sale was made here and there, but nothing big.

    Ultimately I ended up bringing in $727 from the BluCigs campaign and $360 from the GreenSmoke campaign (about 90% of that money was from that first 5 weeks) and paid a total of $166 for Google Adsense.

    I could have kept on going, but the amount of effort for a short-term profit wasn’t worth it, especially when I already have profitable businesses of my own that offer a more long term payoff.  I can already see some of you trying to signup and start your own experiments with these ;-)

    …however…hopefully this experiment demonstrated the POTENTIAL this sort of business model has in a more legitimate form.  I wish I knew about it a long time ago when I was an active “financial” blogger.

    I learned a lot and made a net profit!
    -Neville Medhora

    My Affiliate Marketing Experiment – Part 6

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    Part 1
    Part 2
    Part 3
    Part 4
    Part 5
    Part 6:

     At this point in my little experiment I’ve made some money and learned a few pro’s and con’s about this affiliate marketing industry (at least the low-end type):

     Pro’s of simple affiliate marketing:

    • It’s possible to start making money very quickly with relatively little work.
    • It’s possible to scale up successful campaigns to large levels.
    • It’s possible to “sell” a product without knowing anything about it.

    It’s not hard to see why so many get-rich-quick books teach this very method of making money…because it SEEMS like it could work for anyone.  Some people might even have some nominal success trying something like this, but very quickly the con’s start showing their head:

    Con’s of simple affiliate marketing:

    • It’s possible to LOSE those quickly-gained profits very quickly also.
    • Most successful campaigns you create will start to garner much attention from other affiliate marketers who quickly start copying you.
    • You have to be hush about your work….you can’t openly talk about what you’re promoting or your methods.  This is why many people I talked to about this were so secretive.

    By and far the largest con I see with doing this simple type of affiliate marketing is there is no long term value being provided. With my business HouseOfRave for example, everything I do today pays off for months at a time, even years.

    With these small affiliate promotions, there is very little value ultimately being imparted to the customer.  Ultimately a beginner trying to simply “make money online” with these almost-scam-like promotions will probably end up disappointed.

    But screw that, I was now up to $371 in profit with JUST BluCigs and I’d barely spent $70 to get there!

    ….and this experiment called for finding out how to make a landing and optimize it with Google Website Optimizer, so that was the next step.

    Basically what I’m trying to do in this step is have several versions of the same page and measure the effectiveness of each.  After X-amount of people cycle through each version, a clear winner is usually identified.  This is called an A/B Split Test…and if you do this enough, you can identify which pages convert the most people.

    For this I had to do several things:

    • Make a separate landing page to send traffic (I chose ecigaretterecs.com).
    • Make three different versions of the page.
    • Enter all this stuff into Google Website Optimizer.
    • Drive traffic to the site, wait for results.

    I didn’t say this experiment was going to be pretty, I just wanted to learn the underlying lessons in it, so here goes:

    Step 1.) Buy the domain name.

    I chose ecigaretterecs.com because all sorts of other combinations were taken.  Ultimately it didn’t matter what the domain was.  Even I kept forgetting what name I had purchased.  I setup the site on my server and was up and running.

    Step 2.) Make three versions of the page.

    I wanted a basic page that looked sort of like a reviews site, a site where you go to get reviews of a particular genre of product.  I actually first purchased a WordPress plugin that makes a fully-functional reviews site, but I wanted this experiment to be extremely quick and dirty so I did it the ghetto home-made way.

    Since E-cigarettes are quite new, there are multiple brands people want to look through before choosing one.  I would provide this review information for them on this (ghetto and poorly made) page (ecigaretterecs.com).

    I decided I would make three very different versions: 1 stylish, 1 simple and plan, 1 supper-ghetto:

    (This was the “stylish” one…shut up, don’t make fun of my web design skilzz).

    (This was “plain and simple”).


    (This was the bare-bones and ugly one).

    …the point of this is to simply test out different versions and see if there was any statistical difference in how each of them converted into sales.  Sometimes the data is very surprising.  I find from many friends who do this on a large scale that ugly and simply is often better.

    NOTE: An A/B Split Test doesn’t need to have versions that are so dramatically different like this experiment, it can simply be a different picture or different headline text for each version.

    Step 3.) Enter into Google Website Optimizer

    I went through the Google Optimizer process and outfitted each version of the page with special snippets of code (keep in mind this is something almost ANYONE can do) and set all the links to go to the affiliate sites I earlier created with the custom headers.

    Now when someone lands on the webpage ecigaretterecs.com, it randomly selects which version of that page to show the visitor. So if you look at that page from your computer and your friend views it from a different computer, there is a good chance you will see a completely different page.

    Google Website Optimizer then collects information over time and tracks the conversion rates to see if there is a statistically “better” version.  When I ended up pulling the plug on this experiment there were 190 page visits, but no statistical variance shown (you usually need around 50 conversions per variant before conclusions can be drawn).

    I didn’t get the final results before I pulled the plug on this experiment, but I didn’t care.  I had learned how to A/B Split Test which was the important thing….now I can use it to make already-profitable pages more profitable.

    So far I’ve accomplished almost everything I set out to learn with this experiment, and I even made some money.

    I was still making money, so why did I finally end up pulling the plug on this experiment?

    Go to Part 7.

    Working…or not

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    At the beginning of this month one of my goals was to make a blog post every 2 days on this blog…well my last one was THREE days ago, so I need to make up (Carnaval in Austin definitely got in the way)!

    I have 12 minutes to write/edit/publish this post before the security guard at the library kicks me out, so here goes:

    I just read a post by Dave (brought my attention by Adam’s Twitter stream) about his transition from having a job to owning a business.  I always like it when people take that leap, even if it doesn’t work out, I’m sure they will learn a massive amount.

    It made me reflect on my own experience with this.  I’ve never had a job except one in college where I did NOTHING but work on my own businesses then promptly quit when they made me do work.

    After college I never got a job…I didn’t (still don’t) even have a resume.  I simply continued running my businesses I had already started.  It’s really the only way of working I’ve ever known, and I must say…I like it.    Judging by the way most people talk about their jobs, it seems I’ve made the correct choice.

    One thing I really like about owning a business, aside from all the fun stuff like being able to label your own role or change what you do by starting a new business….all your success depends entirely on you.

    In ten years if I’m homeless and living on the side of the road, you can point directly at the person whose fault that was.  I like that responsibility because it puts you in charge of your destiny a little more than working for someone else.  In a sense, they control your future.  If they go out of business, you do too.

    I know people who worked for Dell at the right time in history who made millions on stock options, and people who worked the same jobs a few years later who weren’t quite as fortunate.  That irks me.  It’s kind of a lottery you play.  You COULD get successful, but your involvement doesn’t dictate it.

    Ok, the guard is giving me the stink-eye, time to jet!

    My Affiliate Marketing Experiment – Part 5

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    Part 1
     Part 2
     Part 3
     Part 4
     Part 5:

    …so now I had a very simple yet profitable affiliate campaign running.  The next step was to try out some of the other e-cigarette companies with affiliate programs.  I found another seemingly good e-cig company called GreenSmoke and joined their affiliate program.

    I already knew what to do (and not to do) thanks to my prior BluCigs experiment, so I quickly setup my GreenSmoke campaign:

    • I registered a domain called BuyGreenSmokes.com
    • PhotoShopped a custom frames header for it that made it seem like part of the GreenSmoke website.
    • I made the framed header like I BluCigsStore site and got the new site running.
    • Immediately posted some Google AdWords pointing towards it.

    Since I already knew what to do, within about 1 hour I completed most of this work.  When BuyGreenSmokes.com went live it looked like:


    So just like the BluCigs page I made, anytime someone gets to this page through my link and buys something, I make money.

    Speaking of the BluCigs experiment, whilst I was making the GreenSmoke page and signing up for other affiliate programs, this small little experiment of mine had been working.  I had been making 1-2 sales per day from the Blu campaign, and within a few days here was my revenue:


    At this time for every dollar I spent on AdWords, I was making $6 back. So a 6X Return on Investment.  At this point I had never seen the product I sold or promoted, didn’t know anything about them and wasn’t particularly “helping” anyone.  In fact the people who came through my links never knew who I was or that they were coming through an affiliate.

    However in about a week I earned my first check:

    This is a very simple affiliate experiment, and probably against the rules of most affiliate offers.  You see, I’m not ACTUALLY adding any value to the companies whose products I’m promoting.  They probably would’ve made these sales regardless if I was in the picture or not.

    Now lets say I owned a large forum for smokers to talk about smoking….then I write an article about how great BluCigs or GreenSmoke electronic cigarettes are.  If those articles contained affiliate links that people followed then purchased products, THAT would be of great value to the companies….they just made sales they probably wouldn’t have without you.

    REWIND BACK to the first post of this experiment, I was talking about why a lot of affiliate marketers seemed shady:

    “I can tell them I own a rave store and sell light up stuff online. It’s pretty straightforward, and they can even see the website for themselves. Why were these people acting so shady? They were obviously hiding something or lying about something.”

    From this little experiment the answer became pretty obvious: They don’t want competition.

    If I told someone “I’m doing this easy affiliate program for BluCigs and making 6X my money” ….what do you think would happen REALLY soon??

    That’s right, tons of people copying you. Cool…a little competition never hurt.  But what’s different now is since there are other people bidding for your same keywords on your ads, the PRICE GOES UP.  Now instead of making 6X my money, I’m down to 2X all of a sudden….and if more people start bidding the price up, I might even start losing money soon.

    So all of a sudden I’m making tons of cash, then one week later that same campaign is LOSING money. No wonder people keep their mouth shut.

    So the first two questions of my original list of things to learn were mainly answered.

    Now I wanted to learn about making a good landing page using Google Website Optimizer.  This could be something I could use on my other businesses to make more money.  All the while I was learning all these new things, I was still collecting about $100+ per week in commissions from this small-time experiment….

    Go to Part 6