Blogging Income – Financial Freedom or Overrated/Overhyped?

Today, I decided I will not use this blog to make money (yet). The primary reasons being

  1. I don’t have much value to add to people’s lives (yet)
  2. Blogging isn’t the best source of income
  3. Getting ahead of myself – learn to write, be consistent, build expertise before eyeing dollars

No Value-Added

I’m a kid still figuring shit out. Most of the best blog’s I’ve seen (For this post I’ll just look at smartpassiveincome.com) have some value to add to people’s lives. The owner, Pat, makes $2M a year in passive income and through that he can help others using his experience and expertise. He has very helpful pages, such as the one where he builds a niche site from scratch (Some security guard training site).

Income

One interesting thing about Pat’s site is that he publishes his monthly income and expenses, and through that, I’ve noticed something.

spi1

First is that he makes more in a month than I do in a year (shocking). Second, it’s that most of his earnings come from Bluehost sales. Bluehost is used to host websites so I think it’s safe to assume many of these websites were inspired by Pat himself, by selling the dream of “smart, passive income”.

SPI2

The second is that his book sales PALE in comparison to his affiliate earnings. This could be because people don’t buy books twice, and he’s writing new books (the bottom one) to replace old books (the top one). SPI3

Now here’s where shit gets nutty – TWO HUNDRED AND FORTY THREE THOUSAND, THREE HUNDRED AND THIRTY TWO DOLLARS – FROM SALES OF AN ONLINE COURSE. INCONCEIVABLE!!!

Just what the hell is he selling that’s worth five years of my salary?!?!

And that’s when it hit me.

Maybe he’s selling a dream.  You can see it in the website title. You can see it in his earnings reports. I look at his website and it makes me feel like I could have smart, passive income. People are buying Bluehost and other online services he reps because they want to be just like him – to make that much money a year. People are spending hundreds, maybe even thousands on his courses thinking it’ll springboard them into success.

“I will help you be successful”

“I will help you launch a profitable blog”

etc, etc.

I just want to add here that I’m not undermining his expertise and desire to help others at all – in fact, it seems to me as if he’s a blogger with a very high moral and ethical framework. Certainly higher than me since I hate everybody. He also seems to really believe in what he’s pitching (similar to motivational speakers). From a basic glance, I believe in some of his (promoted) products as well. But let’s continue.

How much money can you make from a blog anyways? What’s all the hype?

Google tells me:

  • Average revenue per 1000 clicks = 1-2$
  • Average Amazon affiliate commission = 5-15%
  • Average conversion rate = 2-3%

So let’s say I have my own business and blog.

Let’s say the blog gets 1000 viewers a day. With a 2% conversion rate and 1000 exposures to an advertisement, for a 30$ product that I sell through affiliates I would make roughly 60$. Not bad for a day’s work!

Let’s now say I have my own business. I sell a product myself, and let’s assume I have a 20% margin (not unrealistic). So let’s say I sell a 30$ product to 1000 viewers at 2% conversion rate. That would equal:

  1. 600$ in revenue
  2. 120$ in profit
  3. COGS written off as business expenses

There are some products with even larger margins than 20% I think. I’ll have to research more to be sure.

Now I understand why Pat is the only person in his entire community making $2M a year. I’m not knocking his brand and what he’s done, as he’s been wildly successful, but I’m typing this post just to record my thoughts and observations about his operation. I’m quite sure he’s got a repertoire of valuable information, but I’m also quite sure I can find the same information for free online (a sentiment he agrees with while commenting on his LEED study materials for his niche site).

Throwing your money at people who promise to make you successful isn’t going to give you $2M a year.

 

 

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Author: Wayne

Aspiring overachiever.

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